-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Dx/NFSp+F/XErI1XNNPU586yU/tsKzZjQp+T2B40LjzkOAwSJw8DV8YOGGgUwg4v b0hyLfr6qQnUjmQjg7qhDw== 0000025890-01-500015.txt : 20010810 0000025890-01-500015.hdr.sgml : 20010810 ACCESSION NUMBER: 0000025890-01-500015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROWN CORK & SEAL CO INC CENTRAL INDEX KEY: 0000025890 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 231526444 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02227 FILM NUMBER: 1702781 BUSINESS ADDRESS: STREET 1: ONE CROWN WAY CITY: PHILADELPHIA STATE: PA ZIP: 19154 BUSINESS PHONE: 2156985100 10-Q 1 r10q01-jun.txt FORM 10-Q FOR QUARTER ENDED JUNE 30, 2001 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO _________ COMMISSION FILE NUMBER 1-2227 CROWN CORK & SEAL COMPANY, INC. (Exact name of registrant as specified in its charter) Pennsylvania 23-1526444 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) One Crown Way, Philadelphia, PA 19154-4599 (Address of principal executive offices) (Zip Code) 215-698-5100 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- There were 125,634,204 shares of Common Stock outstanding as of July 31, 2001. ================================================================================ Crown Cork & Seal Company, Inc. PART I - FINANCIAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS (In millions except share and per share data) (Unaudited)
- --------------------------------------------------------------------------------------------------------------- Three months ended June 30, 2001 2000 - --------------------------------------------------------------------------------------------------------------- Net sales $ 1,878 $ 1,935 ---------- ---------- Costs, expenses & other income Cost of products sold, excluding depreciation and amortization 1,543 1,552 Depreciation 96 95 Amortization 28 30 Selling and administrative expense 70 78 Provision for restructuring and asset impairments 3 77 Gain on sale of assets ( 1) Interest expense 120 97 Interest income ( 5) ( 6) Translation and exchange adjustments 3 2 ---------- ---------- 1,857 1,925 ---------- ---------- Income before income taxes 21 10 Provision for income taxes 14 8 Minority interests, net of equity earnings ( 2) ( 6) ---------- ---------- Net income / (loss) $ 5 ($ 4) ========== ========== Earnings / (loss) per average common share: Basic and diluted $ .04 ($ .03) ========== ========== Dividends per common share $ .25 ========== Average common shares outstanding: Basic 125,635,607 127,433,082 Diluted 125,635,607 127,433,082 - ---------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Certain prior year amounts have been reclassified to improve comparability. 2 Crown Cork & Seal Company, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (In millions except share and per share data) (Unaudited)
- -------------------------------------------------------------------------------------------------------------- Six months ended June 30, 2001 2000 - -------------------------------------------------------------------------------------------------------------- Net sales $ 3,536 $ 3,634 ---------- ---------- Costs, expenses & other income Cost of products sold, excluding depreciation and amortization 2,938 2,904 Depreciation 190 192 Amortization 58 61 Selling and administrative expense 156 163 Provision for restructuring and asset impairments 5 77 Gain on sale of assets ( 1) Interest expense 235 189 Interest income ( 11) ( 10) Translation and exchange adjustments 6 2 ---------- ---------- 3,576 3,578 ---------- ---------- (Loss) / income before income taxes and cumulative effect of accounting change ( 40) 56 Provision for income taxes 3 27 Minority interests, net of equity earnings ( 2) ( 10) ---------- ---------- Net (loss) / income before cumulative effect of accounting change ( 45) 19 Cumulative effect of change in accounting for derivatives and hedging activities, net of tax 4 ---------- ---------- Net (loss) / income ( 41) 19 Preferred stock dividends 2 ---------- ---------- Net (loss) / income available to common shareholders ($ 41) $ 17 ========== ========== (Loss) / earnings per average common share: Basic and diluted - before cumulative effect of accounting change ($ .36) $ .14 ========== ========== Cumulative effect of accounting change $ .03 ========== Basic and diluted - after cumulative effect of accounting change ($ .33) $ .14 ========== ========== Dividends per common share $ .50 ========== Average common shares outstanding: Basic 125,629,864 125,661,602 Diluted 125,629,864 127,996,659 - --------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. Certain prior year amounts have been reclassified to improve comparability. 3 Crown Cork & Seal Company, Inc. CONSOLIDATED BALANCE SHEETS (Condensed) (In millions) - -------------------------------------------------------------------------------- June 30, December 31, 2001 2000 (Unaudited) - -------------------------------------------------------------------------------- Assets Current assets Cash and cash equivalents $ 308 $ 382 Receivables 1,251 1,153 Inventories 1,275 1,288 Prepaid expenses and other current assets 127 90 ------- ------- Total current assets 2,961 2,913 ------- ------- Long-term notes and receivables 20 25 Investments 150 142 Goodwill, net of amortization 3,671 3,920 Property, plant and equipment 2,745 2,969 Other non-current assets 1,295 1,190 ------- ------- Total $10,842 $11,159 ======= ======= Liabilities and shareholders' equity Current liabilities Short-term debt $ 542 $ 232 Current maturities of long-term debt 57 68 Accounts payable and accrued liabilities 1,691 1,903 Income taxes payable 29 58 ------- ------- Total current liabilities 2,319 2,261 ------- ------- Long-term debt, excluding current maturities 5,031 5,049 Postretirement and pension liabilities 705 731 Other non-current liabilities 742 814 Minority interests 193 195 Shareholders' equity 1,852 2,109 ------- ------- $10,842 $11,159 ======= ======= Total - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. 4 Crown Cork & Seal Company, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Condensed) (In millions) (Unaudited)
- ------------------------------------------------------------------------------------------------- Six months ended June 30, 2001 2000 - ------------------------------------------------------------------------------------------------- Cash flows from operating activities Net (loss) / income ($ 41) $ 19 Depreciation and amortization 248 253 Provision for restructuring and asset impairments 3 55 Gain on sale of assets ( 1) Cumulative effect of accounting change ( 4) Change in assets and liabilities, other than debt ( 450) ( 392) ----- ----- Net cash used in operating activities ( 245) ( 65) ----- ----- Cash flows from investing activities Capital expenditures ( 90) ( 116) Proceeds from sale of property, plant and equipment 7 20 Other, net ( 14) ( 3) ----- ----- Net cash used in investing activities ( 97) ( 99) ----- ----- Cash flows from financing activities Proceeds from long-term debt 3 Payments of long-term debt ( 30) ( 150) Net change in short-term debt 317 400 Stock repurchased ( 36) Dividends paid ( 65) Minority dividends, net of contributions ( 3) ( 2) ----- ----- Net cash provided by financing activities 284 150 ----- ----- Effect of exchange rate changes on cash and cash equivalents ( 16) ( 9) ----- ----- Net change in cash and cash equivalents ( 74) ( 23) Cash and cash equivalents at beginning of period 382 267 ----- ----- Cash and cash equivalents at end of period $308 $244 ==== ==== - --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 5 Crown Cork & Seal Company, Inc. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (In millions) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------ Accumulated Other Comprehensive Income/(loss) Preferred Common Paid-In Retained Treasury Comprehensive Quarter Year-To-Date Stock Stock Capital Earnings Stock Income/(loss) Total - ------------------------------------------------------------------------------------------------------------------------------------ Balance at December 31, 2000 | $780 $1,596 $ 994 ($151) ($1,110) $2,109 Net income / (loss) $ 5 ($ 41) | ( 41) ( 41) Translation adjustments ( 51) ( 206) | ( 206) ( 206) Derivatives qualifying as hedges 4 ( 10) | ( 10) ( 10) ---- ---- | Comprehensive loss ($ 42) ($257) | ==== ==== | | - ------------------------------------------------------------------------------------------------------------------------------------ Balance at June 30, 2001 | $780 $1,596 $ 953 ($151) ($1,326) $1,852 ==================================================================================================================================== | Accumulated | Other Comprehensive Income/(loss) | Preferred Common Paid-In Retained Treasury Comprehensive Quarter Year-To-Date | Stock Stock Capital Earnings Stock Income/(loss) Total ----------------------------------------------------------------------------------------------------------------------------------- Balance at December 31, 1999 | $349 $779 $1,317 $1,295 ($173) ($ 676) $2,891 Net (loss) / income ($ 4) $ 19 | 19 19 Translation adjustments ( 74) ( 168) | ( 168) ( 168) ---- ---- | Comprehensive loss ($ 78) ($149) | ==== ==== | Dividends declared: | Common | ( 63) ( 63) Preferred | ( 2) ( 2) Stock repurchased | ( 25) ( 11) ( 36) Preferred stock conversions | ( 349) 1 311 37 - ------------------------------------------------------------------------------------------------------------------------------------ Balance at June 30, 2000 | $780 $1,603 $1,249 ($147) ($ 844) $2,641 ====================================================================================================================================
The accompanying notes are an integral part of these financial statements. 6 Crown Cork & Seal Company, Inc. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In millions, except per share and employee data) (Unaudited) A. Statement of Information Furnished ---------------------------------- The accompanying unaudited interim consolidated financial statements have been prepared by the Company in accordance with Form 10-Q instructions. In the opinion of management, these consolidated financial statements contain all adjustments of a normal and recurring nature necessary to present fairly the financial position of Crown Cork & Seal Company, Inc. as of June 30, 2001 and the results of its operations and cash flows for the periods ended June 30, 2001 and 2000, respectively. These results have been determined on the basis of generally accepted accounting principles and practices consistently applied. Certain information and footnote disclosures, normally included in financial statements presented in accordance with generally accepted accounting principles, have been condensed or omitted. The accompanying Consolidated Financial Statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. B. Accounting Change ----------------- Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended (SFAS 133). SFAS 133 requires that the Company recognize all outstanding derivative instruments on the balance sheet at their fair values. The impact on earnings from recognizing these instruments at fair value depends on whether the instruments are designated and qualify as hedges. If the derivative does not qualify as a hedge, changes in fair value are reported in earnings immediately. If the derivative instrument qualifies as a hedge and based on the risk being hedged, changes in the fair value of the derivatives will either be offset against changes in fair value of the hedged assets, liabilities or firm commitments through earnings (fair value hedges) or recognized in other comprehensive income (cash flow and net investment hedges). Any ineffective portion of designated hedges is reported in earnings immediately. For cash flow hedges, adjustments to the fair value of the derivative instruments are temporarily reported in other comprehensive income until the related hedged items impact earnings. For hedges of the net investment in foreign operations, fair value adjustments are reported in other comprehensive income as translation adjustments and released to earnings when the investments are disposed. Within the balance sheet, the fair values of the derivatives are reported as current or non-current assets or liabilities consistent with the classification of the hedged items. Within the Consolidated Statements of Cash Flows, cash flows from hedging transactions are classified under the same category as the cash flows of the hedged items. At January 1, 2001, the Company recorded transition adjustments, the cumulative effect of an accounting change, which resulted in an after-tax credit of $4 to net income and an after-tax charge of $18 to "accumulated other comprehensive income" in Shareholders' Equity. The per share credit to earnings was $.03. The ongoing impact on the Company from adoption of this standard will depend on a variety of factors, including interest rates and other market conditions, as well as future interpretive guidance from the Financial Accounting Standards Board ("FASB"), which continues to address implementation issues. The cumulative effects on earnings and equity were due primarily to net fair value adjustments related to outstanding cross-currency swaps. 7 Crown Cork & Seal Company, Inc. A reconciliation of current period changes, net of applicable income taxes, in "accumulated other comprehensive income" in Shareholders' Equity, referred to as "Derivatives qualifying as hedges," follows: Transition adjustment as of January 1, 2001 ($18) Current period changes in fair value - net 22 Reclassification to earnings - net ( 14) --- Balance at June 30, 2001 ($10) === For hedges of future cash flows (cash flow hedges), which include foreign exchange contracts, cross-currency swaps, and commodity contracts, the ineffective portion was not material and no items were excluded from the measure of effectiveness. Of the charge of $18 recorded in equity at January 1, 2001, $2, net of taxes, was reclassified to earnings during the first six months of 2001. Of the charge of $10 reported in equity at June 30, 2001, $6, net of income taxes, is expected to be reclassified to earnings over the twelve month period ending June 30, 2002. The actual amount that will be reclassified to earnings over the next twelve months will vary from this amount as a result of changes in market conditions. No amounts were reclassified to earnings during the first six months in connection with forecasted transactions that were no longer considered probable. At June 30, 2001, the maximum term of derivative instruments that hedge forecasted transactions, excluding those related to payment of variable interest on existing financial instruments, was two years. For hedges of recognized assets, liabilities and firm commitments, including intercompany transactions, the ineffective portion was not material. For fair value hedges, the Company excludes the time value component of the derivative in its measurement of effectiveness. Amounts excluded from the measure of effectiveness, reported in earnings for the six months ended June 30, 2001, amounted to less than $1 before income taxes. The impact on earnings from the net fair value adjustments of cross-currency swaps designated as fair value hedges is included in "interest expense" in the Consolidated Statements of Operations. In the fourth quarter of 2000, the Company adopted EITF 00-10, "Accounting for Shipping and Handling Fees and Costs." EITF 00-10 requires that shipping and handling costs be excluded from revenues. The Company, to comply with the standard, has reclassified from net sales to cost of products sold $59 and $118 for the quarter and the six months ended June 30, 2000. C. Receivables ----------- The Company utilizes receivable securitization agreements in its management of cash flow activities. Agreements were outstanding during the first six months of 2001 in North America and Europe, providing for the accelerated receipt of up to $450 of cash on available receivables. Securitization transactions have been accounted for as sales in accordance with SFAS No. 140. Accordingly, accounts included under outstanding securitization programs have been reflected as a reduction in receivables in the accompanying Consolidated Balance Sheets. Outstanding receivable securitizations at June 30, 2001, December 31, 2000 and June 30, 2000, amounted to $218, $162 and $291, respectively. During the first six months of 2001 and 2000, the Company recorded fees related to the outstanding securitizations amounting to approximately $7 and $5, which amounts have been included in "interest expense" in the Consolidated Statements of Operations. 8 Crown Cork & Seal Company, Inc. D. Inventories ----------- ----------------------------------------------------------- June 30, December 31, 2001 2000 ----------------------------------------------------------- Finished goods $ 551 $ 530 Work in process 164 165 Raw material and supplies 560 593 ------ ------ $1,275 $1,288 ====== ====== E. Restructuring ------------- During the first quarter of 2001, the Company provided $4 for the costs associated with the closure of a U.S. food can plant. During the second quarter of 2001, the Company provided $3 for severance costs to close a plant in the U.K. and to reduce headcount in three plants in Africa, resulting in the termination of 130 employees. Also during the first two quarters of 2001, the Company recorded a restructuring credit of $6 for the reversal of severance costs related to a restructuring charge provided during the second quarter of 2000. The Company decided not to pursue certain restructuring activities in its European operations that had been previously approved. Remaining balances in the reserves represent contracts or agreements whereby payments are extended over time. This includes agreements with unions and governmental agencies related to employees as well as with landlords in lease arrangements. The balance of the restructuring reserves (excluding write-down of assets which is reflected as a reduction of the related asset account) is included within "accounts payable and accrued liabilities" in the Consolidated Balance Sheets. The components of the restructuring reserve and movements within these components during the first six months of 2001 were as follows:
Termination Other Exit Asset Benefits Costs Write-downs Total -------- ---------- ----------- ----- Opening balance............................ $ 24 $ 8 $ 32 Provision, net ............................ ( 2) * 2 1 1 Payments made.............................. ( 13) ( 5) ( 18) Other **................................... ( 1) ( 1) Transfer against assets.................... ( 1) ( 1) ---- ---- ---- ---- Closing balance............................ $ 8 $ 5 $ 13 ==== ==== ==== ==== * Includes reversal of severance of $6, representing headcount of 65 ** Includes translation adjustments
During the first six months of 2001, payments of $13 were made for the termination of 594 employees, 437 of whom were involved in direct manufacturing operations. Payments of $5 were made for other exit costs, including dismantlement costs, equipment removal and various contractual obligations. F. Asset Impairments ----------------- During the second quarter of 2001, the company provided $4 to write-down the value of certain property, plant and equipment whose value was considered to be impaired. The write-downs were required due to (i) the loss of a customer contract in the U.S. plastics operations during the second quarter, (ii) the removal from service of certain machinery in the U.S. and Europe that was operating at inefficient levels, and (iii) the reduced market value of a property held for sale in Europe. 9 Crown Cork & Seal Company, Inc. G. Earnings Per Share ------------------ The following table summarizes the basic and diluted earnings per common share computations for the periods ended June 30, 2001 and 2000, respectively:
2001 2000 ------------------------------------- ------------------------------------- Average Average Quarter Income Shares EPS Income Shares EPS ------- ------------------------------------- ------------------------------------- Basic EPS $ 5 125.6 $ .04 ($ 4) 127.4 ($ .03) Potentially dilutive securities: Stock options --- ----- --- ----- Diluted EPS $ 5 125.6 $ .04 ($ 4) 127.4 ($ .03) === ===== === ===== 2001 2000 ------------------------------------- ------------------------------------- Average Average Year-to-date Income Shares EPS Income Shares EPS ------------ ------------------------------------- ------------------------------------- Net (loss) / income ($41) $19 Less: Preferred stock dividends ( 2) --- --- Basic EPS ( 41) 125.6 ($ .33) 17 125.7 $ .14 Potentially dilutive securities: Stock options Assumed preferred stock conversion ---- ----- --- ----- Diluted EPS ($41) 125.6 ($ .33) $17 125.7 $ .14 === ===== === =====
Excluded from the computation of diluted earnings per share for the six months ended June 30, 2000 were approximately 2.3 million common share equivalents resulting from the assumed conversion of weighted average outstanding preferred stock. This conversion would have been anti-dilutive. Common shares contingently issueable upon the exercise of stock options, amounting to 11.7 million and 7.8 million shares for the quarters ended June 30, 2001 and 2000, and 9.2 million and 7.9 million shares for the six months ended June 30, 2001 and 2000, respectively, were excluded from the computation of diluted earnings per share because the grant prices of the then outstanding options were above the average market price for the related periods. H. Supplemental Cash Flow Information ---------------------------------- Cash payments, including prepayments, for interest, net of amounts capitalized, were $260 and $186 during the six months ended June 30, 2001 and 2000, respectively. Cash payments for income taxes amounted to $28 and $27 during the six months ended June 30, 2001 and 2000, respectively. 10 Crown Cork & Seal Company, Inc. I. Segment Information ------------------- The Company maintains three operating segments, defined geographically: Americas, Europe and Asia-Pacific. Each reportable segment is an operating division within the Company and has a President reporting directly to the Chief Executive Officer. "Corporate" includes Corporate Technology and headquarters' costs. Divisional headquarter costs are maintained within the operating segments. The interim segment information is as follows:
Quarter ended June 30, ---------------------- 2001 Americas Europe Asia-Pacific Corporate Total ---- -------- ------ ------------ --------- ----- External sales $ 982 $ 814 $ 82 $1,878 Restructuring and asset impairments 3 3 Segment income 54 94 6 ($ 16) 138 2000 ---- External sales 1,007 847 81 1,935 Restructuring and asset impairments 10 47 20 77 Segment income 76 57 6 ( 36) 103 Six months ended June 30, ------------------------- 2001 Americas Europe Asia-Pacific Corporate Total ---- -------- ------ ------------ --------- ----- External sales $1,825 $1,555 $156 $3,536 Restructuring and asset impairments 7 ( 2) 5 Segment income 65 156 11 ($ 43) 189 2000 ---- External sales 1,867 1,615 152 3,634 Restructuring and asset impairments 10 47 20 77 Segment income 151 133 12 ( 59) 237
The following table reconciles the Company's segment income to consolidated pre-tax income / (loss):
Second Quarter Ended Six Months Ended June 30, June 30, 2001 2000 2001 2000 -------------------- ------------------- Total segment income $138 $103 $189 $237 Interest expense 120 97 235 189 Interest income ( 5) ( 6) ( 11) ( 10) Gain on sale of assets ( 1) ( 1) Translation and exchange adjustments 3 2 6 2 ---- ---- ---- ---- Consolidated pre-tax income / (loss) $ 21 $ 10 ($ 40) $ 56 ==== ==== ==== ====
11 Crown Cork & Seal Company, Inc. J. Commitments and Contingent Liabilities -------------------------------------- The Company has various commitments to purchase materials and supplies as part of the ordinary conduct of business. Such commitments are not at prices in excess of current market. The Company's basic raw materials for its products are tinplate, aluminum and resins, all of which are purchased from multiple sources. The Company is subject to material fluctuations in the cost of these raw materials and has periodically adjusted its selling prices to reflect these movements. There can be no assurance, however, that the Company will be able to fully recover any increases or fluctuations in raw material costs from its customers. The Company is one of over 100 defendants in a substantial number of lawsuits filed by persons alleging bodily injury as a result of exposure to asbestos. This litigation arose from the insulation operations of a U.S. company, the majority of whose stock the Company purchased in 1963. Within approximately three months of this stock purchase, this U.S. company sold its insulation operations. The accrual recorded for asbestos claims constitutes management's best estimate of such costs for pending and future claims that are probable and estimable. The Company cautions, however, that this estimate may be influenced by changes in the litigation environment and other factors which may vary as claims are filed and settled or otherwise disposed of. Accordingly, these matters, if resolved in a manner different from the estimate, could have a material effect on the operating results or cash flows in future periods. While it is not possible to predict with certainty the ultimate outcome of these lawsuits and contingencies, the Company believes, after consultation with counsel, that resolution of these matters is not expected to have a material adverse effect on the Company's financial position. The Company is also subject to various lawsuits and claims with respect to matters such as governmental and environmental regulations and other actions arising out of the normal course of business. While the impact on future financial results is not subject to reasonable estimation because considerable uncertainty exists, management believes, after consulting with counsel, that the ultimate liabilities resulting from such lawsuits and claims will not materially affect the consolidated results, liquidity or financial position of the Company. K. Recent Accounting Pronouncements -------------------------------- During July 2001, the FASB issued SFAS No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 supercedes APB Opinion No. 16, Business Combinations. This standard modifies the method of accounting for business combinations entered into after June 30, 2001 and addresses the accounting for intangible assets. All business combinations entered into after June 30, 2001, are accounted for using the purchase method. SFAS No. 142, which supercedes APB Opinion No. 17, Intangible Assets, eliminates the current requirement to amortize goodwill and indefinite-lived intangible assets, addresses the amortization of intangible assets with a defined life, and addresses the impairment testing and recognition for goodwill and intangible assets. The Company will adopt this standard on January 1, 2002. This standard applies to goodwill and intangible assets arising from transactions completed before and after the date of adoption. Effective January 1, 2002, the Company will cease amortization of goodwill and indefinite-lived intangibles and test for impairment, at least, annually. Management is currently assessing the provisions of both standards and their potential impact on the Company's consolidated results of operations and financial position. 12 Crown Cork & Seal Company, Inc. PART I - FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (in millions, except share and employee data) Introduction ------------ The following discussion presents management's analysis of the results of operations for the three months ended June 30, 2001, compared to the corresponding period in 2000 and the changes in financial condition and liquidity from December 31, 2000. This discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2000, along with the consolidated financial statements and related notes included in and referred to within this report. Results of Operations --------------------- Net Income and Earnings Per Share --------------------------------- Net income for the quarter ended June 30, 2001 was $5 or $.04 per share versus a loss of $4 or $.03 per share for the second quarter of 2000. The results for 2001 included an after-tax charge of $2 ($.01 per share) for restructuring and asset impairment costs, as described later in this discussion, and a net after-tax gain below $1 on asset disposals. The results for 2000 included after-tax charges of $36 ($.28 per share) for restructuring costs and $19 ($.15 per share) for asset impairments, as described later in this discussion, and $13 ($.10 per share) for a bad debt provision for a U.S. food can customer. Excluding the charges noted above, earnings per share in the second quarter of 2001 were $.05 versus $.50 in the prior year period. The decrease is due primarily to lower beverage can pricing in North America, reduced U.S. food can volumes, reduced profits in the Company's U.K. operations, lower pension income and increased net interest expense. For the six months ended June 30, 2001, net income declined by $58 or $.47 per share to a loss of $41 or $.33 per share from net income of $17 or $.04 per share for the same period in 2000. Included in the results for 2001 was a gain of $4 or $.03 per share for the cumulative effect of a change in accounting for derivatives and hedging activities. Excluding the non-recurring items referred to for the second quarters of 2001 and 2000, as well as the cumulative effect of the change in accounting in 2001, the net loss for 2001 was $40 or $.32 per share as compared to net income of $85 or $.68 per share for the same period in 2000. The decrease in earnings from 2000 for the six months is due primarily to the same factors outlined above for the second quarter of 2001. Net Sales --------- Net sales in the second quarter of $1,878 were $57 or 2.9% below the prior year period. Excluding the effect of foreign currency translation of $65, net sales would have increased $8 compared to the second quarter of 2000. Net sales for the six months ended June 30, 2001 decreased $98 or 2.7% compared to the same period in 2000. The impact of foreign currency translation on net sales for the six months of 2001, when compared to 2000, was $132. Excluding the effect of translation, net sales for 2001 increased $34 or .9% above the 2000 level of $3,634. Sales from U.S. operations accounted for approximately 41% and 42% of consolidated net sales in the second quarter of 2001 and 2000, respectively. Sales of beverage cans and ends accounted for approximately 35% and sales of food cans and ends accounted for approximately 27% of consolidated sales in the second quarter of 2001, as compared to 33% and 28%, respectively, for the same period in 2000. 13 Crown Cork & Seal Company, Inc. Item 2. Management's Discussion and Analysis (Continued) An analysis of comparative net sales by operating division follows:
Net Sales Percentage Change ---------------------------------------------- ---------------------- Second Quarter Six Months Ended Second Six 2001 2000 2001 2000 Quarter Months ---- ---- ---- ---- ------- ------ Divisions: Americas $ 982 $1,007 $1,825 $1,867 (2.5%) (2.2%) Europe 814 847 1,555 1,615 (3.9%) (3.7%) Asia-Pacific 82 81 156 152 1.2% 2.6% ------ ------ ------ ------ $1,878 $1,935 $3,536 $3,634 (2.9%) (2.7%) ====== ====== ====== ======
The decrease in 2001 Americas Division net sales in the second quarter was primarily due to (i) lower selling prices for beverage cans and (ii) a 9.6% decrease in food can volumes in North America due to a soft market and the bankruptcy filing by a large customer in the second quarter of 2000. These decreases were partially offset by (i) a 5.6% sales unit volume increase of beverage cans and (ii) increased sales unit volumes of plastic beverage and specialty closures, PET preforms and bottles and across several health and beauty product lines. Net sales in the European Division, excluding $55 of unfavorable currency translation, increased $22 or 2.6% in the second quarter versus the prior year period, primarily due to sales unit volume increases of (i) beverage cans across Southern Europe, (ii) food cans in Greece, West Africa and the U.K., (iii) aerosol cans, PET preforms and bottles on a division-wide basis and (iv) the entire line of health and beauty products. These volume increases were partially offset by lower beverage can unit volumes in the U.K. and the Middle East and food can unit volumes in France. Net sales in the Asia-Pacific Division increased to $82 as compared to $81 in the second quarter of 2000. Excluding losses of $5 due to currency translation, sales increased $6, primarily due to increased beverage can unit volumes in Malaysia and Singapore. Overcapacity in the Chinese beverage can market continues to put pressure on selling prices. Selling and Administrative -------------------------- Selling and administrative expenses were $70 for the second quarter of 2001 as compared to $78 for the same period of the prior year. The decrease in 2001 was due to lower headcounts and foreign currency translation. Restructuring and Asset Impairments ----------------------------------- During the second quarter of 2001, the Company provided $3 for severance costs to close a plant in the U.K. and to reduce headcount in three plants in Africa, resulting in the termination of 130 employees. The Company anticipates that these actions will generate after-tax savings of approximately $2 ($.02 per share) on an annualized basis when fully implemented. Also during the second quarter of 2001, the Company recorded a restructuring credit of $4 for the reversal of severance costs related to a restructuring charge provided during the second quarter of 2000. The Company decided not to pursue certain restructuring activities in its European operations that had been previously approved. During the second quarter of 2001, the company provided $4 to write-down certain property, plant and equipment in the U.S. and Europe whose value was considered to be impaired. These restructuring and asset impairment items resulted in a combined charge of $3 ($2 net of tax or $.01 per share) during the second quarter of 2001. 14 Crown Cork & Seal Company, Inc. Item 2. Management's Discussion and Analysis (Continued) During the second quarter of 2000, the Company provided $51 ($36 after-tax or $.28 per share) for the costs associated with structure modifications in Europe and the closure of three Americas Division plants and $26 ($19 after-tax or $.15 per share) for asset impairments. Additional details about the restructuring and asset impairment activity are provided in Notes E and F to the Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q. Operating Income ---------------- Consolidated operating income was $138 as compared to $103 in the second quarter of 2000. Excluding restructuring and asset impairment charges, operating income in 2001 decreased to $141 from $180 in the second quarter of 2000. Excluding restructuring and asset impairment charges, operating income as a percentage to net sales was 7.5% in 2001 versus 9.3% in 2000. An analysis of operating income by division follows:
Operating Income ---------------- (excluding restructuring and asset impairments) Percentage Change --------------------------------------------- ----------------- Second Quarter Six Months Ended Second Six 2001 2000 2001 2000 Quarter Months ---- ---- ---- ---- ------- ------ Divisions: Americas $ 57 $ 86 $ 72 $161 (33.7%) (55.3%) Europe 94 104 154 180 ( 9.6%) (14.4%) Asia-Pacific 6 6 11 12 ( 8.3%) Corporate ( 16) ( 16) ( 43) ( 39) (10.3%) ---- ---- ---- ---- $141 $180 $194 $314 (21.7%) (38.2%) ==== ==== ==== ====
Americas Division operating income, excluding restructuring and asset impairment charges, was 5.8% of net sales in the second quarter of 2001 as compared to 8.5% for the same period of 2000. Excluding the bad debt provision of $20, second quarter 2000 operating income was 10.5% of net sales. The decrease in operating income in 2001 was primarily due to (i) lower selling prices in the North American beverage can market, (ii) reduced U.S. food can volumes, (iii) lower pension income in the U.S. and (iv) higher energy costs. European Division operating income, excluding restructuring and asset impairments, as a percentage of net sales was 11.5% in the second quarter of 2001 as compared to 12.3% in 2000. The decrease in 2001 operating margins was due to (i) cost/price pressure across many operations and (ii) pressure on U.K. selling prices due to the relative weakness of the euro; partially offset by sales unit volume increases across most product lines. Asia-Pacific Division operating income of $6 in the second quarter was unchanged from the same period in 2000 as improvements in the Southeast Asian beverage can operations were offset by reduced profits in the Chinese beverage can operations. As a percentage of net sales, Asia-Pacific operating income in the second quarter of 2001 was 7.3% as compared to 7.4% for the same period in 2000. 15 Crown Cork & Seal Company, Inc. Item 2. Management's Discussion and Analysis (Continued) Net Interest Expense -------------------- Net interest expense increased $24 in the second quarter of 2001 as compared to 2000, primarily due to increased borrowing rates and higher average debt outstanding. During the third and fourth quarters of 2000, the Company's ability to access the commercial paper market was eliminated due to downgrades in its credit ratings. Since that time the Company has funded its operations through its multicurrency credit facility and a new term loan which have higher borrowing rates as compared to commercial paper. The multicurrency credit facility, which was renegotiated in March of 2001, and the new term loan are discussed more fully under Liquidity and Capital Resources. Translation and Exchange Adjustments ------------------------------------ The results for the second quarter of 2001 included losses of $2 and $1 in Turkey and Brazil, respectively, in connection with currency devaluations as compared to a loss of $2 in Brazil for the second quarter of 2000. Taxes on Income --------------- The effective tax rate for the second quarter of 2001, excluding non-deductible goodwill amortization of $28, was approximately 29%. The effective tax rate for the same period of 2000, excluding goodwill amortization of $30, was 20%. The lower rate in 2000 was primarily due to (i) the tax impact of the 2000 restructuring program and (ii) the reduction of a previously established valuation allowance of $4 for net operating loss carryforwards in Mexico. Minority Interests, Net of Equity Earnings ------------------------------------------ The charge for minority interests, net of equity earnings, was $4 less in the second quarter of 2001 versus the same period in 2000. The reduction in the charge was primarily due to the third quarter 2000 purchase of the minority interests in the Company's Asia Limited subsidiaries. Liquidity and Capital Resources ------------------------------- Cash from Operations -------------------- Cash of $245 was used by operations in the first six months of 2001 versus $65 over the same period in 2000. The increase was due to reduced operating income and increased interest payments, including prepayments made in connection with the Company's amended and restated multicurrency credit facility and new term loan. These items were partially offset by an improvement in working capital. Investing Activities -------------------- Investing activities used cash of $97 in the first six months of 2001 compared to $99 in the prior year period. The slight improvement in investing activities is a result of reduced capital spending, offset by lower proceeds from asset sales and an increase in other investing activities. The company is reviewing various strategic alternatives, which could include the sale of assets. The timing of any such sales, the proceeds to be received, and any gain or loss on disposal cannot be determined at this time. Net proceeds received from such dispositions will be used to reduce outstanding debt pursuant to the terms of the Company's multicurrency revolving credit facility, which is referenced below. 16 Crown Cork & Seal Company, Inc. Item 2. Management's Discussion and Analysis (Continued) Financing Activities -------------------- Financing activities provided cash of $284 in the first half of 2001, an increase of $134 over the prior year period. Increased borrowings were required due to lower operating cash flow, partially offset by the suspension of dividend payments and stock repurchases. On March 2, 2001 the company amended and restated its $2,500 multicurrency revolving credit facility and obtained a new $400 term loan. The amended and restated credit facility bears interest at LIBOR plus 2.5% and the maturity date has been extended to December 8, 2003. The term loan bears interest at LIBOR plus 3.5% and matures February 4, 2002. Total debt, net of cash and cash equivalents, was $5,322 at June 30, 2001, an increase above the December 31, 2000 level of $4,967. Total debt, net of cash equivalents, as a percentage to total capitalization was 72.2% at June 30, 2001 as compared to 68.3% at December 31, 2000. Total capitalization is defined as total debt, minority interests and shareholders' equity. The increase in total debt, net of cash and cash equivalents, from December 31, 2000 is primarily due to the funding of the seasonal working capital buildup. The increase in total debt as a percentage of total capitalization was also affected by a reduction in shareholder's equity, due to negative currency translation adjustments in the first half of 2001. See the section entitled "Liquidity and Capital Resources" in Part II, Item 7: "Management's Discussion and Analysis of Financial Condition and Results of Operations" within the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 for additional information regarding the Company's indebtedness and financial position. On March 13, 2001, Standard and Poor's lowered the Company's senior implied rating to BB- from BB and senior unsecured debt rating to B from BB. On April 17, 2001 Moody's lowered the Company's senior implied ratings to B3 from B2 and unsecured ratings to Caa3 from B2. Both agencies assigned a negative outlook. Forward Looking Statements -------------------------- Statements included herein in "Management's Discussion and Analysis of Financial Condition and Results of Operations", including, but not limited to, in the "Restructuring and Asset Impairments" and "Investing Activities" sections, and in the discussion of the asbestos matters in Note J to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and also in Part I, Item 1: "Business" and Item 3: "Legal Proceedings" and in Part II, Item 7: "Management's Discussion and Analysis of Financial Condition and Results of Operations", within the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, which are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto), are "forward-looking statements" within the meaning of the federal securities laws. In addition, the Company and its representatives may from time to time make other oral or written statements which are also "forward-looking statements". These forward-looking statements are made based upon management's expectations and beliefs concerning future events impacting the Company and therefore involve a number of risks and uncertainties. Management cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. 17 Crown Cork & Seal Company, Inc. Item 2. Management's Discussion and Analysis (Continued) While the Company periodically reassesses material trends and uncertainties affecting the Company's results of operations and financial condition in connection with the preparation of "Management's Discussion and Analysis of Financial Condition and Results of Operations" and certain other sections contained in the Company's quarterly, annual or other reports filed with the Securities and Exchange Commission ("SEC"), the Company does not intend to review or revise any particular forward-looking statement in light of future events. A discussion of important factors that could cause the actual results of operations or financial condition of the Company to differ from expectations has been set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2000 within Part II, Item 7; "Management's Discussion and Analysis of Financial Condition and Results of Operations" under the caption "Forward Looking Statements" and is incorporated herein by reference. Some of the factors are also discussed elsewhere in this Form 10-Q and in prior Company filings with the SEC. In addition, other factors have been or may be discussed from time to time in the Company's SEC filings. Item 3. Quantitative and Qualitative Disclosures About Market Risk As of June 30, 2001 there have been no material changes in the Company's market risk exposure as described in Management's Discussion and Analysis contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. 18 Crown Cork & Seal Company, Inc. PART II - OTHER INFORMATION Item 4. Submission of Matters to Vote of Security Holders The Company's Annual Meeting of Shareholders was held on April 26, 2001. The matters voted upon and the results thereof are set forth in Part II, Item 4 of the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001 and such Item 4 is incorporated herein by reference. Item 5. Other Information On July 26, 2001, the Company announced that Hans J. Loliger, Vice Chairman of Winter Group, Basel, Switzerland was elected to its Board of Directors. This addition has increased the number of directors to ten. Item 6. Exhibits and Reports on Form 8-K a) Exhibits 10.a. Receivables Purchase Agreement dated as of January 26, 2001, as amended and restated as of May 7, 2001, among Crown Cork & Seal Receivables (DE) Corporation, as Seller, Crown Cork & Seal Company (USA), Inc., as Servicer, the banks and other financial institutions party thereto, as Purchasers, and Citibank, N. A., as the Agent. 10.b. Receivables Contribution and Sale Agreement dated as of January 26, 2001, as amended and restated as of May 7, 2001, among Crown Cork & Seal Company (USA), Inc., Constar, Inc., Risdon-AMS(USA), Inc., Zeller Plastiks, Inc., and Crown Cork & Seal Canada, Inc., as Sellers, Crown Cork & Seal Receivables (DE) Corporation, as Buyer, and Crown Cork & Seal Company (USA), Inc., as the Buyer's Servicer. 10.c. Undertaking Agreement dated as of January 26, 2001, as amended and restated as of May 7, 2001, made by Crown Cork & Seal Company. Inc., as the Parent, in favor of the Purchasers referred to therein and Citibank, N. A., as Agent. b) Reports on Form 8-K There were no reports on Form 8-K filed by Crown Cork & Seal Company, Inc., during the quarter for which this report is filed. 19 Crown Cork & Seal Company, Inc. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Crown Cork & Seal Company, Inc. Registrant By: /s/ Thomas A. Kelly --------------------------------------- Thomas A. Kelly Vice President and Corporate Controller Date: August 9, 2001 -------------- 20 EX-10 3 ex10a-purchagree.txt RECEIVABLES PURCHASE AGREEMENT RECEIVABLES PURCHASE AGREEMENT RECEIVABLES PURCHASE AGREEMENT dated as of January 26, 2001, as amended and restated as of May 7, 2001 (this "Agreement") among CROWN CORK & SEAL RECEIVABLES (DE) CORPORATION, a Delaware corporation (the "Seller"), CROWN CORK & SEAL COMPANY (USA), INC., a Delaware corporation ("Crown (USA)"), as the initial Servicer (as hereinafter defined), the banks and other financial institutions listed on the signature pages hereof as the Initial Purchasers (the "Initial Purchasers") and CITIBANK, N.A., a national banking association ("Citibank"), as administrative agent (the "Agent") for the Purchasers and the other Owners (as hereinafter defined). PRELIMINARY STATEMENTS: (1) The parties hereto have entered into a Receivables Purchase Agreement dated as of January 26, 2001 (such Receivables Purchase Agreement being the "Existing Receivables Purchase Agreement"). (2) The parties hereto have agreed to amend and restate the Existing Receivable Purchase Agreement for the purpose of, among other things, including Crown Cork & Seal Canada Inc., a corporation organized and existing under the laws of Ontario, Canada, as an Originator and providing for the Receivables to include Canadian Dollar denominated Receivables of Crown Cork & Seal Canada Inc. (3) Certain terms which are capitalized and used throughout this Agreement (in addition to those defined above) are defined in Article I of this Agreement. (4) The Seller will from time to time purchase or otherwise acquire from the Originators Pool Receivables in which the Seller intends to sell interests referred to herein as Receivable Interests. (5) The Purchasers may at any time and from time to time purchase Receivable Interests from the Seller. (6) In consideration of the reinvestment in Pool Receivables of daily Collections (other than with regard to accrued Yield and Servicer Fee) attributable to a Receivable Interest, the Seller will sell to each Owner of such Receivable Interest additional interests in the Pool Receivables as part of such Receivable Interest until such reinvestment is terminated. (7) Crown (USA) has been requested and is willing to act as the initial Servicer. (8) Citibank has been requested and is willing to act as the Agent. NOW, THEREFORE, in consideration of the premises, the parties hereto agree that, effective as of the Effective Date, the Existing Receivables Purchase Agreement is amended and restated as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. ----------------------------------- As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Advance Billings" means, in respect of any Obligor, the aggregate amount invoiced for the sale of goods by any Originator to such Obligor before delivery of such goods. "Adverse Claim" means a lien, security interest or other charge or encumbrance, or other type of preferential arrangement. "Affiliate" means as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by or is under common control with such Person. "Affiliated Obligor" means any Obligor which is an Affiliate of another Obligor. "Agent's Account" means the deposit account of the Agent (account number 38858061, ABA 02100089, Reference: Crown) maintained with Citibank at its office at 399 Park Avenue, New York, New York 10043, Attention: Anne Marie Povco, or such other account as the Agent shall specify in writing to the Seller, the Servicer and the Purchasers. "Applicable Margin" means, for the Base Rate, 1.50% per annum and, for the Eurodollar Rate, 3.00% per annum. "Applicable Reserve" means, for any Receivable Interest at any date, an amount equal to (NRPB x RP) where: NRPB = the Net Receivables Pool Balance at the close of business of the Servicer on such date. RP = the Reserve Percentage at the close of business of the Servicer on such date. "Assignee" means (i) in the case of any assignment of any Receivable Interest or portion thereof pursuant to Section 9.01, Citibank or any Purchaser or any of their respective Affiliates as the assignee of such Receivable Interest or such portion and (ii) in the case of any assignment of any rights and obligations pursuant to Section 9.03, any Eligible Assignee as the assignee of such rights and obligations. 2 "Assignment" means an assignment, in substantially the form of Exhibit A hereto, by which a Receivable Interest may be assigned pursuant to Section 9.01. "Assignment and Acceptance" means an assignment and acceptance, in substantially the form of Exhibit B hereto, entered into by any Purchaser and an Assignee pursuant to Section 9.03. "Base Rate" means a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall at all times be equal to the rate of interest announced publicly by Citibank in New York, New York, from time to time as Citibank's base rate. "Business Day" means any day (other than a Saturday or Sunday) on which (i) banks are not authorized or required to close in New York, New York or Philadelphia, Pennsylvania and (ii) if the term "Business Day" is used in connection with the Eurodollar Rate, dealings in United States dollars are carried on in the London interbank market. "Canadian Dollars" means the lawful currency of Canada. "Canadian Originator" means Crown Cork & Seal Canada Inc., a corporation organized and existing under the laws of Ontario, Canada. "Canadian Receivable" means each Receivable which is denominated in Canadian Dollars and which was originated by the Canadian Originator. "Capital" means, in respect of any Receivable Interest, the original amount paid to the Seller for such Receivable Interest at the time of its acquisition by the Purchasers pursuant to Sections 2.01 and 2.02, reduced from time to time by Collections received and distributed on account of such Capital pursuant to Section 2.05 or 2.06; provided, however, that if such Capital of such Receivable Interest shall have been reduced by any distribution of any portion of Collections and thereafter such distribution is rescinded or must otherwise be returned for any reason, such Capital of such Receivable Interest shall be increased by the amount of such distribution, all as though such distribution had not been made. "Certificate" means a certificate of assignment dated as of January 26, 2001 as amended and restated as of the Effective Date, by the Seller to the Agent on behalf of the Owners, in the form of Exhibit C hereto, evidencing each Receivable Interest of the Owners. 3 "Change of Control" means the occurrence of any of the following: (a) any Person or two or more Persons acting in concert, other than a trustee or other fiduciary holding securities under an employee benefit plan of the Parent or a corporation owned, directly or indirectly, by the Parent or by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent (e.g., a holding company reorganization), shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of the Parent (or other securities convertible into such Voting Interests of the Parent (or other securities convertible into such Voting Interests) representing 50% or more of the combined voting power of all Voting Interests of the Parent; or (b) any Person or two or more Persons acting in concert shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of the power to exercise, directly or indirectly, a controlling influence over the management or policies of the Parent; or (c) the Parent, or a corporation owned, directly or indirectly, by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent, shall cease to own, directly or indirectly, 100% of the Equity Interests in Crown (USA) or any other Originator unless, in the case of such other Originator, such Originator is, upon at least five Business Days' prior written notice to the Agent, sold by the Parent and thereupon ceases to be an Originator hereunder without causing an Event of Termination or a Potential Event of Termination to occur. "Citibank" has the meaning assigned to that term in the recital of parties hereto. "Citibank Rate" means, for any Settlement Period for any Receivable Interest, an interest rate per annum equal, at the Seller's election upon written notice to the Agent, given not later than 11:00 A.M. (New York City time) on the third Business Day (in the case of the Citibank Rate computed by reference to the Eurodollar Rate) or the Business Day (in the case of the Citibank Rate computed by reference to the Base Rate) prior to the first day of such Settlement Period, to (a) in the case of the Citibank Rate computed by reference to the Eurodollar Rate, the sum of (i) the Eurodollar Rate for such Settlement Period plus (ii) the Applicable Margin for the Eurodollar Rate, and (b) in the case of the Citibank Rate computed by reference to the Base Rate, the sum of (i) the Base Rate in effect from time to time plus (ii) the Applicable Margin for the Base Rate (or, if no such notice is given, the sum of the Base Rate in effect from time to time plus the Applicable Margin for the Base Rate); provided, however, that: (i) in the case of any such Settlement Period of one to and including 21 days, the "Citibank Rate" for such Settlement Period for such Receivable Interest shall be an interest rate per annum equal to the sum of the Base Rate in effect from time to time plus the Applicable Margin for the Base Rate; (ii) if either (A) the introduction of or any change after the date hereof in or in the interpretation of any law or regulation shall make it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for any Owner of such Receivable Interest to obtain funds in the London interbank market during such Settlement Period, or (B) Citibank is unable for any reason to establish its Eurodollar Rate for such Settlement Period, or (C) the Eurodollar Rate will not adequately reflect the cost to the Required Purchasers of making a Purchase of or maintaining such Receivable Interest during such Settlement Period, then the "Citibank Rate" for such Settlement Period for such Receivable Interest shall be an interest rate per annum equal to the sum of the Base Rate in effect from time to time plus the Applicable Margin for the Base Rate; provided, however, that the Agent (with the consent or at the request of the Purchasers) and the Seller may agree in writing from time to time upon a different "Citibank Rate"; and 4 (iii) upon the occurrence and during the continuance of an Event of Termination, the "Citibank Rate" shall be the sum of applicable interest rate per annum determined pursuant to the provisions set forth above plus 2.00% per annum. "Closing Date" means the date of the initial Purchase hereunder. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collections" means, with respect to any Pool Receivable, all cash collections and other cash proceeds of such Pool Receivable, including, without limitation, (i) all cash proceeds of the Related Security with respect to such Pool Receivable and (ii) any Collections of such Pool Receivable deemed to have been received, and actually paid, pursuant to Section 2.07. "Commitment" means (i) in respect of each Initial Purchaser, the amount set forth as the "Commitment" under the name of such Initial Purchaser on the signature pages hereto and (ii) in respect of each Purchaser that became a Purchaser by entering into an Assignment and Acceptance, the amount set forth as the "Commitment" for such Purchaser in the Register maintained by the Agent pursuant to Section 9.03(c), in the case of clauses (i) and (ii) as such amount may be reduced from time to time as the result of any assignment of any Commitment or any portion thereof pursuant to Section 9.03 or may be reduced from time to time pursuant to Section 2.03. "Commitment Fee" has the meaning specified in Section 2.09. "Commitment Termination Date" means the earlier of (i) December 8, 2003 and (ii) the date of termination in whole of the aggregate Commitments pursuant to Section 2.03 or 7.01. "Concentration Limit" for any Obligor means (i) so long as such Obligor's long-term senior unsecured and unguaranteed debt securities shall be rated at least B by S&P and B2 by Moody's, $25,000,000 or the Equivalent in Canadian Dollars in the case of any Obligor of a Canadian Receivable, and (ii) so long as such Obligor's long-term senior unsecured and unguaranteed debt securities shall not be rated at least B by S&P and B2 by Moody's, $15,000,000 or the Equivalent in Canadian Dollars in the case of any Obligor of a Canadian Receivable; provided, however, that in the case of an Obligor with any Affiliated Obligor, the Concentration Limit shall be calculated as if such Obligor and such Affiliated Obligor are one Obligor. "Consent and Agreement" means a consent and agreement dated January 26, 2001, as amended and restated as of the date hereof, in substantially the form of Exhibit G hereto, with respect to the Receivables Contribution and Sale Agreement, duly executed by the Seller and each Originator. 5 "Contract" means an agreement between any Originator and an Obligor in any written form acceptable to such Originator, or in the case of any open account agreement as evidenced by one of the forms of invoices set forth in Schedule IV hereto or otherwise approved by the Agent from time to time (which approval shall not be unreasonably withheld), pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time. "Corporate Allowances" means, in respect of any Obligor, the aggregate amount of corporate allowances owed by any Originator or the Seller to such Obligor with respect to Receivables of such Obligor. "Credit and Collection Policy" means those credit and collection policies and practices in effect on the date hereof relating to Contracts and Receivables and described in Schedule II hereto, as modified from time to time in compliance with Section 5.03(c). "Credits In Past Due" means, in respect of any Obligor, the aggregate amount of credits that shall have been given by any Originator or the Seller in favor of such Obligor in respect of Defaulted Receivables of such Obligor. "Currency Reserve" means 1.5, times (i) the highest percentage change from the first day of one month to the first day of the next month for the preceding 12 month period in the quoted spot rate at which the Agent's principal office in New York City offers to exchange Canadian Dollars for US Dollars in New York City prior to 4:00 P.M. (New York City time) on such day, multiplied by (ii) the Equivalent in US Dollars of the aggregate principal amount of all Canadian Receivables as set forth in the most recent Seller Report. "Daily Report" means a report, in substantially the form of Exhibit D-3 hereto, furnished by the Servicer to the Agent for the Owners pursuant to Section 2.07. "Daily Settlement Date" means, for each Settlement Period for each Receivable Interest, each Business Day during such Settlement Period on which the Servicer shall be required to set aside and hold in trust for the Owner of each Receivable Interest any amount of Collections of Pool Receivables pursuant to clause (i)(B) of Section 2.05(a). "Debt" means (i) indebtedness for borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations to pay the deferred purchase price of property or services other than accounts payable arising in the ordinary course of business that are not outstanding for more than 60 days after first becoming due, (iv) obligations as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, and (v) obligations under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above. 6 "Defaulted Receivable" means a Receivable: (i) as to which any payment, or part thereof, remains unpaid for 61 days or more from the original due date for such payment; (ii) as to which the Obligor thereof or any other Person obligated thereon or owning any Related Security in respect thereof has taken any action, or suffered any event to occur, of the type described in Section 7.01(g); or (iii) which, consistent with the Credit and Collection Policy, should be written off the Seller's or any Originator's books as uncollectible. "Designated Obligor" means, at any time, each Obligor; provided, however, that any Obligor shall cease to be a Designated Obligor upon three Business Days' notice by the Agent to the Seller given in accordance with the Agent's then current credit guidelines and with the consent or at the request of the Required Purchasers. "Effective Date" means the date on which the conditions precedent set forth in Section 3.03 are satisfied. "Eligible Assignee" means (i) each Initial Purchaser or any of its Affiliates, and (ii) any commercial bank, finance company, insurance company or other financial institution or any other Person, in each case approved by the Agent and the Seller (which approval shall not be unreasonably withheld or delayed); provided, however, that neither an Originator nor the Seller nor any of their respective Affiliates may be an Eligible Assignee. "Eligible Receivable" means, at any time and with respect to any Receivable Interest, only such Receivables of the Seller as the Agent, in accordance with its then current credit guidelines, shall from time to time elect to consider Eligible Receivables for purposes of this Agreement, it being understood and agreed by the parties hereto that, none of the following Receivables shall be Eligible Receivables: (i) Any Receivable the Obligor of which is an Affiliate of any of the parties hereto; (ii) Any Receivable the Obligor of which at the time of the initial creation of any interest therein hereunder is not a Designated Obligor; (iii) Any Receivable the Obligor of which at the time of the initial creation of an interest therein hereunder is the Obligor of any Defaulted Receivables in the aggregate amount of more than 50% of the aggregate Outstanding Balance of all Pool Receivables of such Obligor; (iv) Any Receivable which at the time of the initial creation of an interest therein hereunder is a Defaulted Receivable; (v) Any Receivable (other than a Canadian Receivable) the Obligor of which is not a United States resident, or any Canadian Receivable the Obligor of which is not a Canadian resident; 7 (vi) Any Receivable, other than a Pre-Season Deferred Receivable, that is not required to be paid in full within 150 days of the original invoice date therefor; (vii) Any Pre-Season Deferred Receivable that at the time of determination is not required to be paid in full within 150 days after such time; (viii) Any Receivable that does not arise from the sale by any Originator of inventory in the ordinary course of business; or (ix) Any Receivable denominated in a currency other than US Dollars or, in the case of Canadian Receivables only, Canadian Dollars. "Equity Interest" means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination. "Equivalent" in US Dollars of Canadian Dollars on any date means the equivalent in US Dollars of Canadian Dollars determined using the quoted spot rate at which the Agent's principal office in New York City offers to exchange US Dollars for Canadian Dollars in New York City prior to 4:00 p.m. (New York City time) on such date, and the "Equivalent" in Canadian Dollars of US Dollars on any date means the equivalent in Canadian Dollars of US Dollars determined using the quoted spot rate at which the Agent's principal office in New York City offers to exchange Canadian Dollars for US Dollars in New York City prior to 4:00 p.m. (New York City time) or such date. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. "ERISA Affiliate" means any Person that for purposes of Title IV of ERISA is a member of the Seller's controlled group, or under common control with the Seller, within the meaning of Section 414 of the Code. "Eurodollar Rate" means, for any Settlement Period, an interest rate per annum equal to the rate per annum obtained by dividing (i) the rate per annum at which deposits in U.S. dollars are offered by the principal office of Citibank in London, England to prime banks in the London interbank market at 11:00 A.M. (London time) two Business Days before the first day of such Settlement Period in an amount substantially equal to the Capital associated with such Settlement Period for a period equal to such Settlement Period by (ii) a percentage equal to 100% minus Citibank's Eurodollar Reserve Percentage (as defined below) for such Settlement Period. Citibank's "Eurodollar Reserve Percentage" for any Settlement Period means the reserve percentage applicable during such Settlement Period under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or, if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Settlement Period during which any such percentage shall be so applicable) for determining the maximum reserve requirement (including, but not limited to, any emergency, supplemental or other marginal reserve requirement) for Citibank in respect of liabilities or assets consisting of or including eurocurrency liabilities (as that term is defined in Regulation D of the Board of Governors of the Federal Reserve System as in effect from time to time) having a term equal to such Settlement Period. 8 "Events of Termination" has the meaning specified in Section 7.01. "Existing Credit Facilities" means the facilities made available under the Credit Agreement dated as of February 4, 1997 as amended and restated as of March 1, 2001 among the Parent, certain subsidiaries of the Parent party thereto, The Chase Manhattan Bank, a New York banking corporation, as administrative and collateral agents, and the banks and other financial institutions from time to time party thereto. "Existing Receivables Purchase Agreement" has the meaning specified in Preliminary Statement (1) of this Agreement. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day for such transactions received by the Agent from three Federal funds brokers of recognized standing selected by it. "Fee Letter" means the fee letter agreement dated January 3, 2001 among the Parent, Citibank and Salomon Smith Barney Inc., as the same may from time to time be amended, supplemented or otherwise modified. "GAAP" means generally accepted accounting principles in the United States consistently applied, in effect from time to time. "Indemnified Amounts" has the meaning specified in Section 10.01. "Indemnified Party" means any or all of the Purchasers, the Assignees and the Agent and their respective Affiliates and successors and assigns and their respective officers, directors, managers, managing members, partners and employees. "Initial Capital" means, in respect of each Initial Purchaser, the amount set forth as the "Initial Capital" under the name of such Initial Purchaser on the signature pages hereto. 9 "Intercreditor Agreement" means the Intercreditor Agreement, dated as of March 1, 2001, a copy of which is attached as Exhibit K hereto, among the Agent, the Parent, the Seller, each Originator (other than the Canadian Originator) and The Chase Manhattan Bank, as administrative and collateral agent under the Existing Credit Facilities, as the same may from time to time be amended, supplemented or otherwise modified in accordance with the terms thereof and the second proviso to the first sentence of Section 11.01. "Investment" in any Person means any loan or advance to such Person, any purchase or other acquisition of any capital stock or other ownership or profit interest, warrants, rights, options, obligations or other securities of such Person, any capital contribution to such Person or any other investment in such Person. "Liquidation Day" means, for any Receivable Interest, either (i) each day during any Settlement Period for such Receivable Interest on which the conditions set forth in Section 3.02 are not satisfied (and such failure of conditions is not waived by the Required Purchasers), provided that such conditions are also not satisfied (and such failure of conditions is not waived by the Required Purchasers) on any succeeding day during such Settlement Period, or (ii) each day which occurs on or after the Termination Date for such Receivable Interest. "Liquidation Fee" means, for each Receivable Interest for any Settlement Period during which the Citibank Rate therefor is computed by reference to the Eurodollar Rate and during which any Liquidation Day or the Termination Date or any Daily Settlement Date for such Receivable Interest occurs, the amount, if any, by which (i) the additional Yield (calculated without taking into account any Liquidation Fee or any shortened duration of such Settlement Period ) which would have accrued on the reductions of Capital of such Receivable Interest during such Settlement Period if such reductions had remained as Capital, exceeds (ii) the income, if any, received by the Owner of such Receivable Interest from such Owner's investing the proceeds of such reductions of Capital. "Lock-Box Account" means a deposit account (including, without limitation, any concentration account) maintained at a Lock-Box Bank for the purpose of receiving Collections. "Lock-Box Agreement" means an agreement, in substantially the form of Exhibit E hereto, between any Originator or the Seller, as the case may be, and a Lock-Box Bank. "Lock-Box Bank" means any of the banks specified on Schedule I hereof and any other bank specified as a "Lock-Box Bank" in accordance with this Agreement, in each case holding one or more Lock-Box Accounts. "Lock-Box Notice" means a notice, in substantially the form of Annex A to a Lock-Box Agreement, from the Agent to any Lock-Box Bank. "Moody's" means Moody's Investors Service, Inc. or any successor thereof. 10 "Multiemployer Plan" means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to which the Seller or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within any of the preceding five plan years made or accrued an obligation to make contributions. "Multiple Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Seller or any ERISA Affiliate and at least one Person other than the Seller and the ERISA Affiliates or (b) was so maintained and in respect of which the Seller or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. "Net Receivables Pool Balance" means at any time the Outstanding Balance of the Eligible Receivables in the Receivables Pool at such time reduced by the sum of (i) the aggregate Outstanding Balance of the Defaulted Receivables in the Receivables Pool at such times, (ii) the aggregate amount by which the then Outstanding Balance of all Eligible Receivables (other than Defaulted Receivables) of each Obligor then in the Receivables Pool exceeds the Concentration Limit for such Obligor at such time, (iii) the aggregate amount by which the then Outstanding Balance of all Eligible Receivables that are Canadian Receivables exceeds 15% of the aggregate amount of the then Outstanding Balance of all Eligible Receivables, (iv) the Unapplied Cash and Credits at such time, (v) the aggregate amount of Offset Reserves in existence at such time in respect of the Obligors of Pool Receivables and (vi) the Currency Reserve. "Notice of Purchase" has the meaning specified in Section 2.02(a). "Obligor" means a Person obligated to make payments pursuant to a Contract. "Offset Reserve" means, in respect of the Pool Receivables owing by any Obligor at any time, the lesser of (a) the sum of (i) the aggregate amount of Over/Under Payments in respect of such Obligor at such time, plus (ii) the aggregate amount of Rebates in respect of such Obligor at such time, plus (iii) the aggregate amount of Corporate Allowances in respect of such Obligor at such time, plus (iv) the aggregate amount of Advance Billings in respect of such Obligor at such time, plus (v) the aggregate amount of Credits In Past Due in respect of such Obligor at such time, plus (vi) the aggregate amount of all other amounts payable by any Originator or any Affiliate thereof to such Obligor, and (b) the aggregate Outstanding Balance of such Pool Receivables at such time; provided, however, that in the case of any such Obligor that owes Pool Receivables which are Canadian Receivables, the aggregate amounts referred to in clause (a) above that are denominated in Canadian Dollars shall be the Equivalent in US Dollars of such aggregate amounts. 11 "Originator" means Constar, Inc., a Pennsylvania corporation, Crown (USA), Risdon-AMS (USA), Inc., a Delaware corporation, Zeller Plastik, Inc., a Delaware corporation, and the Canadian Originator; provided, however, that any Originator shall cease to be an Originator upon (i) the occurrence of any event set forth in Section 7.01(g) as to such Originator, (ii) the Parent, one or more direct or indirect wholly-owned subsidiaries of the Parent, or a corporation owned directly or indirectly by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent ceasing to own, directly or indirectly, 100% of the Equity Interests of such Originator, (iii) three Business Days' notice to such effect by the Agent (with the consent or at the request of the Required Purchasers) to the Seller following the occurrence of any Event of Termination as to such Originator, or (iv) in the case of the Canadian Originator only (and without limiting clauses (i) through (iii) above), forty-five days notice to such effect by the Seller to the Agent, and provided, further, however, that, in the case of clauses (i), through (iv) above, such Originator shall continue to be an Originator for purposes of all Pool Receivables existing, and in which interests have been created hereunder, prior to the occurrence of any event set forth in clause (i) through (iv) above. "Other Taxes" has the meaning specified in Section 2.12(b). "Outstanding Balance" of any Receivable at any time means (i) for Receivables other than Canadian Receivables, the then outstanding principal balance thereof, and (ii) for Canadian Receivables, the Equivalent in US Dollars of the then outstanding principal balance thereof. "Over/Under Payments" means, in respect of any Obligor, the aggregate amount by which the payments made by such Obligor in respect of Pool Receivables owed by such Obligor exceed, or are less than, such Pool Receivables. "Owner" means, in respect of each Receivable Interest, upon its purchase by any of the Purchasers, the purchaser thereof; provided, however, that, upon any assignment thereof pursuant to Article IX, the Assignee thereof shall be an Owner thereof. "Parent" means Crown Cork & Seal Company, Inc., a Pennsylvania corporation. "Parent Undertaking" means an undertaking, in substantially the form of Exhibit I hereto, by the Parent in favor of the Agent and the other Indemnified Parties, as such undertaking may from time to time be amended, supplemented or otherwise modified. "PBGC" means the Pension Benefit Guaranty Corporation or any successor. "Percentage Interest" has the meaning specified in Section 9.02(a). "Person" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" means a Single Employer Plan or a Multiple Employer Plan. "Pool Receivable" means a Receivable in the Receivables Pool. 12 "Potential Event of Termination" means any event that, with the giving of notice or the passage of time or both, would constitute an Event of Termination. "PPSA" means the Personal Property Security Act (Ontario), as amended from time to time, and any regulations promulgated thereunder. "Pre-Season Deferred Receivable" means any Receivable the Obligor of which is in the business of processing and canning fruits or vegetables and for which the applicable Contract provides for more than 150 days after the applicable invoice date for payment of such Receivables. "Provisional Liquidation Day" means any day which could be a Liquidation Day but for the proviso in clause (i) of the definition of "Liquidation Day". "Purchase" means a purchase by the Purchasers of a Receivable Interest from the Seller pursuant to Article II. "Purchasers" means the Initial Purchasers and each Assignee that shall become a party hereto pursuant to Section 9.03. "Rebates" means, in respect of any Obligor, the aggregate amount of rebates or other amounts (other than Corporate Allowances) owed by any Originator or the Seller to such Obligor with respect to Receivables of such Obligor. "Receivable" means the indebtedness (whether constituting accounts or general intangibles or chattel paper or otherwise) of any Obligor under a Contract, and includes the right to payment of any interest or finance charges and other obligations of such Obligor with respect thereto. "Receivable Interest" means, at any time, an undivided percentage ownership interest at such time in (i) all then outstanding Pool Receivables arising prior to the time of the most recent computation or recomputation of such undivided percentage interest pursuant to Section 2.04, (ii) all Related Security with respect to such Pool Receivables and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables. Such undivided percentage interest for such Receivable Interest shall be computed as C + AR ------ NRPB where: C = the Capital of such Receivable Interest at the time of such computation; AR = the Applicable Reserve of such Receivable Interest at the time of such computation; NRPB = the Net Receivables Pool Balance at the time of such computation; 13 provided, however, that upon the occurrence of any Termination Date that results from either any Commitment Termination Date in turn resulting from the occurrence and continuance of an Event of Termination pursuant to Section 7.01 or any Reinvestment Termination Date in turn resulting from the designation of such Reinvestment Termination Date by the Agent pursuant to clause (ii) of the definition of "Reinvestment Termination Date" contained in this Section 1.01 (such Termination Date being the "Special Termination Date"), the Receivable Interests then outstanding under this Agreement, if more than one Receivable Interest, shall be combined into one Receivable Interest hereunder (such one Receivable Interest, whether the one Receivable Interest then outstanding or the one Receivable Interest resulting from such combination of Receivable Interests, being the "Special Receivable Interest") and such Special Receivable Interest shall then be recomputed to be, and shall be fixed at all times thereafter at, an undivided percentage ownership interest of one hundred percent (100%) in (i) all then outstanding Pool Receivables arising prior to the Special Termination Date, (ii) all Related Security with respect to such Pool receivables and (iii) all Collections with respect to, and other proceeds of, such Pool Receivables. Each Receivable Interest shall be determined from time to time pursuant to the provisions of Section 2.04. "Receivable Interest Percent" means 100%. "Receivables Contribution and Sale Agreement" means the Receivables Contribution and Sale Agreement, dated as of January 26, 2001, as amended and restated as of the date hereof and in substantially the form of Exhibit F hereto, among each Originator, the Seller and Crown (USA) as the Buyer's Servicer thereunder, as the same may from time to time be amended, supplemented or otherwise modified with the prior written consent of the Required Purchasers. "Receivables Pool" means at any time the aggregation of each then outstanding Receivable in respect of which the Obligor is a Designated Obligor or, as to any Receivable in existence on such date, was a Designated Obligor on the date of the initial creation of an interest in such Receivable under this Agreement. "Records" means, with respect to any Receivable, all Contracts and other documents, books, records and other information (including, without limitation, computer programs, tapes, discs, punch cards, data processing software and related property and rights) relating to such Receivable and the related Obligor. "Register" has the meaning specified in Section 9.03(c). "Reinvestment Termination Date" means that Business Day which: (i) the Seller designates as the first date on which Collections in respect of each Receivable Interest shall not be reinvested in accordance with Section 2.05, by at least 30 Business Days' prior written notice to the Agent or, (ii) if the conditions precedent in Section 3.02 are not satisfied, that Business Day which the Agent (with the consent or at the request of the Required Purchasers) designates as the first date on which Collections in respect of each Receivable Interest shall not be reinvested in accordance with Section 2.05, by at least one Business Day's prior written notice to the Seller. 14 "Related Security" means with respect to any Receivable: (i) all of the Seller's interest in the goods (including returned goods), if any, relating to the sale which gave rise to such Receivable; (ii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements signed by an Obligor describing any collateral securing such Receivable; (iii) all letter of credit rights, guarantees, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise; (iv) all Records relating to such Receivable; and (v) all of the Seller's right, title and interest in and to the following: (A) the Receivables Contribution and Sale Agreement, including, without limitation, (i) all rights to receive moneys due and to become due under or pursuant to the Receivables Contribution and Sale Agreement, (ii) all rights to receive proceeds of any indemnity, warranty or guaranty with respect to the Receivables Contribution and Sale Agreement, (iii) claims for damages arising out of or for breach of or default under the Receivables Contribution and Sale Agreement, and (iv) the right to perform under the Receivables Contribution and Sale Agreement and to compel performance and otherwise exercise all remedies thereunder, and (B) all proceeds of any and all of the foregoing (including, without limitation, proceeds which constitute property of the types described in subclause (A) of this clause (v)). "Required Purchasers" means at any time Purchasers owning at least 51% of the then aggregate outstanding Receivable Interests owned by the Purchasers or, if no Receivable Interest is then owned by the Purchasers, Purchasers holding at least 51% of the aggregate Commitments of the Purchasers. "Required Net Receivables Pool Balance" means the sum of (i) the aggregate outstanding Capital of Receivable Interests plus (ii) the aggregate Applicable Reserve for all Receivable Interests. "Reserve Percentage" means 20 percent, provided that the Reserve Percentage may, upon at least one Business Day's notice by the Agent to the Seller and the Servicer, be increased by the Agent at any time and in its discretion in accordance with its then current credit guidelines and provided, further, that the Reserve Percentage may, upon at least one Business Day's notice by the Agent to the Seller and the Servicer, be decreased by the Agent at any time with the consent or at the request of all Purchasers. 15 "S&P" means Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc., or any successor thereof. "Seller Report" means a report, in substantially the form of Exhibit D-1 hereto, furnished by the Servicer to the Agent for each Owner pursuant to Section 2.07. "Seller's Account" means the deposit account of the Seller (account number 005-1713) maintained with Mellon Bank, N.A. at its office at Three Mellon Bank Center, Room 3119, Pittsburgh, Pennsylvania 15259, Attention: Document Control Manager. "Servicer" has the meaning specified in Section 6.01. "Servicer Fee" has the meaning specified in Section 2.09. "Settlement Date" means, for each Settlement Period for each Receivable Interest, the last day of such Settlement Period. "Settlement Period" means, for each Receivable Interest: (a) in the case of any Settlement Period in respect of which the Citibank Rate is computed by reference to the Eurodollar Rate, initially, the period beginning on the date of Purchase of such Receivable Interest or the last day of the immediately preceding Settlement Period, as the case may be, and ending on the last day of the period selected by the Seller pursuant to the provisions below, and thereafter, each subsequent period commencing on the last day of the immediately preceding Settlement Period and ending on the last day of the period selected by the Seller pursuant to the provisions below. The duration of each such Settlement Period shall be one week, two weeks or one month, as the Seller may, upon written notice given by the Seller to the Agent not later than 11:00 a.m. (New York City time) on the third Business Day prior to the first day of such Settlement Period, select (or, if no such notice is given, one month); provided, however, that in the case of any such Settlement Period for any Receivable Interest which commences before the Termination Date and would otherwise end on a date occurring after the Termination Date, such Settlement Period shall end on the Termination Date and the duration of each such Settlement Period which commences on or after the Termination Date may be any period (including, without limitation, a period of one day) as shall be selected from time to time by the Agent (with the consent or at the request of the Required Purchasers); provided, further, however, that there shall be no more than six Settlement Periods selected by the Seller with respect to the Receivable Interests at any one time; and provided, further, however, that whenever the last day of any such Settlement Period would otherwise occur on a day other than a Business Day, the last day of such Settlement Period shall be extended to occur on the next succeeding Business Day, except that, if such extension would cause the last day of such Settlement Period to occur in the next following calendar month, the last day of such Settlement Period shall occur on the next preceding Business Day; and 16 (b) in the case of any Settlement Period in respect of which the Citibank Rate is computed by reference to the Base Rate, initially, the period beginning on the date of Purchase of such Receivable Interest or the last day of the immediately preceding Settlement Period, as the case may be, and ending on the last day of the period selected by the Seller pursuant to the provisions below and, thereafter, each subsequent period commencing on the last day of the immediately preceding Settlement Period and ending on the last day of the period selected by the Seller pursuant to the provisions below. The duration of each such Settlement Period shall be any period from one to and including 30 days, as shall be selected by the Seller upon written notice given by the Seller to the Agent not later than 11:00 A.M. (New York City time) on the Business Day prior to the first day of such Settlement Period (or if no such notice is given, one day); provided, however, that in the case of any such Settlement Period for any Receivable Interest which commences before the Termination Date and would otherwise end on a date occurring after the Termination Date, such Settlement Period shall end on the Termination Date and the duration of each such Settlement Period which commences on or after the Termination Date may be any period (including, without limitation, a period of one day) as shall be selected from time to time by the Agent; and provided, further, however, that whenever the last day of any such Settlement Period would otherwise occur on a day other than a Business Day, the last day of such Settlement Period shall be extended to occur on the next succeeding Business Day. "Single Employer Plan" means a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Seller or any ERISA Affiliate and no Person other than the Seller and the ERISA Affiliates or (b) was so maintained and in respect of which the Seller or any ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated. "Special Receivable Interest" has the meaning specified in the definition of "Receivable Interest" contained in this Section 1.01. "Special Termination Date" has the meaning specified in the definition of "Receivable Interest" contained in this Section 1.01. "Subordinated Note" has the meaning specified in the Receivables Contribution and Sale Agreement. "Taxes" has the meaning specified in Section 2.12(a). "Terminating Settlement Period" has the meaning specified in Section 2.02(e). 17 "Termination Date" means the earlier of (i) the Reinvestment Termination Date and (ii) the Commitment Termination Date. "Total Commitment" means $350,000,000, as such amount may be reduced from time to time pursuant to Section 2.03. "Transaction Documents" means this Agreement, the Certificates, the Receivables Contribution and Sale Agreement, the Parent Undertaking, the Subordinated Notes, the Lock-Box Agreements, the Consent and Agreement, the Fee Letter and the Intercreditor Agreement. "UCC" means the Uniform Commercial Code as from time to time in effect in the specified jurisdiction. "Unapplied Cash and Credits" means, at any time, the aggregate amount of Collections or other cash or credits then held by or for the account of the Servicer, any Originator or the Seller in respect of the payment of Pool Receivables, but not yet applied or reinvested pursuant to Section 2.05 or applied pursuant to Section 2.06, and in the case of such Collections or other cash or credits in respect of Canadian Receivables means the Equivalent in US Dollars of the aggregate amount of such Collections or other cash or credits. "United States" and "U.S." each means United States of America. "Unused Commitment" means, with respect to any Purchaser at any time, (a) such Purchaser's Commitment at such time minus (b) that aggregate outstanding Capital of Receivable Interests paid by such Purchaser pursuant to Section 2.02 and not reduced by Collections received and distributed to such Purchaser on account of such Capital pursuant to Section 2.05 or 2.06. "US Dollars" and "$" each means the lawful currency of the United States. "Voting Interests" means shares of capital stock issued by a corporation, or equivalent Equity Interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency. "Weekly Report" means a report, in substantially the form of Exhibit D-2 hereto, furnished by the Servicer to the Agent for the Owners pursuant to Section 2.07. "Welfare Plan" means a welfare plan, as defined in Section 3(l) of ERISA. "Yield" means for each Receivable Interest for any Settlement Period; CR x C x ED + LF --- 360 18 where: CR = the Citibank Rate for such Receivable Interest for such Settlement Period; C = the Capital of such Receivable Interest during such Settlement Period; ED = the actual number of days elapsed during such Settlement Period; and LF = the Liquidation Fee, if any, for such Receivable Interest for such Settlement Period. provided that no provision of this Agreement shall require the payment or permit the collection of Yield in excess of the maximum permitted by applicable law; and provided further that Yield for any Receivable Interest shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason. SECTION 1.02. Other Terms. ------------------------- All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 of the UCC in the State of New York and not specifically defined herein are used herein as defined in such Article 9. SECTION 1.03. Computation of Time Periods. ----------------------------------------- Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding". ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES SECTION 2.01. Commitment. ------------------------ (a) On the terms and conditions herein set forth, each Purchaser severally agrees to make Purchases (i) on the Closing Date and from time to time thereafter on any Business Day during the period from the Closing Date to the Commitment Termination Date and (ii) in an aggregate amount for such Purchaser not to exceed at any time outstanding such Purchaser's Commitment; provided, however, that no Purchaser shall be obligated to make any Purchase if, after giving effect to such Purchase, the aggregate outstanding Capital of Receivable Interests would exceed the Total Commitment. Purchases shall be made by the Purchasers simultaneously and ratably in accordance with their respective Commitments. (b) On the terms and conditions hereinafter set forth, the Agent on behalf of the Owners of each Receivable Interest shall have the Collections attributable to such Receivable Interest automatically reinvested pursuant to Section 2.05 in additional undivided percentage interests in the Pool Receivables by making an appropriate adjustment of such Receivable Interest. 19 SECTION 2.02. Making Purchases. ------------------------------ (a) Each Purchase of a Receivable Interest by the Purchasers shall be made on notice from the Seller to the Agent, given not later than 11:00 A.M. (New York City time) (i) on the third Business Day before the date of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield based on the Eurodollar Rate and (ii) on the Business Day of such Purchase in the case of the Purchase of any Receivable Interest initially bearing Yield based on the Base Rate. Each such notice of a proposed Purchase of a Receivable Interest (a "Notice of Purchase") shall be by telephone (confirmed promptly thereafter in writing) or facsimile, in substantially the form of Exhibit J hereto, and shall specify the requested aggregate amount of such Purchase (which shall not be less than $1,000,000) to be paid to the Seller and the requested Business Day of such Purchase. The Agent shall give each Purchaser prompt notice of such notice of such proposed Purchase, the date of such Purchase, and the amount of Capital to be paid by such Purchaser in connection with such Purchase, by telephone or telefax. On the date of such Purchase, each Purchaser shall, upon satisfaction of the applicable conditions set forth in Article III, make available to the Agent its ratable share of the aggregate amount of such Purchase by deposit of such ratable share in same day funds to the Agent's Account, and, after receipt by the Agent of such funds, the Agent shall cause such funds to be made immediately available to the Seller at the Seller's Account. (b) Each Notice of Purchase delivered pursuant to Section 2.02(a) shall be irrevocable and binding on the Seller. The Seller shall indemnify each Purchaser against any actual loss or expense incurred by such Purchaser as a result of any failure to fulfill on or before the date of any proposed Purchase (as to which a Notice of Purchase has been given pursuant to Section 2.02(a)) the applicable conditions set forth in Article III, including, without limitation, any actual loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Purchaser to fund its ratable portion of such proposed Purchase when such Purchase, as a result of such failure, is not made on such date. (c) Unless the Agent shall have received notice from a Purchaser prior to the date of any Purchase that such Purchaser will not make available to the Agent such Purchaser's ratable portion of such Purchase, the Agent may assume that such Purchaser has made such portion available to the Agent on the date of such Purchase in accordance with Section 2.02(a), and the Agent may, in reliance upon such assumption, make available to the Seller on such date a corresponding amount. However, if the Agent has received such notice from such Purchaser, the Agent may not make such assumption and may not make available to the Seller on such date such corresponding amount. If and to the extent that such Purchaser shall not have made such ratable portion available to the Agent, such Purchaser and the Seller severally agree to pay (to the extent not repaid by the Seller or such Purchaser, respectively) to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Seller until the date such amount is repaid to the Agent, at (i) in the case of the Seller, the Yield rate applicable to such amount and (ii) in the case of such Purchaser, the Federal Funds Rate. If such Purchaser shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Purchaser's ratable portion of such Purchase for purposes of this Agreement. (d) The failure of any Purchaser to make available such Purchaser's ratable portion of any Purchase shall not relieve any other Purchaser of its obligation, if any, hereunder to make available such other Purchaser's ratable portion of such Purchase on the date of such Purchase, but no Purchaser shall be responsible for the failure of any other Purchaser to make available such other Purchaser's ratable portion of such Purchase on the date of any Purchase. 20 (e) Either the Seller or the Agent upon notice to and consent by the other (and upon notice by the Agent to the Purchaser) received at least three Business Days prior to the end of any Settlement Period (the "Terminating Settlement Period") for any Receivable Interest, may, effective on the last day of the Terminating Settlement Period: (i) divide any such Receivable Interest into multiple Receivable Interests, (ii) combine any such Receivable Interest with one or more other Receivable Interests that have a Settlement Period ending on the same day as such Terminating Settlement Period or (iii) combine any such Receivable Interest with a new Receivable Interest to be purchased by the Purchasers on the day such Terminating Settlement Period ends. SECTION 2.03. Termination or Reduction of the Commitments. --------------------------------------------------------- The Seller may, upon at least five Business Days' notice to the Agent, terminate in whole or reduce in part, the unused portions of the Commitments of the Purchasers; provided, however, that for purposes of this Section 2.03, the unused portions of the Commitments of the Purchasers shall be computed as the excess of (i) the aggregate of the Commitments of the Purchasers immediately prior to giving effect to such termination or reduction over (ii) the aggregate Capital of Receivable Interests outstanding at the time of such computation; and provided, further, that each such partial reduction of the unused portions of the Commitments (i) shall be in an amount equal to $1,000,000 or an integral multiple thereof, (ii) shall be made ratably among the Purchasers in accordance with their respective Commitments and (iii) shall reduce the Total Commitment in an amount equal to each such reduction. SECTION 2.04. Receivable Interest. --------------------------------- Each Receivable Interest shall be initially computed as of the opening of business of the Servicer on the date of Purchase of such Receivable Interest. Thereafter until the Termination Date, such Receivable Interest shall be automatically recomputed as of the close of business of the Servicer on each day (other than a Liquidation Day). Such Receivable Interest shall remain constant from the time as of which any such computation or recomputation is made until the time as of which the next such recomputation, if any, shall be made. Each Receivable Interest other than any Special Receivable Interest, as computed as of the day immediately preceding the Termination Date, shall remain constant at all times on and after the Termination Date; and any Special Receivable Interest, as computed as of any Special Termination Date, shall remain constant (at 100%) at all times on and after such Special Termination Date. Such Receivable Interest shall become zero at such time as the Owners of such Receivable Interest shall have received the accrued Yield for such Receivable Interest, shall have recovered the Capital of such Receivable Interest, and shall have received payment of all other amounts payable by the Seller to such Owners, and the Servicer shall have received the accrued Servicer Fee for such Receivable Interest. 21 SECTION 2.05. Non-Liquidation Settlement Procedures. --------------------------------------------------- (a) On each day (other than a Liquidation Day or a Provisional Liquidation Day) during each Settlement Period for each Receivable Interest, the Servicer shall: (i) out of Collections of Pool Receivables attributable to such Receivable Interest received on such day, in the case of any such Collections denominated in Canadian Dollars, convert such Collections into US Dollars to the extent necessary to comply with this Section 2.05 and, in the case of all such Collections, set aside and hold in trust for the Owners of such Receivable Interest an amount in US Dollars equal to the sum of (A) the Yield and Servicer Fee accrued through such day for such Receivable Interest and not so previously set aside, (B) that amount, if any, which would be required to reduce the Capital of such Receivable Interest so that, together with similar and ratable reductions of Capital of all other Receivable Interests, the undivided percentage interest of all Receivable Interests would not, after giving effect to the Collections of Pool Receivables and the addition of new Pool Receivables on such day and the resulting recomputation of such Receivable Interests pursuant to Section 2.04 as of the end of such day, exceed the Receivable Interest Percent then in effect, and (C) the aggregate of any other amounts then accrued or owed hereunder by the Seller to such Owners and not so previously set aside and (ii) reinvest the remainder of such Collections, for the benefit of such Owners, by recomputation of such Receivable Interest pursuant to Section 2.04 as of the end of such day and the payment of such remainder to the Seller; provided, however, that, to the extent that the Agent or any Owner shall be required for any reason to pay over any amount of Collections which shall have been previously reinvested for the account of such Owners pursuant hereto, such amount shall be deemed not to have been so applied but rather to have been retained by the Seller and paid over for the account of such Owners and, notwithstanding any provision hereof to the contrary, such Owners shall have a claim for such amount. (b) On each Daily Settlement Date for each Settlement Period for such Receivable Interest, the Servicer shall deposit to the Agent's Account for the account of the Owners of such Receivable Interest the amounts set aside as described in clause (i)(B) of Section 2.05(a). Upon receipt of such funds by the Agent, the Agent shall distribute them to the Owners of such Receivable Interest in reduction of the Capital of such Receivable Interest in the amount referred to in such clause (i)(B). (c) On the Settlement Date for each Settlement Period for such Receivable Interest, the Servicer shall deposit to the Agent's Account for the account of the Owners of such Receivable Interest the amounts set aside as described in clause (i) of the first sentence of Section 2.05(a) to the extent not already deposited pursuant to Section 2.05(b). Upon receipt of such funds by the Agent, the Agent shall distribute them (x) to the Owners of such Receivable Interest (I) in payment of the accrued Yield for such Receivable Interest, (II) in reduction of the Capital of such Receivable Interest in the amount referred to in clause (i)(B) of Section 2.05(a), and (III) in payment of any other amounts then owed by the Seller hereunder to such Owners and (y) to the Servicer in payment of the accrued Servicer Fee payable with respect to such Receivable Interest. If there shall be insufficient funds on deposit for the Agent to distribute funds in payment in full of the aforementioned amounts, the Agent shall distribute funds, first, in payment of the accrued Yield for such Receivable Interest, second, in reduction of the Capital of such Receivable Interest in the amount referred to in clause (i)(B) of Section 2.05(a), third, in payment of any other amounts owed by the Seller hereunder to such Owners, and fourth, in payment of the accrued Servicer Fee payable with respect to such Receivable Interest; provided, however, that on and after the date on which the Agent shall designate as Servicer any Person other than Crown (USA) or any of its Affiliates pursuant to Section 6.01, the Agent shall distribute funds, first, in payment of the accrued Yield for such Receivable Interest, second, in payment of the accrued Servicer Fee payable with respect to such Receivable Interest, third, in reduction of the Capital of such Receivable Interest in the amount referred to in clause (i)(B) of Section 2.05(a), and fourth, in payment of any other amounts owed by the Seller hereunder to such Owners. 22 SECTION 2.06. Liquidation Settlement Procedures. ----------------------------------------------- On each Liquidation Day and on each Provisional Liquidation Day during each Settlement Period for each Receivable Interest (including, without limitation, the Special Receivable Interest), the Servicer shall, in the case of any such Collections denominated in Canadian Dollars, convert such Collections into US Dollars to the extent necessary to comply with this Section 2.06 and, in the case of all such Collections, set aside and hold in trust in US Dollars for the Owners of such Receivable Interest the Collections of Pool Receivables attributable to such Receivable Interest received on such day. On the Settlement Date for each Settlement Period for such Receivable Interest, the Servicer shall deposit to the Agent's Account for the account of the Owners of such Receivable Interest the amounts in US Dollars set aside pursuant to the preceding sentence but not to exceed the sum of (i) the accrued Yield for such Receivable Interest, (ii) the Capital of such Receivable Interest, (iii) the accrued Servicer Fee payable with respect to such Receivable Interest and (iv) the aggregate amount of other amounts owed hereunder by the Seller to the Owners of such Receivable Interest. Any amounts set aside pursuant to the first sentence of this Section 2.06 and not required to be deposited to the Agent's Account pursuant to the preceding sentence shall be paid to the Seller by the Servicer; provided, however, that if amounts are set aside pursuant to the first sentence of this Section 2.06 on any Provisional Liquidation Day which is subsequently determined not to be a Liquidation Day, such amounts shall be applied pursuant to Section 2.05(a) on the day of such subsequent determination. Upon receipt of funds deposited to the Agent's Account pursuant to the second sentence of this Section 2.06, the Agent shall distribute them (A) to the Owners of such Receivable Interest (x) in payment of the accrued Yield for such Receivable Interest, (y) in reduction (to zero) of the Capital of such Receivable Interest and (z) in payment of any other amounts owed by the Seller hereunder to such Owners and (B) to the Servicer in payment of the accrued Servicer Fee payable with respect to such Receivable Interest. If there shall be insufficient funds on deposit for the Agent to distribute funds in payment in full of the aforementioned amounts, the Agent shall distribute funds, first, in payment of the accrued Yield for such Receivable Interest, second, in reduction of Capital of such Receivable Interest, third, in payment of other amounts payable to such Owners, and fourth, in payment of the accrued Servicer Fee payable with respect to such Receivable Interest; provided, however, that on and after the date on which the Agent shall designate as Servicer any Person other than Crown (USA) or any of its Affiliates pursuant to Section 6.01, the Agent shall distribute funds, first, in payment of the accrued Yield for such Receivable Interest, second, in payment of the accrued Servicer Fee payable with respect to such Receivable Interest, third, in reduction of the Capital of such Receivable Interest, and fourth, in payment of other amounts payable to such Owners. 23 SECTION 2.07. General Settlement Procedures. ------------------------------------------- (a) If on any day the Outstanding Balance of a Pool Receivable is either (i) reduced as a result of any defective, rejected or returned goods or services, any discount, or any adjustment by the Seller or any Originator, or (ii) reduced or cancelled as a result of a setoff in respect of any claim by the Obligor thereof against the Seller or any Originator (whether such claim arises out of the same or a related transaction or an unrelated transaction), the Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation (in the case of any such Receivable that is a Canadian Receivable, in the amount of the Equivalent in US Dollars of such reduction or cancellation) and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.01(g). If on any day any of the representations or warranties in Section 4.01(g) is no longer true with respect to any Pool Receivable, the Seller shall be deemed to have received on such day a Collection in full of such Pool Receivable (in the case of any such Pool Receivable that is a Canadian Receivable, a Collection in full of the Equivalent in US Dollars of such Pool Receivable) and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.01(g). In addition, the Seller shall be deemed to have received as a Collection on the day of conversion of any Collections denominated in Canadian Dollars into US Dollars an amount equal to the amount (if any) by which the Equivalent in US Dollars of such Collections exceeds the amount of US Dollars realized on such conversion and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 5.01(g). Except as stated in the preceding sentences of this Section 2.07 or as otherwise required by law or the underlying Contract, all Collections received from an Obligor of any Receivable shall be applied to Receivables then outstanding of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, except if payment is designated by such Obligor for application to specific Receivables. (b) On or prior to the eighth Business Day of each calendar month, the Servicer shall prepare and furnish to the Agent for each Owner of a Receivable Interest (i) a Seller Report (which will include, without limitation, a Pool Receivable roll forward analysis and a rate for the exchange of Canadian Dollars into US Dollars which shall be determined by the Seller in good faith having regard to the quoted spot rate at which the Agent's principal office in New York City offers to exchange US Dollars for Canadian Dollars in New York City prior to 4:00 p.m. (New York City time) one Business Day before the date of such Seller Report), relating to each Receivable Interest, as of the close of business of the Servicer on the last day of the immediately preceding calendar month, (ii) a listing of the ten Obligors owing greatest amount of Pool Receivables, (iii) a listing by Obligor of all Pool Receivables, together with an analysis as to the aging of such Receivables, as of such last day, (iv) a report, relating to each Obligor which shall owe Pool Receivables of $15,000,000 (or the Equivalent in Canadian Dollars) or more in the aggregate within the immediately preceding 12-month period, setting forth (A) the name of such Obligor, (B) the balance of the Pool Receivables owing by such Obligor as of such date, (C) the ratings, if any, of such Obligor's long-term public senior unsecured and unguaranteed debt securities by S&P and Moody's and (D) a summary of credit terms applicable to such Pool Receivables under the applicable Contract, and (v) such other information as shall be reasonably requested from time to time by the Agent. On or prior to the day the Servicer is required to make a deposit with respect to a Settlement Period pursuant to Section 2.05 or 2.06, the Servicer will advise the Agent of each Liquidation Day, each Provisional Liquidation Day and each Daily Settlement Date occurring during such Settlement Period and of the allocation of the amount of such deposit to each outstanding Receivable Interest; provided, however, that, if Crown (USA) is not the Servicer, Crown (USA) shall advise the Servicer of the occurrence of each such Liquidation Day, each Provisional Liquidation Day and each Daily Settlement Date occurring during such Settlement Period on or prior to such day. (c) On the second Business Day of each week, by no later than 12:00 noon (New York City time), the Servicer shall prepare and furnish to the Agent for the Owners a Weekly Report relating to the Receivable Interests as at the end of the last Business Day of the immediately preceding week; provided, however, that the Servicer shall not be required to furnish to the Agent a Weekly Report under this Section 2.07(c) during those periods of time in which the Net Receivables Pool Balance shall exceed the Required Net Receivables Pool Balance by more than $40,000,000. 24 (d) On each Business Day by no later than 11:00 a.m. (New York City time), the Servicer shall prepare and furnish to the Agent for the Owners a Daily Report, stating (i) the aggregate amount of the Net Receivables Pool Balance as of the end of the immediately preceding Business Day, in such detail as shall be satisfactory to the Agent, (ii) the aggregate amount of the Collections from the Pool Receivables received by or on behalf of the Servicer as of the end of the immediately preceding Business Day, in such detail as shall be satisfactory to the Agent, (iii) the aggregate of sales and billings of each Originator as of the end of the immediately preceding Business Day, and (iv) such other information as shall be specified from time to time by the Agent. SECTION 2.08. Payments and Computations, Etc. -------------------------------------------- (a) All amounts to be paid or deposited by the Seller or the Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York City time) on the day when due in US Dollars in same day funds to the Agent's Account. The Agent shall promptly thereafter cause to be distributed (i) like funds relating to the payment out of Collections in respect of Capital, Yield, Servicer Fee or other amounts payable out of Collections, to the Owners (ratably in accordance with their respective interests) and the Servicer in accordance with the provisions of Section 2.05 or 2.06, as applicable, and (ii) like funds relating to the payment by the Seller of fees and other amounts payable by the Seller hereunder, to the parties hereto for whose benefit such funds were paid (and if such funds are insufficient, such distribution shall be made ratably in accordance with the respective amounts thereof). Upon the Agent's acceptance of an Assignment and Acceptance and recording of the information contained therein in the Register pursuant to Section 9.03(c), from and after the effective date specified in such Assignment and Acceptance, the Agent shall make all payments hereunder in respect of the interest assigned thereby to the assignee thereunder, and the parties to such Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior to such effective date directly between themselves. (b) The Seller shall, to the extent permitted by law, pay to the Agent interest on all amounts not paid or deposited when due hereunder (except for those amounts with respect to which Yield accrues) at 3.50% per annum above the Base Rate in effect from time to time, payable on demand, provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law. Such interest shall be for the account of, and distributed by the Agent to, the applicable Owners ratably in accordance with their respective interests in such overdue amount. (c) All computations of interest and all computations of Yield, Commitment Fee and other per annum fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. (d) The Seller hereby authorizes each Owner, if and to the extent payment owed by the Seller to such Owner is not made to the Agent when due hereunder, to charge from time to time against any or all of the Seller's accounts with such Owner any amount so due. 25 (e) Unless the Agent shall have received notice from the Servicer or the Seller prior to the date on which any payment is due to the Owners hereunder that the Servicer or the Seller, as the case may be, will not make such payment in full, the Agent may assume that the Servicer or the Seller, as the case may be, has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Owner on such due date an amount equal to the amount then due such Owner. If and to the extent the Servicer or the Seller, as the case may be, shall not have so made such payment in full to the Agent, each Owner shall repay to the Agent forthwith on demand such amount distributed to such Owner together with interest thereon, for each day from the date such amount is distributed to such Owner until the date such Owner repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.09. Fees. ------------------ (a) The Seller shall pay to the Agent such fees as are set forth in the Fee Letter. (b) The Owners shall pay to the Servicer a fee (the "Servicer Fee") of 1/4 of 1% per annum on the average daily amount of Capital of each Receivable Interest owned by such Owners, from the date of the initial Purchase hereunder until the later of the Commitment Termination Date or the date on which such Capital is reduced to zero, payable on the Settlement Date for each Settlement Period for such Receivable Interest; provided, however, that, upon three Business Days' notice to the Agent, the Servicer (if not Crown (USA)) may elect to be paid, as such fee, another percentage per annum on the average daily amount of Capital of each such Receivable Interest, but in no event in excess of 110% of the costs and expenses referred to in Section 6.02(c); and provided further that such fee shall be payable only from Collections pursuant to, and subject to the priority of payment set forth in, Sections 2.05 and 2.06. (c) The Seller shall pay to the Agent for the account of each Purchaser, a commitment fee (a "Commitment Fee") of 1/2 of 1% per annum on the average daily Unused Commitment of such Purchaser, from the date of the Existing Receivables Purchase Agreement in the case of Citibank, as Initial Purchaser, from the Effective Date in the case of each other Initial Purchaser and from the effective date specified in the Assignment and Acceptance pursuant to which it became a Purchaser in the case of each other Purchaser until the Commitment Termination Date, payable on the Settlement Date for each Settlement Period. 26 SECTION 2.10. Increased Costs. ----------------------------- If, due to either (a) a change after the date hereof in Regulation D of the Board of Governors of the Federal Reserve System (to the extent any cost incurred pursuant to such regulation is not included in the calculation of Eurodollar Rate), (b) the introduction of or any change after the date hereof in or in the interpretation of any law or regulation (other than any law or regulation relating to taxes, as to which Section 2.12 shall govern) or (c) the compliance with any guideline or request issued or made after the date hereof from any central bank or other governmental authority (whether or not having the force of law), there shall be any increase in the cost to (or, in the case of Regulation D of the Board of Governors of the Federal Reserve System, there shall be imposed a cost on) any Indemnified Party of agreeing to make or making any Purchase or purchasing or maintaining any Receivable Interest or any interest therein hereunder, then the Seller shall from time to time, upon demand and delivery to the Seller of the certificate referred to in the last sentence of this Section 2.10 by such Indemnified Party (or by the Agent for the account of such Indemnified Party) (with a copy of such demand and certificate to the Agent), pay to the Agent for the account of such Indemnified Party additional amounts sufficient to compensate such Indemnified Party for such increased or imposed cost. Each Indemnified Party hereto agrees to use reasonable efforts promptly to notify the Seller of any event referred to in clause (a), (b) or (c) above, provided that the failure to give such notice shall not affect the rights of any Indemnified Party under this Section 2.10. Each Indemnified Party agrees that it shall use reasonable efforts to designate another applicable office of such Indemnified Party to hold its interest in any Receivable Interest if the amounts payable to it under this Section 2.10 would thereby be reduced and if the making, funding or maintenance of its interest in such Receivable Interest through such other applicable office would not otherwise adversely affect such interest or such Indemnified Party. A certificate in reasonable detail as to the basis for and the amount of such increased cost, submitted to the Seller and the Agent by such Indemnified Party (or by the Agent for the account of such Indemnified Party) shall be conclusive and binding for all purposes, absent manifest error. SECTION 2.11. Increased Capital. ------------------------------- If any Indemnified Party determines that either the introduction of or any change in or in the interpretation of any law or regulation after the date hereof or the compliance with any guideline or request issued or made after the date hereof from any central bank or other governmental authority (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by such Indemnified Party or any corporation controlling such Indemnified Party and that the amount of such capital is increased by or based upon the existence of such Indemnified Party's commitment, if any, to purchase any Receivable Interest or any interest therein, or to maintain such Receivable Interest or interest, hereunder, then, upon demand and delivery to the Seller of the certificate referred to in the last sentence of this Section 2.11 by such Indemnified Party (or by the Agent for the account of such Indemnified Party) (with a copy of such demand and certificate to the Agent) the Seller shall pay to the Agent for the account of such Indemnified Party from time to time, as specified by such Indemnified Party, additional amounts sufficient to compensate such Indemnified Party or such corporation in the light of such circumstances, to the extent that such Indemnified Party reasonably determines such increase in capital to be allocable to the existence of any such commitment. Each Indemnified Party hereto agrees to use reasonable efforts promptly to notify the Seller of any event referred to in the first sentence of this Section 2.11, provided that the failure to give such notice shall not affect the rights of any Indemnified Party under this Section 2.11. A certificate in reasonable detail as to the basis for, and the amount of, such compensation submitted to the Seller and the Agent by such Indemnified Party (or by the Agent for the account of such Indemnified Party) shall be conclusive and binding for all purposes, absent manifest error. 27 SECTION 2.12. Taxes. ------------------- (a) Any and all payments by the Seller hereunder or deposits from Collections hereunder shall be made, in accordance with Section 2.08, free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Indemnified Party, (i) taxes that are imposed on its overall net income by the United States and (ii) taxes that are imposed on its overall net income, assets or net worth (and franchise taxes imposed in lieu thereof) by the state or foreign jurisdiction under the laws of which such Indemnified Party is organized or qualified to do business or in which such Indemnified Party holds any asset in connection with this Agreement or, in each case, any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in respect of payments hereunder or deposits from Collections hereunder being hereinafter referred to as "Taxes"). If the Seller or the Servicer or the Agent shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or deposit from Collections hereunder to any Indemnified Party, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.12) such Indemnified Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Seller or the Servicer or the Agent shall make such deductions and (iii) the Seller or the Servicer or the Agent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Seller shall pay any present or future sales, stamp, documentary, excise, property or similar taxes, charges or levies that arise from any payment made hereunder or deposit from Collections hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement, the Certificate, the Receivables Contribution and Sale Agreement, the Consent and Agreement or the Fee Letter (hereinafter referred to as "Other Taxes"). (c) The Seller shall indemnify each Indemnified Party for and hold it harmless against the full amount of Taxes and Other Taxes (including, without limitation, taxes of any kind imposed by any jurisdiction on amounts payable under this Section 2.12) imposed on or paid by such Indemnified Party and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto whether or not such Taxes or other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Indemnified Party makes written demand therefor (with a copy to the Agent). (d) Within 30 days after the date of any payment of Taxes, the Seller shall furnish to the Agent, at its address referred to in Section 11.02, the original or a certified copy of a receipt evidencing such payment. (e) Each Owner organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of each Initial Purchaser, and on the date of the Assignment or the Assignment and Acceptance pursuant to which it became an Owner in the case of each other Owner, and from time to time thereafter as requested in writing by the Seller (but only so long thereafter as such Owner remains lawfully able to do so), provide each of the Agent and the Seller with two original Internal Revenue Service forms W-8ECI or W-8BEN, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Owner is exempt from or entitled to a reduced rate of United States withholding tax on payments pursuant to this Agreement. If the forms provided by an Owner at the time such Owner first becomes a party to this Agreement indicate a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Owner provides the appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such form; provided, however, that if, at the effective date of the Assignment or the Assignment and Acceptance pursuant to which an Assignee becomes an Owner hereunder, the Owner assignor was entitled to payments 28 under subsection (a) of this Section 2.12 in respect of United States withholding tax with respect to amounts paid hereunder at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to such Assignee on such date. If any form or document referred to in this subsection (e) requires the disclosure of information, other than information necessary to compute the tax payable and information required on the date hereof by Internal Revenue Service form W-8ECI or W-8BEN, that the Owner reasonably considers to be confidential, the Owner shall give notice thereof to the Seller and shall not be obligated to include in such form or document such confidential information. (f) For any period with respect to which an Owner has failed to provide the Seller with the appropriate form described in subsection (e) of this Section 2.12 (other than if such failure is due to a change in law occurring after the date on which a form originally was required to be provided or if such form otherwise is not required under subsection (e) of this Section 2.12), such Owner shall not be entitled to indemnification under subsection (a) or (c) of this Section 2.12 with respect to Taxes imposed by the United States by reason of such failure; provided, however, that should an Owner become subject to Taxes because of its failure to deliver a form required hereunder, the Seller shall take such steps as such Owner shall reasonably request to assist such Owner (at such Owner's expense) to recover such Taxes. SECTION 2.13. Sharing of Payments, Etc. -------------------------------------- If any Purchaser shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off or otherwise) on account of the Purchases made by it (other than with respect to payments due to such Purchaser pursuant to Section 2.10, 2.11 or 2.12) in excess of its ratable share of payments on account of the Purchases obtained by all the Purchasers, such Purchaser shall forthwith purchase from the other Purchasers such interests in the Receivable Interests purchased by them as shall be necessary to cause such Purchaser to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such Purchaser, such purchase from each other Purchaser shall be rescinded and such other Purchaser shall repay to the Purchaser the purchase price to the extent of such recovery together with an amount equal to such other Purchaser's ratable share (according to the proportion of (i) the amount of such other Purchaser's required repayment to (ii) the total amount so recovered from the Purchaser) of any interest or other amount paid or payable by the Purchaser in respect of the total amount so recovered. The Seller agrees that any Purchaser so purchasing an interest in Receivable Interests from another Purchaser pursuant to this Section 2.13 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such interest in Receivable Interests as fully as if such Purchaser were the direct creditor of the Seller in the amount of such interest in Receivable Interests. 29 ARTICLE III CONDITIONS OF PURCHASES SECTION 3.01. Condition Precedent to Initial Purchase. ----------------------------------------------------- The initial Purchase by each Purchaser under the Existing Receivables Purchase Agreement is subject to the satisfaction of the following conditions precedent: (a) The Agent shall have received all fees and expenses required to be paid on the date of such Purchase pursuant to the terms of this Agreement and the Fee Letter. (b) The Agent shall have received on or before the date of such Purchase the following, each (unless otherwise indicated) dated such date, in form and substance satisfactory to the Agent: (i) The Certificate for the Purchaser; (ii) The Receivables Contribution and Sale Agreement, duly executed by the Seller and each Originator, together with: (A) Proper financing statements naming each Originator as debtor, the Seller as secured party and Citibank, as Agent, as assignee, to be filed under the UCC of all jurisdictions that the Agent may deem necessary in order to perfect the Seller's interests created or purported to be created by the Receivables Contribution and Sale Agreement; (B) Proper financing statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Related Security, Collections or Contracts previously granted by any Originator; (C) Completed requests for information, dated on or a date reasonably near to the date of the initial Purchase, listing all effective financing statements which name each Originator (under its present name and any previous name) as debtor and which are filed in the jurisdictions in which filings were made pursuant to clause (ii)(A) above, together with copies of such financing statements (none of which, except those filed pursuant to clause (ii)(A) above, shall cover any Receivables, Related Security, Collections or Contracts); (D) The Consent and Agreement, duly executed by the Seller and each Originator; and (E) The Subordinated Notes, in substantially the form of Exhibit B to the Receivables Contribution and Sale Agreement, payable to the order of the Originators, respectively, and duly executed by the Seller. (iii) Parent Undertaking, duly executed by the Parent. (iv) Certified copies of the charter and by-laws, as amended, of the Seller, each Originator and the Parent, respectively. (v) Good standing certificates issued by the Secretary of State of the jurisdiction of incorporation of the Seller, each Originator and the Parent, with respect to the Seller, such Originator and the Parent, respectively. 30 (vi) Certified copies of the resolutions of the Board of Directors of each of (A) the Seller approving the Transaction Documents to be delivered by it hereunder and the transactions contemplated hereby and thereby, (B) each Originator approving the Transaction Documents to be delivered by it hereunder and the transactions contemplated hereby and thereby and (C) the Parent approving the Parent Undertaking. (vii) A certificate of the Secretary or Assistant Secretary of each of (A) the Seller certifying the names and true signatures of the officers of the Seller authorized to sign the Transaction Documents and the other documents to be delivered by it hereunder, (B) each Originator certifying the names and true signatures of the officers of each Originator authorized to sign the Transaction Documents and the other documents to be delivered by it hereunder and (C) the Parent certifying the names and true signatures of the officers of the Parent authorized to sign the Parent Undertaking and the other documents to be delivered by it hereunder. (viii) Proper financing statements naming the Seller as debtor and Citibank, as Agent, as secured party, to be filed under the UCC of all jurisdictions that the Agent may deem necessary or desirable in order to perfect the ownership interests created or purported to be created hereby and by the Certificates. (ix) Proper financing statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Contracts, Related Security or Collections previously granted by the Seller. (x) Completed requests for information, dated on or a date reasonably near to the date of the initial Purchase, listing all effective financing statements filed in the jurisdictions referred to in subsection (b)(viii) above that name the Seller as debtor, together with copies of such other financing statements (none of which, except those filed pursuant to subsection (b)(viii) above, shall cover any Receivables, Contracts, Related Security or Collections. (xi) Favorable opinions of (A) Dechert, counsel to the Seller, each Originator and the Parent, in substantially the form of Exhibit H-1 hereto and as to such other matters as the Agent may reasonably request, (B) William T. Gallagher, Vice President, Secretary and General Counsel of the Parent, in substantially the form of Exhibit H-2 hereto and as to such other matters as the Agent may reasonably request, and (C) Dechert, counsel to each Originator and the Seller, in substantially the form of Exhibit H-3 and as to such other matters as the Agent may reasonably request, including (1) a "true sale" opinion with respect to the sale of Receivable Assets under and as defined in the Receivables Contribution and Sale Agreement from each Originator to the Seller and (2) an opinion with respect to the non-substantive consolidation of the Seller with each Originator or any of its Affiliates in a case under the U.S. Bankruptcy Code. 31 (xii) A favorable opinion of Shearman & Sterling, counsel to the Agent, as the Agent may reasonably request. (xiii) A Lock-Box Agreement with each Lock-Box Bank, executed by such Lock-Box Bank and the Seller or an Originator, as applicable. (xiv) A business plan of the Parent prepared by the chief financial officer of the Parent. (xv) A term sheet setting forth, among other things, the amounts, parties, terms and conditions of the restructuring of the Existing Credit Facilities. SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments. --------------------------------------------------------------------- Each Purchase (including the initial Purchase by each Purchaser and the Purchase referred to in Section 3.03) hereunder and the right of the Servicer to reinvest in Pool Receivables those Collections attributable to a Receivable Interest pursuant to Section 2.05 shall be subject to the further conditions precedent that (a) with respect to any such Purchase, on or prior to the date of such Purchase, the Servicer shall have delivered to the Agent, in form and substance satisfactory to the Agent, (i) a completed Seller Report, dated within 30 days prior to the date of such Purchase, together with a listing by Obligor of all Pool Receivables, (ii) a completed Weekly Report effective as of the end of the last Business Day of the then immediately preceding week, (iii) a completed Daily Report effective as of the end of the immediately preceding Business Day, and (iv) such additional information as may be reasonably requested by the Agent, and (b) on the date of such Purchase or reinvestment the following statements shall be true (and the acceptance by the Seller of the proceeds of such Purchase or reinvestment shall constitute a representation and warranty by the Seller that on the date of such Purchase or reinvestment such statements are true): (i) The representations and warranties contained in Section 4.01 of this Agreement, in Section 3.01 of the Receivables Contribution and Sale Agreement and in Section 5 of the Parent Undertaking are correct in all material respects on and as of the date of such Purchase or reinvestment, before and after giving effect to such Purchase or reinvestment and to the application of the proceeds therefrom, as though made on and as of such date, other than any such representations and warranties that, by their terms, refer to a specific date other than the date of said Purchase or reinvestment, in which case as of such dates; and (ii) No event has occurred and is continuing, or would result from such Purchase or reinvestment or from the application of the proceeds therefrom, which constitutes an Event of Termination or a Potential Event of Termination. and (c) the Agent shall have received such other approvals, opinions or documents as the Agent may reasonably request. 32 SECTION 3.03. Conditions Precedent to the Effectiveness of this Agreement. ------------------------------------------------------------------------- This Agreement, as it shall amend and restate the Existing Receivables Purchase Agreement, shall become effective when and only when, the parties hereto shall have executed counterparts of this Agreement pursuant to Section 11.08 and the following conditions precedent are satisfied: (a) The Agent shall have received on or before the Effective Date the following, each (unless otherwise indicated) dated the Effective Date, in form and substance satisfactory to the Agent: (i) The Certificate for the Purchasers, in exchange for the existing Certificate delivered pursuant to Section 3.01 (b)(i), which the Agent will cancel; (ii) The Receivables Contribution and Sale Agreement dated as of May 7, 2001, duly executed by the Seller and each Originator, together with: (A) Executed financing statements naming the Canadian Originator as debtor, the Seller as secured party and Citibank, as Agent, as assignee, to be filed under the PPSA, in each case, in order to perfect the Seller's interests created or purported to be created by the Receivables Contribution and Sale Agreement; (B) Proper financing change statements, if any, necessary to release all security interests and other rights of any Person in the Receivables, Related Security, Collections or Contracts previously granted by the Canadian Originator; (C) Completed requests for information, dated on or a date reasonably near to the date of such Purchase, listing all effective financing statements which name the Canadian Originator (under its present name and any previous name) as debtor and which are filed under the PPSA, together with copies of such financing statements (none of which, except those filed pursuant to clause (ii)(A) above, shall cover any Receivables, Related Security, Collections or Contracts); (D) The Consent and Agreements dated as of May 7, 2001, duly executed by the Seller and each Originator; and (E) A Subordinated Note dated as of May 7, 2001, in substantially the form of Exhibit B to the Receivables Contribution and Sale Agreement, payable to the order of the Canadian Originator, and duly executed by the Seller; (iii) Parent Undertaking, dated as of May 7, 2001, duly executed by the Parent; (iv) Certified copies of the articles and by-laws, as amended, of the Canadian Originator; (v) Certificate of status issued by the Ministry of Consumer and Business Services in the Province of Ontario, with respect to the Canadian Originator; 33 (vi) Certified copies of the resolutions of the Board of Directors of the Canadian Originator approving the Transaction Documents to be delivered by it hereunder and the transactions contemplated hereby and thereby; (vii) A certificate of the Secretary or Assistant Secretary of each of (A) the Seller, the Parent and each Originator (other than the Canadian Originator) certifying that the matters set forth in the certificate of Secretary of the Seller, the Parent or such Originator delivered on the Closing Date in respect of the Existing Receivables Purchase Agreement remain true and correct as of the date hereof and that there has been no amendment to the Charter or By-Laws of the Seller, the Parent or such Originator since the Closing Date, and (B) the Canadian Originator certifying the names and true signatures of the officers of the Canadian Originator authorized to sign the Transaction Documents and the other documents to be delivered by it hereunder; (viii) Executed UCC-2 or UCC-3 amendments to existing filed financing statements relating to the Receivables Purchase Agreement amending such financing statements to reflect the changes being made in the amended and restated Receivable Purchase Agreement in order to perfect the ownership interests created or purported to be created hereby and by the Certificate; (ix) Favorable opinions of (A) Dechert, counsel to the Seller, each Originator and the Parent, in substantially the form of Exhibit H-1 hereto and as to such other matters as the Agent may reasonably request, (B) Stikeman Elliott, Canadian counsel to the Canadian Originator in substantially the form of Exhibit H-4 hereto and as to such other matters as the Agent may reasonably request, (C) William T. Gallagher, Vice President, Secretary and General Counsel of the Parent, in substantially the form of Exhibit H-2 hereto and as to such other matters as the Agent may reasonably request, and (D) Dechert, counsel to each Originator and the Seller, in substantially the form of Exhibit H-3 and as to such other matters as the Agent may reasonably request, including (1) a "true sale" opinion with respect to the sale of Receivable Assets under and as defined in the Receivables Contribution and Sale Agreement from each Originator to the Seller and (2) an opinion with respect to the non-substantive consolidation of the Seller with each Originator or any of its Affiliates in a case under the U.S. Bankruptcy Code; and (x) A Lock-Box Agreement with each Lock-Box Bank at which a Lock-Box Account is maintained by the Canadian Originator, executed by such Lock-Box Bank and the Canadian Originator; (b) The Agent shall have received on or before the Effective Date either those consents (in writing) to the execution, delivery and performance by the parities hereto of this Agreement which are required under the Intercreditor Agreement or a written agreement by the Bank Agent (as defined in the Intercreditor Agreement) addressed to the Agent to the effect that no such consents are required under the Intercreditor Agreement. 34 (c) The Agent shall have received the payment in full of all fees and other amounts payable by the Seller on the execution and delivery of this Agreement and/or on the Effective Date. (d) Each Initial Purchaser other than Citibank shall have paid to the Agent's Account for the account of Citibank, and Citibank shall have received from such Initial Purchaser, an amount equal to such Initial Purchaser's Initial Capital pursuant to, and in accordance with Section 9.02(b). ARTICLE IV REPRESENTATIONS AND WARRANTIES SECTION 4.01. Representations and Warranties of the Seller. ---------------------------------------------------------- The Seller represents and warrants as follows: (a) The Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction indicated at the beginning of this Agreement, and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, except to the extent that any failure to be so qualified or in good standing as a foreign entity could not reasonably be expected to have a material adverse effect upon (i) the financial condition or operations of the Seller or (ii) the ability of the Seller to perform its obligations under this Agreement or any other Transaction Document to which the Seller is a party. The Seller has no subsidiaries. All of the outstanding shares of stock of the Seller are owned by the Parent, one or more direct or indirect wholly-owned subsidiaries of the Parent, or a corporation owned directly or indirectly by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent. (b) The execution, delivery and performance by the Seller of the Transaction Documents to which it is a party and the other documents delivered by it hereunder, and the transactions contemplated hereby and thereby, including the Seller's use of the proceeds of Purchases and reinvestments, are within the Seller's corporate powers, have been duly authorized by all necessary corporate action, do not (i) contravene the Seller's charter or by-laws, (ii) violate any applicable law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, or (iii) breach or result in a default under, or result in the acceleration of (or entitle any party to accelerate) the maturity of any obligation of the Seller under, or result in or require the creation of any lien upon or security interest in any property of the Seller pursuant to the terms of, any Contract or any other agreement or instrument (other than any Transaction Document) binding on or affecting the Seller or any of its properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Seller of any Transaction Document to which it is a party or any other agreement or document delivered hereunder or for the perfection of or the exercise by any Indemnified Party of its rights and remedies under the Transaction Documents and such other agreements or documents, except for the filings of the financing statements referred to in Article III. 35 (d) This Agreement has been, and each other Transaction Document to which the Seller is a party when delivered will have been, duly executed and delivered by the Seller. This Agreement is, and the other Transaction Documents to which the Seller is or will be a party when delivered hereunder will be, the legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and to general equitable principles. (e) There is no pending or, to the knowledge of the Seller, threatened action or proceeding affecting the Seller before any court, governmental agency or arbitrator which could reasonably be expected to materially adversely affect (i) the financial condition or operations of the Seller or (ii) the ability of the Seller to perform its obligations under this Agreement or any other Transaction Document to which the Seller is a party, or which purports to affect the legality, validity or enforceability of any Transaction Document. (f) No proceeds of any Purchase or reinvestment will be used to acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934. (g) Immediately prior to the time of the initial creation of an interest hereunder in any Pool Receivable and each Purchase, the Seller is the legal and beneficial owner of the Pool Receivables and Related Security with respect thereto, in each case free and clear of any Adverse Claim. Upon each Purchase or reinvestment, the Seller shall transfer to the Owner making such Purchase or reinvestment (and such Owner shall acquire) a valid undivided percentage ownership interest or security interest to the extent of the pertinent Receivable Interest in each Pool Receivable then existing or thereafter arising and in the Related Security and Collections with respect thereto, free and clear of any Adverse Claim, which ownership interest or security interest shall be a perfected first priority ownership interest or security interest upon the filing of the financing statements referred to in Section 3.01(b)(viii). No effective financing statement or other instrument similarly in effect covering any Contract or any Pool Receivable or Related Security or Collections with respect thereto is on file in any recording office, except those filed in favor of the Agent relating to this Agreement or in favor of the Seller and the Agent relating to the Receivables Contribution and Sale Agreement. (h) Each Seller Report, Weekly Report and Daily Report (if prepared by the Seller or one of its Affiliates, or to the extent that information contained therein is supplied by the Seller or any Affiliate thereof), information, exhibit, financial statement, or other report or document furnished or to be furnished at any time by or on behalf of the Seller to the Agent or any Owner in connection with this Agreement is and will be accurate in all material respects as of its date or as of the date so furnished, and no such report or document contains, or will contain, as of its date of delivery or the date so furnished, any untrue statement of a material fact or omits to state, or will omit to state, as of its date of delivery or the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. 36 (i) The principal place of business and chief executive office of the Seller, and the office where the Seller keeps its Records concerning the Pool Receivables, are located at the address specified in Schedule III hereto (or, by notice to the Agent in accordance with Section 5.01(c), at such other locations in jurisdictions, within the United States, where all actions required by Section 6.05(a) have been taken and completed). (j) The names and addresses of all the Lock-Box Banks, together with the lock-box numbers related to, and the account numbers and owners (the Seller or any Originator) of, the Lock-Box Accounts at such Lock-Box Banks, are specified in Schedule I hereto (or such other Lock-Box Banks and/or such other Lock-Box Accounts as have been notified to the Agent in accordance with Section 5.03(d)). (k) Since the date of its formation, the Seller has not engaged in any activity other than that contemplated by the Transaction Documents or entered into any commitment or incurred any Debt other than pursuant to, or as permitted under, the Transaction Documents. (l) The Seller has not maintained, contributed to or incurred or assumed any obligation with respect to any Plan, Multiemployer Plan or Welfare Plan. (m) The Seller has not sold, assigned, transferred, pledged or hypothecated any interest in any Pool Receivable or the Collections with respect thereto to any Person other than as contemplated by this Agreement or that has been released by the Agent from the Receivables Pool. (n) The Seller has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder. (o) The Seller has not extended or modified the terms of any Pool Receivable or the Contract under which any such Pool Receivable arose, except in accordance with the Credit and Collection Policy. (p) Except under the Lock-Box Agreements, the Seller has not granted any Person dominion or control of any Lock-Box Account, or the right to take dominion or control over any Lock-Box Account at a future time or upon the occurrence of a future event. (q) With respect to each transfer to it of any Pool Receivables, the Seller has either (i) purchased such Pool Receivables from any Originator in exchange for payment (made by the Seller to an Originator in accordance with the provisions of the Receivables Contribution and Sale Agreement) in an amount which constitutes fair consideration and approximates fair market value for such Pool Receivables and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximate an arm's-length transaction between unaffiliated parties or (ii) acquired such Pool Receivables from any Originator as a capital contribution in accordance with the provisions of the Receivables Contribution and Sale Agreement. No such sale, and no such contribution, has been made for or on account of an antecedent debt owed by any Originator to the Seller and no such sale or contribution is or may be voidable or subject to avoidance under any section of the U.S. Bankruptcy Code. 37 (r) The Seller has filed, or caused to be filed or be included in, all tax reports and returns (federal, state, local and foreign), if any, required to be filed by it and paid, or caused to be paid, all amounts of taxes, including interest and penalties, required to be paid by it, except for such taxes (i) as are being contested in good faith by proper proceedings and (ii) against which adequate reserves shall have been established in accordance with and to the extent required by GAAP, but only so long as the proceedings referred to in clause (i) above could not subject the Agent or any other Indemnified Party to any civil or criminal penalty or liability or involve any material risk of the loss, sale or forfeiture of any property, rights or interests covered hereunder or under the Receivables Contribution and Sale Agreement. SECTION 4.02. Representations and Warranties of the Servicer. ------------------------------------------------------------ The Servicer represents and warrants as follows: (a) The Servicer is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction indicated at the beginning of this Agreement, and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, except to the extent that any failure to be so qualified or in good standing as a foreign entity could not reasonably be expected to have a material adverse effect upon (i) the financial condition or operations of the Servicer or (ii) the ability of the Servicer to perform its obligations under this Agreement or any other Transaction Document to which the Servicer is a party. (b) The execution, delivery and performance by the Servicer of the Transaction Documents to which it is a party and the other documents to be delivered by it hereunder, and the transactions contemplated hereby and thereby, are within the Servicer's corporate powers, have been duly authorized by all necessary corporate action, do not (i) contravene the Servicer's charter or by-laws, (ii) violate any applicable law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, or (iii) breach or result in a default under, or result in the acceleration of (or entitle any party to accelerate) the maturity of any obligation of the Servicer under, or result in or require the creation of any lien upon or security interest in any property of the Servicer pursuant to the terms of, any Contract or any other agreement or instrument (other than any Transaction Document) binding on or affecting the Servicer or any of its properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Servicer of any Transaction Document to which it is a party. 38 (d) This Agreement has been, and each other Transaction Document to which the Servicer is a party when delivered will have been, duly executed and delivered by the Servicer. This Agreement is, and the other Transaction Documents to which the Servicer is party when delivered hereunder will be, the legal, valid and binding obligations of the Servicer enforceable against the Servicer in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and to general equitable principles. (e) There is no pending or, to the knowledge of the Servicer, threatened action or proceeding affecting the Servicer before any court, governmental agency or arbitrator which could reasonably be expected to materially adversely affect (i) the financial condition or operations of the Servicer or (ii) the ability of the Servicer to perform its obligations under this Agreement or any other Transaction Document to which the Servicer is a party, or which purports to affect the legality, validity or enforceability of any Transaction Document. (f) Each Seller Report, Weekly Report and Daily Report (if prepared by the Servicer or one of its Affiliates, or to the extent that information contained therein is supplied by the Servicer or any Affiliate thereof), information, exhibit, financial statement, or other report or document furnished or to be furnished at any time by or on behalf of the Servicer to the Agent or any Owner in connection with this Agreement is and will be accurate in all material respects as of its date or as of the date so furnished, and no such report or document contains, or will contain, as of its date of delivery or the date so furnished, any untrue statement of a material fact or omits to state, or will omit to state, as of its date of delivery or the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. (g) Since June 1, 2000, the Servicer has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder. (h) The Servicer has not extended or modified the terms of any Pool Receivable or the Contract under which any such Pool Receivable arose, except in accordance with the Credit and Collection Policy or in accordance with Section 6.02(b). ARTICLE V GENERAL COVENANTS OF THE SELLER AND THE SERVICER SECTION 5.01. Affirmative Covenants of the Seller. ------------------------------------------------- Until the later of (i) the Commitment Termination Date and (ii) the date upon which no Capital for any Receivable Interest shall be existing and no Yield, fees or other amounts remain unpaid under this Agreement, the Seller will, unless the Agent shall otherwise consent in writing: 39 (a) Compliance with Laws, Etc. -------------------------- Comply in all material respects with all applicable laws, rules, regulations and orders with respect to it and all Pool Receivables and related Contracts, Related Security and Collections with respect thereto. (b) Preservation of Corporate Existence. -------------------------------------- Preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such qualification would materially adversely affect the interests of the Owners or the Agent hereunder or in the Pool Receivables and Related Security, or the ability of the Seller or the Servicer to perform their respective obligations hereunder or the ability of the Seller to perform its obligations under the Contracts. (c) Offices, Records and Books of Accounts. -------------------------------------- (i) Keep its principal place of business and chief executive office and the offices where it keeps its Records concerning the Pool Receivables at the address of the Seller referred to in Section 4.01(i) or, upon at least 30 days' prior written notice to the Agent, at any other location in a jurisdiction where all actions required by Section 6.05(a) shall have been taken, and (ii) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable, the Outstanding Balance of each Pool Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Pool Receivable). (d) Performance and Compliance with Contracts and Credit and Collection ----------------------------------------------------------------------- Policy. ------ At its expense, timely and fully (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy in regard to the Pool Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce such Related Security as reasonably requested by the Agent. (e) Examination of Records; Audits. -------------------------------- (i) From time to time upon two days prior notice and during regular business hours as requested by the Agent, permit the Agent, or its agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of any Originator, the Seller, their respective Affiliates or the agents of such Originator, the Seller or their respective Affiliates, relating to Pool Receivables and the Related Security, including, without limitation, the related Contracts, and (B) to visit the offices and properties of any Originator, 40 the Seller, their respective Affiliates or the agents of such Originator, the Seller or their respective Affiliates, for the purpose of examining such materials described in clause (A) above, and to discuss matters relating to Pool Receivables and the Related Security or the Seller's performance hereunder or under the Contracts with any of the officers or employees of the Seller having knowledge of such matters, and (ii) at the request of the Agent within 90 days after the end of each fiscal year of the Seller commencing with the fiscal year of the Seller ending on December 31, 2001, and at the request of the Agent at any time and from time to time upon the occurrence and during the continuance of any Event of Termination or Potential Event of Termination, at the expense of the Seller, cause its independent public accountants to perform, and deliver to the Agent, a written report of an audit conducted by such accountants with respect to the Pool Receivables, Credit and Collection Policy, Lock-Box Account activity and the Seller's performance of its obligations under this Agreement, the Fee Letter and the Receivables Contribution and Sale Agreement on a scope and in a form reasonably requested by the Agent for such audit. (f) Keeping of Records and Books of Account. --------------------------------------- (i) Keep, or cause to be kept, proper books of record and account, which shall be maintained or caused to be maintained by the Seller and shall be separate and apart from those of any Affiliate of the Seller, in which full and correct entries shall be made of all financial transactions and the assets and business of the Seller in accordance with GAAP, (ii) to the extent Records are in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Interests have been conveyed to the Owners, and (iii) to the extent such Records constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Interests have been conveyed to the Owners. (g) Deposits to Lock-Box Accounts. ----------------------------- Instruct, or cause the Servicer to instruct, all Obligors to make payments in respect of Pool Receivables to a Lock-Box Account and, if the Seller or any Originator shall otherwise receive any Collections (including, without limitation, any Collections deemed to have been received by the Seller pursuant to Section 2.07), segregate and hold in trust such Collections and deposit such Collections, or cause such Collections to be deposited, to a Lock-Box Account within two Business Days following such receipt. (h) Maintenance of Separate Existence. --------------------------------- Do all things necessary to maintain its corporate existence separate and apart from each Originator and other Affiliates of the Seller, including, without limitation, (i) maintaining proper corporate records and books of account separate from those of such Affiliates; (ii) maintaining its assets, funds and transactions separate from those of such Affiliates, reflecting such assets, funds and transactions in financial statements separate and distinct from those of such Affiliates, and evidencing such assets, funds and transactions by appropriate entries in the records and books referred to in clause (i) above, and providing for its own operating expenses and liabilities from its own assets and funds other than certain expenses and liabilities relating to basic corporate overhead which may be allocated between the Seller and such Affiliates; (iii) holding such appropriate meetings or obtaining such appropriate consents of its Board of Directors as are necessary to authorize all the Seller's corporate actions required by law to be authorized by its Board of Directors, keeping minutes of such meetings and of meetings of its stockholders and observing all other customary corporate formalities (and any successor Seller not a corporation shall observe similar procedures in accordance with its governing documents and applicable law); (iv) at all times entering into its contracts and otherwise holding itself out to the public under the Seller's own name as a legal entity separate and distinct from such Affiliates; and (v) conducting all transactions and dealings between the Seller and such Affiliates on an arm's-length basis. 41 (i) Compliance with Opinion Assumptions and Charter and By-Laws. ----------------------------------------------------------- Without limiting the generality of subsection (h) above, maintain in place all policies and procedures, and take and continue to take all actions, described in the assumptions as to facts set forth in, and forming the basis of, the opinions set forth in the opinion delivered to the Agent pursuant to Section 3.01(b)(xi)(B), and comply with, and cause compliance with, the provisions of the charter and by-laws of the Seller delivered to the Agent pursuant to Section 3.01 as the same may, from time to time, be amended, supplemented or otherwise modified with the prior written consent of the Agent. (j) Purchase of Pool Receivables from Originators. --------------------------------------------- With respect to each Pool Receivable acquired from any Originator by the Seller other than as a capital contribution, pay to such Originator (in accordance with the Receivables Contribution and Sale Agreement) an amount which constitutes fair consideration and approximates fair market value for such Pool Receivable and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximate an arm's-length transaction between unaffiliated parties. (k) Nature of Business and Permitted Transactions. --------------------------------------------- Engage solely in the businesses and transactions authorized by Section 3 of its charter. (l) Receivables Contribution and Sale Agreement. ------------------------------------------- At its expense, timely and fully perform and comply in all material respects with all provisions, covenants and other promises required to be observed by it under the Receivables Contribution and Sale Agreement, maintain the Receivables Contribution and Sale Agreement in full force and effect, enforce the Receivables Contribution and Sale Agreement in accordance with its terms, take all such action to such end as may be from time to time reasonably requested by the Agent, and make to any party to the Receivables Contribution and Sale Agreement such demands and requests for information and reports or for action as the Seller is entitled to make thereunder and as may be from time to time reasonably requested by the Agent. SECTION 5.02. Reporting Requirements of the Seller. -------------------------------------------------- Until the later of (i) the Commitment Termination Date and (ii) the date upon which no Capital for any Receivable Interest shall be existing and no Yield, fees or other amounts remain unpaid under this Agreement, the Seller will, unless the Agent shall otherwise consent in writing, furnish to the Agent: (a) as soon as available and in any event within 60 days after the end of each fiscal year of the Seller, a copy of the financial statements for such year for the Seller certified in a manner acceptable to the Agent by the Chief Financial Officer, Vice President or Treasurer of the Seller; 42 (b) as soon as possible and in any event within two days after an officer of the Seller, Crown (USA), an Originator or the Parent first becomes aware of each Event of Termination or Potential Event of Termination continuing on the date of such statement, a statement of the chief financial officer of the Seller setting forth details of such Event of Termination or Potential Event of Termination and the action which the Seller has taken and proposes to take with respect thereto; and (c) such other information, documents, records or reports respecting the Receivables, the Related Security, the Contracts or the condition or operations, financial or otherwise, of the Seller as the Agent may from time to time reasonably request. SECTION 5.03. Negative Covenants of the Seller. ---------------------------------------------- Until the later of (i) the Commitment Termination Date and (ii) the date upon which no Capital for any Receivable Interest shall be existing and no Yield, fees or other amounts remain unpaid under this Agreement, the Seller will not, without the written consent of the Agent: (a) Sales, Adverse Claims, Etc. -------------------------- Except as otherwise provided herein, sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon or with respect to, the Seller's undivided interest in any Pool Receivable or Related Security or Collections in respect thereof, or upon or with respect to any related Contract or any deposit account to which any Collections of any Pool Receivable are sent (including, without limitation, any Lock-Box Account), or assign any right to receive income in respect thereof. (b) Extension or Amendment of Receivables. ------------------------------------- Except as otherwise permitted in Section 6.02, extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related thereto. (c) Change in Business or Credit and Collection Policy. -------------------------------------------------- Make any change in the character of its business or in the Credit and Collection Policy that would, in either case, be reasonably likely to impair the collectibility of the Pool Receivables. (d) Change in Payment Instructions to Obligors. ------------------------------------------ Add or terminate any bank as a Lock-Box Bank or any deposit account as a Lock-Box Account from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days' prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and the Seller or any Originator, as applicable. (e) Deposits to Lock-Box Accounts. ----------------------------- Deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables. 43 (f) Change of Name, Etc. ------------------- Change its name, identity, form of legal structure or jurisdiction of organization, unless, prior to the effective date of any such change, the Seller delivers to the Agent (i) UCC financing statements, executed by the Seller and, if applicable, each Originator, necessary to reflect such change and to continue the perfection of the ownership interests in the Receivable Interests contemplated by this Agreement and (ii) if the identity or structure of the Seller has changed and such change adversely affects the rights of the Agent under then existing Lock-Box Agreements with the Seller to take control of the Lock-Box Accounts pursuant to Section 6.03(a), new Lock-Box Agreements executed by the Seller and the Lock-Box Banks, to the extent necessary to reflect such changes and to continue to enable the Agent to exercise such rights. (g) Debt. ---- Except as otherwise provided herein or in the Receivables Contribution and Sale Agreement, create, incur, assume or suffer to exist any indebtedness, other than (i) indebtedness of the Seller representing fees, expenses and indemnities arising hereunder or under the Receivables Contribution and Sale Agreement for the purchase price of the Receivables under the Receivables Contribution and Sale Agreement, and (ii) other indebtedness of the Seller incurred in the ordinary course of its business in an amount not to exceed $9,500 at any time outstanding. (h) Lease Obligations. ----------------- Create, incur, assume or suffer to exist any obligations as lessee for the rental or lease of real or personal property, other than for the lease or rental of an office space or office equipment for use by the Seller in the ordinary course of its business. (i) ERISA. ----- Adopt, maintain, contribute to or incur or assume any obligation with respect to any Plan, Multiemployer Plan or Welfare Plan. (j) Investments in Other Persons. ---------------------------- Except as otherwise provided herein or in the Receivables Contribution and Sale Agreement, make or hold any Investment in any Person. (k) Sales, Etc., of Assets. ---------------------- Except as contemplated by this Agreement, sell, lease, transfer or otherwise dispose of any assets. (l) Merger, Etc. ----------- Consolidate with or merge into any other Person. (m) Organizational Documents. ------------------------ Amend, supplement or otherwise modify Section 3, 6 or 7 of its charter or Section 1, 3, 4 or 16 of Article II of its by-laws, in each case furnished to the Agent pursuant to Section 3.01. (n) Accounting. ---------- Account for (including for accounting and tax purposes) or otherwise treat the transactions contemplated by the Receivables Contribution and Sale Agreement in any manner other than as sales of Receivables by any Originator to the Seller, or account for (other than for tax purposes) or otherwise treat the transactions contemplated by this Agreement in any manner other than as sales of Receivable Interests by the Seller to the Agent for the account of the Purchasers. 44 (o) Receivables Contribution and Sale Agreement. ------------------------------------------- (i) Cancel or terminate the Receivables Contribution and Sale Agreement or consent to or accept any cancellation or termination thereof, (ii) amend, supplement or otherwise modify any term or condition of the Receivables Contribution and Sale Agreement or give any consent, waiver or approval thereunder, (iii) waive any default under or breach of the Receivables Contribution and Sale Agreement or (iv) take any other action under the Receivables Contribution and Sale Agreement not required by the terms thereof that would impair the value of any Additional Assigned Rights or the rights or interests of the Seller thereunder or of the Agent or any Owner or Indemnified Party hereunder or thereunder. SECTION 5.04. Affirmative Covenants of the Servicer. --------------------------------------------------- Until the later of (i) the Commitment Termination Date and (ii) the date upon which no Capital for any Receivable Interest shall be existing and no Yield, fees or other amounts remain unpaid under this Agreement, the Servicer will, unless the Agent shall otherwise consent in writing: (a) Compliance with Laws, Etc. ------------------------- Comply in all material respects with all applicable laws, rules, regulations and orders with respect to it and all Pool Receivables and related Contracts, Related Security and Collections with respect thereto. (b) Preservation of Corporate Existence. ----------------------------------- Preserve and maintain its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such qualification would materially adversely affect the interests of the Owners or the Agent hereunder or in the Pool Receivables and Related Security, or the ability of the Servicer to perform its obligations hereunder. (c) Books of Accounts. ----------------- Maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Pool Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Pool Receivables (including, without limitation, records adequate to permit the daily identification of each Pool Receivable, the Outstanding Balance of each Pool Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Pool Receivable). (d) Performance and Compliance with Contracts and Credit and Collection ------------------------------------------------------------------- Policy. ------ At its expense, timely and fully (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Pool Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy in regard to the Pool Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce such Related Security as reasonably requested by the Agent. 45 (e) Examination of Records; Audits. ------------------------------ (i) From time to time upon two days prior notice and during regular business hours as requested by the Agent, permit the Agent, or its agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of any Originator, the Seller, the Servicer, their respective Affiliates or the agents of such Originator, the Seller, the Servicer or their respective Affiliates, relating to Pool Receivables and the Related Security, including, without limitation, the related Contracts, and (B) to visit the offices and properties of any Originator, the Seller, the Servicer, their respective Affiliates or the agents of such Originator, the Seller, the Servicer, or their respective Affiliates, for the purpose of examining such materials described in clause (A) above, and to discuss matters relating to Pool Receivables and the Related Security or the Servicer's performance hereunder or under the Contracts with any of the officers or employees of the Servicer having knowledge of such matters, and (ii) at the request of the Agent within 90 days after the end of each fiscal year of the Servicer commencing with the fiscal year of the Seller ending on December 31, 2001, and at the request of the Agent at any time and from time to time upon the occurrence and during the continuance of any Event of Termination or Potential Event of Termination, at the expense of the Servicer, cause its independent public accountants to perform, and deliver to the Agent, a written report of an audit conducted by such accountants with respect to the Pool Receivables, Credit and Collection Policy, Lock-Box Account activity and the Servicer's performance of its obligations under this Agreement and the Receivables Contribution and Sale Agreement on a scope and in a form reasonably requested by the Agent for such audit. (f) Keeping of Records and Books of Account. --------------------------------------- (i) Keep, or cause to be kept, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Servicer in accordance with GAAP, (ii) to the extent Records are in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Interests have been conveyed to the Owners, and (iii) to the extent such Records constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Interests have been conveyed to the Owners. (g) Deposits to Lock-Box Accounts. ----------------------------- Instruct all Obligors to make payments in respect of Pool Receivables to a Lock-Box Account and, if the Servicer shall otherwise receive any Collections (including, without limitation, any Collections deemed to have been received by the Seller pursuant to Section 2.07), segregate and hold in trust such Collections and deposit such Collections, or cause such Collections to be deposited, to a Lock-Box Account within two Business Days following such receipt. SECTION 5.05. Negative Covenants of the Servicer. ------------------------------------------------ Until the later of (i) the Commitment Termination Date and (ii) the date upon which no Capital for any Receivable Interest shall be existing and no Yield, fees or other amounts remain unpaid under this Agreement, the Servicer will not, without the written consent of the Agent: (a) Extension or Amendment of Receivables. ------------------------------------- Except as otherwise permitted in Section 6.02, extend, amend or otherwise modify the terms of any Pool Receivable, or amend, modify or waive any term or condition of any Contract related thereto. 46 (b) Change in Business or Credit and Collection Policy. -------------------------------------------------- Make any change in the character of its business or in the Credit and Collection Policy that would, in either case, be reasonably likely to impair the collectibility of the Pool Receivables. (c) Change in Payment Instructions to Obligors. ------------------------------------------ Add or terminate any bank as a Lock-Box Bank or any deposit account as a Lock-Box Account from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days' prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and the Seller or any Originator, as applicable. (d) Deposits to Lock-Box Accounts. ----------------------------- Deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Pool Receivables. ARTICLE VI ADMINISTRATION AND COLLECTION SECTION 6.01. Designation of Servicer. ------------------------------------- The Pool Receivables shall be serviced, administered and collected by the Person (the "Servicer") designated to do so from time to time in accordance with this Section 6.01. Until the Agent designates a new Servicer, Crown (USA) is hereby designated as, and hereby agrees to perform the duties and obligations of, the Servicer pursuant to the terms hereof. The Agent may at any time designate as Servicer any Person (including itself) to succeed Crown (USA) or any successor Servicer, if such Person (other than itself) shall agree in writing to perform the duties and obligations of the Servicer pursuant to the terms hereof. The Servicer may subcontract with each other Originator to service, administer or collect the Pool Receivables that such other Originator creates, and may, with the prior consent of the Agent, subcontract with any other Person to service, administer or collect the Pool Receivables, provided that such other Originator or other Person with whom the Servicer so subcontracts shall not become the Servicer hereunder and the Servicer shall remain liable for the performance of the duties and obligations of the Servicer pursuant to the terms hereof. SECTION 6.02. Duties of Servicer. -------------------------------- (a) The Servicer shall take or cause to be taken all such commercially reasonable actions as may be necessary or advisable to collect each Pool Receivable from time to time, all in accordance with applicable laws, rules and regulations, with reasonable care and diligence, and in accordance with the Credit and Collection Policy. Each of the Seller, the Purchasers and the Agent hereby appoints as its agent the Servicer, from time to time designated pursuant to Section 6.01, to enforce its respective rights and interests in and under the Pool Receivables, the Related Security and the related Contracts. 47 (b) The Servicer shall set aside and hold in trust for the account of the Seller and each Owner their respective allocable shares of the Collections of Pool Receivables in accordance with Sections 2.05 and 2.06, but shall not be required (unless otherwise requested by the Agent) to segregate the funds constituting such portion of such Collections prior to the remittance thereof in accordance with such Sections. If instructed by the Agent, the Servicer shall segregate and deposit with a bank (which may be Citibank) designated by the Agent such allocable share of Collections of Pool Receivables set aside for each Owner on the first Business Day following receipt by the Servicer of such Collections. If no Event of Termination or Potential Event of Termination shall have occurred and be continuing, Crown (USA), while it is the Servicer, may, in accordance with the Credit and Collection Policy, (i) extend the maturity or adjust the Outstanding Balance of any Defaulted Receivable as Crown (USA) may determine to be appropriate to maximize Collections thereof, (ii) extend the term of any Contract and (iii) adjust any other terms and conditions of any Contract if, but only if (in the case of this clause (iii)), the Servicer gives at least two Business Days' prior written notice of such adjustments to the Agent and the Agent agrees in writing to such adjustments. (c) The Servicer shall administer the Collections in accordance with the procedures described herein and in Section 2.07. The Servicer shall set aside and hold in trust for the account of the Seller in accordance with subsection (b) of this Section 6.02, (i) the Seller's allocable share of the Collections of Pool Receivables less all reasonable out-of-pocket costs and expenses of such Servicer of servicing, administering and collecting the Pool Receivables to the extent not covered by the Servicer Fee received by it and (ii) the Collections of any Receivable which is not a Pool Receivable in accordance with Section 2.07. The Servicer shall, if not Crown (USA), as soon as practicable following receipt, turn over to the Seller any cash collections or other cash proceeds received with respect to Receivables not constituting Pool Receivables. (d) The Servicer shall hold in trust for the Seller and each Owner, in accordance with their respective interests, all Records that evidence or relate to the Pool Receivables. The Servicer shall, upon the occurrence and during the continuance of any Event of Termination, and at the request of the Agent, provide to the Agent the Records with respect to the Pool Receivables. (e) The Servicer shall, from time to time at the request of the Agent, furnish to the Agent (promptly after any such request) a calculation of the amounts set aside for each Owner pursuant to Section 2.05 or 2.06. SECTION 6.03. Rights of the Agent. --------------------------------- (a) The Agent is hereby authorized at any time to date, and to deliver to the Lock-Box Banks, the Lock-Box Notices referred to in the Lock-Box Agreements. The Seller and Crown (USA) each hereby, when the Agent shall deliver the Lock-Box Notices to the Lock-Box Banks, transfers to the Agent the exclusive ownership, dominion and control of the Lock-Box Accounts to which the Obligors of Pool Receivables shall make payments, and shall take any further action that the Agent may reasonably request to effect such transfer. Further, the Agent may notify at any time and at the Seller's expense the Obligors of Pool Receivables, or any of them, of the ownership of Receivable Interests by the Owners. (b) At any time following the designation of a Servicer other than Crown (USA) pursuant to Section 6.01: 48 (i) The Agent may direct the Obligors of Pool Receivables, or any of them, to make payment of all amounts due or to become due to the Seller under any Pool Receivable directly to the Agent or its designee. (ii) The Seller and Crown (USA) each shall, at the Agent's request and at the Seller's and Crown (USA)'s expense, give notice of such ownership to such Obligors and direct them to make such payments directly to the Agent or its designee. (iii) The Seller and Crown (USA) each shall, at the Agent's request, (A) assemble all of the Records which evidence or relate to the Pool Receivables, and the related Contracts and Related Security, or which are otherwise necessary or desirable to collect the Pool Receivables, and shall make the same available to the Agent at a place reasonably selected by the Agent or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of Pool Receivables in a manner reasonably acceptable to the Agent and shall, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee. (iv) The Agent may take any and all commercially reasonable steps in the Seller's or Crown (USA)'s name and on behalf of the Seller and the Owners necessary or desirable, in the determination of the Agent, to collect all amounts due under any and all Pool Receivables, including, without limitation, endorsing the Seller's or Crown (USA)'s name on checks and other instruments representing Collections, enforcing such Pool Receivables and the related Contracts, and adjusting, settling or compromising the amount or payment thereof, in the same manner and to the same extent as the Seller or Crown (USA) might have done. SECTION 6.04. Responsibilities of the Seller. -------------------------------------------- Anything herein to the contrary notwithstanding: (a) The Seller and Crown (USA) each shall perform all of its obligations under the Contracts related to the Pool Receivables to the same extent as if Receivable Interests had not been sold hereunder and the exercise by the Agent of its rights hereunder shall not release Crown (USA) or the Seller from such obligations or its obligations with respect to Pool Receivables or under the related Contracts; and (b) Neither the Agent nor the Owners shall have any obligation or liability with respect to any Pool Receivables or related Contracts, nor shall any of them be obligated to perform any of the obligations of the Seller thereunder. 49 SECTION 6.05. Further Action Evidencing Purchases. ------------------------------------------------- (a) The Seller and the Servicer each agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary, or that the Agent may reasonably request, in order to perfect, protect or more fully evidence the Receivable Interests purchased by the Owners hereunder, or to enable any of them or the Agent to exercise and enforce any of their respective rights and remedies hereunder or under the Certificates. Without limiting the generality of the foregoing, the Seller and the Servicer each will upon the request of the Agent: (i) execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary, or as the Agent may reasonably request, in order to perfect, protect or evidence such Receivable Interests; (ii) mark conspicuously each invoice evidencing each Pool Receivable and the related Contract with a legend, acceptable to the Agent, evidencing that such Receivable Interests have been sold in accordance with this Agreement; and (iii) mark its master data processing records evidencing such Pool Receivables and related Contracts with such legend. (b) The Seller hereby authorizes the Agent to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relating to all or any of the Contracts, or Pool Receivables and the Related Security and Collections with respect thereto, now existing or hereafter arising, without the signature of the Seller where permitted by law. A photocopy or other reproduction of this Agreement or any financing statement covering all or any of the Contracts, or Pool Receivables and the Related Security and Collections with respect thereto shall be sufficient as a financing statement where permitted by law. (c) If the Servicer or the Seller fails to perform any agreement contained herein, then after notice to the Servicer or the Seller, as applicable, the Agent may itself perform, or cause performance of, such agreement, and the reasonable costs and expenses of the Agent incurred in connection therewith shall be payable by the Seller under Section 10.01 or Section 11.04, as applicable. ARTICLE VII EVENTS OF TERMINATION SECTION 7.01. Events of Termination. ----------------------------------- If any of the following events ("Events of Termination") shall occur and be continuing: (a) The Seller or the Servicer (if Crown (USA) or any of its Affiliates) shall fail to make any payment or deposit to be made by it hereunder when due and such failure remains unremedied for one Business Day, or the Servicer (if Crown (USA) or any of its Affiliates) shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed (other than any such term, covenant or agreement contained in Article (V)) and such failure remains unremedied for five Business Days; or (b) Any representation or warranty made or deemed made by the Seller or any Originator or the Parent (or any of their respective officers) under or in connection with this Agreement or any other Transaction Document or in any Seller Report, Weekly Report or Daily Report or any other written report, certificate or information delivered by or on behalf of the Seller or any Originator or the Parent (or any of their respective officers) pursuant hereto or thereto, shall prove to have been incorrect in any material respect when made or deemed made or delivered; or 50 (c) The Seller or the Servicer (if Crown (USA) or any of its Affiliates) shall fail to perform or observe any term, covenant or agreement contained in Section 5.01(e), 5.01(g), 5.02(b), 5.03, 5.04(e), 5.04(g) or 5.05 of this Agreement, or any Originator shall fail to perform or observe any term, covenant or agreement contained in Section 4.01(g), 4.01(i), 4.01(j)(v) or 4.02 of the Receivables Contribution and Sale Agreement; or (d) The Seller, Crown (USA) (other than in its capacity as Servicer), any Originator or the Parent shall fail to perform or observe any other term, covenant or agreement contained in any Transaction Document to which it is a party on its part to be performed or observed and any such failure shall remain unremedied for 10 days after written notice thereof shall have been given to the Seller, Crown (USA), such Originator or the Parent, as the case may be, by the Agent; or (e) The Seller or Crown (USA) or the Parent shall fail to pay any principal of, or premium or interest on, any of its Debt that is outstanding in a principal amount of at least $9,500, in the case of the Seller, and $100,000,000, in the case of Crown (USA) or the Parent, either individually or in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), redeemed, purchased or defeased, or an offer to prepay, redeem, purchase or defease such Debt shall be required to be made, in each case prior to the stated maturity thereof; or (f) Any Purchase or any reinvestment pursuant to Section 2.05 shall for any reason (other than pursuant to the terms hereof) cease to create, or any Receivable Interest shall for any reason cease to be, a valid and perfected first priority undivided percentage ownership interest or security interest to the extent of the pertinent Receivable Interest in each applicable Pool Receivable and the Related Security and Collections with respect thereto or any Certificate shall for any reason cease to evidence in the Owner of such Receivable Interest legal and equitable title to, and ownership of, an undivided percentage ownership interest or security interest in Pool Receivables and Related Security to the extent of such Receivable Interest; or (g) The Seller, the Servicer (if Crown (USA) or any of its Affiliates), the Parent or any Originator shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Seller, the Servicer (if Crown (USA) or any of its Affiliates), the Parent or any Originator seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for it or for any substantial part of its property and, in the case of any such proceeding instituted against it (but not instituted by it) that is being diligently contested by it in good faith, either such proceeding shall remain undismissed or unstayed for a period of 30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official for, it or for any substantial part of its property) shall occur; or the Seller, the Servicer (if Crown (USA) or any of its Affiliates), the Parent or any Originator shall take any corporate action to authorize any of the actions set forth above in this subsection (g); or 51 (h) The Net Receivables Pool Balance shall be less than the Required Net Receivables Pool Balance for a period of two consecutive Business Days or more; or (i) Since December 31, 2000, there shall have been any material adverse change in the financial condition or operations of the Seller or Crown (USA) or the Parent or any Originators, other than to the extent expressly set forth on Schedule V hereto or disclosed in any public filing prior to the date hereof with the Securities and Exchange Commission, or there shall have occurred any event which materially adversely affects the collectibility of the Pool Receivables, or there shall have occurred any other event which materially adversely affects the ability of the Servicer (if Crown (USA) or any of its Affiliates) to collect Pool Receivables or the ability of the Servicer (if Crown (USA) or any of its Affiliates) to perform hereunder, other than to the extent expressly set forth on Schedule V hereto or disclosed in any public filing prior to the date hereof with the Securities and Exchange Commission; or (j) Any provision of any Transaction Document shall for any reason cease to be a legal, valid and binding obligation of the Seller, the Servicer (if Crown (USA) or any of its Affiliates), the Parent or any Originator, as applicable, or the Seller, the Servicer (if Crown (USA) or any of its Affiliates), the Parent or any Originator, as applicable, shall so state in writing; or (k) The Parent, or another corporation owned directly or indirectly by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent, shall cease to own, directly or indirectly, 100% of the outstanding shares of stock of the Seller; or (l) A Change of Control shall occur; or (m) Section 3, 6 or 7 of the charter, or Section 1, 3, 4, or 16 of Article II of the by-laws, of the Seller shall be amended, supplemented or otherwise modified without consent of the Agent; then, and in any such event, the Agent shall, at the request, or may with the consent, of the Required Purchasers, by notice to the Seller and the Servicer declare the Commitment Termination Date to have occurred, whereupon the Commitment Termination Date shall forthwith occur; provided that, automatically upon the occurrence of any event (without any requirement for the passage of time or the giving of notice, or both) described in subsection (g) of this Section 7.01, the Commitment Termination Date shall occur, and the Agent may replace the Servicer pursuant to Section 6.01. Upon any such occurrence of the Commitment Termination Date, the Agent and each Owner shall have, in addition to all other rights and remedies under this Agreement or otherwise, all other rights and remedies provided under the PPSA or the UCC of the applicable jurisdiction and other applicable laws, which rights shall be cumulative. Without limiting the foregoing or the general applicability of Article IX hereof, any Owner may elect to assign any Receivable Interest owned by such Owner to an Assignee pursuant to Section 9.01 following the occurrence of any Event of Termination. 52 ARTICLE VIII THE AGENT SECTION 8.01. Authorization and Action. -------------------------------------- Each Purchaser hereby appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Transaction Documents and the other instruments and documents delivered pursuant hereto as are delegated to the Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto. The Agent agrees to give to each Purchaser prompt notice of each notice (including, without limitation, each report and financial statement received hereunder or under any other Transaction Document) given to the Agent by the Seller, the Servicer, the Parent or an Originator pursuant to the terms of this Agreement or any other Transaction Document. SECTION 8.02. Agent's Reliance, Etc. ----------------------------------- Neither the Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Agent under or in connection with this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto (including, without limitation, the Agent's servicing, administering or collecting Pool Receivables as Servicer pursuant to Section 6.01), except for its or their own gross negligence or willful misconduct. Without limiting the generality of the foregoing, except as otherwise agreed by the Agent and any Owner, the Agent: (i) may consult with legal counsel (including counsel for the Seller, the Servicer or any Originator), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or representation to any Owner and shall not be responsible to any Owner for any statements, warranties or representations (whether written or oral) made in or in connection with this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto; (iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto on the part of the Seller or any Originator or to inspect the property (including the books and records) of the Seller or any Originator; (iv) shall not be responsible to any Owner for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Contribution and Sale Agreement; and (v) shall incur no liability under or in respect of this Agreement or any other Transaction Document or any other instrument or document delivered pursuant hereto by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by telecopier, telegram, cable or telex) reasonably believed by it to be genuine and signed or sent by the proper party or parties. 53 SECTION 8.03. Citibank and Affiliates. ------------------------------------- With respect to any Receivable Interest owned by it, Citibank shall have the same rights and powers under this Agreement as any other Owner and may exercise the same as though it were not the Agent. Citibank and its Affiliates may generally engage in any kind of business with the Seller or any Originator or any Obligor, any of their respective Affiliates and any Person who may do business with or own securities of the Seller or any Originator or any Obligor or any of their respective Affiliates, all as if Citibank were not the Agent and without any duty to account therefor to the Owners. SECTION 8.04. Purchase Decisions. -------------------------------- Each Purchaser acknowledges that it has, independently and without reliance upon the Agent or any of its Affiliates or any other Purchaser or Owner and based on such documents and information as it has deemed appropriate, made its own evaluation and decision to enter into this Agreement and to purchase undivided ownership interests in Pool Receivables hereunder. Each Purchaser also acknowledges that it shall, independently and without reliance upon the Agent, any of its Affiliates or any other Purchaser or Owner and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement. SECTION 8.05. Indemnification. ----------------------------- The Purchasers agree to indemnify the Agent (to the extent not promptly reimbursed by the Seller), ratably according to the Receivable Interests then owned by them (or, if no Receivable Interest is at that time owned by them, ratably according to their respective Commitments) from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against the Agent in any way relating to or arising out of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or any action taken or omitted by the Agent under this Agreement or any other Transaction Document or any such instrument or document; provided that no Purchaser shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's gross negligence or willful misconduct. Without limitation of the foregoing, the Purchasers agree to reimburse the Agent, ratably according to the Receivable Interests then owned by them (or, if no Receivable Interest is at that time owned by any of them, ratably according to their respective Commitments), promptly upon demand for any costs and expenses (including, without limitation, reasonable fees and disbursements of counsel) payable by the Seller to the Agent under Section 11.04, to the extent that the Agent is not promptly reimbursed for such costs and expenses by the Seller. 54 ARTICLE IX ASSIGNMENT OF RECEIVABLE INTERESTS SECTION 9.01. Assignment. ------------------------ (a) Each Purchaser may assign to any Assignee, and any Assignee may assign to any other Assignee, any Receivable Interest. Upon any such assignment, (i) the Assignee thereof shall become an Owner of such Receivable Interest for all purposes of this Agreement and (ii) the Owner assignor thereof shall relinquish its rights with respect to such Receivable Interest for all purposes of this Agreement. Such assignment shall be upon such terms and conditions as the assignor and the Assignee of such Receivable Interest may mutually agree; the parties thereto shall deliver to the Agent an Assignment, duly executed by such parties; and such assignor shall promptly execute and deliver all further instruments and documents, and take all further action, that the Assignee may reasonably request in order to perfect, protect or more fully evidence the Assignee's right, title and interest in and to such Receivable Interest, and to enable the Assignee to exercise or enforce any rights hereunder or under the Certificate. The Agent shall promptly provide notice to the Seller of any assignment of any Receivable Interest hereunder. (b) By executing and delivering an Assignment (in the case of an Owner assignor) and executing and accepting an Assignment (in the case of an Assignee), the Owner assignor thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment, such assigning Owner makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Contribution and Sale Agreement; (ii) such assigning Owner makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller or any Originator or the Parent or the performance or observance by the Seller or any Originator or the Parent of any of its obligations under this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto; (iii) such Assignee confirms that it has received copies of this Agreement and the other Transaction Documents, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and to purchase such Receivable Interest; (iv) such Assignee will, independently and without reliance upon the Agent, any of its Affiliates, such assigning Owner or any other Owner and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto; (v) such Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto as are delegated to the Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; and (vi) such Assignee appoints as its agent the Servicer from time to time designated pursuant to Section 6.01 to enforce its respective rights and interests in and under the Pool Receivables and the Related Security and Collections with respect thereto and the related Contracts. 55 SECTION 9.02. Citibank's Assignment of Rights and Obligations to Other --------------------------------------------------------------------------- Initial Purchasers. ------------------ (a) On the Effective Date, Citibank hereby sells and assigns to each other Initial Purchaser, and such other Initial Purchaser hereby purchases and assumes from Citibank, that percentage interest which is set forth under the name of such other Initial Purchaser on the signature pages hereto (such percentage interest being such other Initial Purchaser's "Percentage Interest") in and to (i) Citibank's rights and obligations under this Agreement as of the Effective Date (including, without limitation, Citibank's commitment to make Purchases and Citibank's obligation to make reinvestments of its interest in Collections of Pool Receivables from time to time hereunder) and (ii) Citibank's right, title and interest in the existing Receivable Interests owned by Citibank on the Effective Date, with the effect that such other Initial Purchaser shall have a Commitment under this Agreement on and as of the Effective Date equal to the amount set forth as the "Commitment" opposite the name of such other Initial Purchaser on the signature pages hereto. (b) In consideration of the payment to the Agent's Account for the account of Citibank by each Initial Purchaser other than Citibank of an amount equal to such Initial Purchaser's Initial Capital, being such Initial Purchaser's Percentage Interest of the existing aggregate Capital attributable to Citibank's right, title and interest in the Receivable Interests owned by Citibank on the Effective Date, Citibank hereby assigns to such Initial Purchaser, and such Initial Purchaser hereby purchases from Citibank, its Percentage Interest in and to all of Citibank's right, title and interest in and to the Receivable Interests purchased by Citibank prior to the Effective Date. (c) On the Effective Date Citibank (i) represents and warrants to each other Initial Purchaser that Citibank is the legal and beneficial owner of the interest in the Receivable Interests being assigned by it under Section 9.02 (a) and (b) and that such interest in such Receivable interests is free and clear of any Adverse Claim created by Citibank; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any such other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created purported to be created under this Agreement or under the Receivables Contribution and Sale Agreement; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller or any Originator or the Parent or the performance or observance by the Seller or any Originator or Parent of any of its obligations under this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto. (d) On the Effective Date, each Initial Purchaser other than Citibank (i) confirms to Citibank that it has received a copy of the Transaction Documents together with such other documents and information as it has deemed appropriate to make its own analysis and decision to enter into this Agreement and to purchase its Percentage Interest in and to Citibank's right, title and interest in such Receivable Interests being purchased by such Initial Purchaser under this Section 9.02; and (ii) agrees that it will, independently and without reliance upon the Agent, any of its Affiliates, Citibank or an any former Owner and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto. 56 SECTION 9.03. Purchaser's Assignment of Rights and Obligations. -------------------------------------------------------------- (a) Each Purchaser may assign to any Eligible Assignee all or a portion of its rights and obligations under this Agreement (including, without limitation, all or a portion of its Commitment and the Receivable Interests owned by it); provided, however, that (i) each such assignment shall be a constant, and not a varying, percentage of such Purchaser's rights and obligations under this Agreement and the Receivable Interests owned by it, (ii) in the case of any assignment by any Purchaser that is not assigning pursuant thereto all of its right and obligations under this Agreement, (A) the amount of the Commitment (determined as of the date of the applicable Assignment and Acceptance) being assigned pursuant to each such assignment shall be at least $5,000,000, or (B) the aggregate amount of all Commitments (determined as of the date of the applicable Assignments and Acceptances) being assigned by such Purchaser on such date to two or more Eligible Assignees that are Affiliates of each other shall be at least $5,000,000, (iii) each such assignment shall be to an Eligible Assignee, (iv) the parties to each such assignment shall execute and deliver to the Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recording fee of $3,500 and (v) the consent of the Agent and the Seller (which consent shall not be unreasonably withheld or delayed) shall first have been obtained. Upon such execution, delivery and acceptance, from and after the effective date specified in each Assignment and Acceptance, which effective date shall be the later of (x) the date the Agent receives the executed Assignment and Acceptance and (y) the date of such Assignment and Acceptance, (I) the assignee thereunder shall be a party hereto and shall have all the rights and obligations of a Purchaser hereunder and (II) the assigning Purchaser shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such assignment and acceptance, relinquish its rights and be released from its obligations under this Agreement. (b) By executing and delivering an Assignment and Acceptance, the assigning Purchaser and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, the assigning Purchaser makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto, or the perfection, priority or value of any ownership interest or security interest created or purported to be created hereunder or under the Receivables Contribution and Sale Agreement; (ii) the assigning Purchaser makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Seller or any Originator or the Parent or the performance or observance by the Seller or any Originator or the Parent of any of its obligations under this Agreement or any other Transaction Document or any other instrument or document furnished pursuant hereto; (iii) such Assignee confirms that it has received copies of this Agreement and the other Transaction Documents, together with such other documents and information as it has deemed appropriate to make its own analysis and decision to enter into such Assignment and Acceptance; (iv) such Assignee will, independently and without reliance upon the Agent, any of its Affiliates, the assigning Purchaser or any other Purchaser and based on such documents and information as it shall deem appropriate at the time, continue to make its own decisions in taking or not taking action under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto; (v) such Assignee confirms that it is an Eligible Assignee; (vi) such Assignee appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers and discretion under this Agreement and the other Transaction Documents and the other instruments and documents furnished pursuant hereto as are delegated to the Agent by the terms hereof and thereof, together with such powers and discretion as are reasonably incidental thereto; (vii) such Assignee appoints as its agent the Servicer from time to time designated pursuant to Section 6.01 to enforce its respective rights and interests in and under the Pool Receivables and the Related Security and Collections with respect thereto and the related Contracts; and (viii) such Assignee agrees that it will perform in accordance with their terms all of the obligations which by the terms of this Agreement are required to be performed by it as a Purchaser. 56 (c) The Agent shall maintain at its office referred to in Section 11.02 a copy of each Assignment and Acceptance delivered to and accepted by it and a register (the "Register") for the recordation of the names and addresses of the Purchasers and the Commitment of, and each Receivable Interest owned by, each Purchaser from time to time, which Register shall be available for inspection by the Seller at any reasonable time and from time to time upon reasonable prior notice. The entries in the Register shall be conclusive and binding for all purposes, absent manifest error, and the Seller, the Servicer, the Purchasers and the Agent may treat each Person whose name is recorded in the Register as a Purchaser hereunder for all purposes of this Agreement. (d) Upon its receipt of an Assignment and Acceptance executed by any assigning Purchaser and an assignee representing that it is an Eligible Assignee, the Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit B hereto, (i) accept such Assignment and Acceptance and (ii) give prompt notice thereof to the Seller and the Servicer. SECTION 9.04. Annotation of Certificate. --------------------------------------- The Agent shall annotate the Certificates to reflect assignments made pursuant to Section 9.01, 9.02 or 9.03 or otherwise. ARTICLE X INDEMNIFICATION SECTION 10.01. Indemnities. -------------------------- Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law, and whether or not any of the transactions contemplated hereby are consummated, the Seller hereby agrees to indemnify each Indemnified Party from and against, and hold each thereof harmless from, any and all claims, losses, liabilities, costs and expenses of any kind whatsoever (including, without limitation, reasonable attorneys' fees and expenses) (all of the foregoing being collectively referred to as "Indemnified Amounts") arising out of, or resulting from, in whole or in part, one or more of the following: (a) this Agreement or any other Transaction Document or any other agreement or document delivered or to be delivered in connection with this Agreement; (b) the use of proceeds of any Purchase or reinvestment; (c) the interest of any Owner in any Receivable, any Contract or any Related Security; or (d) any transaction contemplated by this Agreement or any other Transaction Document or any other agreement or document delivered or to be delivered in connection with this Agreement; excluding, however, Indemnified Amounts to the extent resulting solely and directly from either (x) the gross negligence or willful misconduct on the part of such Indemnified Party, or (y) the failure to collect amounts in respect of a Pool Receivable, to the extent such failure results from a discharge of the Obligor with respect thereto in a proceeding in respect of such Obligor under applicable bankruptcy laws or otherwise results from the Obligor's financial inability to pay such amounts. Without limiting or being limited by the foregoing and whether or not any of the transactions contemplated hereby are consummated, the Seller shall pay on demand to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts which relate to or result from, or which would not have occurred but for, one or more of the following: 58 (i) any Receivable becoming a Pool Receivable which is not at the date of the initial creation of an interest therein hereunder an Eligible Receivable; (ii) any representation or warranty or statement made or deemed made by the Seller (or any of its officers) under or in connection with this Agreement or any other Transaction Document or any Seller Report or Weekly Report or other document delivered or to be delivered in connection herewith or with any other Transaction Document being incorrect in any material respect when made or deemed made or delivered; (iii) the failure by such Seller to comply with any applicable law, rule or regulation with respect to any Pool Receivable or the related Contract or any Related Security with respect thereto; or the failure of any Pool Receivable or the related Contract or any Related Security with respect thereto to conform to any such applicable law, rule or regulation; (iv) the failure to vest in the Owner of a Receivable Interest a first priority perfected undivided percentage ownership interest, to the extent of such Receivable Interest, in each Receivable in, or purported to be in, the Receivables Pool and the Related Security and Collections in respect thereof, free and clear of any Adverse Claim; or the failure of the Seller to have obtained a first priority perfected ownership interest in the Pool Receivables and the Related Security and Collections with respect thereto transferred or purported to be transferred to the Seller under the Receivables Contribution and Sale Agreement, free and clear of any Adverse Claim; (v) the failure of the Seller to have filed, or any delay by the Seller in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Receivable in, or purported to be in, the Receivables Pool and the Related Security and Collections in respect thereof, whether at the time of any Purchase or reinvestment or at any subsequent time unless such failure results directly and solely from the Agent's failure to take appropriate action; 59 (vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of any Obligor to the payment of any Receivable in, or purported to be in, the Receivables Pool (including, without limitation, any defense based on the fact or allegation that such Receivable or the related Contract is not a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale of the goods or services related to such Receivable or the furnishing or failure to furnish such goods or services; (vii) any failure of the Seller to perform its duties or obligations in accordance with the provisions of this Agreement or any other Transaction Document or to perform its duties or obligations under any Contract; (viii) any product liability, personal injury, copyright infringement, theft of services, property damage, or other breach of contract, antitrust, unfair trade practices or tortious claim arising out of or in connection with subject matter of any Contract or out of or in connection with any transaction contemplated by this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or such Contract; (ix) the commingling by the Seller of Collections of Pool Receivables at any time with other funds; (x) any action or omission by the Seller, reducing or impairing the rights of any Owner of a Receivable Interest under this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto or with respect to any Pool Receivable; (xi) any cancellation or modification of a Pool Receivable, the related Contract or any Related Security, whether by written agreement, verbal agreement, acquiescence or otherwise; (xii) any investigation, litigation or proceeding related to or arising from this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto, or any transaction contemplated by this Agreement or any Contract or the use of proceeds from any Purchase or reinvestment pursuant to this Agreement, or the ownership of, or other interest in, any Receivable, the related Contract or Related Security; (xiii) the existence of any Adverse Claim against or with respect to any Pool Receivable, the related Contract or the Related Security or Collections with respect thereto; (xiv) any failure by the Seller to pay when due any taxes, including without limitation sales, excise or personal property taxes, payable by the Seller in connection with any Receivable or the related Contract or any Related Security with respect thereto; 60 (xv) any claim brought by any Person other than an Indemnified Party arising from any activity of the Seller in servicing, administering or collecting any Pool Receivable; (xvi) any failure by any Lock-Box Bank to comply with the terms of the Lock-Box Agreement to which it is a party; or (xvii) to the extent not covered by the foregoing clauses, the occurrence and continuance of any Event of Termination. ARTICLE XI MISCELLANEOUS SECTION 11.01. Amendments, Etc. ------------------------------ No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Seller or the Servicer therefrom, shall be effective unless in a writing signed by the Agent and the Required Purchasers and, in the case of any such amendment, the Seller and the Servicer, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall (a) without the prior written consent of each Purchaser, (i) amend the definitions of "Eligible Receivable", "Defaulted Receivable", "Net Receivables Pool Balance" or "Required Net Receivables Pool Balance" or increase the then existing Concentration Limit, or (ii) amend, modify or waive any provision of this Agreement in any way which would (A) reduce the amount of Capital or Yield that is payable on account of any Receivable Interest or delay any scheduled date for payment thereof or change the order of application of Collections to the payment thereof, or (B) impair any rights expressly granted to a Purchaser or an Owner under this Agreement, or (C) reduce fees payable by the Seller to or for the account of the Purchasers hereunder or delay the dates on which such fees are payable, or (D) modify any provisions decreasing the Applicable Reserve, or (iii) agree to a different Citibank Rate pursuant to the definition of "Citibank Rate", or 61 (iv) amend or waive the Event of Termination contained in Section 7.01(g) relating to the bankruptcy of the Seller, the Servicer (if Crown (USA) or any of its Affiliates), the Parent or any Originator, or (v) change the percentage of Commitments, or the number of Owners or Purchasers, which shall be required for the Purchasers or any of them to take any action hereunder, or (vi) amend this Section 11.01, or (vii) extend the Commitment Termination Date, or (viii) amend or waive the Event of Termination contained in Section 7.01(h); or (ix) increase the amount of the Total Commitment or amend Section 2.01(a), and (b) without the consent of the applicable Purchaser, increase the Commitment of such Purchaser or subject such Purchaser to any additional obligations; and provided, further, however, that the Agent shall not, without the prior written consent of the Required Purchasers, either (x) agree to any amendment or waiver of any provision of the Intercreditor Agreement or (y) consent to any departure from the Intercreditor Agreement by any party thereto. No failure on the part of any Owner or the Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. Without limiting the foregoing, each Purchaser is hereby authorized by the Seller upon the occurrence and during the continuance of an Event of Termination, to the fullest extent permitted by law, to setoff and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Purchaser to or for the credit or the account of the Seller against any and all of the obligations of the Seller now or hereafter existing under this Agreement to such Purchaser or, if such Purchaser is Citibank, to the Agent or any Affiliate thereof, irrespective of whether or not any formal demand shall have been made under this Agreement and although such obligations may be unmatured. Each Purchaser agrees promptly to notify the Seller after any such setoff and application; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Purchaser under this Section 11.01 are in addition to other rights and remedies (including, without limitation, other rights of setoff) which such Purchaser may have. 62 SECTION 11.02. Notices, Etc. --------------------------- All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (including telegraphic, telecopy or telex communication) and mailed, telegraphed, telecopied, telexed or delivered, (i) to each of the Seller, the Servicer, the Agent and the Initial Purchasers, at its address set forth under its name on the signature pages hereof, (ii) to each Purchaser other than the Initial Purchasers, at its address specified on the Assignment and Acceptance pursuant to which it became a Purchaser hereunder or (iii) to any party hereto at such other address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerback, respectively, except that notices and communications to the Agent pursuant to Article II shall not be effective until received by the Agent. SECTION 11.03. Binding Effect; Assignability. -------------------------------------------- This Agreement shall be binding upon and inure to the benefit of the Seller, Crown (USA), the Agent and each Owner and their respective successors and assigns, except that neither the Seller nor Crown (USA) shall have the right to assign its rights or obligations hereunder or any interest herein without the prior written consent of the Agent. This Agreement shall create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect until such time, after the Commitment Termination Date, as no Capital of any Receivable Interest shall be outstanding; provided, however, that rights and remedies with respect to the provisions of Sections 2.10, 2.11, 2.12, 10.01, 11.04, 11.05 and 11.06 shall be continuing and shall survive any termination of this Agreement. SECTION 11.04. Costs and Expenses. --------------------------------- The Seller agrees to pay, upon receipt of a written invoice, all costs and expenses in connection with the preparation, execution, delivery and administration (including periodic auditing of Receivables) of, and searches and filings in respect of, this Agreement, the other Transaction Documents and the other documents and agreements to be delivered hereunder and thereunder, including, without limitation, the reasonable fees and disbursements of (i) counsel for the Agent with respect thereto and advising the Agent as to its rights and remedies hereunder and (ii) internal and external auditors. The Seller further agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and disbursements), of each Owner, the Agent or any Affiliate thereof, in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the other Transaction Documents and the other documents and agreements to be delivered in connection herewith or therewith. SECTION 11.05. Confidentiality. ------------------------------ Except as otherwise required by applicable law, each of the parties hereto agrees to maintain the confidentiality of this Agreement, the Receivables Contribution and Sale Agreement, the Parent Undertaking, the Consent and Agreement, the Fee Letter (and all drafts thereof) and all non-public information delivered in connection herewith in communications with third parties and otherwise; provided that this Agreement, the Receivables Contribution and Sale Agreement, the Parent Undertaking, the Consent and Agreement, the Fee Letter and such information may be disclosed (i) to third parties to the extent such disclosure is made pursuant to a written confidentiality agreement in form and substance substantially identical to this Section 11.05, (ii) to the Seller's, the Agent's and each Owner's legal counsel, accountants and auditors if they agree to hold it confidential, (iii) to any nationally recognized rating agency, (iv) to bank examiners and other governmental authorities that have regulatory powers in respect of the Agent or any Purchaser to the extent required by such bank examiners or governmental authorities and (v) pursuant to court order or subpoena; provided, however, that each of the parties hereto agrees that the disclosure of this Agreement, the Receivables Contribution and Sale Agreement, the Parent Undertaking, the Consent and Agreement, the Fee Letter or other information required to be made by or pursuant to court order or subpoena will not be made until the other parties hereto have been notified at least five Business Days in advance of any such disclosure, unless such notification is prohibited by applicable law or such court order or subpoena. 63 SECTION 11.06. Governing Law. ---------------------------- THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 11.07. Jurisdiction, Etc. -------------------------------- (a) Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents to which it is a party, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto hereby agrees that service of process in any such action or proceeding may be effected by mailing a summons and complaint to it at its address specified in Section 11.02 by registered mail, return receipt requested, or in any other manner permitted by applicable law. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Transaction Documents in the courts of any other jurisdiction. (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents to which it is a party in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. SECTION 11.08. Execution in Counterparts. ---------------------------------------- This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement. SECTION 11.09. Intent of the Parties. ------------------------------------ It is the intention of the parties hereto that each Purchase and reinvestment shall convey to each Owner, to the extent of its Receivable Interests, an undivided ownership interest in the Pool Receivables and the Related Security and Collections in respect thereof and that such transaction shall constitute a purchase and sale and not a secured loan for all purposes other than for federal income tax purposes. If, notwithstanding such intention, the conveyance of the Receivable Interests from the Seller to any Owner shall ever be recharacterized as a secured loan and not a sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and that the Seller shall be deemed to have granted to such Owner a duly perfected first priority security interest in all of the Seller's right, title and interest in, to and under the Pool Receivables and the Related Security and Collections in respect thereof, free and clear of Adverse Claims. 64 SECTION 11.10. Entire Agreement. ------------------------------- This Agreement and the other Transaction Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, relating to the subject matter hereof. SECTION 11.11. Severability of Provisions. ----------------------------------------- Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 11.12. Waiver of Jury Trial. ----------------------------------- Each of the parties hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any of the other Transaction Documents, the Purchases or the actions of the Agent or any Indemnified Party in the negotiation, administration, performance or enforcement hereof or thereof. 65 IN WITNESS WHEREOF, the parties have caused this amended and restated Agreement to be executed by their respective officers thereunto duly authorized, as of the date above written. CROWN CORK & SEAL RECEIVABLES (DE) CORPORATION By: /s/ Michael B. Burns ----------------------------------------------- Name: Michael B. Burns Title: Vice President and Treasurer Address: 919 Market Street Wilmington, DE 19801 Attention: Michael B. Burns, Vice President and Treasurer Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 CROWN CORK & SEAL COMPANY (USA), INC., as Servicer By: /s/ Michael B. Burns ----------------------------------------------- Name: Michael B. Burns Title: Vice President and Treasurer One Crown Way Philadelphia, PA 19154 Attention: Michael B. Burns, Vice President and Treasurer Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 AGENT ----- CITIBANK, N.A., as Agent By: /s/ Jeffrey Nitz ---------------------------------------------- Name: Jeffrey Nitz Title: Vice President 388 Greenwich Street, 19th Floor New York, New York 10013 Attention: Jeffrey Nitz Telephone No.: (212) 816-2399 Telecopier No.: (212) 816-2613 INITIAL PURCHASERS AMSOUTH CAPITAL CORP. By: /s/ Patrick R. Brocker ----------------------------------------------- Name: Patrick R. Brocker Title: Attorney-in-fact 350 Park Avenue, 20th Floor New York, New York 10022 Attention: Kevin Rogers Telephone No.: (212) 955-2237 Telecopier No.: (212) 935-7458 Commitment: $20,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by divinding twenty (20.00) by three hundred fifty (350.00). Initial Capital: $6,000,000 --------------- CITIBANK, N.A. By: /s/ Jeffrey Nitz ----------------------------------------------- Name: Jeffrey Nitz Title: Vice President 388 Greenwich Street, 19th Floor New York, New York 10013 Attention: Jeffrey Nitz Telephone No.: (212) 816-2399 Telecopier No.: (212) 816-2613 Commitment: $38,500,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing thirty-eight and one half (38.50) by three hundred fifty (350.00). Initial Capital: $11,550,000 --------------- FOOTHILL CAPITAL CORPORATION By: /s/ Rina Shinoda ----------------------------------------------- Name: Rina Shinoda Title: Vice President 2450 Colorado Avenue, Suite 3000 West Santa Monica, California 90404 Attention: Juan Barrera, Assistant Vice President Telephone No.: (310) 453-7312 Telecopier No.: (310) 453-7446 Commitment: $50,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing fifty (50.00) by three hundred and fifty (350.00). Initial Capital: $15,000,000 --------------- GMAC BUSINESS CREDIT, L.L.C. By: /s/ John Buff ------------------------------------------------ Name: John Buff Title: Director 461 Fifth Avenue New York, New York 10017 Attention: John Buff Telephone No.: (646) 935-2884 Telecopier No.: (212) 489-3980 Commitment: $25,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing twenty-five (25.00) by three hundred fifty (350.00). Initial Capital: $7,500,000 --------------- GMAC COMMERCIAL CREDIT, L.L.C. By: /s/ Frank Imperat ------------------------------------------------- Name: Frank Imperat Title: Senior Vice President 1 Penn Plaza, 9th Floor New York, New York 10019 Attention: Jeff Hagel Telephone No.: (646) 884-7186 Telecopier No.: (212) 884-7396 Commitment: $25,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing twenty-five (25.00) by three hundred fifty (350.00). Initial Capital: $7,500,000 --------------- HELLER FINANCIAL, INC. By: /s/ Thomas W. Bukowski ------------------------------------------------- Name: Thomas W. Bukowski Title: Senior Vice President 622 Third Avenue, 32nd Floor New York, New York 10017 Attention: Albert Forzano Telephone No.: (212) 880-2916 Telecopier No.: (212) 880-7002 Commitment: $38,500,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------ obtained by dividing thirty-eight and one half (38.50) by three hundred fifty (350.00). Initial Capital: $11,550,000 --------------- IBJ WHITEHALL BUSINESS CREDIT CORPORATION By: /s/ John N. Favale ------------------------------------------------- Name: John N. Favale Title: Assistant Vice President One State Street New York, New York 10004 Attention: John Favale Telephone No.: (212) 858-2505 Telecopier No.: (212) 585-2151 Commitment: $15,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing fifteen (15.00) by three hundred fifty (350.00). Initial Capital: $4,500,000 -------------- MUIRFIELD TRADING LLC By: /s/ Ann E. Morris ------------------------------------------------- Name: Ann E. Morris Title: Assistant Vice President c/o Banc of America Securities LLC 100 North Tyron Street NC1-007-06-07 Attention: Annabet Morris Telephone No.: (704) 387-1939 Telecopier No.: (704) 388-0648 Commitment: $3,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing three (3.00) by three hundred fifty (350.00). Initial Capital: $900,000 --------------- NATIONAL CITY COMMERCIAL FINANCE, INC. By: /s/ Dannion C. McGary --------------------------------------------------------- Name: Dannion C. McGary Title: Vice President 1965 East Sixth Street Suite 400, Loc. 3049 Cleveland, Ohio 44114-2214 Attention: Dennis G Hatvany, Vice President Telephone No.: (216) 222-9002 Telecopier No.: (216) 575-9555 Commitment: $25,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing twenty-five (25.00) by three hundred fifty (350.00). Initial Capital: $7,500,000 --------------- RZB FINANCE LLC By: /s/ John A. Valiska /s/ Pearl Geffers ------------------------------------------------- Name: John A. Valiska Pearl Geffers Title: Vice President First Vice President 113 Avenue of the Americas New York, New York 10036 Attention: John Valiska Telephone No.: (212) 845-4130 Telecopier No.: (212) 944-2093 Commitment: $10,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing ten (10.00) by three hundred fifty (350.00). Initial Capital: $3,000,000 --------------- SIEMENS FINANCIAL SERVICES, INC. By: /s/ Frank Amodio ------------------------------------------------- Name: Frank Amodio Title: Vice President - Credit 200 Somerset Corporate Blvd. Bridgewater, NJ 08807 Attention: Karen De Lauro Telephone No.: (908) 575-4071 Telecopier No.: (908) 575-4060 Commitment: $15,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing fifteen (15.00) by three hundred fifty (350.00). Initial Capital: $4,500,000 --------------- THE CIT GROUP/COMMERCIAL SERVICES, INC. By: /s/ John J. McKenna ------------------------------------------------- Name: /s/ John J. McKenna Title: Senior Vice President 1211 Avenue of the Americas New York, New York 10036 Attention: Anthony Montemarano Telephone No.: (212) 382-6826 Telecopier No.: (212) 382-6814 Commitment: $50,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing fifty (50.00) by three hundred fifty (350.00). Initial Capital: $15,000,000 --------------- THE PROVIDENT BANK By: /s/ Brent S. Vandermyde ------------------------------------------------- Name: Brent S. Vandermyde Title: Assistant Vice President One East Fourth Street, ML 249A Cincinnati, Ohio 45202 Attention: Brent Vandermyde, AVP Telephone No.: (513) 639-4889 Telecopier No.: (513) 639-1588 Commitment: $10,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing ten (10.00) by three hundred fifty (350.00). Initial Capital: $3,000,000 --------------- TRANSAMERICA BUSINESS CAPITAL CORPORATION By: /s/ Michael S. Burns ------------------------------------------------- Name: Michael S. Burns Title: Senior Vice President 555 Theodore Fremd Avenue, Suite C-301 Rye, New York 10580 Attention: Barry S. Fein, Vice President Telephone No.: (914) 925-7230 Telecopier No.: (914) 921-5883 Commitment: $25,000,000 ---------- Percentage Interest: The quotient, expressed as a percentage, ------------------- obtained by dividing twenty-five (25.00) by three hundred fifty (350.00). Initial Capital: $7,500,000 --------------- EXECUTION COPY RECEIVABLES PURCHASE AGREEMENT Dated as of January 26, 2001 as amended and restated as of May 7, 2001 among CROWN CORK & SEAL RECEIVABLES (DE) CORPORATION, as the Seller, -- --- ------ CROWN CORK & SEAL COMPANY (USA), INC., as the initial Servicer, -- --- ------- -------- THE BANKS AND OTHER FINANCIAL INSTITUTIONS PARTY HERETO, as Purchasers -- ---------- and CITIBANK, N.A., as the Agent -- --- ----- TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS........................................................2 SECTION 1.01. Certain Defined Terms........................................2 SECTION 1.02. Other Terms.................................................19 SECTION 1.03. Computation of Time Periods.................................19 ARTICLE II AMOUNTS AND TERMS OF THE PURCHASES...............................19 SECTION 2.01. Commitment..................................................19 SECTION 2.02. Making Purchases............................................20 SECTION 2.03. Termination or Reduction of the Commitments.................21 SECTION 2.04. Receivable Interest.........................................21 SECTION 2.05. Non-Liquidation Settlement Procedures.......................22 SECTION 2.06. Liquidation Settlement Procedures...........................23 SECTION 2.07. General Settlement Procedures...............................24 SECTION 2.08. Payments and Computations, Etc..............................25 SECTION 2.09. Fees........................................................26 SECTION 2.10. Increased Costs.............................................27 SECTION 2.11. Increased Capital...........................................27 SECTION 2.12. Taxes.......................................................28 SECTION 2.13. Sharing of Payments, Etc....................................29 ARTICLE III CONDITIONS OF PURCHASES.........................................30 SECTION 3.01. Condition Precedent to Initial Purchase.....................30 SECTION 3.02. Conditions Precedent to All Purchases and Reinvestments.....32 SECTION 3.03. Conditions Precedent to Initial Purchase on or after the date of Amending and Restating the Existing Receivables Purchase Agreement..............................33 ARTICLE IV REPRESENTATIONS AND WARRANTIES...................................36 SECTION 4.01. Representations and Warranties of the Seller................36 SECTION 4.02. Representations and Warranties of the Servicer..............39 ARTICLE V GENERAL COVENANTS OF THE SELLER AND THE SERVICER..................40 SECTION 5.01. Affirmative Covenants of the Seller.........................40 SECTION 5.02. Reporting Requirements of the Seller........................43 SECTION 5.03. Negative Covenants of the Seller............................44 SECTION 5.04. Affirmative Covenants of the Servicer.......................46 SECTION 5.05. Negative Covenants of the Servicer..........................47 ARTICLE VI ADMINISTRATION AND COLLECTION....................................48 SECTION 6.01. Designation of Servicer.....................................48 SECTION 6.02. Duties of Servicer..........................................48 SECTION 6.03. Rights of the Agent.........................................49 SECTION 6.04. Responsibilities of the Seller..............................50 SECTION 6.05. Further Action Evidencing Purchases.........................51 ARTICLE VII EVENTS OF TERMINATION...........................................51 SECTION 7.01. Events of Termination.......................................51 ARTICLE VIII THE AGENT......................................................54 SECTION 8.01. Authorization and Action....................................54 SECTION 8.02. Agent's Reliance, Etc.......................................54 SECTION 8.03. Citibank and Affiliates.....................................55 SECTION 8.04. Purchase Decisions..........................................55 SECTION 8.05. Indemnification.............................................55 ARTICLE IX ASSIGNMENT OF RECEIVABLE INTERESTS...............................56 SECTION 9.01. Assignment..................................................56 SECTION 9.02. Citibank's Assignment of Rights and Obligations to Other Initial Purchasers.................................57 SECTION 9.03. Purchaser's Assignment of Rights and Obligations............58 SECTION 9.04. Annotation of Certificate...................................60 ARTICLE X INDEMNIFICATION...................................................60 SECTION 10.01. Indemnities................................................60 ARTICLE XI MISCELLANEOUS....................................................62 SECTION 11.01. Amendments, Etc............................................62 SECTION 11.02. Notices, Etc...............................................64 SECTION 11.03. Binding Effect; Assignability..............................65 SECTION 11.04. Costs and Expenses.........................................65 SECTION 11.05. Confidentiality............................................65 SECTION 11.06. Governing Law..............................................66 SECTION 11.07. Jurisdiction, Etc..........................................66 SECTION 11.08. Execution in Counterparts..................................66 SECTION 11.09. Intent of the Parties......................................67 SECTION 11.10. Entire Agreement...........................................67 SECTION 11.11. Severability of Provisions.................................67 SECTION 11.12. Waiver of Jury Trial.......................................67 ii EXHIBITS EXHIBIT A Form of Assignment EXHIBIT B Form of Assignment and Acceptance EXHIBIT C Form of Certificate EXHIBIT D-1 Form of Seller Report EXHIBIT D-2 Form of Weekly Report EXHIBIT D-3 Form of Daily Report EXHIBIT E Form of Lock-Box Agreement EXHIBIT F Form of Receivables Contribution and Sale Agreement EXHIBIT G Form of Consent and Agreement EXHIBIT H-1 Form of Opinion of Dechert, Counsel to the Seller, each Originator and the Parent EXHIBIT H-2 Form of Opinion of Internal Counsel to the Seller, each Originator and the Parent EXHIBIT H-3 Form of Opinion of Dechert, Counsel to the Seller and each Originator ("true sale" and non-substantive consolidation opinion) EXHIBIT H-4 Form of Opinion of Stikeman Elliott, Canadian Counsel to the Seller, Crown Cork & Seal Canada Inc. and the Parent EXHIBIT I Form of Parent Undertaking EXHIBIT J Form of Notice of Purchase EXHIBIT K Intecreditor Agreement iii SCHEDULES SCHEDULE I Lock-Box Banks and Lock-Box Accounts SCHEDULE II Credit and Collection Policy SCHEDULE III Location of the Seller's Principal Place of Business, Chief Executive Office and Office Where Records are Kept SCHEDULE IV Forms of Invoices SCHEDULE V Changes in Financial Conditions or Operations iv EX-10 4 ex10b-reccontrb.txt RECEIVABLES CONTRIBUTION AND SALES AGREEMENT EXECUTION COPY RECEIVABLES CONTRIBUTION AND SALE AGREEMENT Dated as of January 26, 2001 as amended and restated as of May 7, 2001 among CROWN CORK & SEAL COMPANY (USA), INC., CONSTAR, INC., RISDON-AMS (USA), INC., ZELLER PLASTIK, INC., CROWN CORK & SEAL CANADA INC. as the Sellers, -- --- ------- and CROWN CORK & SEAL RECEIVABLES (DE) CORPORATION as the Buyer -- --- ----- and CROWN CORK & SEAL COMPANY (USA), INC. as the initial Buyer's Servicer -- --- ------- ------- -------- TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms........................................2 SECTION 1.02. Other Terms..................................................4 SECTION 1.03. Computation of Time Periods..................................4 ARTICLE II SALE OF SELLER RECEIVABLES SECTION 2.01. Sale of Seller Receivables...................................4 SECTION 2.02. Terms of Sales...............................................5 SECTION 2.03. General Settlement Procedures................................6 SECTION 2.04. Payments and Computations, Etc...............................7 SECTION 2.05. Buyer's Servicer Fee.........................................8 ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.01. Representations and Warranties of Each Seller................8 ARTICLE IV GENERAL COVENANTS OF EACH SELLER SECTION 4.01. Affirmative Covenants of Each Seller........................12 SECTION 4.02. Negative Covenants of such Seller...........................15 ARTICLE V ADMINISTRATION AND COLLECTION SECTION 5.01. Designation of Buyer's Servicer.............................17 SECTION 5.02. Rights of the Buyer and the Agent...........................18 SECTION 5.03. Responsibilities of the Seller..............................19 SECTION 5.04. Further Actions Evidencing Purchases........................19 ARTICLE VI INDEMNIFICATION SECTION 6.01. Indemnities by the Seller...................................20 ARTICLE VII MISCELLANEOUS SECTION 7.01. Amendments, Etc.............................................23 SECTION 7.02. Notices, Etc................................................23 SECTION 7.03. Binding Effect; Assignability...............................23 SECTION 7.04. Costs, Expenses and Taxes...................................23 SECTION 7.05. NonBusiness Days............................................25 SECTION 7.06. Confidentiality.............................................25 SECTION 7.07. Governing Law...............................................25 SECTION 7.08. Consent to Jurisdiction.....................................25 SECTION 7.09. Execution in Counterparts...................................26 SECTION 7.10. Intent of the Parties, etc..................................26 SECTION 7.11. Entire Agreement............................................26 SECTION 7.12. Severability of Provisions..................................26 SECTION 7.13. Waiver of Jury Trial.........................................1 EXHIBITS EXHIBIT A Receivables Activity Report EXHIBIT B Subordinated Note SCHEDULES SCHEDULE I Lock-Box Banks and Lock-Box Accounts SCHEDULE II Description of Credit and Collection Policy SCHEDULE III Forms of Invoices SCHEDULE IV Location of Principal Place of Business, Chief Executive Office and Office Where Records are Kept SCHEDULE V Changes in Financial Conditions or Operations SCHEDULE VI Trademark or other names for Sellers RECEIVABLES CONTRIBUTION AND SALE AGREEMENT RECEIVABLES CONTRIBUTION AND SALE AGREEMENT dated as of January 26, 2001, as amended and restated as of May 7, 2001 (this "Agreement") among CROWN CORK & SEAL COMPANY (USA), INC. a Delaware corporation ("Crown (USA)"), CONSTAR, INC., a Pennsylvania corporation ("Constar"), RISDON-AMS (USA), INC., a Delaware corporation ("Risdon"), ZELLER PLASTIK, INC., a Delaware corporation ("Zeller") and CROWN CORK & SEAL CANADA INC., a corporation organized and existing under the laws of Ontario, Canada ("Crown (Canada)" and together with Crown (USA), Constar, Risdon and Zeller, the "Sellers", and each a "Seller"), CROWN CORK & SEAL RECEIVABLES (DE) CORPORATION, a Delaware corporation (the "Buyer"), and Crown (USA), as the initial Buyer's Servicer. PRELIMINARY STATEMENTS: (1) The parties hereto (other than Crown (Canada)) have entered into a Receivables Contribution and Sale Agreement dated as of January 26, 2001 (such Receivables Contribution and Sale Agreement being the "Existing Receivables Contribution and Sale Agreement"). (2) The parties hereto have agreed to amend and restate the Existing Receivables Contribution and Sale Agreement for the purpose of, among other things, including Crown (Canada) as a party hereto as a Seller and providing for the Seller Receivables (as hereinafter defined) to include Canadian Dollar denominated Receivables (as defined in the Receivables Purchase Agreement, as defined below) of Crown (Canada). (3) Each Seller in the ordinary course of business generates, and will generate from time to time, Receivables (as defined in the Receivables Purchase Agreement, as defined below) from time to time owing to it. (4) Each Seller wishes to sell to the Buyer from time to time hereunder all present and future Receivables in respect of each of which, on the date of the sale of such Receivable to the Buyer hereunder, the Obligor is a Designated Obligor (as defined in the Receivable Purchase Agreement, as defined below) (such Receivable being a "Seller Receivable"), together with the Related Security and Collections (as hereinafter defined) with respect thereto. (5) The Buyer wishes concurrently to sell interests, to the extent of the Receivable Interests (as defined in the Receivables Purchase Agreement referred to below) sold from time to time by it to the Purchasers (as defined in the Receivables Purchase Agreement referred to below), in each of the present and future Seller Receivables, together with the Related Security and Collections with respect thereto, pursuant to the Receivables Purchase Agreement dated as of January 26, 2001, as amended and restated as of May 7, 2001 (as the same may from time to time be amended, supplemented or otherwise modified, the "Receivables Purchase Agreement") among the Buyer, Crown (USA) as Servicer thereunder, the Purchasers, and Citibank, N.A. ("Citibank"), as administrative agent (the "Agent") for the Purchasers and any other owners of Receivable Interests. NOW, THEREFORE, in consideration of the premises, the parties hereto agree that, effective as of the date hereof, the Existing Receivables Contribution and Sale Agreement is amended and restated as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. --------------------------------------- Terms defined in the Receivable Purchase Agreement and not otherwise defined herein are used in this Agreement as defined in the Receivable Purchase Agreement. In addition, as used in this Agreement and unless otherwise stated herein, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Agent" has the meaning specified in Preliminary Statement (5). "Buyer's Servicer" has the meaning specified in Section 5.01. "Buyer's Servicer Fee" has the meaning specified in Section 2.05. "Citibank" has the meaning specified in Preliminary Statement (5). "Collections" means, with respect to any Seller Receivable, all cash collections and other cash proceeds of such Seller Receivable, including, without limitation, (i) all cash proceeds of the Related Security with respect to such Seller Receivable and (ii) any Collections of such Seller Receivable deemed to have been received, and actually paid, pursuant to Section 2.03. "Contract" means an agreement between any Seller and an Obligor, in any written form acceptable to such Seller, or in the case of any open account agreement as evidenced by one of the forms of invoices set forth in Schedule III hereto or otherwise approved by the Agent from time to time (which approval shall not be unreasonably withheld), pursuant to or under which such Obligor shall be obligated to pay for goods or services from time to time. "Credit and Collection Policy" means those credit and collection policies and practices in effect on the date hereof relating to Contracts and Receivables and described in Schedule II hereto, as modified from time to time in compliance with Section 4.02(c). "Indemnified Amounts" has the meaning specified in Section 6.01. 2 "Indemnified Party" means any or all of the Buyer, the Purchasers and the other Owners under the Receivables Purchase Agreement, the Agent and their respective Affiliates and successors and assigns. "Initial Purchase Price" has the meaning specified in Section 2.02(a). "Material Adverse Effect" means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance or properties of any Seller, the Buyer or the Parent, (b) the rights and remedies of the Buyer, the Agent or any other Indemnified Party or (c) the ability of any Seller or the Parent to perform its obligations under this Agreement or any other Transaction Document or the Contracts. "Obligor" means a Person obligated to make payments pursuant to a Contract. "Other Taxes" has the meaning specified in Section 7.04(b). "Purchase Price" has the meaning specified in Section 2.02(b). "Receivable Assets" has the meaning specified in Section 2.01(a). "Receivables Activity Report" means a report prepared by the Seller, in substantially the form attached hereto as Exhibit A, pursuant to Section 2.03(c). "Receivables Purchase Agreement" has the meaning specified in Preliminary Statement (5). "Related Security" means with respect to any Receivable: (i) all of the applicable Seller's interest in the goods (including returned goods), if any, relating to the sale which gave rise to such Receivable; (ii) all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements signed by an Obligor describing any collateral securing such Receivable; (iii) all letter of credit rights, guaranties, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivables whether pursuant to the Contract related to such Receivable or otherwise; and (iv) all Records relating to such Receivable. "Seller Receivable" has the meaning specified in Preliminary Statement (4). 3 "Solvent" means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person's property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. "Subordinated Note" means a subordinated promissory note, in substantially the form of Exhibit B hereto, executed by the Buyer to the order of any Seller. "Termination Date" means the Termination Date under and as defined in the Receivables Purchase Agreement. "Transaction Documents" means this Agreement, the Receivables Purchase Agreement, the Parent Undertaking, the Subordinated Notes, the Lock-Box Agreements, the Consent and Agreement and the Fee Letter. SECTION 1.02. Other Terms. ------------------------- All accounting terms not specifically defined herein shall be construed in accordance with GAAP. All terms used in Article 9 in the UCC in the State of New York and not specifically defined herein are used herein as defined in such Article 9. SECTION 1.03. Computation of Time Periods. ----------------------------------------- Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and each of the words "to" and "until" means "to but excluding". ARTICLE II SALE OF SELLER RECEIVABLES SECTION 2.01. Sale of Seller Receivables. ------------------------------------------ (a) Each Seller hereby sells, transfers and assigns, without recourse (except as expressly provided herein), to the Buyer, on the terms and subject to the conditions specifically set forth herein, all such Seller's right, title and interest in, to and under all Seller Receivables existing on the date of the Existing Receivables Contribution and Sale Agreement (in the case of each Seller other than Crown (Canada)) and on the date hereof (in the case of Crown (Canada)) and hereafter created from time to time until the Termination Date, all Related Security and Collections with respect thereto and all proceeds of the foregoing, together with all such Seller's rights, remedies, powers and privileges with respect to such Seller Receivables (collectively, the "Receivable Assets"). 4 (b) The parties to this Agreement intend that the transactions contemplated hereby shall be, and shall be created as, a purchase by the Buyer and a sale by each Seller of Receivable Assets and not as a lending transaction. The foregoing sales, transfers and assignments do not constitute and are not intended to result in a creation or assumption by the Buyer of any obligation or liability with respect to any Seller Receivable or Contract, nor shall the Buyer be obligated to perform or otherwise be responsible for any obligation of any Seller or any other Person in connection with any Receivable Assets or under any agreement or instrument relating thereto. (c) In connection with the foregoing sales, transfers and assignments, each Seller agrees to record and file, at its own expense, proper financing statements (and proper continuation or financing charge statements with respect to such financing statements when applicable) with respect to the Receivable Assets now and hereafter from time to time acquired by the Buyer under this Agreement, in such manner and in such jurisdictions as are necessary to perfect the sales, transfers and assignments of the Receivable Assets to the Buyer hereunder, and to deliver copies of such financing statements to the Buyer and the Agent on or prior to the initial Purchase under the Receivable Purchase Agreement. Such financing statements shall name such Seller as debtor/seller, the Buyer as secured party/buyer and the Agent as assignee. SECTION 2.02. Terms of Sales. ---------------------------- (a) On the date of the Existing Receivables Contribution and Sale Agreement (in the case of each Seller other than Crown (Canada)) and on the date hereof (in the case of Crown (Canada)), the Buyer does accept from each Seller, and each Seller does sell, transfer and assign to the Buyer, such Seller's right, title and interest in, to and under those Receivable Assets that are outstanding on such date. As consideration for such sale, transfer and assignment of Receivable Assets on such date, the Buyer shall pay (or cause to be paid) to each Seller on such date an amount (such Seller's "Initial Purchase Price") agreed upon prior to such date, between such Seller and the Buyer to be reasonably equivalent value for such Receivable Assets as of such date. On the date of the Existing Receivables Contribution and Sale Agreement (in the case of each Seller other than Crown (Canada)) and on the date hereof (in the case of Crown (Canada)) the Buyer shall pay to the respective Sellers as part of the total Initial Purchase Price paid to the respective Sellers the total amount which the Purchasers shall pay to the Buyer in Capital on such date under the Receivables Purchase Agreement. To the extent that such amount is not sufficient to enable the Buyer to pay the Initial Purchase Price due to any Seller or Sellers hereunder, the Buyer shall on such date pay to such Seller or Sellers the Initial Purchase Price due to such Seller or Sellers in a manner set forth in subsection (c) of this Section 2.02. (b) On each Business Day after the date of the Existing Receivables Contribution and Sale Agreement (in the case of each Seller other than Crown (Canada)) and on each Business Day after the date hereof (in the case of Crown (Canada)) until the Termination Date or, in the case of a Seller that ceases to be an Originator, the date on which such Seller ceases to be an Originator, the Buyer shall accept from each Seller, and each Seller shall sell, transfer and assign to the Buyer, such Seller's right, title and interest in, to and under those Receivable Assets that are created on such Business Day. As consideration for such continuing sale and assignment of Receivable Assets after the date of the Existing Receivables Contribution and Sale Agreement or the date hereof, as applicable, the Buyer shall pay (or cause to be paid) to such Seller an amount (such Seller's "Purchase Price") agreed upon prior to the date of such sale and assignment, between such Seller and the Buyer to be reasonably equivalent value for such Receivable Assets as of the date of such sale and assignment. 5 (c) Each Seller's Purchase Price other than each Seller's Initial Purchase Price, and the balance, if any, of each Seller's Initial Purchase Price to be so paid by the Buyer on the date of the Existing Receivables Contribution and Sale Agreement or the date hereof, as applicable, in accordance with the last sentence of subsection (a) of this Section 2.02, shall be paid in any of the following ways: (i) in cash paid to such Seller in US Dollars or (in the case of Canadian Receivables only) Canadian Dollars in same day funds on or before the next occurring Settlement Date or the date of the Existing Receivables Contribution and Sale Agreement or the date hereof, as the case may be; or (ii) upon the agreement of such Seller and the Buyer, by means of indebtedness owed by the Buyer to such Seller evidenced by, and payable with interest pursuant to, the Subordinated Note payable to the order of such Seller; or (iii) a combination of the above; provided, however, that the Buyer may not pay any such Purchase Price or such balance of any such Initial Purchase Price, as the case may be, for such Receivable Assets by way of subordinated indebtedness referred to in clause (ii) above to the extent that the ratio of the aggregate indebtedness of the Buyer under the Subordinated Notes to the total equity capital of the Buyer exceeds 9 to 1. SECTION 2.03. General Settlement Procedures. ---------------------------------------------- (a) If on any day the Outstanding Balance of a Seller Receivable is either (i) reduced as a result of any defective, rejected or returned goods or services, any discount, or any adjustment by any Seller or (ii) reduced or canceled as a result of a setoff in respect of any claim by the Obligor thereof against such Seller (whether such claim arises out of the same or a related transaction or an unrelated transaction), such Seller shall be deemed to have received on such day a Collection of such Receivable in the amount of such reduction or cancellation (in the case of any such Receivable that is a Canadian Receivable, in the amount of the Equivalent in US Dollars of such reduction or cancellation) and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 4.01(i). If on any day any of the representations or warranties in Section 3.01(f) is no longer true with respect to any Seller Receivable, the Seller to which such Seller Receivable shall have been originally owed shall be deemed to have received on such day a Collection in full of such Seller Receivable (in the case of any such Pool Receivable that is a Canadian Receivable, a Collection in full of the Equivalent in US Dollars of such Pool Receivable) and shall make the payment 6 required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 4.01(i). In addition, Crown (Canada) shall be deemed to have received as a Collection on the day of conversion of any Collections denominated in Canadian Dollars into US Dollars an amount equal to the amount (if any) by which the Equivalent in US Dollars of such Collections exceeds the amount of US Dollars realized on such conversion and shall make the payment required to be made by it in connection with such Collection on the day required by, and otherwise pursuant to, Section 4.01(i). Except as stated in the preceding sentences of this Section 2.03 or as otherwise required by law or the underlying Contract, all Collections received from an Obligor of any Receivable shall be applied to Receivables then outstanding of such Obligor in the order of the age of such Receivables, starting with the oldest such Receivable, except if payment is designated by such Obligor for application to specific Receivables. (b) On or prior to the day the Servicer is required to make a deposit with respect to a Settlement Period pursuant to Section 2.05 or 2.06 of the Receivables Purchase Agreement, the Buyer's Servicer shall advise the Buyer and the Agent of each Liquidation Day and each Provisional Liquidation Day occurring during such Settlement Period and the allocation of the amount of such deposit to each outstanding Receivable Interest. (c) At least two Business Days before each Settlement Date, the Buyer's Servicer shall prepare and forward to the Buyer and the Agent a Receivables Activity Report of the Buyer's Servicer, as of the close of business of the Buyer's Servicer on the last day of the immediately preceding Settlement Period, relating to the Receivable Assets during such Settlement Period and setting forth the calculation of the actual Purchase Price for each Receivable Asset sold, transferred and assigned during such Settlement Period, and the reconciliation of how the Purchase Price has been paid reflecting the cash advanced from the Buyer to each Seller during such Settlement Period, the adjustments to and current balance, if any, due from the Buyer to each Seller under its Subordinated Note, and the amount of additional cash, if any, to be paid by the Buyer to each Seller on such Settlement Date. SECTION 2.04. Payments and Computations, Etc. -------------------------------------------- (a) All amounts to be paid or deposited by each Seller or the Buyer's Servicer hereunder shall be paid or deposited in accordance with the terms hereof no later than 12:00 noon (New York City time) on the day when due in US Dollars in same day funds to the Buyer as directed by the Buyer to such Seller or the Buyer's Servicer in writing. Each Seller shall, to the extent permitted by law, pay to the Buyer interest on all amounts not paid or deposited when due hereunder at 3.50% per annum above the Base Rate in effect from time to time, payable on demand; provided, however, that such interest rate shall not at any time exceed the maximum rate permitted by applicable law. (b) All computations of interest and fees hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the last day) elapsed. (c) For the purposes of the Interest Act (Canada), (i) whenever any interest or fee under this Agreement is calculated using a rate based on a year of 360 days or 365 days, as the case may be, the rate determined pursuant to such calculation, when expressed as an annual rate, is equivalent to (x) the applicable rate based on a year of 360 days or 365 days, as the case may be, (y) multiplied by the actual number of days in the calendar year in which the period for which such interest or fee is payable (or compounded) ends, and (z) divided by 360 or 365, as the case may be, (ii) the principle of deemed reinvestment of interest does not apply to any interest calculation under this Agreement, and (iii) the rates of interest stipulated in this Agreement are intended to be nominal rates and not effective rates or yields. 7 (d) Each Seller hereby irrevocably and unconditionally waives and relinquishes to the fullest extent it may legally do so (i) any express or implied vendor's lien, and any other lien, security interest, charge or encumbrance, which would otherwise be imposed on or affect any Seller Receivable or any Receivable Asset on account of any unpaid amount of such Seller's Initial Purchase Price or any Purchase Price therefor or on account of any other unpaid amounts otherwise payable by the Buyer under or in connection with this Agreement or the Subordinated Note payable to the order of such Seller or otherwise and (ii) with respect to the obligations of such Seller to make payments or deposits under this Agreement (including, without limitation, payments under Sections 2.03 and 6.01), any setoff, counterclaim, recoupment, defense and other right or claim which such Seller may have against the Buyer as a result of or arising out of the failure of the Buyer to pay any amount on account of such Seller's Initial Purchase Price or any Purchase Price under Sections 2.01 and 2.02 or any other amount payable by the Buyer to such Seller under this Agreement or the Subordinated Note payable to the order of such Seller or otherwise. SECTION 2.05. Buyer's Servicer Fee. ------------------------------------ The Buyer shall pay to the Buyer's Servicer a collection fee (the "Buyer's Servicer Fee") from the date of the Existing Receivables Contribution and Sale Agreement until the Termination Date, payable on each Settlement Date, in an amount equal to the amount payable to the Servicer under the Receivables Purchase Agreement or such other amount calculated on an arm's-length basis for services performed as a subcontractor on terms common to collection agency arrangements in comparable asset sale transactions; provided, however, that the Buyer shall be given a credit against the Buyer's Servicer Fee payable under this Agreement equal to the full amount of the Servicer Fee paid under the Receivables Purchase Agreement. ARTICLE III REPRESENTATIONS AND WARRANTIES SECTION 3.01. Representations and Warranties of Each Seller. ------------------------------------------------------------ Each Seller represents and warrants as follows: (a) Such Seller is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation indicated at the beginning of this Agreement, and is duly qualified to do business, and is in good standing, in every jurisdiction where the nature of its business requires it to be so qualified, except to the extent that any failure to be so qualified or in good standing could reasonably be expected to result in a Material Adverse Effect. 8 (b) The execution, delivery and performance by such Seller of the Transaction Documents to which it is a party and the other documents to be delivered by it thereunder, and the transactions contemplated hereby and thereby, including such Seller's use of the proceeds of the sales, transfers and assignments of Receivable Assets hereunder, are within such Seller's corporate powers, have been duly authorized by all necessary corporate action, do not (i) contravene such Seller's charter, articles or by-laws, (ii) violate any applicable law, rule, regulation, order, writ, judgment, injunction, decree, determination or award, or (iii) breach or result in a default under, or result in the acceleration of (or entitle any party to accelerate) the maturity of any obligation of such Seller under, or result in or require the creation of any lien upon or security interest in any property of such Seller pursuant to the terms of, any Contract or any other agreement or instrument (other than any Transaction Document) binding on or affecting such Seller or any of its properties. (c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by such Seller of any Transaction Document to which it is a party or any other agreement or document to be delivered thereunder, or for the perfection of or the exercise by any Indemnified Party of its rights and remedies under such Transaction Document or such other agreement or document, except for the filing of the financing statements referred to in Section 2.01(c). (d) This Agreement has been, and each other Transaction Document to which such Seller is a party when delivered will have been, duly executed and delivered by such Seller. This Agreement is, and the other Transaction Documents to which such Seller is a party when delivered will be, the legal, valid and binding obligations of such Seller enforceable against such Seller in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and to general equitable principles. (e) There is no pending or, to the best of such Seller's knowledge, threatened action or proceeding affecting such Seller before any court, governmental agency or arbitrator or other authority, domestic or foreign, which could reasonably be expected to have a Material Adverse Effect or which purports to affect the legality, validity or enforceability of this Agreement or any other Transaction Document. (f) Immediately prior to each sale, transfer, assignment and/or contribution by such Seller of any Receivable Assets hereunder, such Seller is the legal and beneficial owner of such Receivable Assets, free and clear of any Adverse Claim. Upon each sale, transfer, assignment and/or contribution by such Seller of each Receivable Asset hereunder, the Buyer shall have a valid and perfected first priority undivided 100% ownership interest or security interest in such Receivable Asset free and clear of any Adverse Claim except as created or permitted by this Agreement and the Receivables Purchase Agreement. No effective financing statement or other instrument similarly in effect covering any Contract or any Receivable Assets is on file in any recording office, except those filed in favor of the Buyer and the Agent relating to this Agreement or in favor of the Agent and relating to the Receivables Purchase Agreement. 9 (g) No proceeds of any sale, transfer, assignment and/or contribution by such Seller of any Seller Receivable hereunder will be used to acquire any security in any transaction which is subject to Sections 13 and 14 of the Securities Exchange Act of 1934, as amended. (h) Each Receivables Activity Report, Seller Report, Weekly Report and Daily Report (if prepared by such Seller or one of its Affiliates, or to the extent that information contained therein is supplied by such Seller or any Affiliate thereof), information, exhibit, financial statement, or other report or document furnished or to be furnished at any time by or on behalf of such Seller to the Buyer or the Agent or any Owner in connection with this Agreement or the Receivables Purchase Agreement is or will be accurate in all material respects as of its date or as of the date so furnished, and no such report or document contains, or will contain, as of its date of delivery or the date so furnished, any untrue statement of a material fact or omits to state, or will omit to state, as of its date of delivery or the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. (i) The principal place of business and chief executive office of such Seller, and the office where such Seller keeps its Records concerning the Receivable Assets, are located at the address specified for the Seller in Schedule IV hereto (or, by notice to the Buyer and the Agent in accordance with Section 4.01(e), at such other locations in jurisdictions, within the United States or in the case of Crown (Canada), Ontario, Canada, where all actions required by Section 5.04(a) have been taken and completed). (j) The names and addresses of all the Lock-Box Banks, together with the lock-box numbers related to, and the account numbers of, the Lock-Box Accounts of such Seller at such Lock-Box Banks, are specified in Schedule I hereto (or such other Lock-Box Banks and/or such other Lock-Box Accounts as have been notified to the Buyer and the Agent in accordance with Section 4.02(d)). (k) Except as set forth on Schedule VI hereto, such Seller has not changed its name during the four-month period prior to the date of the Existing Receivables Contribution and Sale Agreement, and has no tradenames, fictitious names, assumed names or "doing business as" names. (l) The Initial Purchase Price payable to such Seller on the date of the Existing Receivables Contribution and Sale Agreement or the date hereof, as applicable, pursuant to Section 2.02(a) for the Receivable Assets outstanding on the date of the Existing Receivables Contribution and Sale Agreement or the date hereof, as applicable, and the Purchase Price payable on each Settlement Date pursuant to Section 2.02(b) for such Seller's Receivable Assets created after such date, in each case constitutes fair consideration and approximates fair market value for such Receivable Assets, and the terms and conditions (including, without limitation, such Initial Purchase Price or Purchase Price, as applicable, therefor) of the sale, transfer and assignment of such Receivable Assets pursuant to Sections 2.01 and 2.02 reasonably approximate an arm's-length transaction between unaffiliated parties. No such sale, transfer or assignment has been made for or on account of an antecedent debt owed by such Seller to the Buyer and no such sale, transfer or assignment is or may be voidable or subject to avoidance under any section of the U.S. Bankruptcy Code. 10 (m) Such Seller has filed, or caused to be filed or be included in, all tax reports and returns (federal, state, local and foreign), if any, required to be filed by it and paid, or caused to be paid, all amounts of taxes, including interest and penalties, required to be paid by it, except for such taxes (i) as are being contested in good faith by proper proceedings and (ii) against which adequate reserves shall have been established in accordance with and to the extent required by GAAP, but only so long as the proceedings referred to in clause (i) above could not subject the Agent or any other Indemnified Party to any civil or criminal penalty or liability or involve any material risk of the loss, sale or forfeiture of any property, rights or interests covered hereunder or under the Receivables Purchase Agreement. (n) The consolidated unaudited balance sheet of such Seller and its subsidiaries as at December 31, 2000, and the related consolidated unaudited statements of income and retained earnings and of cash flows of such Seller and its subsidiaries for the fiscal year then ended, fairly present the consolidated financial condition of such Seller and its subsidiaries as at such date, and the consolidated results of the operations and cash flows of such Seller and its subsidiaries for the periods ended on such date, all in accordance with generally accepted accounting principles applied on a consistent basis. Since December 31, 2000, there has been no material adverse change in such condition or operations, other than to the extent expressly set forth on Schedule V hereto or disclosed in any public filing prior to the date of the Existing Receivables Contribution and Sale Agreement with the Securities and Exchange Commission, or in the collectibility of such Seller's Seller Receivables taken as a whole or in the ability of such Seller (as Seller, the Buyer's Servicer, the Servicer or otherwise) to perform its obligations under any Transaction Document, other than to the extent expressly set forth on Schedule V hereto or disclosed in any public filing prior to the date of the Existing Receivables Contribution and Sale Agreement with the Securities and Exchange Commission. (o) Such Seller is in compliance in all material respects with the presently applicable provisions of ERISA and the Code. (p) Such Seller has not sold, assigned, transferred, pledged or hypothecated any interest in any Receivable Assets with respect thereto to any Person other than as contemplated by this Agreement. 11 (q) Such Seller has complied with the Credit and Collection Policy in all material respects and since the date of this Agreement there has been no change in the Credit and Collection Policy except as permitted hereunder. (r) Since December 31, 2000, no event has occurred which could result in a Material Adverse Effect, other than to the extent expressly set forth on Schedule V hereto or disclosed in any public filing prior to the date of the Existing Receivables Contribution and Sale Agreement with the Securities and Exchange Commission. (s) Such Seller has not extended or modified the terms of any Seller Receivable or the Contract under which any such Seller Receivable arose, except in accordance with the Credit and Collection Policy or in accordance with Section 6.02(b) of the Receivables Purchase Agreement. (t) Except under the Lock-Box Agreements, such Seller has not granted any Person dominion or control of any Lock-Box Account, or the right to take dominion or control over any Lock-Box Account at a future time or upon the occurrence of a future event. (u) Such Seller is Solvent. ARTICLE IV GENERAL COVENANTS OF EACH SELLER SECTION 4.01. Affirmative Covenants of Each Seller. -------------------------------------------------- Until the later of (i) the Termination Date and (ii) the date on which no Capital of any Receivable Interest shall be outstanding and all other amounts due to the Agent and each Owner under the Receivables Purchase Agreement shall have been paid in full, each Seller shall, unless the Buyer and the Agent shall otherwise consent in writing: (a) Compliance with Laws, Etc. ------------------------- Comply in all material respects with all applicable laws, rules, regulations and orders with respect to it and all Receivable Assets. (b) Payment of Taxes, Etc. --------------------- Pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims that, if unpaid, might by law become a lien upon its property; provided, however, that such Seller shall not be required to pay or discharge any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained. (c) Maintenance of Insurance. ------------------------ Maintain insurance with responsible and reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies engaged in similar businesses and owning similar properties in the same general areas in which such Seller operates. 12 (d) Preservation of Corporate Existence, Etc. ---------------------------------------- Preserve and maintain its existence and, except where the failure to do so could reasonably be expected to have a Material Adverse Effect, its rights (charter and statutory), permits, licenses, approvals, privileges and franchises; provided, however, that such Seller may consummate any merger or consolidation permitted under Section 4.02(i). (e) Offices, Records and Books of Accounts. -------------------------------------- (i) Keep its principal place of business and chief executive office and the offices where it keeps its Records concerning the Receivable Assets at the address of such Seller referred to in Section 3.01(i) or, upon at least thirty days' prior written notice to the Agent, at any other location in a jurisdiction where all action required by Section 5.04(a) shall have been taken and completed, and (ii) maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing Seller Receivables in the event of the destruction of the originals thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of all Seller Receivables (including, without limitation, records adequate to permit the daily identification of each Seller Receivable, the Outstanding Balance of each Seller Receivable and the dates which payments are due thereon and all Collections of and adjustments to each existing Seller Receivable). (f) Performance and Compliance with Contracts and Credit and ---------------------------------------------------------------- Collection Policy. ----------------- At its expense, timely and fully (i) perform, or cause to be performed, and comply in all material respects with, or cause to be complied with in all material respects, all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Seller Receivables, and timely and fully comply in all material respects with the Credit and Collection Policy in regard to the Seller Receivables and the related Contracts and (ii) as beneficiary of any Related Security, enforce such Related Security as reasonably requested by the Agent. (g) Examination of Records; Audits. ------------------------------ (i) From time to time upon two days prior notice and during regular business hours as requested by the Buyer or the Agent, permit the Buyer or the Agent, or their respective agents or representatives, (A) to examine and make copies of and abstracts from all Records in the possession or under the control of such Seller or any of its Affiliates or any agent of such Seller or its Affiliates relating to Seller Receivables and the Related Security, including, without limitation, the related Contracts, and (B) to visit the offices and properties of such Seller or any of its Affiliates or any agent of such Seller or its Affiliates for the purpose of examining such materials described in clause (A) above, and to discuss matters relating to Seller Receivables and the Related Security or such Seller's performance hereunder or under the Contracts with any of the officers or employees of such Seller having knowledge of such matters, and (ii) at the request of the Buyer or the Agent within 90 days after the end of each fiscal year of such Seller commencing with the fiscal year ending on December 31, 2001, and at the request of the Buyer or the Agent at any time and from time to time upon the occurrence and during the continuance of any Event of Termination or Potential Event of Termination, at the expense of such Seller, cause its independent public accountants to perform, and deliver to the Buyer and the Agent, a written report of an audit conducted by such accountants with respect to the Seller Receivables, Credit and Collection Policy, Lock-Box Account activity and the performance by such Seller (as Seller, the Buyer's Servicer, the Servicer or otherwise) of its obligations under this Agreement and the Receivables Purchase Agreement on a scope and in a form reasonably requested by either the Buyer or the Agent for such audit. 13 (h) Keeping of Records and Books of Account. --------------------------------------- (i) Keep, or cause to be kept, proper books of record and account, which shall be maintained or caused to be maintained by such Seller and shall be separate and apart from those of any Affiliate of such Seller, in which full and correct entries shall be made of all financial transactions and the assets and business of such Seller in accordance with GAAP, (ii) to the extent Records are in written form, segregate such Records in file cabinets or storage containers and appropriately label such file cabinets or storage containers to reflect that the Receivable Assets have been conveyed to the Buyer, and (iii) to the extent such Records constitute computer programs and other non-written Records, appropriately legend such Records to reflect that the Receivable Assets have been conveyed to the Buyer. (i) Deposits to Lock-Box Accounts. -------------------------------- Instruct, or cause to be instructed, all Obligors to make payments in respect of Seller Receivables to a Lock-Box Account and, if such Seller shall otherwise receive any Collections (including, without limitation, any Collections deemed to have been received by such Seller pursuant to Section 2.03), segregate and hold in trust such Collections and deposit such Collections directly to any Lock-Box Account within two Business Days following its receipt thereof. (j) Reporting Requirements. ----------------------- Provide to the Buyer and the Agent the following: (i) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year, unaudited consolidated and consolidating balance sheets of such Seller and its subsidiaries as of the end of such quarter and consolidated and consolidating statements of income and an unaudited consolidated statement of cash flows of such Seller and its subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and unaudited consolidated and consolidating statements of income and an unaudited consolidated statement of cash flows of such Seller and its subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding figures for the corresponding period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Vice President of Finance or Treasurer of such Seller as having been prepared in accordance with GAAP; 14 (ii) as soon as available and in any event within 120 days after the end of each fiscal year, consolidated and consolidating balance sheets of such Seller and its subsidiaries as of the end of such fiscal year and consolidated and consolidating statements of income and a consolidated statement of cash flows of such Seller and its subsidiaries for such fiscal year, setting forth in each case in comparative form the corresponding figures for the previous fiscal year, all in reasonable detail and duly certified by the Chief Financial Officer, Vice President of Finance or Treasurer of such Seller as having been prepared in accordance with GAAP; (iii) as soon as available and in any event within 30 days after the end of each fiscal year, a copy of the financial projections and business plans of such Seller and its subsidiaries for the forthcoming three fiscal years, in form and substance satisfactory to the Agent; (iv) promptly after the commencement thereof, notice of all actions and proceedings before any court or governmental agency or arbitrator or other authority affecting the Seller of the type described in Section 3.01(e); (v) as soon as possible and in any event within two days after an officer of such Seller becomes aware of the occurrence of each Event of Termination or Potential Event of Termination, a statement of the chief financial officer of the Seller setting forth details of such Event of Termination or event and the action that the Seller has taken and proposes to take with respect thereto; and (vi) such other information as the Buyer or the Agent may, from time to time, reasonably request with respect to the Receivable Assets or the condition or operations, financial or otherwise, of such Seller or any of its Affiliates. SECTION 4.02. Negative Covenants of such Seller. ----------------------------------------------- Until the later of (i) the Termination Date and (ii) the date on which no Capital of any Receivable Interest shall be outstanding and all other amounts due to the Agent and each Owner shall have been paid in full, each Seller shall not, without the prior written consent of the Buyer and the Agent: (a) Sales, Adverse Claims, Etc. -------------------------- Except as otherwise provided herein, sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any option with respect to, or create or suffer to exist any Adverse Claim upon or with respect to, any Receivable Asset, or upon or with respect to any related Contract or upon or with respect to any deposit account to which any Collections of any Seller Receivables are sent (including, without limitation, any Lock-Box Account), or assign any right to receive income in respect thereof. (b) Extension or Amendment of Receivables. ----------------------------------------- Except as otherwise permitted in the Receivables Purchase Agreement, extend, amend or otherwise modify the terms of any Seller Receivable, or amend, modify or waive any term or condition of any Contract related thereto. 15 (c) Change in Business or Credit and Collection Policy. --------------------------------------------------------------- Make any change in the character of its business or in the Credit andCollection Policy that would, in either case, be reasonably likely to impair the collectibility of the Seller Receivables. (d) Change in Payment Instructions to Obligors. ------------------------------------------ Add or terminate any bank as a Lock-Box Bank, or any deposit account as a Lock-Box Account, from those listed in Schedule I, or make any change in the instructions to Obligors regarding payments to be made to any Lock-Box Account, unless the Agent shall have received at least 20 days' prior written notice of such addition, termination or change and shall have received, with respect to each new Lock-Box Account, (i) a Lock-Box Agreement executed by the Lock-Box Bank that maintains such Lock-Box Account and such Seller and (ii) a related undated Lock-Box Notice executed by such Seller. (e) Deposits to Lock-Box Accounts. ----------------------------- Deposit or otherwise credit, or cause or permit to be so deposited or credited, to any Lock-Box Account cash or cash proceeds other than Collections of Seller Receivables. (f) Change of Name, Etc. -------------------- Change its name, identity or form of legal structure or jurisdiction of its organization, unless, prior to the effective date of any such change, such Seller delivers to the Agent (i) UCC financing statements, or PPSA financing charge statements in the case of Crown (Canada), executed by such Seller, necessary to reflect such change and to continue the perfection of the Buyer's ownership interests in the Receivable Assets sold, transferred and assigned hereunder, and (ii) if the identity or structure of such Seller has changed and such change adversely affects the rights of the Agent under then existing Lock-Box Agreements with such Seller to take control of the Lock-Box Accounts pursuant to Section 6.03(a), new Lock-Box Agreements executed by such Seller and the Lock-Box Banks to the extent necessary to reflect such change and to continue to enable the Agent to exercise such rights, together with related undated Lock-Box Notices executed by such Seller. (g) Accounting of Purchases. ----------------------- Prepare any financial statements which shall account for the transactions contemplated hereby in any manner other than the sale of the Receivable Assets by such Seller to the Buyer or in any other respect account for or treat the transactions contemplated hereby (including but not limited to accounting purposes, but excluding tax reporting purposes) in any manner other than as a sale of the Receivable Assets by such Seller to the Buyer. (h) Voluntary Petitions. ------------------- Cause the Buyer to file a voluntary petition under the U.S. Bankruptcy Code or any other bankruptcy or insolvency laws so long as the Buyer is not "insolvent" within the meaning of the U.S. Bankruptcy Code, and unless, and only unless, such filing has been authorized in accordance with the Buyer's Constituent Documents. (i) Mergers, Etc. ------------ Enter into a transaction of consolidation or merger with any Person unless (i) before and after giving effect on a pro forma basis to such consolidation or merger, no event shall have occurred and be continuing, or would result from such consolidation or merger, that constitutes an Event of Termination or Potential Event of Termination and (ii) such Person is not the Buyer and either (A) such Seller shall survive such consolidation or merger or (B) such other corporation or entity formed by such consolidation or into which such Seller shall be merged shall assume, in a writing on terms reasonably satisfactory to the Buyer and the Agent, all of such Seller's rights, obligations and liabilities under the Transaction Documents and all the other instruments or documents delivered or to be delivered thereunder. 16 (j) Maintenance of Separate Existence. --------------------------------- Take any action, or omit to take any action, if the effect is to cause the Buyer to fail to perform or observe in any material respect the covenants contained in Sections 5.01(h) and (i) of the Receivables Purchase Agreement or to otherwise cause the Buyer not to be considered as legal entity separate and distinct from such Seller. ARTICLE V ADMINISTRATION AND COLLECTION SECTION 5.01. Designation of Buyer's Servicer. --------------------------------------------- The Seller Receivables shall be serviced, administered and collected by the Person (the "Buyer's Servicer") designated from time to time to perform the duties of the Servicer under the Receivables Purchase Agreement in accordance with Section 6.01 of the Receivables Purchase Agreement, and shall be serviced, administered and collected by the Buyer's Servicer in the manner set forth in Section 6.02 of the Receivables Purchase Agreement (including by subcontracting to any Originator pursuant to Section 6.01 of the Receivables Purchase Agreement). Until the Agent designates a new Servicer in accordance with Section 6.01 of the Receivables Purchase Agreement, Crown (USA) is hereby designated to act as, and Crown (USA) hereby agrees to perform the duties and obligations of, the Buyer's Servicer hereunder. SECTION 5.02. Rights of the Buyer and the Agent. ----------------------------------------------- (a) Each of the Buyer and the Agent acting together or alone may notify the Obligors of Seller Receivables, at any time and at the Seller's expense, of the Buyer's interest in the Seller Receivables and the ownership of Receivable Interests by the Owners. The Agent is hereby authorized at any time to date, and to deliver to the Lock-Box Banks, the Lock-Box Notices referred to in the Lock-Box Agreements. Each Seller hereby, when the Agent shall deliver the Lock-Box Notices to the Lock-Box Banks, transfers to the Agent the exclusive ownership, dominion and control of the Lock-Box Accounts to which the Obligors of Pool Receivables shall make payments, and shall take any further action that the Agent may reasonably request to effect such transfer. (b) At any time following the designation of a Seller's Servicer other than the Seller pursuant to Section 6.01 of the Receivables Purchase Agreement: (i) Each of the Buyer and the Agent acting together or alone may, at the expense of the respective Sellers to which the respective Seller Receivables shall have been originally owed, direct the Obligors of such Seller Receivables, or any of them, to make payment of all amounts due or to become due to any Seller under Seller Receivables directly to the Agent or its designee. 17 (ii) Each Seller shall, at the Buyer's or the Agent's request and at such Seller's expense, give notice of such ownership to such Obligors and direct them to make such payments directly to the Agent or its designee. (iii) Each Seller shall, at the Buyer's or the Agent's request and at such Seller's expense, (A) assemble all of the Records that evidence or relate to the Receivable Assets, and shall make the same available to the Agent at a place reasonably selected by the Agent or its designee, and (B) segregate all cash, checks and other instruments received by it from time to time constituting Collections of Seller Receivables in a manner reasonably acceptable to the Agent and, promptly upon receipt, remit all such cash, checks and instruments, duly endorsed or with duly executed instruments of transfer, to the Agent or its designee. (iv) The Agent may take any and all reasonably commercial steps in the name of any Seller and on behalf of such Seller, the Buyer and the Owners that are necessary or desirable, in the determination of the Agent, to collect amounts due under the Seller Receivables, including, without limitation, endorsing such Seller's name on checks and other instruments representing Collections of Seller Receivables and enforcing the Seller Receivables and the Related Security and related Contracts, and adjusting, settling or compromising the amount or payment thereof, in the same manner and to the same extent as such Seller might have done. SECTION 5.03. Responsibilities of the Seller. -------------------------------------------- Anything herein to the contrary notwithstanding: (a) Each Seller shall perform its obligations under the Contracts related to the Seller Receivables to the same extent as if the Receivable Assets had not been sold and the exercise by the Buyer or the Agent of its rights hereunder shall not release the Buyer's Servicer or such Seller from any of its duties or obligations with respect to any Seller Receivables or under the related Contracts; and (b) Neither the Buyer nor the Agent nor the Owners nor any other Indemnified Party shall have any obligation or liability with respect to any Seller Receivables or related Contracts, nor shall any of them be obligated to perform any of the obligations of the Seller thereunder. SECTION 5.04. Further Actions Evidencing Purchases. -------------------------------------------------- (a) Each Seller agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary, or that the Buyer or the Agent may reasonably request, to perfect, protect or more fully evidence the sale, transfer and assignment of Receivable Assets by such Seller to the Buyer hereunder and the Receivable Interests purchased by the Owners under the Receivables Purchase Agreement, or to enable any of them or the Agent to exercise and enforce their respective rights and remedies hereunder or under the Receivables Purchase Agreement. Without limiting the foregoing, each Seller will, upon the request of the Buyer or the Agent, (i) execute and file such financing or continuation statements or amendments thereto, and such other instruments and documents, that may be necessary, or that the Buyer or the Agent may reasonably request, to perfect, protect or evidence such sales, transfers and assignments and such Receivable Interests; (ii) mark conspicuously each invoice evidencing each Seller Receivable and the related Contract with a legend, acceptable to the Buyer or the Agent, as applicable, evidencing that such Seller Receivables have been sold, transferred and assigned to the Buyer in accordance with this Agreement; and (iii) mark its master data processing records evidencing such Seller Receivables and related Contracts with such legend. 18 (b) Each Seller hereby authorizes each of the Buyer and the Agent acting together or alone (upon prior written notice to the Seller) to file one or more financing or continuation statements and amendments thereto relating to all or any of the Receivable Assets without the signature of such Seller where permitted by law. A photocopy or other reproduction of this Agreement shall be sufficient as a financing statement where permitted by law. (c) If Crown (USA) in its capacity as Buyer's Servicer fails to perform any of its obligations hereunder, the Buyer or the Agent may, upon prior written notice to Crown (USA), itself perform, or cause performance of, such obligation; and the reasonable costs and expenses of the Agent or the Buyer incurred in connection therewith shall be payable by the Seller under Section 6.01 or 7.04, as applicable. ARTICLE VI INDEMNIFICATION SECTION 6.01. Indemnities by the Seller. --------------------------------------- Without limiting any other rights that any Indemnified Party may have hereunder or under applicable law, and whether or not any of the transactions contemplated hereby are consummated, each Seller hereby agrees to indemnify each Indemnified Party from and against, and hold each thereof harmless from, any and all claims, losses, liabilities, costs and expenses of any kind whatsoever (including, without limitation, reasonable attorneys' fees and expenses) (all of the foregoing being collectively referred to as "Indemnified Amounts") arising out of, or resulting from, in whole or in part, the activities of such Seller in connection herewith or with any other Transaction Document or the use of proceeds of sales, transfers and assignments of Receivable Assets hereunder; excluding, however, Indemnified Amounts to the extent resulting solely and directly from either (x) the gross negligence or willful misconduct on the part of such Indemnified Party, or (y) the failure to collect amounts in respect of a Seller Receivable to the extent such failure results from a discharge of the Obligor with respect thereto in a proceeding in respect of such Obligor under applicable bankruptcy laws or otherwise results from the Obligor's financial inability to pay such amounts. Without limiting or being limited by the foregoing and whether or not any of the transactions contemplated hereby are consummated, each Seller shall pay on demand to each Indemnified Party any and all amounts necessary to indemnify such Indemnified Party from and against any and all Indemnified Amounts which relate to or result from, or which would not have occurred but for, one or more of the following: 19 (i) any Receivable originally owed to such Seller becoming a Seller Receivable which is not at the date of its sale, transfer and assignment hereunder an Eligible Receivable; (ii) any representation or warranty or statement made or deemed made by such Seller (or any of its officers) under or in connection with this Agreement or any other Transaction Document or any Receivables Activity Report, Seller Report, Weekly Report or other document delivered or to be delivered by such Seller in connection herewith or with any other Transaction Document being incorrect in any material respect when made or deemed made or delivered; (iii) the failure by such Seller to comply with any applicable law, rule or regulation with respect to any Seller Receivable originally owed to such Seller or the related Contract or any Related Security with respect thereto; or the failure, as a result of any action or omission of such Seller, of any Seller Receivable or the related Contract or any Related Security with respect thereto to conform to any such applicable law, rule or regulation; (iv) the failure by any action or inaction of such Seller to vest in the Buyer a first priority perfected 100% ownership interest in each Seller Receivable originally owed to such Seller and the Related Security and Collections in respect thereof, free and clear of any Adverse Claim; (v) the failure of such Seller to have filed, or any delay by such Seller in filing, financing statements or other similar instruments or documents under the PPSA or the UCC of any applicable jurisdiction or other applicable laws with respect to any Seller Receivable originally owed to such Seller and the Related Security and Collections in respect thereof, whether at the time of the initial sale, transfer and assignment hereunder or at any subsequent time; (vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the Obligor) of any Obligor with or against such Seller to the payment of any Seller Receivable originally owed to such Seller (including, without limitation, any defense based on the fact or allegation that such Receivable or the related Contract is not a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the sale by such Seller of the goods or services related to such Receivable or such Seller's furnishing or failure to furnish such goods or services; (vii) any failure of Crown (USA), as Buyer's Servicer, Servicer, or otherwise, to perform its duties, obligations or covenants under and in accordance with this Agreement or any other Transaction Documents or to perform its duties or obligations under any Contract; 20 (viii) any product liability, personal injury, copyright infringement, theft of services, property damage, or other breach of contract, antitrust, unfair trade practices or tortious claim arising out of or in connection with any action or omission of such Seller and the subject matter of any Contract or out of or in connection with any transaction contemplated by this Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or such Contract; (ix) the commingling by such Seller of Collections of Seller Receivables originally owed to such Seller at any time with other funds; (x) any action or omission by such Seller, whether as Servicer or otherwise, reducing or impairing the rights of the Buyer hereunder or of any Owner of a Receivable Interest under the Receivables Purchase Agreement, any other Transaction Document or any other instrument or document furnished pursuant hereto or thereto or with respect to any Seller Receivable; (xi) any cancellation or modification of a Seller Receivable originally owed to such Seller, the related Contract or any Related Security, whether by written agreement, verbal agreement, acquiescence or otherwise; (xii) (A) any investigation, litigation or proceeding related to or arising from this Agreement, any other Transaction Document or any other instrument or document furnished pursuant thereto, or any transaction contemplated by this Agreement or any Contract, or the ownership of, or other interest in, any Seller Receivable originally owed to such Seller, the related Contract or Related Security, excluding, however, Indemnified Amounts to the extent resulting from a claim of any Indemnified Party that does not arise out of or result from any action or omission of such Seller or (B) the use by such Seller of proceeds of any sale, transfer and assignment of any Receivable Asset hereunder; (xiii) the existence of any Adverse Claim against or with respect to any Seller Receivable originally owed to such Seller, the related Contract, Related Security or Collections and resulting from any act or omission of such Seller; (xiv) any failure by such Seller to pay when due any taxes, including without limitation sales, excise or personal property taxes, payable by such Seller in connection with any Seller Receivable originally owed to such Seller or the related Contract or any Related Security with respect thereto; (xv) any claim brought by any Person other than an Indemnified Party arising from any action or omission of by such Seller or any Affiliate of such Seller (other than the Buyer) in servicing, administering or collecting any Seller Receivable originally owed to such Seller; or 21 (xvi) any failure by any Lock-Box Bank holding a Lock-Box Account in the name of such Seller to comply with the terms of the Lock-Box Agreement to which such Lock-Box Bank is a party; or (xvii) to the extent not covered by the foregoing clauses, the occurrence and continuance of any Event of Termination resulting from an act or omission of such Seller. ARTICLE VII MISCELLANEOUS SECTION 7.01. Amendments, Etc. ----------------------------- No amendment or waiver of any provision of this Agreement or consent to any departure by any Seller or the Buyer therefrom shall be effective unless in a writing and signed by the Agent (with the consent or at the request of the Required Purchasers) and, in the case of any such waiver or consent, the party against which the waiver or consent is to be enforced or, in the case of any such amendment, the Buyer and each Seller, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No failure on the part of the Buyer, any Owner or the Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. SECTION 7.02. Notices, Etc. -------------------------- All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (including telegraphic, telecopy or telex communication) and mailed, telegraphed, telecopied, telexed or delivered, to each party hereto, at its address set forth under its name on the signature pages hereof or at such other address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerbacks, respectively, except that notices and communications to the Buyer and the Agent pursuant to Article II shall not be effective until received by the Buyer and the Agent. SECTION 7.03. Binding Effect; Assignability. ------------------------------------------- This Agreement shall become effective when it shall have been executed by each Seller (including Crown (USA) as the Buyer's Servicer) and the Buyer and acknowledged by the Agent, and thereafter shall be binding upon and inure to the benefit of such Seller, the Buyer, the Agent, and each other Indemnified Party and their respective successors and assigns, except that no Seller shall have the right to assign its rights or obligations hereunder or any interest herein without the prior written consent of the Buyer and the Agent, and the Buyer shall not have the right to assign its rights or obligations hereunder or any interest herein except pursuant to the Consent and Agreement. This Agreement shall create and constitute the continuing obligation of the parties hereto in accordance with its terms, and shall remain in full force and effect until the Termination Date; provided, however, that rights and remedies with respect to the provisions of Article VI and Sections 2.03, 7.04, 7.05 and 7.06 shall be continuing and shall survive any termination of this Agreement. 22 SECTION 7.04. Costs, Expenses and Taxes. --------------------------------------- (a) In addition to the rights of indemnification granted under this Agreement, each Seller agrees to pay on demand all costs and expenses in connection with the preparation, execution, delivery and administration (including periodic auditing of Receivables) of, and searches and filings in respect of, this Agreement, the other Transaction Documents and the other documents and agreements to be delivered hereunder or thereunder, and costs and expenses, if any, incurred by the Buyer under Section 11.04 of the Receivables Purchase Agreement, including, without limitation, in each case, the reasonable fees and disbursements of counsel for the Agent and the Purchasers with respect thereto and advising the Agent as to its rights and remedies hereunder. Each Seller further agrees to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and disbursements) of each Owner, the Agent or any Affiliate thereof, in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement, the other Transaction Documents and the other instruments and documents to be delivered in connection herewith or therewith. (b) In addition, each Seller agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement, any other Transaction Document, or any other document or instrument delivered in connection herewith or therewith (but excluding income taxes, such non-excluded taxes being hereinafter referred to as "Other Taxes"). Each Seller shall indemnify each Indemnified Party for and hold it harmless against the full amount of Other Taxes (including, without limitation, any taxes imposed by any jurisdiction on amounts payable under this Section 7.04(b)) imposed on or paid by such Indemnified Party and any liability (including penalties, additions to tax, interest and expenses) arising therefrom or with respect thereto whether or not such Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Indemnified Party makes written demand therefor (with a copy to the Agent). SECTION 7.05. NonBusiness Days. ------------------------------ In any case where any payment or action is due under this Agreement on a day which is not a Business Day, such payment or action may be made on the next succeeding Business Day, but such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be. SECTION 7.06. Confidentiality. ----------------------------- Except as otherwise required by applicable law, each of the parties hereto agrees to maintain the confidentiality of this Agreement, the Receivables Purchase Agreement, the Consent and Agreement, the Parent Undertaking, the Fee Letter (and all drafts thereof) and all non-public information delivered in connection herewith in communications with third parties and otherwise; provided that this Agreement, the Receivables Purchase Agreement, the Parent Undertaking, the Consent and Agreement, the Fee Letter and such information may be disclosed (i) to third parties to the extent such disclosure is made pursuant to a written confidentiality agreement in form and substance substantially identical to this Section 7.06, (ii) to each Seller's, the Buyer's, the Agent's and each Owner's legal counsel, accountants and auditors if they agree to hold it confidential, (iii) to any nationally recognized rating agency, and (iv) pursuant to court order or subpoena; provided, however, that each of the parties hereto agrees that the disclosure of this Agreement, the Receivables Purchase Agreement, the Consent and Agreement, the Fee Letter or other information required to be made by or pursuant to court order or subpoena will not be made until the other parties hereto have been notified at least five Business Days in advance of any such disclosure, unless such notification is prohibited by applicable law or such court order or subpoena. 23 SECTION 7.07. Governing Law. --------------------------- THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEWYORK. SECTION 7.08. Consent to Jurisdiction. ------------------------------------- (a) Each of the Sellers and the Buyer hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents to which it is a party, or for recognition or enforcement of any judgment, and each of the Sellers and the Buyer hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such Federal court. Each of the Sellers and the Buyer hereby agrees that service of process in any such action or proceeding may be effected by mailing a summons and complaint to it at its address specified in Section 7.02 by registered mail, return receipt requested, or in any other manner permitted by applicable law. Each of the Sellers and the Buyer agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any of the other Transaction Documents in the courts of any other jurisdiction. (b) Each of the Sellers and the Buyer irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents to which it is a party in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. 24 SECTION 7.09. Execution in Counterparts. --------------------------------------- This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Delivery by telecopier of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement. SECTION 7.10. Intent of the Parties, etc. ---------------------------------------- As provided in Section 2.01(b), the parties to this Agreement intend that the transaction contemplated by this Agreement shall be, and shall be treated as, a purchase by the Buyer and a sale by each Seller of Receivable Assets and not as a lending transaction. Recognizing the risk that, notwithstanding the parties' intent, a court deciding the issue might recharacterize the Receivable Asset transfers contemplated hereby as a secured lending transaction, it is the intention of the parties hereto, in the event of such recharacterization, that this Agreement shall constitute a security agreement under applicable law, and that each Seller shall be deemed to have granted to the Buyer a duly perfected first priority security interest in all of such Seller's right, title and interest in such Receivable Assets, whether now owned or hereafter acquired, and all cash and non-cash proceeds in respect thereof, free and clear of Adverse Claims. In contemplation of such risk (but only for such purpose), (a) each Seller hereby grants to the Buyer a duly perfected first priority security interest in all of such Seller's right, title and interest in, to and under the Receivable Assets, whether now owned or hereafter acquired, and all cash and non-cash proceeds in respect thereof and (b) if such Seller shall have taken any action, or suffered any event to occur, of the type described in Section 7.01(g) of the Receivables Purchase Agreement, all of the obligations of such Seller under this Agreement shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by such Seller. SECTION 7.11. Entire Agreement. ------------------------------ This Agreement and the other Transaction Documents to which the parties hereto are party contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, relating to the subject matter hereof. SECTION 7.12. Severability of Provisions. ---------------------------------------- Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 25 SECTION 7.13. Waiver of Jury Trial. ---------------------------------- Each of the parties hereto irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this Agreement or any of the other Transaction Documents or the actions of the Agent or any Indemnified Party in the negotiation, administration, performance or enforcement hereof or thereof. IN WITNESS WHEREOF, the parties have caused this amended and restated Agreement to be executed by their respective officers thereunto duly authorized, as of the date above written. CROWN CORK & SEAL COMPANY (USA), INC. By: /s/ Michael B. Burns ------------------------------ Name: Michael B. Burns Title: Vice President and Treasurer One Crown Way Philadelphia, PA 19154 Attention: Michael B. Burns Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 CONSTAR, INC. By: /s/ Michael B. Burns ------------------------------ Name: Michael B. Burns Title: Vice President and Treasurer One Crown Way Philadelphia, PA 19154 Attention: Michael B. Burns Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 RISDON-AMS (USA), INC. By: /s/ Michael B. Burns ------------------------------ Name: Michael B. Burns Title: Vice President and Treasurer One Risdon Street Naugatuck, CT 06770 Attention: Michael B. Burns Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 ZELLER PLASTIK, INC. By: /s/ Michael B. Burns ------------------------------ Name: Michael B. Burns Title: Vice President and Treasurer 1515 Franklin Boulevard Libertyville, IL 60048-4459 Attention: Michael B. Burns Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 CROWN CORK & SEAL CANADA INC. By: /s/ Adrian Cobbold ------------------------------ Name: Adrian Cobbold Title: Director of Finance and Chief Financial Officer 7900 Keele Street Concord, Ontario L4K 2A3 Canada Attention: Adrian Cobbold Telephone No.: (905) 660-8250 Telecopier No.: (905) 669-9236 CROWN CORK & SEAL RECEIVABLES (DE) CORPORATION By: /s/ Michael B. Burns -------------------------------- Name: Michael B. Burns Title: Vice President and Treasurer 919 Market Street Wilmington, DE 19801 Attention: Michael B. Burns, Vice President and Treasurer Telephone No.: (215) 698-5036 Telecopier No.: (215) 676-6011 Acknowledged as of the date first above written: CITIBANK, N.A., as Agent By: /s/ Jeffrey Nitz ------------------------------------------------ Name: Jeffrey Nitz Title: Vice President EX-10 5 ex10c-undrtkagree.txt UNDERTAKING AGREEMENT EXECUTION COPY UNDERTAKING AGREEMENT Dated as of January 26, 2001 as amended and restated as of May 7, 2001 made by CROWN CORK & SEAL COMPANY, INC. as the Parent, -- --- ------ in favor of THE PURCHASERS REFERRED TO HEREIN and CITIBANK, N.A. as Agent -- ----- TABLE OF CONTENTS Page PRELIMINARY STATEMENTS. SECTION 1. Unconditional Undertaking.....................................2 SECTION 2. Obligations Absolute..........................................2 SECTION 3. Waivers and Acknowledgments...................................4 SECTION 4. Subrogation...................................................4 SECTION 5. Representations and Warranties................................5 SECTION 6. Covenants.....................................................7 SECTION 7. Payments Free and Clear of Taxes, etc........................12 SECTION 8. Amendments, etc..............................................13 SECTION 9. Addresses for Notices........................................13 SECTION 10. No Waiver; Remedies..........................................13 SECTION 11. Continuing Agreement; Assignments under Receivables Purchase Agreement.........................................13 SECTION 12. Entire Agreement.............................................14 SECTION 13. Severability of Provisions...................................14 SECTION 14. Confidentiality..............................................14 SECTION 15. Governing Law; Jurisdiction; Waiver of Jury Trial, etc.......14 EXHIBITS Exhibit A Certain Defined Terms Exhibit B Form of Compliance Certificate UNDERTAKING AGREEMENT UNDERTAKING AGREEMENT (this "Agreement"), dated as of January 26, 2001, as amended and restated as of May 7, 2001 made by CROWN CORK & SEAL COMPANY, INC., a Pennsylvania corporation (the "Parent"), in favor of the Purchasers as defined in the Receivables Purchase Agreement and CITIBANK, N.A. ("Citibank"), as administrative agent (the "Agent") for the Purchasers and the other Owners. PRELIMINARY STATEMENTS. 1. The Parent has executed and delivered an Undertaking Agreement dated as of January 26, 2001 (such Undertaking Agreement being the "Existing Undertaking Agreement"). 2. The Parent, the Agent, the Purchasers and the other Owners have agreed that the Parent shall amend and restate the Existing Undertaking Agreement in connection with the amendment and restatement of the Receivables Purchase Agreement (as hereinafter defined) and the Contribution and Sale Agreement (as hereinafter defined) on the date hereof. 3. The Parent owns, directly or indirectly, all of the issued and outstanding shares of common stock of Crown Cork & Seal Receivables (DE) Corporation, a Delaware corporation (the "Seller"), and all of the issued and outstanding shares of common stock of each of the Originators (as defined in the Receivables Purchase Agreement). 4. The Seller and Crown (USA) as Servicer have entered into a Receivables Purchase Agreement dated as of January 26, 2001, as amended and restated as of the date hereof (such agreement, as it may from time to time be further amended, supplemented or otherwise modified, being the "Receivables Purchase Agreement") with the Purchasers and Citibank, N.A., as the Agent, pursuant to which the Seller may sell to each Purchaser undivided percentage ownership interests in its accounts receivable that were originally owed to each Originator and that have been acquired from time to time by the Seller from each Originator pursuant to a Receivables Contribution and Sale Agreement dated as of January 26, 2001, as amended and restated as of the date hereof (such agreement, as it may from time to time be further amended, supplemented or otherwise modified, being the "Contribution and Sale Agreement") among the Originators, as sellers, the Seller, as the Buyer, and Crown (USA), as the Buyer's Servicer. 5. Terms defined in either the Receivables Purchase Agreement or the Contribution and Sales Agreement and not otherwise defined in this Agreement are used in this Agreement (including, without limitation, Exhibit A to this Agreement) as defined in the Receivables Purchase Agreement or the Contribution and Sale Agreement, as applicable. Capitalized terms defined in Exhibit A to this Agreement are used in this Agreement as defined in such Exhibit A. 1 6. It is a condition precedent to the making of the initial Purchase under the Receivables Purchase Agreement that the Parent shall have executed and delivered this Agreement. NOW, THEREFORE, in consideration of the premises, and the substantial direct and indirect benefits to the Parent from the financing arrangements contemplated by the Receivables Purchase Agreement and the Contribution and Sale Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parent hereby agrees that, effective as of the date hereof, the Existing Undertaking Agreement is amended and restated as follows: SECTION 1. Unconditional Undertaking. The Parent hereby unconditionally and irrevocably undertakes and agrees with and for the benefit of each of the Purchasers and the other Owners and the Agent (collectively the "Indemnified Parties") to cause the due and punctual performance and observance by each of (a) the Seller and its successors and assigns, (b) Servicer (so long as any Affiliate of the Parent is the Servicer) and (c) each of the Originators and each of their respective successors and assigns, in each case of clauses (a), (b), and (c), of all of the terms, covenants, agreements, undertakings and other obligations on the part of the Seller, the Servicer (so long as any Affiliate of the Parent is the Servicer) or each of the Originators, as applicable, to be performed or observed under each of the Receivables Purchase Agreement, the Contribution and Sale Agreement and the other Transaction Documents and the other documents delivered in connection therewith in accordance with the terms thereof, including, without limitation, the obligations to pay when due all monetary obligations of each of the Seller, the Servicer (so long as any Affiliate of the Parent is the Servicer) and the Originators now or hereafter existing under the Receivables Purchase Agreement, the Contribution and Sale Agreement and the other Transaction Documents, whether for Collections received, deemed Collections, Yield, interest, indemnifications, fees, costs, expenses or otherwise (such terms, covenants, agreements, undertakings and other obligations being the "Obligations") and undertakes and agrees to pay any and all expenses (including reasonable counsel fees and expenses) incurred by the Indemnified Parties, or any of them, in enforcing any rights under this Agreement. In the event that the Seller, the Servicer (so long as any Affiliate of the Parent is the Servicer) or any of the Originators shall fail in any manner whatsoever to perform or observe any of its Obligations when the same shall be required to be performed or observed, then the Parent shall itself duly and punctually perform or observe, or cause to be duly and punctually performed and observed, such Obligation, and it shall not be a condition to the accrual of the obligation of the Parent hereunder to perform or observe any Obligation (or to cause the same to be performed or observed) that any Indemnified Party shall have first made any request of or demand upon or given any notice to the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators or any of their successors or assigns, or have instituted any action or proceeding against the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators or any of their successors or assigns in respect thereof. 2 SECTION 2. Obligations Absolute. The Parent undertakes and agrees that the Obligations will be paid and performed strictly in accordance with the terms of the Transaction Documents and each other document delivered in connection therewith, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Indemnified Party with respect thereto. The obligations of the Parent under this Agreement are independent of the Obligations, and a separate action or actions may be brought and prosecuted against the Parent to enforce this Agreement, irrespective of whether any action is brought against the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators or whether the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators are joined in any such action or actions. The liability of the Parent under this Agreement shall be irrevocable, absolute and unconditional irrespective of, and, to the extent permitted by law, the Parent hereby irrevocably waives any defenses (except for any defenses arising or accruing as a result of the gross negligence or willful misconduct of the Indemnified Parties) it may now or hereafter have in any way relating to, any or all of the following: (a) any lack of validity or enforceability of the Obligations or any Pool Receivable, any Receivable Interest or any Related Security, or of any Transaction Document or any other document relating thereto; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations under the Transaction Documents or any other document relating thereto, or any other amendment or waiver of or any consent to departure from any Transaction Document or any other document relating thereto; (c) any taking, exchange, release or nonperfection of or failure to transfer title to any asset or collateral, or any taking, release, amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; (d) any manner of application of any asset or collateral, or proceeds thereof, to all or any of the Obligations, or any manner of sale or other disposition of any asset or collateral for all or any of the Obligations or any other obligations of the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators under the Transaction Documents or any other document relating thereto; (e) any change, restructuring or termination of the structure or existence of the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators; (f) any failure of any Indemnified Party to disclose to the Parent any information relating to the financial condition, operations, properties or prospects of the Seller, or any of the Originators now or in the future known to such Indemnified Party (the Parent waiving any duty on the part of such Indemnified Party to disclose such information); 3 (g) any impossibility or impracticality of performance, illegality, any act of any government, or any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by any Indemnified Party that might constitute a defense available to, or a discharge of, the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators or a guarantor of the Obligations; or (h) any other circumstance, event or happening whatsoever, whether foreseen or unforeseen and whether similar or dissimilar to anything referred to above in this Section 2. This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time (x) any payment in connection with any of the Obligations is rescinded or must otherwise be returned by any Indemnified Party, or (y) any performance or observance of any Obligation is rescinded or otherwise invalidated, upon the insolvency, bankruptcy or reorganization of the Seller, the Servicer (if any Affiliate of the Parent is the Servicer) or any of the Originators or otherwise, all as though payment had not been made or as though such Obligation had not been performed or observed. SECTION 3. Waivers and Acknowledgments. -------------------------------------- (a) To the extent permitted by applicable law, the Parent hereby waives promptness, diligence, notice of acceptance and any other notice (except to the extent that such other notice is expressly required to be given to the Parent by any Indemnified Party pursuant to any other Transaction Document) with respect to any of the Obligations and this Agreement and any other document related thereto, and any requirement that any Indemnified Party protect, secure, perfect or insure any lien or any property subject thereto or exhaust any right or take any action against the Seller, the Servicer (whether or not any Affiliate of the Parent is the Servicer) or any of the Originators or any other Person or any asset or collateral. (b) The Parent hereby waives any right to revoke this Agreement, and acknowledges that this Agreement is continuing in nature and applies to all Obligations, whether existing now or in the future. SECTION 4. Subrogation. ---------------------- The Parent shall not exercise or assert any rights that it may now have or hereafter acquire against the Seller, the Servicer (to the extent the Parent is not the Servicer), or any of the Originators that arise from the existence, payment, performance or enforcement of the Parent's obligations under this Agreement or any other Transaction Document, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification or any right to participate in any claim or remedy of any Indemnified Party against the Seller, such Servicer or any of the Originators or any asset or collateral, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from the Seller, such Servicer or any of the Originators, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all amounts in connection with the Obligations and all amounts payable under this Agreement shall have been paid in full and 4 all other amounts payable to the Indemnified Parties under the Transaction Documents shall have been paid in full. If any amount shall be paid to the Parent in violation of the preceding sentence at any time prior to the later of (i) the payment in full of the Obligations and all other amounts payable under this Agreement and all amounts payable to the Indemnified Parties under the Transaction Documents and (ii) the Termination Date, such amount shall be held in trust for the benefit of the Indemnified Parties and shall forthwith be paid to the Agent to be credited and applied to the Obligations, whether matured or unmatured, in accordance with the terms of the Transaction Documents or to be held by the Agent as collateral security for any Obligations payable under this Agreement thereafter arising. SECTION 5. Representations and Warranties. ----------------------------------------- The Parent hereby represents and warrants as follows: (a) The Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its organization. Except where failure could not be reasonably expected to have a Material Adverse Effect, the Parent (a) is duly qualified to transact business and is in good standing in each jurisdiction where the nature and extent of its business and properties require the same, and (b) possesses all requisite authority, power, licenses, approvals, permits, authorizations, and franchises to use its assets and conduct its business as is now being, or is contemplated herein to be, conducted. (b) All of the issued and outstanding shares of common stock of the Seller and each of the Originators, are owned, directly or indirectly, by the Parent, or by a corporation owned directly or indirectly by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent, in each case free and clear of any Adverse Claim other than a pledge of the stock of the Originators as security for the Existing Credit Facilities. (c) The execution, delivery and performance by the Parent of each of this Agreement and the other Transaction Documents to which the Parent is a party, and the transactions contemplated hereby and thereby, are within the Parent's corporate powers, have been duly authorized by all necessary corporate action and do not (i) contravene the Parent's charter or bylaws, (ii) violate any applicable law, rule, regulation, order, writ, judgment, injunction, decree, determination or award binding on or affecting the Parent or any of its properties, or (iii) breach or result in a default under, or result in the acceleration of (or entitle any party to accelerate) the maturity of any obligation of the Parent under, or result in or require the creation of any lien upon or security interest in any property of the Parent pursuant to the terms of, any credit or loan agreement, indenture, or other agreement or instrument binding on or affecting the Parent or any of its properties. Each of this Agreement and the other Transaction Documents to which the Parent is a party have been duly executed and delivered by the Parent. (d) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery and performance by the Parent of this Agreement or any of the other Transaction Documents to which the Parent is a party or to ensure the legality, validity or enforceability hereof or thereof. 5 (e) Each of this Agreement and the other Transaction Documents to which the Parent is a party are the legal, valid and binding obligation of the Parent enforceable against the Parent in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and to general equitable principles. (f) The consolidated balance sheet of the Parent and its consolidated subsidiaries as at December 31, 2000, and the related consolidated statements of income and cash flows of the Parent and its consolidated subsidiaries for the fiscal year then ended, in each case certified by PricewaterhouseCoopers LLP, independent public accountants, copies of which have been furnished to the Agent, fairly present in all material respects the consolidated financial condition of the Parent and its consolidated subsidiaries as at such date and the consolidated results of the operations of the Parent and its consolidated subsidiaries for the period ended on such date, all in accordance with GAAP and, since December 31, 2000, there has been no material adverse change in such condition or operations of the Parent, or the ability of the Parent to perform its obligations hereunder or under any other Transaction Document to which it is a party, in each case other than to the extent expressly set forth on Schedule V to the Receivables Purchase Agreement, Schedule V to the Contribution and Sale Agreement, or in any public filing prior to the date hereof with the Securities and Exchange Commission. (g) Except as disclosed in the Parent's public filings prior to the date hereof with the Securities and Exchange Commission or as disclosed in writing to the Agent on or prior to the date hereof, there is no pending or, to the knowledge of the Parent, threatened action, suit or proceeding affecting the Parent or any of its subsidiaries, or its property or the property of any of its subsidiaries, before any court, governmental agency or arbitrator that could reasonably be expected to have a Material Adverse Effect, or that purports to affect the legality, validity or enforceability of this Agreement or any of the other Transaction Documents to which the Parent is a party. (h) Each Seller Report, Weekly Report, Daily Report and Receivables Activity Report (in each case if prepared by the Parent or any Affiliate thereof, or to the extent that information contained therein is supplied by the Parent or any Affiliate thereof), and each notice or other written item of information, exhibit, financial statement, document, book, record or report, furnished or to be furnished at any time by the Parent or any Affiliate thereof to any Indemnified Party in each case in connection with any Transaction Document is or will be accurate in all material respects as of its date or as of the date so furnished, and no such report or document contains or will contain any untrue statement of a material fact or omits to state, or will omit to state, as of its date of delivery or the date so furnished, a material fact necessary in order to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. 6 (i) There are no conditions precedent to the effectiveness of this Agreement or any of the other Transaction Documents to which the Parent is a party that have not been satisfied or waived. (j) The obligations of the Parent under this Agreement and each of the other Transaction Documents to which the Parent is a party do rank and will rank at least pari passu in priority of payment and in all other respects with all other unsecured Debt of the Parent. (k) The Parent is neither a "holding company" nor a "subsidiary holding company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, or any successor statute. Neither the Parent nor any of its Affiliates is an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or any successor statute. (l) (i) Except with respect to the Continental Can International Corp. Salaried Pension Plan for 1993, no Plan has incurred an accumulated funding deficiency, as defined in Section 302 of ERISA and Section 412 of the Code, (ii) neither the Parent nor any ERISA Affiliate has incurred material liability which is currently due and remains unpaid under Title IV of ERISA to the PBGC or to a Plan in connection with any such Plan (excluding, however, premiums that may be owed to the PBGC), (iii) neither the Parent nor any ERISA Affiliate has withdrawn in whole or in part from participation in a Multiemployer Plan, except to the extent that any such withdrawal could not reasonably be expected to have a Material Adverse Effect, (iv) the Parent has not engaged in any "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) which would be a Material Adverse Event, and (v) no Reportable Event (as defined in Section 4043 of ERISA) has occurred which is likely to result in the termination of a Plan. The actuarial present value of all accumulated benefit liabilities within the meaning of Statement of Financial Accounting Standards No. 35 under each Plan (based on those actuarial assumptions used to fund such Plan) did not, as of December 31, 1999, exceed the value of the assets of such Plan, and the total actuarial present values of all accumulated benefit liabilities within the meaning of Statement of Financial Accounting Standards No. 35 of all Plans (based on the actuarial assumptions used to fund each such Plan) did not, as of December 31, 1999, exceed the value of the assets of all such Plans. SECTION 6. Covenants. -------------------- The Parent covenants and agrees that, until the date that occurs 365 days after the latest of (i) the Commitment Termination Date, and (ii) the date on which no Capital of any Receivable Interest shall be outstanding and no Yield, fees or other amounts remain unpaid under the Receivables Purchase Agreement, the Parent will, unless the Required Purchasers shall otherwise consent in writing: 7 (a) Compliance with Laws, Etc. ------------------------- Comply in all material respects with the provisions of all laws, rules, regulations and orders applicable to it. (b) Preservation of Corporate Existence, Etc. ------------------------------------------- At all times (i) maintain its existence and good standing in the jurisdiction of its organization (provided, however, that the Parent may consummate any merger or consolidation permitted under Section 6(e)) and its authority to transact business in all other jurisdictions where the failure to so maintain its authority to transact business could reasonably be expected to have a Material Adverse Effect; (ii) maintain all licenses, permits, and franchises necessary for its business where the failure to so maintain could reasonably be expected to have a Material Adverse Effect; and (iii) keep all of its assets which are used in and necessary to its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. (c) Inspections. From time to time upon two days' prior notice and during regular business hours as requested by the Agent or any Purchaser, or at any time and from time to time upon the occurrence and during the continuance of any Event of Termination or Potential Event of Termination, allow the Agent or any Purchaser (or their respective agents or representatives) to inspect any of the properties of the Parent or any of its consolidated subsidiaries, to review reports, files, and other records of the Parent or any of its consolidated subsidiaries and to make and take away copies thereof, to conduct tests or investigations, and to discuss any of the affairs, conditions, and finances of the Parent or any of its consolidated subsidiaries with the other creditors, directors, officers, employees, other representatives, and independent accountants of the Parent and its consolidated subsidiaries, all at the expense of the Parent. d) Reporting Requirements. ---------------------- Furnish to the Agent: (i) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year, unaudited consolidated and consolidating balance sheets of the Parent and its consolidated subsidiaries as of the end of such quarter and unaudited consolidated and consolidating statements of income and an unaudited consolidated statement of cash flows of the Parent and its consolidated subsidiaries for the period commencing at the end of the previous fiscal quarter and ending with the end of such fiscal quarter and unaudited consolidated and consolidating statements of income and an unaudited consolidated statement of cash flows of the Parent and its consolidated subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, setting forth in each case in comparative form the corresponding 8 figures for the corresponding period of the preceding fiscal year, all in reasonable detail and duly certified (subject to year-end audit adjustments) by the Chief Financial Officer, Vice President of Finance or Treasurer of the Parent as having been prepared in accordance with GAAP, provided, however, that no such balance sheets, statements of income or statements of cash flows, as applicable, shall be required if and to the extent such balance sheets, statements of income and statements of cash flows are available on the Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval database; (ii) as soon as available and in any event within 120 days after the end of each fiscal year, a copy of the annual audit report for such year for the Parent and its consolidated subsidiaries, including therein consolidated and consolidating balance sheets of the Parent and its consolidated subsidiaries as of the end of such fiscal year and consolidated and consolidating statements of income and a consolidated statement of cash flows of the Parent and its consolidated subsidiaries for such fiscal year, in each case accompanied by an opinion acceptable to the Agent of PricewaterhouseCoopers LLP or other independent public accountants of recognized standing reasonably acceptable to the Agent, provided, however, that no such copy of such annual audit report or opinion, as applicable, shall be required if and to the extent that such annual audit report and opinion are available on the Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval database; (iii) promptly after the commencement thereof, notice of all actions and proceedings before any court or governmental agency or arbitrator or other authority affecting the Parent of the type described in Section 5(g); (iv) as soon as possible and in any event within two days after an officer of the Parent becomes aware of the occurrence of each Event of Termination or Potential Event of Termination, a statement of the chief financial officer of the Parent setting forth details of such Event of Termination or event and the action that the Parent has taken and proposes to take with respect thereto; (v) as soon as available and in any event within 30 days after the end of each fiscal year, a copy of the financial projections and business plans of the Parent and its subsidiaries, in form and substance satisfactory to the Agent; 9 (vi) promptly after the sending thereof, copies of all reports that the Parent sends to each of its securityholders, and copies of all reports and registration statements that the Parent files with the Securities and Exchange Commission (provided, however, that no such copies shall be required with respect to any such reports and registration statements which are available on the Securities and Exchange Commission's Electronic Data Gathering, Analysis and Retrieval database); (vii) promptly upon its receipt of any notice, request for consent, financial statements, certification, report or other communication under or in connection with any Transaction Document from any Person other than the Agent, copies of the same; (viii) as soon as possible and in any event within five days of the Parent's knowledge thereof, notice of (A) any litigation, investigation or proceeding against the Parent or any of its Affiliates which may exist at any time and which, in the reasonable judgment of the Parent, could be reasonably expected to have a material adverse effect on the financial condition or results of operations of the Parent, impair the ability of the Parent to perform its obligations under this Agreement, or materially adversely affect the collectibility of the Pool Receivables, and (B) any material adverse development in any such previously disclosed litigation, investigation or proceeding; (ix) promptly after the Parent knows or has reason to know of any of the following events, notice of such event: (A) the occurrence of a Reportable Event that, alone or together with any other Reportable Event (as defined in Section 4043 of ERISA), could reasonably be expected to result in liability of the Parent to the PBGC in an aggregate amount exceeding $100,000,000; (B) any expressed statement in writing on the part of the PBGC of its intention to terminate any Plan or Plans; (C) the Parent's or an ERISA Affiliate's becoming obligated to file with the PBGC a notice of failure to make a required installment or other payment with respect to any Plan; or (D) the receipt by the Parent or an ERISA Affiliate from the sponsor of a Multiemployer Plan of either a notice concerning the imposition of withdrawal liability in an aggregate amount exceeding $100,000,000 or of the impending termination or reorganization of such Multiemployer Plan; (x) as soon as available and in any event within 60 days after the end of each quarter of each fiscal year, a certificate substantially in the form of Exhibit B hereto, executed by the chief financial officer, principal accounting officer, Treasurer or Controller of the Parent, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Agent) compliance with the covenants set forth in subsections (h), (i) and (j) of this Section 6 and representing as to the absence of any Event of Termination; 10 (xi) such other information, documents, records or reports respecting the condition or operations, financial or otherwise, of the Parent or any of its subsidiaries as the Agent may from time to time reasonably request. (e) Stock Ownership. Continue to own, directly or indirectly, or cause a corporation owned directly or indirectly by the stockholders of the Parent in substantially the same proportions as their ownership of stock of the Parent, to own directly or indirectly all of the issued and outstanding shares of capital stock of the Seller and each of the Originators free and clear of any Adverse Claim. (f) Merger, Etc. Not merge into or consolidate with any Person or permit any Person to merge into it, unless, in each case, (i) immediately after giving effect thereto, no event shall occur and be continuing that constitutes an Event of Termination or a Potential Event of Termination and (ii) the corporation formed by such consolidation or into which the Parent shall be merged shall, at the effective time of such merger or consolidation, assume the Parent's obligations under this Agreement and the other Transaction Documents to which it is a party in a writing reasonably satisfactory in form and substance to the Agent; and not sell, assign or otherwise dispose of all, or substantially all, of its assets in any transaction or series of transactions, unless, in each case, (i) immediately after giving effect thereto, no event shall occur and be continuing that constitutes an Event of Termination or a Potential Event of Termination, (ii) such sale, assignment or other disposition is to (A) one or more Affiliates of the Parent, or (B) a Person the acquisition of 100% of the Parent by whom would not constitute a Change of Control, and (iii) such Affiliates or such Person or the holder, directly or indirectly, of 100% of the equity interests of such Affiliates or such Person shall, at the effective time of such sale, assignment or disposition, assume the Parent's obligations under this Agreement and the other Transaction Documents to which it is a party in a writing reasonably satisfactory in form and substance to the Agent. (g) Taxes. File all tax returns and reports required by law to be filed by it and promptly pay all taxes and governmental charges at any time owing, except any such taxes which are not yet delinquent or are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP have been set aside on its books. (h) Interest Expense Coverage Ratio. Not permit the ratio of (a) Consolidated EBITDA to (b) Consolidated Net Interest Expense, in each case for any period of four consecutive Fiscal Quarters ending on any date during any period set forth below, to be less than the ratio set forth below opposite such period: 11 - -------------------------------------------------------------------------------- Period Ratio - -------------------------------------------------------------------------------- June 30, 2001 through March 30, 2002 1.65 to 1.00 - -------------------------------------------------------------------------------- March 31, 2002 through March 30, 2003 1.70 to 1.00 - -------------------------------------------------------------------------------- March 31, 2003 and thereafter 1.75 to 1.00 - -------------------------------------------------------------------------------- (i) Leverage Ratio. --------------- Not permit the Leverage Ratio as of any date during any period set forth below to exceed the ratio set forth opposite such period: - -------------------------------------------------------------------------------- Period Ratio - -------------------------------------------------------------------------------- June 30, 2001 through March 30, 2002 6.75 to 1.00 - -------------------------------------------------------------------------------- March 31, 2002 through March 30, 2003 6.25 to 1.00 - -------------------------------------------------------------------------------- March 31, 2003 and thereafter 6.00 to 1.00 - --------------------------------------------------------------------------- ---- (j) Asbestos Payments. Not, and not permit any Subsidiary of the Parent to, make any Asbestos Payments that would result in the aggregate amount of Asbestos Payments made in any period of four consecutive Fiscal Quarters ending prior to the Commitment Termination Date exceeding $200,000,000 (calculated on a pre-tax basis). SECTION 7. Payments Free and Clear of Taxes, etc. ------------------------------------------------ (a) Any and all payments by the Parent hereunder shall be made free and clear of and without deduction for any and all present or future Taxes. If the Parent or the Agent shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Indemnified Party, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 7) such Indemnified Party receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Parent or the Agent shall make such deductions and (iii) the Parent or the Agent shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. (b) In addition, the Parent shall pay any present or future Other Taxes that arise from any payment made hereunder or from the execution, delivery or registration of, performing under, or otherwise with respect to, this Agreement. (c) The Parent shall indemnify each Indemnified Party for and hold it harmless against the full amount of Taxes and Other Taxes (including, without limitation, taxes of any kind imposed by any jurisdiction on amounts payable under this Section 7) imposed on or paid by such Indemnified Party and any liability (including penalties, additions to tax, interest and expenses other than those incurred as a result of actions by such Indemnified Party constituting the gross negligence or willful misconduct of such Indemnified Party except to the extent that such actions shall have been approved by or directed to be taken by the Parent or any of its Affiliates) arising therefrom or with respect thereto whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within 30 days from the date such Indemnified Party makes written demand therefor (with a copy to the Agent). 12 (d) Within 30 days after the date of any payment of Taxes or Other Taxes, the Parent shall furnish to the Agent, at its address referred to in Section 9, the original or a certified copy of a receipt evidencing payment thereof. (e) Without prejudice to the survival of any other agreement of the Parent hereunder, the agreements and obligations of the Parent contained in this Section 7 shall survive any termination of the Receivables Agreements. SECTION 8. Amendments, etc. -------------------------- No amendment or waiver of any provision of this Agreement or consent to any departure by the Parent herefrom shall be effective unless in a writing signed by the Required Purchasers (and, in the case of any amendment, also signed by the Parent), and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 9. Addresses for Notices. -------------------------------- All notices and other communications hereunder shall, unless otherwise stated herein, be in writing (including telegraphic, telecopy or telex communication) and mailed, telegraphed, telecopied, telexed or delivered, (i) to the Parent, at its address set forth under its name on the signature page hereof, (ii) to each Indemnified Party, at its address specified in the Receivables Purchase Agreement to which it is a party, or (iii) to any party hereto at such other address as shall be designated by such party in a written notice to the other parties hereto. All such notices and communications shall, when mailed, telegraphed, telecopied or telexed, be effective when deposited in the mails, delivered to the telegraph company, transmitted by telecopier or confirmed by telex answerback, respectively. SECTION 10. No Waiver; Remedies. ------------------------------- No failure on the part of any Indemnified Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 11. Continuing Agreement; Assignments under Receivables Purchase --------------------------------------------------------------------------- Agreement. --------- This Agreement is a continuing agreement and shall, subject to the reinstatement provisions contained in Section 2, (a) remain in full force and effect until the later of (i) the payment and performance in full of the Obligations and the payment of all other amounts payable under this Agreement and (ii) the Termination Date, (b) be binding upon the Parent, its successors and permitted assigns, and (c) inure to the benefit of, and be enforceable by, the Indemnified Parties and each of their respective successors and permitted transferees and assigns. Without limiting the generality of clause (c) of the immediately preceding sentence, (A) any Purchaser or other Owner may assign all or any of its Receivable Interests under the Receivables Purchase Agreement in accordance with the terms thereof to any Eligible Assignee, and (B) the Agent may be replaced pursuant to the provisions of the Receivables Purchase Agreement, and such Eligible Assignee, or such replacement Agent, shall thereupon become vested with all the benefits in respect thereof granted to such Owner, or the Agent, as the case may be, herein or otherwise. The Parent shall not have the right to assign this Agreement or any or all of its rights or obligations hereunder or any interest herein to any Person except either (i) in connection with a merger or consolidation permitted under Section 6(e) or (ii) with the prior written consent of each Purchaser. 13 SECTION 12. Entire Agreement. ---------------------------- This Agreement and the other Transaction Documents to which the parties hereto are a party contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, written or oral, relating to the subject matter hereof. SECTION 13. Severability of Provisions. -------------------------------------- Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 14. Confidentiality. --------------------------- Except as otherwise required by applicable law, by their acceptance of this Agreement the Agent and each Purchaser or other Owner agrees to maintain the confidentiality of this Agreement (and all drafts thereof) and all non-public information delivered in connection herewith in communications with third parties and otherwise; provided that this Agreement and such information may be disclosed (a) to third parties to the extent such disclosure is made pursuant to a written confidentiality agreement in form and substance substantially identical to this Section 14, (b) to the Agent's and each Purchaser's and Owner's legal counsel, accountants and auditors if they agree to hold it confidential, (c) to any nationally recognized rating agency, and (d) pursuant to court order or subpoena; provided, however, that the disclosure of this Agreement or other information required to be made by or pursuant to court order or subpoena will not be made until Parent has been notified at least five Business Days in advance of any such disclosure, unless such notification is prohibited by applicable law or such court order or subpoena. SECTION 15. Governing Law; Jurisdiction; Waiver of Jury Trial, etc. ------------------------------------------------------------------ (a) This Agreement shall be governed by,and construed in accordance with, the laws of the State of New York. (b) The Parent hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents to which it is or is to be a party, or for recognition or enforcement of any judgment, and the Parent hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such New York State court or, to the extent permitted by law, in such federal court. The Parent agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Transaction Document shall affect any right that any party may otherwise have to bring any action or proceeding relating to this Agreement or any other Transaction Document in the courts of any jurisdiction. 14 (c) The Parent irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of the other Transaction Documents to which it is or is to be a party in any New York State court or United States federal court sitting in New York City. The Parent hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such suit, action or proceeding in any such court. (d) THE PARENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTION DOCUMENTS, THE PURCHASES OR THE ACTIONS OF ANY INDEMNIFIED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF. 15 IN WITNESS WHEREOF, the Parent has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. CROWN CORK & SEAL COMPANY, INC. By: /s/ Alan W. Rutherford ------------------------------ Name: Alan W. Rutherford Title: Executive Vice President and Chief Financial Officer One Crown Way Philadelphia, PA 19154 Attention: Michael B. Burns, Vice President and Treasurer Telephone No.: ( 215) 698-5036 Telecopier No.: (215) 676-6011 EXHIBIT A to Undertaking Agreement Certain Defined Terms --------------------- As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "Asbestos Payment" means any cash payment actually made by or on behalf of ----------------- the Parent or any Subsidiary in respect of any liability related to asbestos or any claim, action or proceeding related to asbestos (including any settlement of any thereof and excluding any payments relating to the defense or administration of asbestos-related claims, including, without limitation, the fees of counsel, consultants and experts). "Capital Lease Obligations" means all monetary obligations of the Parent -------------------------- and its Subsidiaries under any leasing or similar arrangement conveying the right to use real or personal property, or a combination thereof, which, in accordance with GAAP, would be classified and accounted for as capital leases, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date on which such lease may be terminated by the lessee without payment of a penalty. "Consolidated EBITDA" means, for any period, Consolidated Net Income for -------------------- such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Net Interest Expense for such period, (ii) consolidated income, franchise, personal property and other tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) charges for financial statement asbestos reserve increases, (v) any Non-Cash Charges for such period and (vi) for any period that includes the fiscal quarter ended December 31, 2000, the non-cash bad debts-related charges for such quarter in the approximate amount of $35,000,000 (pre-tax), and minus (b) without duplication and to the extent included in determining such Consolidated Net Income, any extraordinary gains for such period and any gains realized in connection with the sale of any material assets outside the ordinary course of business during such period, all determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" means, for any period, the net income or loss of ----------------------- the Parent and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded the income or loss of any person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Parent or any Subsidiary or the date that such person's assets are acquired by the Parent or any Subsidiary. "Consolidated Net Interest Expense" means, for any period, (a) the sum of ---------------------------------- (i) the interest expense (including imputed interest expense in respect of Capital Lease Obligations) of the Parent and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus (ii) any interest accrued during such period in respect of Indebtedness of the Parent or any of its Subsidiaries that is required to be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP, minus (b) the amount of interest income received by the Parent and its Subsidiaries for such period. "Fiscal Quarter" shall mean any quarter of a Fiscal Year. -------------- "Fiscal Year" shall mean any period of twelve consecutive calendar months ----------- ending on December 31. "Indebtedness" of any person means, without duplication, (a) all ------------ obligations of such person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such person upon which interest charges are customarily paid (excluding obligations to pay salary or benefits under deferred compensation or other benefit programs), (d) all obligations of such person under conditional sale or other title retention agreements relating to property acquired by such person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness (excluding prepaid interest thereon) of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all guarantees by such person of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i) all obligations, contingent or otherwise, of such person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such person in respect of bankers' acceptances; provided, however, that the term "Indebtedness" shall not include indebtedness incurred by a special purpose, wholly owned Subsidiary of such Person that purchases accounts receivable from such Person and its other Subsidiaries to the extent that such indebtedness is nonrecourse to such Person and each other such Subsidiary and is not required under GAAP to be reflected on the consolidated balance sheet of the Parent. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is directly liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. "Leverage Ratio" means, on any date, the ratio of (a) Total Indebtedness as -------------- of such date to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter most recently ended prior to such date); provided that for purposes of this definition, if the Parent or any of its Subsidiaries has sold, transferred, leased or otherwise disposed of assets pursuant to Section 6.05(f) of the Existing Credit Facilities, during the relevant period for determining Consolidated EBITDA, (x) Consolidated EBITDA for the relevant period shall be calculated after giving pro forma effect thereto, as if any such sale, transfer, lease or other disposition of assets (and any related incurrence, repayment or assumption of Indebtedness, with any new Indebtedness being deemed to be amortized over the relevant period in accordance with its terms) had occurred on the first day or the relevant period for determining Consolidated EBITDA, and (y) Total Indebtedness shall be calculated after giving effect to the application of any Net Cash Proceeds (as defined in the Existing Credit Facilities) from such sale, transfer, lease or other disposition of assets pursuant to Section 2.05 of the Existing Credit Facilities. Any such pro forma calculations may include operating and other expense reductions and other synergistic benefits for such period resulting from any transaction that is being given pro forma effect to the extent that such operating and other expense reductions and other synergistic benefits would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933, as amended. 2 "Non-Cash Charges" means charges that (a) do not represent cash payments ----------------- made or to be made by the Parent or any Subsidiary prior to the Commitment Termination Date (whether in the period incurred or any future period), including, but not limited to minority interest net of equity earnings, losses realized upon the sale of any assets outside the ordinary course of business and extraordinary losses, and (b) do not involve the write-down or write-off of any accounts receivable or inventory unless related to an extraordinary item. "Subsidiary" means with respect to any Person, (i) any corporation of which ---------- more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person, (ii) any partnership of which more than 50% of the outstanding partnership interests having the power to act as a general partner of such partnership (irrespective of whether at the time any partnership interests other than general partnership interests of such partnership shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such person; provided that with respect to partnerships in which the Parent directly or indirectly owns a partnership interest, such partnership shall not be deemed to be a Subsidiary of the Parent unless such partnership's primary assets consist of the capital stock of corporate Subsidiaries of the Parent or (iii) any other legal entity the accounts of which would be consolidated with those of such Person on a consolidated balance sheet of such person prepared in accordance with GAAP. Unless otherwise indicated, when used in this Agreement, the term "Subsidiary" shall refer to a Subsidiary of the Parent. "Total Indebtedness" means, as of any date, the sum of (a) the aggregate ------------------- principal amount of Indebtedness of the Parent and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, plus (b) the aggregate principal amount of Indebtedness of the Parent and the Subsidiaries outstanding as of such date that is not required to be reflected on a balance sheet in accordance with GAAP, determined on a consolidated basis; provided, that (x) for purposes of clause (b) above, the term "Indebtedness" shall not include contingent obligations of the Parent or any Subsidiary as an account party in respect of any letter of credit or letter of guaranty unless such letter of credit or letter of guaranty supports an obligation that constitutes Indebtedness and (y) shall only include any Indebtedness recorded in accordance with SFAS 133 which does not represent an actual obligation and for which an offsetting derivative contract has been recorded in the financial statements to the extent such Indebtedness exceeds $50,000,000. 3 EXHIBIT B to Undertaking Agreement FORM OF COMPLIANCE CERTIFICATE To: Citibank, N.A., as Agent 388 Greenwich Street, 19th Floor New York, New York 10013 Attention: ---------------------- Crown Cork & Seal Company, Inc. ------------------------------ Ladies and Gentlemen: This Compliance Certificate is being delivered pursuant to Section 6 (d)(x) of the Undertaking Agreement dated as of January 26, 2001 as amended and restated as of May 7, 2001 (the "Parent Undertaking") made by Crown Cork & Seal Company, Inc. (the "Parent") in favor of the Purchasers as defined in the Receivables Purchase Agreement (as defined in the Parent Undertaking) and Citibank, N.A., as administrative agent (the "Agent") for the Purchasers and the other Owners. Unless otherwise defined herein, terms defined in the Parent Undertaking Agreement or the Receivables Purchase Agreement (as defined in the Parent Undertaking) are used herein as therein defined. The Parent hereby certifies, represents and warrants that as of , (the 1 "Computation Date"): ---------------- (a) The Leverage Ratio was __:__, as computed on Attachments 1 and 3 hereto and such amount [complies] [does not comply] with the provisions of Section 6(i) of the Parent Undertaking; and (b) The Interest Expense Coverage Ratio was __:__, as computed on Attachments 2 and 3 hereto and such amount [complies] [does not comply] with the provisions of Section 6(h) of the Parent Undertaking; and (c) No Potential Event of Termination or Event of Termination has occurred and is continuing [other than as follows:] - ------------------------ 1 Computation Date should be date of most recent financial statements delivered under Section 6(d)(i) or (ii) of the Parent Undertaking. 1 IN WITNESS WHEREOF, the Parent has caused this Compliance Certificate to be executed and delivered by its duly authorized officer on the _____ day of __________, CROWN CORK & SEAL COMPANY, INC. By: ------------------------------ Name: Title: 2 ATTACHMENT 1 1. Leverage Ratio: A. "Total Indebtedness" means, as of any date, the sum of (a) the aggregate principal amount of Indebtedness of the Parent and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, plus (b) the aggregate principal amount of Indebtedness of the Parent and the Subsidiaries outstanding as of such date that is not required to be reflected on a balance sheet in accordance with GAAP, determined on a consolidated basis; provided, that (x) for purposes of clause (b) above, the term "Indebtedness" shall not include contingent obligations of the Parent or any Subsidiary as an account party in respect of any letter of credit or letter of guaranty unless such letter of credit or letter of guaranty supports an obligation that constitutes Indebtedness and (y) shall only include any Indebtedness recorded in accordance with SFAS 133 which does not represent an actual obligation and for which an offsetting derivative contract has been recorded in the financial statements to the extent such Indebtedness exceeds $50,000,000. B. "Consolidated EBITDA" means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Net Interest Expense for such period, (ii) consolidated income, franchise, personal property and other tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) charges for financial statement asbestos reserve increases, (v) any Non-Cash Charges for such period and (vi) for any period that includes the fiscal quarter ended December 31, 2000, the non-cash bad debts-related charges for such quarter in the approximate amount of $35,000,000 (pre-tax), and minus (b) without duplication and to the extent included in determining such Consolidated Net Income, any extraordinary gains for such period and any gains realized in connection with the sale of any material assets outside the ordinary course of business during such period, all determined on a consolidated basis in accordance with GAAP. C. LEVERAGE RATIO: The ratio of Item 1.A to Item 1.B. -------------- ATTACHMENT 2 2. Interest Expense Coverage Ratio*: A. "Consolidated EBITDA" means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) Consolidated Net Interest Expense for such period, (ii) consolidated income, franchise, personal property and other tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) charges for financial statement asbestos reserve increases, (v) any Non-Cash Charges for such period and (vi) for any period that includes the fiscal quarter ended December 31, 2000, the non-cash bad debts-related charges for such quarter in the approximate amount of $35,000,000 (pre-tax), and minus (b) without duplication and to the extent included in determining such Consolidated Net Income, any extraordinary gains for such period and any gains realized in connection with the sale of any material assets outside the ordinary course of business during such period, all determined on a consolidated basis in accordance with GAAP. B. "Consolidated Net Interest Expense" means, for any period, (a) the sum of (i) the interest expense (including imputed interest expense in respect of Capital Lease Obligations) of the Parent and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP, plus (ii) any interest accrued during such period in respect of Indebtedness of the Parent or any of its Subsidiaries that is required to be capitalized rather than included in consolidated interest expense for such period in accordance with GAAP, minus (b) the amount of interest income received by the Parent and its Subsidiaries for such period. C. INTEREST COVERAGE RATIO: The ratio of Item 2.A to Item 2.B. ----------------------- -------- -------- ATTACHMENT 3 Detailed Calculations LEVERAGE RATIO: A. "Total Indebtedness" = ------------------ B. "Consolidated EBITDA" = ------------------- INTEREST EXPENSE COVERAGE RATIO: A. "Consolidated EBITDA" = ------------------- B. "Consolidated Net Interest Expense" = --------------------------------- EXHIBIT J NOTICE OF PURCHASE Dated as of __________, 20[ ] Citibank, N.A., as Agent 388 Greenwich Street, 19th Floor New York, New York 10013 Attention: ____________________ Ladies and Gentlemen: The undersigned, Crown Cork & Seal Receivables (DE) Corporation, refers to the Receivables Purchase Agreement dated as of January 26, 2001, as amended and restated as of May 7, 2001 (as amended, amended and restated, supplemented or otherwise modified from time to time, the "Receivables Purchase Agreement"), among the undersigned as the Seller, CROWN CORK & SEAL COMPANY (USA), INC., as the Servicer, the banks and other financial institutions party thereto as Purchasers thereunder and CITIBANK, N.A., as administrative agent (the "Agent") for the Purchasers and the other Owners. Unless otherwise defined herein, terms defined in the Receivables Purchase Agreement are used herein as therein defined. The undersigned hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Receivables Purchase Agreement that the undersigned hereby requests a Purchase of Receivable Interests under the Receivables Purchase Agreement, and in that connection sets forth below the information relating to such Purchase of Receivable Interests (the "Proposed Purchase") as required by Section 2.02(a) of the Receivables Purchase Agreement: (i) The requested aggregate amount of such Proposed Purchase is $________. (ii) The requested Business Day of such Proposed Purchase is _________ __, 20[ ]. (iii) The Proposed Purchase shall initially bear Yield based on the [Eurodollar Rate] [Base Rate]. The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Purchase: (A) the representations and warranties contained in Section 4.01 of the Receivables Purchase Agreement, in Section 3.01 of the Contribution and Sale Agreement and in Section 5 of the Parent Undertaking are correct in all material respects on and as of the date hereof, before and after giving effect to the Proposed Purchase and to the application of the proceeds therefrom, as though made on and as of the date hereof, other than any such representations and warranties that, by their terms, refer to a specific date other than the date hereof, in which case as of such dates; and (B) no event has occurred and is continuing, or would result from the Proposed Purchase or from the application of the proceeds therefrom, which constitutes an Event of Termination or a Potential Event of Termination. Delivery of an executed counterpart of this Notice of Purchase by telecopier shall be effective as delivery of an original executed counterpart of this Notice of Purchase. Very truly yours, Crown Cork & Seal Receivables (DE) Corporation By: ----------------------------------- Title: -----END PRIVACY-ENHANCED MESSAGE-----