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EXHIBIT C(7)
SALOMON SMITH BARNEY INC. BANC OF AMERICA SECURITIES LLC
399 PARK AVENUE 100 NORTH TRYON STREET
NEW YORK, NEW YORK 10043 CHARLOTTE, NORTH CAROLINA 28255
July 27, 2000
Pac Packaging Acquisition Corporation
900 Commerce Drive
Oak Brook, Illinois 60523
Berkshire Partners LLC
One Boston Place
Boston, Massachusetts 02108
United States Can Company
Senior Subordinated Notes
Engagement Letter
Ladies and Gentlemen:
Berkshire Partners LLC ("Financial Buyer") and its affiliate, Pac Packaging
Acquisition Corporation ("Transitory Corp."), have advised Citicorp North
America, Inc. ("Citi/SSB"), Salomon Smith Barney Inc. ("SSBI") and Banc of
America Securities LLC ("BAS") and Bank of America Bridge LLC, ("BAB") that
United States Can Company ("Borrower"), a wholly-owned subsidiary of U.S. Can
Corporation (the "Recapitalized Company"), desires to establish the Senior
Secured Facility and the Senior Subordinated Facility, the proceeds of which
would be used to finance the Transactions described in the related transaction
description (the "Transaction Description"). Pursuant to the Commitment Letter
dated July 27, 2000 (the "Commitment Letter") among Citi/SSB, SSBI, BAS and BAB
and Financial Buyer and Transitory Corp., Citi/SSB and BAB have committed to
provide the full principal amount of the Senior Subordinated Facility. In
addition, the Financial Buyer and Transitory Corp. desire to engage SSBI and BAS
(collectively, the "Agents"), on the terms set forth in this Engagement Letter,
to arrange the Proposed Financing (as defined below).
Capitalized terms used in this Engagement Letter but not defined herein shall
have the meanings given to them in the Commitment Letter.
If the transactions described above do not occur, but Financial Buyer or
Transitory Corp. or any affiliate thereof acquires a controlling interest in the
Recapitalized Company or a majority of its assets, determined on a consolidated
basis, within 12 months of the date hereof, such other acquisition shall be
deemed to be the Recapitalization.
Accordingly, the parties hereto agree as follows:
1. Engagement of SSBI and BAS. Financial Buyer and Transitory Corp. hereby
engage the Agents to provide to Financial Buyer, Transitory Corp., Recapitalized
Company and the Borrower such capital markets and other
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financial advisory services in connection with the Recapitalization, including
the financing and refinancing thereof, as Financial Buyer, Transitory Corp.,
Recapitalized Company and the Borrower may reasonably request, and Financial
Buyer and Transitory Corp. shall engage the Agents to be the exclusive
underwriters of, or exclusive placement agents for, or exclusive initial
purchaser of, any public or private offering of debt or other securities
("Securities") by the Recapitalized Company and/or Borrower in connection with
financing the Recapitalization, or refinancing the Senior Subordinated Facility
(any such offering being an "Offering"), whether completed before, on or after
the closing date of the Recapitalization (the "Closing Date"), including, but
not limited to, the contemplated issuance by the Borrower of Senior Subordinated
Notes in an aggregate principal amount in lieu of, or sufficient to refinance,
the Senior Subordinated Facility or the Commitment relating thereto or such
lesser amounts as may be specified by the Agents (the "Proposed Financing").
Notwithstanding the foregoing, the Agents reserve the right not to participate
in any Offering, and the foregoing is not an agreement by the Agents to
underwrite, place or purchase any Securities or otherwise provide any financing.
In connection with any Offering in which the Agents elect to participate, the
Recapitalized Company and the Borrower shall enter into an underwriting
agreement, placement agency agreement or purchase agreement, as applicable, with
the Agents, which agreement shall be consistent with this Engagement Letter and
otherwise in a mutually acceptable form.
Financial Buyer and Transitory Corp. shall cause the Recapitalized Company
and/or Borrower to accept any bona fide offer by Citi/SSB to provide, arrange or
purchase the Proposed Financing, provided, that (i) the interest rate (whether
floating or fixed) shall be determined by Citi/SSB in light of then prevailing
market conditions but in no event shall the weighted average interest rate or
effective interest rate exceed 15% (of which 14% shall be cash pay) and (ii) the
terms of such bona fide offer shall include (a) any warrants to purchase stock
of Recapitalized Company placed in escrow pursuant to and subject to the terms
of the Commitment Letter and (b) any rights to acquire additional equity of
Recapitalized Company, all pursuant to and subject to the terms of the
Commitment Letter. Except as otherwise set forth above, the Senior Subordinated
Notes shall have such form, term, security, guarantees, covenants, default and
subordination provisions and other terms as are customary, all as determined, in
consultation with Financial Buyer and Transitory Corp., by Citi/SSB in its sole
discretion.
It is currently expected that the Proposed Financing will be consummated on or
prior to the Closing Date. Financial Buyer and Transitory Corp. agree to market
and issue the Senior Subordinated Notes as soon as practicable, including any
time prior to or following the closing of the Recapitalization as requested by
Citi/SSB. If the Senior Subordinated Notes are issued prior to the closing of
the Recapitalization, the net proceeds therefrom will be held in escrow and
released, subject to the conditions set forth in the Commitment Letter, to the
Borrower on the Closing Date. The Recapitalized Company will continue the
preparation of a Registration Statement or a Rule 144A Offering Memorandum, as
applicable, relating to the Proposed Financing, and will keep such documentation
updated until all the Securities have been sold by the Agents. The senior
management of the Recapitalized Company will participate in customary road shows
and rating agency presentations from time to time as requested by Citi/SSB.
Financial Buyer and Transitory Corp. each agree that it shall cause
Recapitalized Company and the Borrower not to issue or incur any material debt
or similar obligations (other than the Proposed Financing) until the Commitments
under the Commitment Letter have terminated.
2. Matters Relating to Engagement. Financial Buyer and Transitory Corp.
each acknowledges that the Agents have been engaged solely to provide the
services set forth in this Engagement Letter and in the related Commitment
Letter dated of even date herewith. In rendering such services, the Agents shall
act as an independent contractor, and any duties of the Agents arising out of
their engagement hereunder shall be owed solely to Financial Buyer and
Transitory Corp. SSBI shall be sole book running manager and joint-lead manager
with respect to any Offering, and as compensation for such services shall be
entitled to 80% of the economics related to the Offering including the
Underwriting and Alternate Transaction Fees. BAS shall serve as joint-lead
manager with respect to any Offering, and as compensation for such services
shall be entitled to 20% of the economics related to the Offering including the
Underwriting and Alternate Transaction Fees. Such allocation of economics may be
adjusted with prior the approval of both of the Agents to reflect diminution in
the economics of the Agents associated with any selldown of bridge loans made
pursuant to the Commitment Letter.
Financial Buyer and Transitory Corp. each acknowledges that each of SSBI and BAS
is a securities firm that is engaged in securities trading and brokerage
activities, as well as providing investment banking and financial
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advisory services. In the ordinary course of trading and brokerage activities,
SSBI, BAS and their respective affiliates may at any time hold long or short
positions, and may trade or otherwise effect transactions, for their own account
or the accounts of customers, in debt or equity securities of entities that may
be involved in the transactions contemplated hereby. SSBI and BAS recognize
their responsibility for compliance with federal securities laws in connection
with such activities.
3. Termination. This Engagement Letter may be terminated by either Agent
(with respect only to such terminating Agent's agreement hereunder) at any time
upon 10 days' prior written notice to Financial Buyer and Transitory Corp. This
Engagement Letter may be terminated by Financial Buyer and Transitory Corp. upon
10 days' prior written notice to the Agents after the earlier of (a) the day
that is 12 months after the Closing Date (the "Payment Date"), (b) repayment in
full of the Senior Subordinated Facility and (c) the Closing Date if the
Proposed Financing is consummated in an amount equal to or greater than the
Agents' Commitment under the Senior Subordinated Facility (in which case no such
notice need be given to the Agents). Upon any termination of this Engagement
Letter, the obligations of the parties hereunder shall terminate, except for
their obligations under Sections 3, 4, 5(b), 5(d) and 8 and except, in the event
only one of the Agents terminates this Engagement Letter, for the obligations of
the Financial Buyer and Transitory Corp. and the other Agent to each other.
4. Indemnification. Financial Buyer and Transitory Corp., jointly and
severally, shall indemnify and hold harmless SSBI, Citi/SSB, BAS, BAB and the
other Indemnified Persons referred to therein to the extent set forth in Annex I
hereto to the extent set forth therein, which annex is incorporated by reference
herein and constitutes a part hereof.
5. Fees and Expenses.
(a) Underwriting Fee. In any Offering that is consummated before
termination of this Engagement Letter and in which SSBI and BAS act as
underwriters, placement agents or initial purchasers, Recapitalized Company
shall (or shall cause the Borrower to) pay aggregate underwriters' or initial
purchasers' discounts, or placement agency fees, as applicable, equal to 2.75%
of the gross proceeds of such Offering (the "Underwriting Fee"), payable at the
closing of such Offering out of the proceeds thereof. Notwithstanding the
foregoing, if the Offering involves securities other than senior subordinated
notes, the Underwriting Fee shall be a percentage of the gross proceeds that is
customary for offerings of such other security. In connection with any such
Offering, SSBI shall be sole book running manager and joint-lead manager and BAS
shall be joint-lead manager and shall share fees pursuant to the economics split
set forth in Section 2 above.
(b) Alternate Transaction Fee. If Financial Buyer, Transitory Corp.
or any affiliate thereof consummates the Recapitalization without the Agents
acting as sole and exclusive arranger and/or provider of the senior subordinated
financing, notwithstanding a willingness on the part of the Agents to provide or
arrange the senior subordinated financing for such transaction, Recapitalized
Company shall (or shall cause the Borrower to) pay to the Agents on the date of
the consummation of such transaction for their services hereunder a cash fee
(the "Alternate Transaction Fee") equal to 2.75% of the aggregate principal
amount outstanding of any senior subordinated debt or subordinated debt
financing of Recapitalized Company or the Borrower issued on or about such date
in lieu of the Proposed Financing. The Agents shall share the Alternate
Transaction Fee, if any, pursuant to the economics split set forth in Section 2
above.
(c) Expenses. Upon consummation of the Recapitalization,
Recapitalized Company shall, or shall cause the Borrower to, reimburse the
Agents promptly upon request for all their reasonable out-of-pocket costs and
expenses (including, without limitation, reasonable fees, disbursements and
other charges of legal counsel) incurred in connection with the preparation of
the Predecessor Letter referred to below or this Engagement Letter or any of the
transactions contemplated hereby or thereby, whether or not any Securities are
issued, offered or sold, provided that, each Agent shall be responsible for its
own road-show costs and the Agents shall be responsible for the fees and
expenses of the Agents' counsel) incurred in connection with any Offering in
which the Agents participate. Recapitalized Company and the Borrower shall be
responsible for all printing costs, filing fees and "blue-sky" fees and
expenses.
The obligation of each of Financial Buyer, Transitory Corp., Recapitalized
Company and the Borrower to pay each such fee shall be absolute and
unconditional and shall not be subject to reduction by way of set-off or
counterclaim.
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6. Disclosure. In connection with its engagement hereunder, the Agents
shall assist Recapitalized Company and the Borrower in preparing a prospectus,
offering circular, private placement memorandum or other document to be used in
connection with each Offering in which the Agents participate (the "Offering
Document"). Recapitalized Company and the Borrower shall furnish the Agents with
all financial and other information concerning Recapitalized Company, the
Borrower, the Recapitalized Company and related matters (the "Information")
which the Agents may reasonably request for inclusion in any Offering Document
or otherwise. The Agents may rely, without independent verification, upon the
accuracy and completeness of the Information and any Offering Document, and the
Agents do not assume any responsibility therefor.
The Agents may (subject to paragraph 7(a) below) share any Offering Document,
the Information and any other information or matters relating to Recapitalized
Company, the Borrower, any assets to be acquired or the transactions
contemplated hereby with their respective affiliates, and such affiliates may
likewise share information relating to Recapitalized Company, the Borrower, the
Recapitalization, such assets or such transaction with the Agents.
7. Confidentiality.
(a) The Agents shall use all information provided to it by or on
behalf of Financial Buyer, Transitory Corp. or the Recapitalized Company solely
for the purpose of providing the services that are the subject of this
Engagement Letter and shall treat all such information confidentially, provided
that nothing herein shall prevent the Agents from disclosing any such
information (with a request for confidential treatment in the case of clause (i)
or (ii), if available) (i) pursuant to the order of any court or administrative
agency or in any pending legal or administrative proceeding, or otherwise as
required by applicable law or compulsory legal process, (ii) upon the request or
demand of any regulatory authority having jurisdiction over the Agents or any of
their respective affiliates, (iii) to the extent that such information becomes
publicly available other than by reason of disclosure by the Agents, or (iv) to
their respective affiliates or their officers, directors, affiliates, employees,
legal counsel, independent auditors and other experts or agents who need to know
such information and are informed of the confidential nature of such
information.
(b) Each of Financial Buyer and Transitory Corp. will not disclose
this Engagement Letter, the contents hereof or the activities of the Agents
pursuant hereto to any person without the prior written approval of each Agent,
except that Financial Buyer, Transitory Corp. or the Recapitalized Company may
disclose this Engagement Letter and the contents hereof (i) to their respective
officers, directors, employees, attorneys and advisors on a confidential and
need-to-know basis and (ii) as required by applicable law or compulsory legal
process. The provisions contained in this paragraph 7 shall remain in full force
and effect notwithstanding the termination of this Engagement Letter.
8. Governing Law and Submission to Jurisdiction. This Engagement Letter
shall be governed by and construed in accordance with the laws of the State of
New York, without giving effect to the conflicts of laws principles thereof.
FINANCIAL BUYER, TRANSITORY CORP. AND THE AGENTS IRREVOCABLY AGREE TO WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON
BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS ENGAGEMENT LETTER OR THE
PERFORMANCE OF SERVICES HEREUNDER.
Each of Financial Buyer and Transitory Corp. irrevocably and unconditionally
submits to the nonexclusive jurisdiction of any state or federal court sitting
in the City of New York over any suit, action or proceeding arising out of or
relating to this Engagement Letter. Service of any process, summons, notice or
document by registered mail addressed to Financial Buyer, Transitory Corp. or
the Recapitalized Company, as applicable, shall be effective service of process
against such person for any suit, action or proceeding brought in any such
court. Each of Financial Buyer and Transitory Corp. irrevocably and
unconditionally waives any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or proceeding has been brought in any such court and any claim that any
such suit, action or proceeding has been brought in an inconvenient forum. A
final judgment in any such suit, action or proceeding brought in any such court
may be enforced in any other courts to whose jurisdiction Financial Buyer,
Transitory Corp. or the Recapitalized Company, as applicable, are or may be
subject, by suit upon judgment.
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9. Termination of Obligations. To the extent that Transitory Corp. assumes
Financial Buyer's obligations in connection with closing the Recapitalization,
the obligations of the Financial Buyer hereunder shall terminate.
10. Miscellaneous. This Engagement Letter contains the entire agreement
between the parties relating to the subject matter hereof and supersedes all
oral statements and prior writings with respect thereto, including without
limitation the Engagement Letter dated June 1, 2000 (the "Predecessor Letter").
This Engagement Letter may not be amended or modified except by a writing
executed by each of the parties hereto. Section and paragraph headings herein
are for convenience only and are not a part of this Engagement Letter. This
Engagement Letter is solely for the benefit of Financial Buyer, Transitory Corp.
and the Recapitalized Company and the Agents, and no other person (except for
Indemnified Persons, to the extent set forth in Annex I hereto) shall acquire or
have any rights under or by virtue of this Engagement Letter. This Engagement
Letter is not intended to create a fiduciary relationship among the parties
hereto. This Engagement Letter and each Agent's engagement hereunder may not be
assigned by Financial Buyer or Transitory Corp. without such Agent's prior
written consent.
If any term, provision, covenant or restriction contained in this Engagement
Letter is held by a court of competent jurisdiction to be invalid, void or
unenforceable or against public policy, the remainder of the terms, provisions,
covenants and restrictions contained herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. Financial Buyer
and Transitory Corp. and the Agents shall endeavor in good faith negotiations to
replace the invalid, void or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid, void
or unenforceable provisions.
This Engagement Letter may be executed in counterparts, each of which will be
deemed an original, but all of which taken together will constitute one and the
same instrument. Delivery of an executed counterpart of a signature page of this
Engagement Letter by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
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Please indicate your acceptance of the provisions hereof by signing the enclosed
copy of this Engagement Letter and returning it to us at or before 11:00 p.m.
(New York City time) on July 27, 2000.
If you elect to deliver this Engagement Letter by fax, please arrange for the
executed original to follow by next-day courier.
Very truly yours,
SALOMON SMITH BARNEY INC.
By: /s/ David J. Wirdnam
--------------------------------
Name: David J. Wirdnam
-------------------------------
Title: Director
------------------------------
BANC OF AMERICA SECURITIES LLC
By: /s/ William A. Bowen Jr.
--------------------------------
Name: William A. Bowen Jr.
-------------------------------
Title: Managing Director
------------------------------
Accepted and agreed to as of July 27, 2000:
BERKSHIRE PARTNERS LLC
By: /s/ Richard K. Lubin
-------------------------------------
Name: /s/ Richard K. Lubin
----------------------------------
Title: Managing Director
---------------------------------
PAC PACKAGING ACQUISITION CORPORATION
By: /s/ Paul W. Jones
-------------------------------------
Name: Paul W. Jones
----------------------------------
Title: President
---------------------------------
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CONFIDENTIAL ANNEX I
July 27, 2000 to the Engagement Letter
United States Can Company
Senior Subordinated Notes
Indemnification
All capitalized terms used herein but not defined herein shall have the meanings
provided in the Engagement Letter to which this Annex I is attached (the
"Engagement Letter").
In connection with the Agents' engagement to render financial advisory and
investment banking services to Financial Buyer, Transitory Corp. and the
Recapitalized Company in connection with the proposed loans to, and offering of
debt securities by, Recapitalized Company and/or Borrower, including
modifications or future additions to such engagement and related activities
before the date of the Engagement Letter, Financial Buyer and Transitory Corp.,
jointly and severally, will indemnify and hold harmless the Agents, their
affiliates, and their respective directors, officers, agents, advisors or
employees (hereinafter collectively, the "Indemnified Persons"), to the full
extent lawful, from and against, and the Indemnified Persons shall have no
liability to Financial Buyer, Transitory Corp. and the Recapitalized Company,
their affiliates or their respective officers, directors, employees, advisors,
agents (collectively, the "Representatives"), creditors or security holders for,
any damages, losses, expenses, claims or proceedings including shareholder
actions (collectively, "losses") (i) related to or arising out of (A) oral or
written information provided by Financial Buyer, Transitory Corp. or the
Recapitalized Company, which either Financial Buyer, Transitory Corp. or the
Recapitalized Company or any Indemnified Person provides to any actual or
potential buyers, sellers, investors or offerees, or (B) other action or failure
to act by Financial Buyer, Transitory Corp. or the Recapitalized Company or any
Representative or by any Indemnified Person at the request or with the consent
of Financial Buyer, Transitory Corp. or the Recapitalized Company or any
Representative, or (ii) otherwise related to or arising out of such engagement
or any transaction or conduct in connection therewith, (including, without
limitation, in connection with any action, suit or proceeding (except that this
clause (ii) shall not apply with respect to any losses resulting from such
Indemnified Person's bad faith or gross negligence).
If the foregoing indemnity is unavailable to the Indemnified Person for any
reason (other than as provided in the immediately preceding paragraph),
Financial Buyer and Transitory Corp. will contribute to any claims, damages,
liabilities or expenses related to or arising out of such engagement or any
transaction or conduct in connection therewith. For such losses referred to in
clause (i) of the immediately preceding paragraph, each of Financial Buyer and
Transitory Corp., on the one hand, and the Agents, on the other, shall
contribute in such proportion as is appropriate to reflect the relative benefits
received (or anticipated to be received) by the Indemnified Persons and by
Financial Buyer and Transitory Corp. from the actual or proposed transaction
giving rise to such engagement; provided, that the Indemnified Persons'
aggregate contribution to the amount paid or payable under this paragraph shall
not exceed the aggregate amount of the fees actually received by the Agents
under the Engagement Letter. For any other losses, or for losses referred to in
clause (i) of the first paragraph hereof if the allocation provided by the
immediately preceding sentence is unavailable for any reason, each of Financial
Buyer and Transitory Corp. and the Agents shall contribute in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of each of them in connection with the statements, omissions or other
conduct which resulted in such losses, as well as any other relevant equitable
considerations; provided, the Indemnified Persons' aggregate contribution to the
amount paid or payable under this paragraph shall not exceed the aggregate
amount of the fees actually received by the Agents under the Engagement Letter.
Benefits received (or anticipated to be received) by Financial Buyer and
Transitory Corp. and its affiliates shall be deemed to be equal to the aggregate
cash consideration and value of securities or any other property payable,
exchangeable, issuable or transferable in such transaction or proposed
transaction, and benefits received by any Indemnified Person (or anticipated to
be received) shall be deemed to be equal to the compensation payable by
Financial Buyer, Transitory Corp. or the Recapitalized Company to such
Indemnified Person in connection with such engagement. Relative fault shall be
determined by reference to, among other things, whether any alleged untrue
statement or omission or any other alleged conduct relates to information
provided by Financial Buyer, Transitory Corp. or the Recapitalized Company or
other conduct by Financial Buyer, Transitory Corp. or the Recapitalized Company
(or any Representative) or by an Indemnified Person at the request or with the
consent of Financial Buyer, Transitory Corp. or the Recapitalized Company or any
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Representative, on the one hand, or by an Indemnified Person (other than at the
request or with the consent of Financial Buyer, Transitory Corp. or the
Recapitalized Company or any Representative) on the other hand. The Indemnified
Persons and Financial Buyer and Transitory Corp. agree that it would not be just
and equitable if contribution were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above.
Financial Buyer, Transitory Corp. or the Recapitalized Company will not, without
the prior written consent of the Agents, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim or proceeding related
to or arising out of such engagement or transactions or conduct in connection
therewith (whether or not any Indemnified Person is a party to such claim or
proceeding) unless such settlement (a) includes a provision unconditionally
releasing each Indemnified Person from and holding each Indemnified Person
harmless against all liability in respect of claims by any releasing party
related to or arising out of such engagement or any transaction or conduct in
connection therewith. Financial Buyer, Transitory Corp. or the Recapitalized
Company will not be liable in respect of any settlement effected without its
consent, which consent will not be unreasonably withheld, will also promptly
reimburse each Indemnified Person for all expenses (including counsel fees and
expenses) as they are incurred by the Indemnified Persons in connection with
investigating, preparing or defending, or providing evidence in, any pending or
threatened claim or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Person is a
party to such claim or proceeding) or in enforcing the Engagement Letter.
If any action, suit, proceeding or investigation is commenced as to which an
Indemnified Person proposes to demand indemnification, such Indemnified Person
shall notify Financial Buyer and Transitory Corp. with reasonable promptness;
provided, that any failure by such Indemnified Person to notify Financial Buyer
and Transitory Corp. shall not relieve Financial Buyer and Transitory Corp. from
its obligations hereunder (except, with respect to Financial Buyer's and
Transitory Corp.'s obligations under the second paragraph hereof, to the extent
that Financial Buyer and Transitory Corp. are prejudiced by such failure to
promptly notify). Financial Buyer and Transitory Corp. shall be entitled to
assume the defense of any such action, suit, proceeding or investigation,
including the employment of counsel reasonable satisfactory to the Indemnified
Persons. Each Indemnified Person shall have the right to counsel of its own
choice to represent it, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (a) Financial Buyer and Transitory
Corp. have failed to promptly assume the defense and employ counsel reasonably
satisfactory to such Indemnified Person in accordance with the preceding
sentence, or (b) such Indemnified Person shall have been advised by counsel that
there exists an actual or potential conflict of interests between or among
Financial Buyer and Transitory Corp. and such Indemnified Person, including a
situation in which one or more legal defenses may be available to such
Indemnified Person that are inconsistent with those available to Financial Buyer
and Transitory Corp. (in which case Financial Buyer and Transitory Corp. shall
not be entitled to assume the defense of such action, suit or investigation on
behalf of such Indemnified Person); provided, that Financial Buyer and
Transitory Corp. shall not, in connection with any one such action or proceeding
or separate but substantially similar actions or proceeding arising out of the
same general allegations which does not give rise to any actual or potential
conflict among the Indemnified Persons, be liable for fees and expenses of more
than one separate firm of attorneys at any time for all Indemnified Persons; and
such counsel shall, to the extent consistent with its professional
responsibilities, cooperate with Financial Buyer and Transitory Corp. and any
counsel designated by Financial Buyer and Transitory Corp.
The foregoing shall be in addition to any rights that the Indemnified Persons
may have at common law or otherwise.
This Indemnification shall remain in full force and effect following the
completion or termination of such engagement.
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FIRST AMENDMENT TO AGREEMENT
AND PLAN OF MERGER
THIS FIRST AMENDMENT, dated as of June 28, 2000, is by and between U.S.
Can Corporation, a Delaware corporation (the "Company") and Pac Packaging
Acquisition Corporation, a Delaware corporation ("Newco"), and amends the
Agreement and Plan of Merger, dated as of June 1, 2000, by and between the
Company and Newco (the "Merger Agreement"). Capitalized terms used but not
otherwise defined herein have the meanings assigned to those terms in the Merger
Agreement.
In consideration of the mutual agreements herein contained, the parties
hereto hereby agree as follows:
1. Amendment to Establish Schedule I. The Merger Agreement shall
be and hereby is amended as follows:
a. The first line of the fifth recital in the Merger
Agreement is amended by deleting the words "to be".
b. Section 2.1(c) of the Merger Agreement is amended by
deleting the first three sentences thereof, such that
Section 2.1(c) will begin with the words "(c) At the
Effective Time,".
c. Section 3.20 of the Merger Agreement is amended by
deleting the words "Bank of America, N.A., other
lenders which participate with any or all of the
foregoing persons in the Transactions," and by
replacing those words with the following:
"Lennoxville Investments, Inc., Empire Investments,
S.A.,".
d. Section 8.3 of the Merger Agreement is amended by
deleting the words "; provided, however that the
addition of the definitive Schedule I contemplated by
Section 2.1(c) shall not require any authorization or
approval of the Special Committee".
e. Schedule I to the Merger Agreement is amended by
deleting the Schedule I attached to the Merger
Agreement and replacing it with the Schedule I
attached to this Amendment.
2. Amendment to Company Disclosure Schedule. The Company
Disclosure Schedule shall be and hereby is amended by adding
thereto the Addendum to Company Disclosure Schedule attached
hereto.
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3. Counterparts. For the convenience of the parties hereto, this
Amendment may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same
amendment.
4. Governing Law. This Amendment shall be governed and construed
in accordance with the laws of the State of Delaware without
giving effect to the principles of conflict of laws thereof.
5. Titles. The Section captions in this Amendment are for
convenience of reference only, do not constitute part of this
Amendment and shall not be deemed to limit or otherwise affect
any of the provisions hereof.
6. Effectiveness of Merger Agreement. Except as expressly set
forth herein, the Merger Agreement is not modified, amended,
released or otherwise affected by this Amendment.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
by the duly authorized officers of the parties hereto on the date first
hereinabove written.
U.S. CAN CORPORATION
By: /s/ Paul W. Jones
-----------------------------------------------
Name: Paul W. Jones
Title: Chairman and Chief Executive Officer
PAC PACKAGING ACQUISITION CORPORATION
By: /s/ Richard K. Lubin
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Name: Richard K. Lubin
Title: Senior Vice President
