UNITED STATES CAN COMPANY /DE/, 424B2, 1997-02-12

UNITED STATES CAN COMPANY /DE/
424B2, 1997-02-12
METAL CANS

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OFFER TO EXCHANGE

ALL OUTSTANDING

10 1/8% SENIOR SUBORDINATED NOTES DUE 2006
($275,000,000 PRINCIPAL AMOUNT OUTSTANDING)
FOR

SERIES B 10 1/8% SENIOR SUBORDINATED NOTES DUE 2006
($275,000,000 PRINCIPAL AMOUNT)
OF

U.S. CAN CORPORATION [US CAN LOGO]

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON MARCH 13, 1997, UNLESS EXTENDED.

U.S. Can Corporation, a Delaware corporation (the "Company"), hereby offers (the
"Exchange Offer"), upon the terms and subject to the conditions set forth in
this Prospectus and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), to exchange up to an aggregate principal amount of $275,000,000
of its Series B 10 1/8% Senior Subordinated Notes due 2006 (the "Exchange
Notes") for an equal principal amount of its outstanding 10 1/8% Senior
Subordinated Notes due 2006 (the "Notes"), in integral multiples of $1,000. The
Exchange Notes will be fully and unconditionally guaranteed on a senior
subordinated basis by United States Can Company, a Delaware corporation which is
a wholly owned subsidiary of the Company (the "Guarantor"). The Exchange Notes
will be senior subordinated unsecured obligations of the Company and are
substantially identical (including principal amount, interest rate, maturity and
redemption rights) to the Notes for which they may be exchanged pursuant to this
offer, except that (i) the offering and sale of the Exchange Notes will have
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and (ii) holders of Exchange Notes generally will not be entitled to
certain rights of holders under a Registration Rights Agreement of the Company
dated as of October 17, 1996 (the "Registration Rights Agreement"). See
"Exchange Offer; Registration Rights." The Notes have been, and the Exchange
Notes will be, issued under the indenture (the "Indenture") dated as of October
17, 1996, among the Company, the Guarantor and Harris Trust and Savings Bank, as
trustee (the "Trustee"). See "Description of Exchange Notes." There will be no
proceeds to the Company from this offering; however, pursuant to the
Registration Rights Agreement, the Company will bear certain offering expenses.

The Exchange Notes will be general, unsecured obligations of the Company, and
will be subordinated to all Senior Indebtedness of the Company (as defined on
page 116 of this Prospectus). Senior Indebtedness means all Indebtedness of the
Company unless the instrument creating or evidencing the debt provides that such
obligations are not superior in right of payment to the Notes or Exchange Notes,
excluding: obligations of the Company to any Subsidiary; any liability for
federal, state, local or other taxes; accounts payable or other liabilities to
trade creditors arising in the ordinary course of business; any obligations with
respect to any Capital Stock; and any Indebtedness incurred in violation of the
Indenture. The Exchange Notes will rank pari passu with all Senior Subordinated
Indebtedness of the Company (as defined on page 116 of this Prospectus). Senior
Subordinated Indebtedness means the Notes (to the extent not exchanged pursuant
hereto), the Exchange Notes and any other indebtedness of the Company that
specifically provides that it is to rank pari passu with the Notes or the
Exchange Notes and is not subordinated to any indebtedness of the Company which
is not Senior Indebtedness. The Exchange Notes will rank senior in right of
payment to all other subordinated indebtedness of the Company, if any, other
than Senior Subordinated Indebtedness. The Company is a holding company that
derives all of its operating income and cash flow from the Guarantor. The
Exchange Notes will be fully and unconditionally guaranteed (the "Subsidiary
Guaranties") on an unsecured, senior subordinated basis by each Domestic
Restricted Subsidiary (as defined), including the Guarantor (collectively, the
"Subsidiary Guarantors"). As of the date hereof, the Guarantor is the sole
Subsidiary Guarantor. The Subsidiary Guaranties will be subordinated to all
Senior Indebtedness of the Subsidiary Guarantors and will rank pari passu with
all Senior Subordinated Indebtedness of the Subsidiary Guarantors (as defined on
page 116 of this Prospectus), if any. In addition, the Guarantor is a borrower
under the Senior Credit Agreement (as defined) (which includes the Revolving
Credit Facility and the Term Loan) (both as defined), which ranks senior to the
Subsidiary Guaranties and is effectively senior to the Exchange Notes and the
Notes. The obligations under the Senior Credit Agreement are secured by the
accounts receivable and the inventory of the Guarantor. See "Description of
Exchange Notes" and "Description of Certain Indebtedness."

The claims of holders of the Exchange Notes will be effectively subordinated to
the Senior Indebtedness of the Company and the Guarantor which, on a
consolidated basis, as of September 29, 1996, as adjusted (giving effect to the
issuance of the Notes and the Exchange Notes) was $84.9 million, and such claims
will be effectively subordinated to all indebtedness and other liabilities
(including trade payables, deferred taxes and accrued liabilities but excluding
the Subsidiary Guaranties) of the subsidiaries of the Company that are not
Subsidiary Guarantors. Such indebtedness and other liabilities of such
subsidiaries on an adjusted basis (giving effect to the issuance of the Notes
and the Exchange Notes) aggregated
(Cover text continued on next page)

------------------------
SEE "RISK FACTORS," COMMENCING ON PAGE 21, FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER NOTES IN THE EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this Prospectus is February 11, 1997.
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(cover text continued from previous page)

approximately $40.0 million as of September 29, 1996. See "Capitalization." The
Notes are not currently, and the Exchange Notes upon issuance are not expected
to be, senior in priority to any outstanding indebtedness of the Company or its
subsidiaries. The Indenture limits the ability of the Company and the Restricted
Subsidiaries to incur additional indebtedness, including Senior Indebtedness and
Indebtedness that will rank pari passu with the Exchange Notes and the Notes.
The Company has no current plan or intention to incur any indebtedness to which
the Notes or the Exchange Notes would be senior in priority. The Notes and the
Exchange Notes rank pari passu with one another. There is currently no other
Senior Subordinated Indebtedness of the Company which ranks pari passu with the
Exchange Notes other than that amount which would remain outstanding as Notes in
the event less than all of the Notes are exchanged in the Exchange Offer for the
Exchange Notes.

The Company will accept for exchange any and all validly tendered Notes on
or prior to 5:00 p.m. New York City time, on March 13, 1997, unless the Exchange
Offer is extended (the "Expiration Date"). The Company does not intend to extend
the Exchange Offer beyond March 16, 1997, in any event. Tenders of Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date; otherwise such tenders are irrevocable. Harris Trust and Savings Bank will
act as Exchange Agent (in such capacity, the "Exchange Agent") in connection
with the Exchange Offer. The Exchange Offer is not conditioned upon any minimum
principal amount of Notes being tendered for exchange, but is otherwise subject
to certain customary conditions.

The Notes were sold by the Company on October 17, 1996 (the "Offering") in
transactions not registered under the Securities Act in reliance upon the
exemption provided in Section 4(2) of the Securities Act. The Notes were
subsequently resold to qualified institutional buyers in reliance upon Rule 144A
under the Securities Act and to a limited number of institutional accredited
investors in a manner exempt from registration under the Securities Act.
Accordingly, the Notes may not be reoffered, resold or otherwise transferred in
the United States unless registered under the Securities Act or unless an
applicable exemption from the registration requirements of the Securities Act is
available. The Exchange Notes are being offered hereunder in order to satisfy
certain obligations of the Company under the Registration Rights Agreement. See
"The Exchange Offer."

The Exchange Notes will bear interest from October 17, 1996, the date of
issuance of the Notes that are tendered in exchange for the Exchange Notes (or
the most recent Interest Payment Date (as defined herein) to which interest on
such Notes has been paid), at a rate equal to 10 1/8% per annum. Interest on the
Exchange Notes will be payable semi-annually on April 15 and October 15 of each
year, commencing April 15, 1997. The Exchange Notes are redeemable at the option
of the Company in whole or in part at any time on or after October 15, 2001 in
each case at the redemption prices set forth herein, plus accrued and unpaid
interest to the date of redemption. See "Summary -- Summary of Terms of Exchange
Notes."

Upon the occurrence of a Change of Control (as defined on page 106 of this
Prospectus), each holder of Exchange Notes may require the Company to repurchase
all or a portion of such holder's Exchange Notes at 101% of the aggregate
principal amount of the Exchange Notes, together with accrued and unpaid
interest, if any, to the date of repurchase. See "Description of Exchange
Notes."

The Exchange Offer is being made in reliance on certain no-action positions
that have been published by the staff of the Securities and Exchange Commission
(the "Commission") which require each tendering noteholder to represent that it
is acquiring the Exchange Notes in the ordinary course of its business and that
such holder does not intend to participate and has no arrangement or
understanding with any person to participate in a distribution of the Exchange
Notes. Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. See "Plan of
Distribution." The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of
(cover text continued on next page)

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(cover text continued from previous page)

the Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of
Exchange Notes received in exchange for Notes where such Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Company has agreed that for a period of 180 days after the
Expiration Date, it will make this Prospectus available to any broker-dealer for
use in connection with any such resale. See "Plan of Distribution."

There has not previously been any public market for the Exchange Notes. The
Company does not intend to list the Exchange Notes on any securities exchange or
to seek approval for quotation through any automated quotation system. There can
be no assurance that an active market for the Exchange Notes will develop. To
the extent that an active market for the Exchange Notes does develop, the market
value of the Exchange Notes will depend on market conditions (such as yields on
alternative investments), general economic conditions, the Company's financial
condition, and other factors. Such conditions might cause the Exchange Notes, to
the extent that they are actively traded, to trade at a significant discount
from face value. See "Risk Factors -- Lack of Public Market for the Exchange
Notes."

ANY NOTES NOT TENDERED AND ACCEPTED IN THE EXCHANGE OFFER WILL REMAIN
OUTSTANDING. TO THE EXTENT ANY NOTES ARE TENDERED AND ACCEPTED IN THE EXCHANGE
OFFER, A HOLDER'S ABILITY TO SELL UNTENDERED NOTES COULD BE ADVERSELY AFFECTED.
FOLLOWING CONSUMMATION OF THE EXCHANGE OFFER, THE HOLDERS OF NOTES WILL CONTINUE
TO BE SUBJECT TO THE EXISTING RESTRICTIONS UPON TRANSFER THEREOF AND THE COMPANY
WILL HAVE FULFILLED ONE OF ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS
AGREEMENT. HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES GENERALLY WILL NOT
HAVE ANY FURTHER REGISTRATION RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT OR
OTHERWISE. SEE "THE EXCHANGE OFFER -- CONSEQUENCES OF FAILURE TO EXCHANGE."

The Exchange Notes issued pursuant to this Exchange Offer generally will be
issued in the form of Global Exchange Notes (as defined herein), which will be
deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in its name or in the name of Cede & Co., its nominee. Beneficial
interests in the Global Exchange Notes representing the Exchange Notes will be
shown on, and transfers thereof will be effected through, records maintained by
DTC and its participants. Notwithstanding the foregoing, Notes held in
certificated form will be exchanged solely for the Exchange Notes in
certificated form. After the initial issuance of the Global Exchange Notes,
Exchange Notes in certificated form will be issued in exchange for the Global
Exchange Notes only on the terms set forth in the Indenture. See "Description of
Exchange Notes -- Book-Entry, Delivery and Form."
------------------------

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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY
OTHER THAN THE EXCHANGE NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE EXCHANGE NOTES TO ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE
DATE HEREOF.

UNTIL MAY 12, 1997 (90 DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER), ALL
DEALERS EFFECTING TRANSACTIONS IN THE EXCHANGE NOTES, WHETHER OR NOT
PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS.

AVAILABLE INFORMATION

The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. The Company has filed with the Commission a Registration
Statement on Form S-4 under the Securities Act for the registration of the
Exchange Notes offered hereby (the "Registration Statement"). This Prospectus,
which constitutes a part of the Registration Statement, does not contain all of
the information set forth in the Registration Statement, certain items of which
are contained in exhibits and schedules to the Registration Statement as
permitted by the rules and regulations of the Commission. For further
information with respect to the Company or the Exchange Notes offered hereby,
reference is made to the Registration Statement, including the exhibits and
financial statement schedules thereto, which may be inspected without charge at
the public reference facility maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission at prescribed rates. Statements made in this Prospectus concerning
the contents of any document referred to herein are not necessarily complete.
With respect to each such document filed with the Commission as an exhibit to
the Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.

Such documents and other information filed by the Company can be inspected
and copied at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 and the regional offices of the Commission
located at 7 World Trade Center, New York, New York 10048 and 500 West Madison
Street, 14th Floor, Chicago, Illinois 60661. Copies of such materials may be
obtained from the Public Reference Section of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549 and at its public reference
facilities in New York, New York and Chicago, Illinois at prescribed rates. The
Company makes its filings with the Commission electronically. The Commission
maintains a website that contains reports, proxy and information statements and
other information regarding registrants that file electronically, which
information can be accessed at http://www.sec.gov.

The Guarantor is not currently subject to the informational requirements of
the Exchange Act but voluntarily files reports and other information pursuant to
the Exchange Act, due to covenants contained in an indenture for the 13 1/2%
Notes (as defined). As a result of the offering of the Exchange Notes, the
Guarantor will become subject to the informational requirements of the Exchange
Act. The Company will fulfill the Guarantor's obligations with respect to such
requirements by including information regarding the Guarantor in the periodic
reports of the Company. In addition, the Company will send to each holder of
Exchange Notes copies of annual reports and quarterly or financial reports of
the Company containing the information required to be filed under the Exchange
Act if furnished by it to stockholders generally.

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So long as the Company is subject to the periodic reporting requirements of
the Exchange Act, it is required to furnish the information required to be filed
with the Commission to the Trustee and the holders of the Notes and the Exchange
Notes. The Company has agreed that, even if it is not required under the
Exchange Act to furnish such information to the Commission, it will nonetheless
continue to furnish information that would be required to be furnished by the
Company by Section 13 of the Exchange Act to the Trustee and the holders of the
Notes or Exchange Notes as if it were subject to such periodic reporting
requirements.

In addition, the Company has agreed that, for so long as any of the Notes
remain outstanding, it will make available, upon request, to any seller of such
Notes the information specified in Rule 144(d)(4) under the Securities Act,
unless the Company and the Guarantor are then subject to Section 13 or 15(d) of
the Exchange Act.

INFORMATION INCORPORATED BY REFERENCE

The following documents filed by the Company and/or the Guarantor with the
Commission (file nos. 0-21314 and 33-43734, respectively) are incorporated by
reference into this Prospectus:

1. The Annual Report on Form 10-K of the Company, as amended, for the
fiscal year ended December 31, 1995.

2. The Joint Quarterly Report on Form 10-Q of the Company and the
Guarantor for the fiscal quarter ended March 31, 1996.

3. The Joint Quarterly Report on Form 10-Q of the Company and the
Guarantor for the fiscal quarter ended June 30, 1996.

4. The Joint Quarterly Report on Form 10-Q of the Company and the
Guarantor for the fiscal quarter ended September 29, 1996.

5. The Company's proxy statement in connection with the Company's 1996
Annual Meeting of Stockholders held on April 25, 1996.

6. Report on Form 8-K filed by the Company and the Guarantor on May 14,
1996, as amended by the Report on Form 8-K/A-1 filed by the Company and the
Guarantor on June 26, 1996.

7. Report on Form 8-K filed by the Company and the Guarantor on August 9,
1996, as amended by the Report on Form 8-K/A-1 filed by the Company and the
Guarantor on October 2, 1996.

8. Report on Form 8-K filed by the Company and the Guarantor on September
26, 1996, as amended by the Report on Form 8-K/A-1 filed by the Company and the
Guarantor on October 2, 1996.

9. Report on Form 11-K filed by the Company and the Guarantor on May 31,
1996.

All documents, if any, filed with the Commission by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the Expiration Date are incorporated herein by
reference and such documents shall be deemed to be a part hereof from the date
of filing of such documents. Any statement contained in this Prospectus or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.

THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DEFINED HEREWITH. THE COMPANY HEREBY UNDERTAKES TO PROVIDE SUCH
DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) WITHOUT CHARGE TO
EACH PERSON TO WHOM A PROSPECTUS IS DELIVERED, INCLUDING ANY BENEFICIAL OWNER OF
THE NOTES, UPON WRITTEN OR ORAL REQUEST FROM SUCH PERSON TO U.S. CAN
CORPORATION, 900 COMMERCE DRIVE, OAK BROOK, ILLINOIS, 60521, TELEPHONE (630)
571-2500, ATTENTION: CORPORATE SECRETARY.

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The Company's common stock, par value $.01 ("Common Stock") is traded on
The New York Stock Exchange Inc. (the "Exchange"). Information and reports
concerning the Company are filed with the Exchange and are available for
inspection at the Listed Securities Library, 20 Broad Street, 7th floor, New
York, NY 10005, telephone (212) 656-5060.
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INCLUSION OF FORWARD-LOOKING INFORMATION

CERTAIN STATEMENTS UNDER THE CAPTIONS "SUMMARY", "BUSINESS" AND "RISK
FACTORS", AND ELSEWHERE IN THIS PROSPECTUS, CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 27A(i)(1) OF THE SECURITIES ACT. SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
THE COMPANY, OR INDUSTRY RESULTS, TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHER THINGS, THE
FOLLOWING: GENERAL ECONOMIC AND BUSINESS AND MARKET CONDITIONS, CHANGES IN
PRODUCT DEMAND, CHANGES IN COMPETITION, THE ABILITY OF THE COMPANY TO INTEGRATE
ACQUISITIONS OR COMPLETE FUTURE ACQUISITIONS, INTEREST RATE FLUCTUATIONS,
CURRENCY FLUCTUATIONS, DEPENDENCE ON RAW MATERIAL PRODUCERS, DEPENDENCE ON AND
AVAILABILITY OF QUALIFIED PERSONNEL, CHANGES IN OR FAILURE TO COMPLY WITH
GOVERNMENTAL REGULATIONS INCLUDING ENVIRONMENTAL LAWS, ABILITY TO OBTAIN
ADEQUATE FINANCING IN THE FUTURE AND OTHER FACTORS INDICATED IN THIS PROSPECTUS.
SEE "RISK FACTORS." THESE IMPORTANT FACTORS MAY ALSO CAUSE THE FORWARD-LOOKING
STATEMENTS MADE BY THE COMPANY IN THIS PROSPECTUS, INCLUDING BUT NOT LIMITED TO
THOSE CONTAINED UNDER THE CAPTIONS "SUMMARY," "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS," TO BE
MATERIALLY DIFFERENT FROM ACTUAL RESULTS ACHIEVED BY THE COMPANY. IN LIGHT OF
THESE AND OTHER UNCERTAINTIES, THE INCLUSION OF A FORWARD-LOOKING STATEMENT
HEREIN SHOULD NOT BE REGARDED AS A REPRESENTATION BY THE COMPANY THAT THE
COMPANY'S PLANS AND OBJECTIVES WILL BE ACHIEVED.

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SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, and notes thereto, appearing elsewhere in
this Prospectus. Prospective investors should carefully consider the factors set
forth under "Risk Factors." Where indicated, some disclosure contained in this
Prospectus is presented on a pro forma basis, as if the Company's acquisitions
of three related plastic manufacturers, CPI Plastics, Inc., CP Ohio, Inc. and CP
Illinois, Inc., (collectively the "CPI Group") and a portion of the Crown Cork &
Seal Company, Inc.'s ("Crown") European aerosol can businesses ("USC Europe")
completed in August 1996 and September 1996, respectively, (collectively, the
"Acquisitions") occurred on the first day of the applicable period. References
in this Prospectus to the "Company" shall mean U.S. Can Corporation and its sole
direct subsidiary, United States Can Company, and United States Can Company's
subsidiaries, collectively, unless the context otherwise requires; references to
"U.S. Can" shall mean solely United States Can Company, and unless the context
otherwise requires does not include any of its subsidiaries (all of which are
foreign and relate to the operations of USC Europe); references to "Notes" shall
mean the 10 1/8% Senior Subordinated Notes due 2006; and references to "Exchange
Notes" shall mean the Series B 10 1/8% Senior Subordinated Notes due 2006 being
offered for exchange pursuant to this Prospectus. Capitalized terms not defined
in the Summary have the meanings given them elsewhere in this Prospectus. The
references in this Prospectus to market positions or market share are based on
information derived from annual reports, trade publications and management
estimates which the Company's management believes to be reliable. The financial
information presented below includes operating results expressed in terms of
EBITDA, which represents net income before interest expense, income taxes,
depreciation and amortization, and other net income or net expenses. EBITDA
information is included as supplemental information herein because the Company
understands that such information is used by certain investors as one measure of
an issuer's historical ability to service debt. EBITDA is not intended to
represent, and should not be considered more meaningful than or an alternative
to measures of, performance determined in accordance with generally accepted
accounting principles.

THE COMPANY

The Company is a leading manufacturer of steel containers for personal care
products and household, automotive, paint and industrial supplies, with four
major product groups: (i) aerosol; (ii) paint and general line; (iii) metal
services; and (iv) custom and specialty. The Company believes it currently has
the number one or two market share in each of these product groups. The Company
manufactures an expansive line of aerosol containers for consumer and household
products in the United States and Europe. In paint and general line, U.S. Can
produces metal and plastic, round and oblong containers, pails and drums for
paints, coatings and industrial products. U.S. Can provides metal services
including secondary steel, shearing, slitting, coating, and lithography of tin
mill products for customers inside and outside of the container industry. U.S.
Can manufactures a wide variety of custom and specialty tins, decorative
containers and products. See "Business -- Products."

Management believes the Company's leadership positions in its various
products are due to a number of competitive advantages, including breadth of
available specifications, highly efficient and technologically advanced
manufacturing facilities, strategically located manufacturing facilities and
reputation for quality and service. The Company is a supplier to numerous large
consumer products manufacturers in the United States and Europe, including The
Sherwin-Williams Company ("Sherwin-Williams"), S.C. Johnson & Son, Inc., The
Gillette Company ("Gillette"), The Glidden Company ("Glidden"), The Procter &
Gamble Company ("Procter & Gamble"), Reckitt & Coleman, Inc. ("Reckitt &
Coleman"), Henkel Kommanditgeselschaft ("Henkel") and Elida Gibbs Faberge, a
division of Unilever PLC ("Unilever"). See "Business -- Customers and Sales
Force."

The Company was formed in 1983 through the purchase of the Sherwin-Williams
Container Corporation by an investor group led by William J. Smith, the
Company's Chairman, President and Chief Executive Officer. Since its formation,
the Company has pursued a strategy to become the leader in the

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general packaging (non-food or beverage) segment of the metal container
industry. As a part of this strategy, the Company has completed twenty-two
acquisitions, and has invested significant non-acquisition capital to broaden
its product lines, reach geographically diverse markets, reduce manufacturing
costs and enhance product quality. These investments have allowed the Company to
provide customers with a wide range of products and services while maintaining
standards of the highest quality. The Company's net sales have grown from $124
million in 1984 to over $690 million for the twelve months ended September 29,
1996, a compound annual growth rate of 16%. The Company's most recent
acquisitions include the purchase of USC Europe from Crown, completed in
September 1996, and the purchase of the CPI Group, completed in August 1996.
Giving effect to the Acquisitions, net sales for the twelve months ended
September 29, 1996, would have been over $830 million on a pro forma basis. See
"Business -- Acquisitions" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Acquisitions."

The Company's principal executive offices are located at 900 Commerce
Drive, Oak Brook, Illinois, 60521 and its telephone number is (630) 571-2500.

PRODUCTS
Aerosol

Aerosol containers account for the largest portion of the Company's sales.
Aerosol containers are used to package personal care, household, automotive,
paint and various other products, and are sold to virtually all of the major
United States consumer products companies. Management estimates that U.S. Can
holds the number one position in the United States, on a unit volume basis, in
aerosol containers, accounting for approximately 50.1% of all aerosol containers
sold in the United States during 1995. Aerosol containers accounted for
approximately 47.7% of U.S. Can's sales for the nine-month period ended
September 29, 1996.

On September 11, 1996, the Company completed the acquisition of the five
aerosol can businesses comprising USC Europe from Crown for $52.8 million and
assumption of net indebtedness of $5.8 million (collectively, the "USC Europe
Acquisition"). This acquisition included manufacturing operations in the United
Kingdom, France, Spain and Germany and the aerosol can manufacturing equipment
and assets from a Crown facility in Italy. USC Europe produced approximately 24%
of all European steel aerosol cans sold in 1995, and, as a group, constituted
the second largest manufacturer of steel aerosol cans in Europe. The Company's
agreement with Crown to purchase USC Europe contains a non-competition provision
which materially restricts Crown's ability to compete for USC Europe's customers
prior to September 11, 1997. See "Business -- Competition."

Separately, the Company announced the development of a new aerosol
container manufacturing facility in the United Kingdom, in part, to service a
long-term purchase commitment from Gillette. In October 1996, U.S. Can received
written confirmation of Gillette's intention to purchase certain annual unit
volumes of aerosol cans from U.S. Can, including U.S. Can's European operations,
through 1998, with the option to extend for an additional period, subject to
price adjustment for actual volumes purchased. U.K. Can, Ltd. has entered into a
long-term lease agreement, with an option to purchase the facility for a nominal
price at the end of the lease, for a 320,000 square foot facility in Merthyr
Tydfil, Wales for the establishment of a new manufacturing facility there. It is
not U.S. Can's policy to have any plant devoted exclusively to one customer and
management plans to service other customers from this facility. Prior to this
long-term commitment, neither U.S. Can nor USC Europe supplied Gillette in
Europe. The facility will be located in the Dragon Parc industrial development
area in Merthyr Tydfil, Wales. The Company expects to have manufacturing
capability at that location in mid-1997. See "Business -- Customers and Sales
Force" and " -- Recent Property Developments".

9
<PAGE> 10

Paint and General Line

Paint and general line containers, which include containers such as round
cans for paint and coatings, oblong cans for products such as turpentine and
charcoal lighter, and pails and other containers for industrial and consumer
products, accounted for the second largest portion of the Company's sales,
approximately 28.8%, for the nine-month period ended September 29, 1996.
Management estimates that U.S. Can is second in market share in the United
States, on a unit volume basis, in steel round and general line containers. U.S.
Can produced approximately 41.5% of all steel round and general line containers
sold in the United States during the nine-month period ending September 29,
1996. In September 1996, U.S. Can entered into a container supply agreement with
a major coatings customer. Under this agreement, this customer purchases round
containers for its plants in several locations throughout the United States.
This customer has agreed to purchase certain estimated quantities of round
containers per contract year. This agreement extends until March, 2001, subject
to termination for material breach by either party. Under this agreement, prices
and volumes may be adjusted due to changes in certain raw materials cost,
certain competitive offers and/or availability of new types of containers. U.S.
Can has established a paint and general line manufacturing facility in the
Dallas, Texas area to accommodate the increased demand of this customer. Other
customers are also being serviced from this plant. See "Business -- Recent
Property Developments" and "-- Customers and Sales Force." U.S. Can's largest
customers for its paint and general line containers include Sherwin-Williams and
Glidden.

U.S. Can has expanded into plastic container manufacturing to offer its
customers a wider choice of packaging options. In 1995, U.S. Can purchased
Plastite Corporation ("Plastite"), whose proprietary product line of plastic
containers makes U.S. Can the nation's largest producer of plastic paint cans
for customers such as PPG Industries, Inc. In August 1996, U.S. Can acquired the
CPI Group for approximately $15.1 million, expanding U.S. Can's plastic
container line and customer base. As a result of these acquisitions, U.S. Can
now produces molded drums, pails and other plastic containers and products, and
has added new customers, including Olin Corporation ("Olin"), maker of swimming
pool chemicals, petrochemical producers Amoco Corp., Valvoline International,
Inc., and Texaco, Inc., and other well known companies, such as United States
Gypsum Co. ("U.S. Gypsum"), whose products utilize plastic packaging.

Metal Services

U.S. Can's metal services operations provide secondary steel, as well as
shearing, slitting, coating and lithography of tin mill products. U.S. Can
operates full-service metal decorating and metal services facilities, serving a
variety of customers outside the packaging industry such as the Ross Products
Division of Abbott Laboratories, as well as companies within the container and
packaging industry, such as Silgan Containers Corp. and Ball Corporation.
Recently, U.S. Can more than doubled its metal services business, on a pro forma
basis, through the acquisition, for $14.9 million, of the metal services
division ("AMS") of Alltrista Corporation ("Alltrista"), which had 1995 sales of
approximately $88 million. For the nine-month period ended September 29, 1996,
metal services accounted for 13.0% of U.S. Can's sales, and management believes
U.S. Can is now the domestic market leader in providing metal services to
third-party customers.

Custom and Specialty

U.S. Can manufactures a variety of specialized custom and specialty
products including functional and decorative containers, tins, caps, closures,
metal housewares, custom steel and collectible items, serving such customers as
Wyeth Laboratories Inc., Keebler Co., Inc., and Wal-Mart Stores, Inc. U.S. Can
significantly expanded its presence in the custom and specialty products market
in 1994 with the acquisitions of Steeltin Can Corporation ("Steeltin") and
Ellisco Inc. ("Ellisco"). The Company is also expanding its production of
high-end promotional containers such as specialized tins for the cosmetics and
retail accessory markets. In addition, the Company has the manufacturing
capability to produce a large variety of custom steel containers. In 1996,
custom and specialty has seen a significant expansion

10
<PAGE> 11

in the highly customized promotional container market and is working to expand
its licensed product operations. These businesses had sales of approximately $56
million or 10.0% of the Company's sales for the nine-month period ended
September 29, 1996.

COMPANY STRENGTHS

Since its formation, the Company has pursued a strategy to become the
leader in the general packaging segment of the metal container industry.
Management believes that the Company's leading positions are primarily due to
the following competitive advantages:

Market Leadership. The Company is a market leader in each of its
products. Domestically, the Company holds a number one position in the
aerosol container market and a number two position in the paint and general
line market. In Europe, the Company is the second largest producer of steel
aerosol cans. Furthermore, management believes that the Company is the
leader in providing metal services to third parties and in the manufacture
of a wide range of custom and specialty products. See "Business
-- Aerosol", "-- Paint and General Line", "-- Metal Services" and
"-- Custom and Specialty."

Quality Products and Customer Service. The Company's reputation for
quality and its attention to customer service allow it to continue to meet
the needs of its existing customers and attract new ones. The Company
believes that its products provide a competitive advantage by meeting or
exceeding customer expectations for aesthetics, reliability and durability.
In addition, the Company's wide range of products and strategically located
manufacturing facilities further enhance the Company's ability to fulfill
the requirements of many of the leading consumer and industrial products
companies in the United States and Europe. See "Business -- Products."

Highly Efficient Manufacturing Operations. Since 1983, U.S. Can has
invested heavily in non-acquisition related capital improvements. As a
result, U.S. Can has what management believes to be some of the newest and
most technologically advanced facilities in the industry, enabling it to
achieve a high level of manufacturing efficiency, low rates of defects and
spoilage and reduced unit costs. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources -- Historical" and "-- After the Offering and Exchange Offer."

Leading Corporate Customers. The Company's customers include numerous
leading manufacturers of consumer products in the United States. The
Company is continually strengthening its relationship with the leading
consumers of containers by working closely to develop long-term supply
arrangements such as the recently negotiated supply arrangement with
Gillette for aerosol cans. See "Business -- Customers and Sales Force."

Successful Acquisitions. Since its formation in 1983, the Company has
completed twenty-two acquisitions. The Company's management has
consistently been able to improve the operating margins of acquired
businesses through consolidation, operating synergies, cost reduction and
increased manufacturing efficiency. These acquisitions have strengthened
and expanded the Company's product lines and geographical presence and
enabled it to serve the needs of an expanding list of customers. See
"Business -- Acquisitions."

BUSINESS STRATEGY

Management believes that further growth of the Company will be achieved by
building on its market leadership, continuing to reduce manufacturing costs
while increasing efficiencies and making selective acquisitions. As part of its
strategy, the Company will continue to provide quality products and excellent
service to the leading consumer and industrial products companies in the United
States and Europe. These customers require packaging that provides reliability
with excellent aesthetic characteristics at a competitive cost. In addition, by
broadening its product offerings, the Company can serve businesses

11
<PAGE> 12

that have not historically been customers. The Company can also compete more
effectively by reducing manufacturing costs and enhancing operating efficiencies
through investments in capital equipment and technology. Management believes
that the strategic deployment of capital enables the Company to improve its
overall profitability by increasing its ability to take advantage of the
economies of scale inherent in the manufacture of containers. In addition, the
Company will attempt to continue to improve the operating margins of its
business through the integration of recent acquisitions in the United States and
Europe. While the Company has historically aggressively sought acquisitions to
implement its growth strategies, these objectives have largely been met with the
consummation of the Acquisitions in 1996. However, the Company plans to continue
to evaluate and selectively pursue acquisitions which it believes are
strategically important to meeting its customers needs, attracting new
customers, adding new products, complementing its existing business and
expanding its geographic reach. This strategy should allow the Company to better
serve its existing clients, attract new customers and take advantage of the
overall consolidation taking place in the general packaging industry.

RECENT DEVELOPMENTS

On January 2, 1997, U.S. Can acquired certain assets from Owens-Illinois
Closure Inc. ("O-I") for cash consideration of $10 million, which is subject to
adjustment based upon the actual value of the inventory acquired and potential
contingent payments of up to $1.5 million based upon realization of certain new
business which O-I was bidding for. The assets acquired by U.S. Can include
machinery, equipment, inventory and raw materials of O-I's Erie, Pennsylvania
metal business. O-I will operate these lines for up to one-year, pending
relocation into one or more of U.S. Can's plants. U.S. Can and O-I also entered
into a one-year supply agreement whereby O-I will supply all of U.S. Can's
requirements of liner material for the unishell closures manufactured on the
Erie metal lines.

On December 20, 1996, U.K. Can, Ltd. entered into (and U.S. Can guaranteed)
a $30 million credit agreement with General Electric Capital Corporation, to
finance the capitalized cost of land, building and equipment comprising the
Merthyr Tydfil, Wales aerosol can production facility. This credit facility is
secured by the real and personal property of U.S. Can's Merthyr Tydfil
operation.

The Company executed a lease on December 18, 1996 for a building in
Voghera, Italy for the relocation of aerosol can manufacturing assets from a
Crown facility in Italy. The Company has taken partial occupancy of the building
and anticipates that the full transfer of manufacturing capability to this
location will occur during the first quarter of 1997. See "Business -- Recent
Property Developments."

In connection with its development of a new aerosol container manufacturing
facility in the United Kingdom, the Company has entered into a long term lease
agreement with an option to purchase the site, dated October 25, 1996, for a
property and building in the Dragon Parc industrial development area in Merthyr
Tydfil, Wales. See "Business -- Recent Property Developments."

On October 17, 1996, the Company issued $275 million principal amount of
Notes due 2006 in a private placement. Net proceeds from the issuance of the
Notes, which are the subject of this Exchange Offer, were $268.1 million and
were used to pay down amounts under the Credit Agreement ($158.4 million) with
$109.7 million being placed in an escrow account and used on January 15, 1997 to
redeem the $100 million principal amount of 13 1/2% Senior Subordinated Notes
due 2002 of the Guarantor (the "13 1/2% Notes") and to pay all remaining
interest on the 13 1/2% Notes.

12
<PAGE> 13

THE NOTE OFFERING

The Notes.................. The Notes were sold by the Company in the Offering
on October 17, 1996, and were subsequently resold
to qualified institutional buyers pursuant to Rule
144A under the Securities Act and to institutional
investors that are accredited investors in a manner
exempt from registration under the Securities Act.

Registration Rights
Agreement................ In connection with the Offering, the Company
entered into the Registration Rights Agreement,
which granted holders of the Notes certain exchange
and registration rights. The Exchange Offer is
intended to satisfy such exchange and registration
rights, which, except for limited instances
involving the Initial Purchasers or Holders who are
not eligible to participate in the Exchange Offer,
terminate upon the consummation of the Exchange
Offer. See "Exchange Offer; Registration Rights".

THE EXCHANGE OFFER

Securities Offered......... $275,000,000 aggregate principal amount of Series B
10 1/8% Senior Subordinated Notes due October 15,
2006.

The Exchange Offer......... $1,000 principal amount of the Exchange Notes in
exchange for each $1,000 principal amount of Notes.
As of the date hereof, $275,000,000 aggregate
principal amount of Notes are outstanding. The
Company will issue the Exchange Notes to Holders
(as defined) on or promptly after the Expiration
Date.

Any Holder who tenders in the Exchange Offer with
the intention to participate, or for the purpose of
participating, in a distribution of the Exchange
Notes could not rely on the position of the staff
of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988),
Morgan Stanley & Co., Inc. (available June 5, 1991)
or similar no-action letters and, in the absence of
an exemption therefrom, must comply with the
registration and prospectus delivery requirements
of the Securities Act in connection with the resale
of the Exchange Notes. Failure to comply with such
require-
13
<PAGE> 14

ments in such instance may result in such Holder
incurring liability under the Securities Act for
which the Holder is not indemnified by the Company.

In any State where the Exchange Offer does not fall
under a statutory exemption to such State's Blue
Sky laws, the Company has filed the appropriate
registrations and notices, and has made the
appropriate requests, to permit the Exchange Offer
to be made in such State.

Expiration Date............ 5:00 p.m., New York City time, on March 13, 1997,
unless the Exchange Offer is extended, in which
case the term "Expiration Date" means the latest
date and time to which the Exchange Offer is
extended. The Company presently intends that the
Exchange Offer will not be extended beyond March
16, 1997, in any event.

Interest on the Exchange
Notes and the Notes........ The Exchange Notes will bear interest from October
17, 1996, the date of issuance of the Notes that
are tendered in exchange for the Exchange Notes (or
the most recent Interest Payment Date (as defined
below in the Summary of Terms of Exchange Notes) to
which interest on such Notes has been paid).
Accordingly, Holders of Notes that are accepted for
exchange will not receive interest on the Notes
that is accrued but unpaid at the time of tender,
but such interest will be payable on the first
Interest Payment Date after the Expiration Date.

Conditions to the
Exchange Offer........... The Exchange Offer is subject to certain customary
conditions, which may be waived by the Company. See
"The Exchange Offer -- Conditions."

Procedures for
Tendering Notes.......... Each Holder of Notes wishing to accept the Exchange
Offer must complete, sign and date the accompanying
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver the
Letter of Transmittal, or such facsimile, together
with the Notes and any other required documentation
to the Exchange Agent at the address set forth in
the Letter of Transmittal. By executing the Letter
of Transmittal, each Holder will represent to the
Company that, among other things, the Holder or the
person receiving such Exchange Notes, whether or
not such person is the Holder, is acquiring the
Exchange Notes in the ordinary course of business
and that neither the Holder nor any such other
person has any arrangement or understanding with
any person to participate in the distribution of
such Exchange Notes. In lieu of physical delivery
of the certificates representing Notes, tendering
Holders may transfer Notes pursuant to the
procedure for book-entry transfer as set forth
under "The Exchange Offer -- Procedures for
Tendering."

Special Procedures for
Beneficial Owners........ Any beneficial owner whose Notes are registered in
the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender should contact such registered Holder
promptly and instruct such registered Holder to
tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's
own behalf, such owner must, prior to completing
and
14
<PAGE> 15

executing the Letter of Transmittal and delivering
its Notes, either make appropriate arrangements to
register ownership of the Notes in such owner's
name or obtain a properly completed bond power from
the registered Holder. The transfer of registered
ownership may take considerable time.

Guaranteed Delivery
Procedures............... Holders of Notes who wish to tender their Notes and
whose Notes are not immediately available or who
cannot deliver their Notes, the Letter of
Transmittal or any other documents required by the
Letter of Transmittal to the Exchange Agent (or
comply with the procedures for book-entry transfer)
prior to the Expiration Date must tender their
Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer --
Guaranteed Delivery Procedures."

Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date
pursuant to the procedures described under "The
Exchange Offer -- Withdrawals of Tenders."

Acceptance of Notes and
Delivery of Exchange
Notes.................... The Company will accept for exchange any and all
Notes that are properly tendered in the Exchange
Offer prior to 5:00 p.m., New York City time, on
the Expiration Date. The Exchange Notes issued
pursuant to the Exchange Offer will be delivered
promptly following the Expiration Date. See "The
Exchange Offer -- Terms of the Exchange Offer."

Federal Income Tax
Consequences............. The issuance of the Exchange Notes to Holders of
the Notes pursuant to the terms set forth in this
Prospectus will not constitute an exchange for
federal income tax purposes. Consequently, no gain
or loss would be recognized by Holders of the Notes
upon receipt of the Exchange Notes. See "Certain
Federal Income Tax Consequences of the Exchange
Offer."

Effect on Holders of
Notes...................... As a result of the making of this Exchange Offer,
the Company will have fulfilled certain of its
obligations under the Registration Rights
Agreement, and Holders of Notes who do not tender
their Notes, except for limited instances involving
the Initial Purchasers and Holders that are not
eligible to participate in the Exchange Offer, will
not have any further registration rights under the
Registration Rights Agreement or otherwise. See
"Exchange Offer; Registration Rights". Such Holders
will continue to hold the untendered Notes and will
be entitled to all the rights and subject to all
the limitations applicable thereto under the
Indenture, except to the extent such rights or
limitations, by their terms, terminate or cease to
have further effectiveness as a result of the
Exchange Offer. All untendered Notes will continue
to be subject to certain restrictions on transfer.
Accordingly, if any Notes are tendered and accepted
in the Exchange Offer, the trading market for the
untendered Notes could be adversely affected.

Exchange Agent............. Harris Trust and Savings Bank

15
<PAGE> 16

SUMMARY OF TERMS OF EXCHANGE NOTES

The form and terms of the Exchange Notes are the same as the form and terms
of the Notes (which they replace) except that (i) the Exchange Notes have been
registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof and (ii) the Holders of Exchange Notes, except
for limited instances involving the Initial Purchasers and Holders that are not
eligible to participate in the Exchange Offer, will not be entitled to further
registration rights under the Registration Rights Agreement, which rights will
be satisfied when the Exchange Offer is consummated. The Exchange Notes will
evidence the same debt as the Notes and will be entitled to the benefits of the
Indenture. See "Description of Exchange Notes."

Exchange Notes............. $275,000,000 in aggregate principal amount of
Series B 10 1/8% Senior Subordinated Notes due
2006.

Maturity................... October 15, 2006.

Interest Payment Dates..... April 15 and October 15, commencing April 15, 1997.

Subsidiary Guaranties...... The Exchange Notes will be fully and
unconditionally guaranteed on an unsecured senior
subordinated basis by the Subsidiary Guarantors
under the Subsidiary Guaranties. As of the Issue
Date (as defined), the Guarantor, the Company's
only Domestic Restricted Subsidiary, is the only
Subsidiary Guarantor.

Subordination of Exchange
Notes and Subsidiary
Guaranties............... The Exchange Notes and the Subsidiary Guaranties
will be general unsecured senior subordinated
obligations of the Company and the Subsidiary
Guarantors, respectively. The Exchange Notes and
the Subsidiary Guaranties will be subordinated in
right of payment to the prior payment in full of
all present and future Senior Indebtedness, pari
passu with all present and future Senior
Subordinated Indebtedness and senior to all present
and future subordinated indebtedness of the
Company, or the Subsidiary Guarantors, as
applicable. As of September 29, 1996, after giving
effect to the Offering and the application of the
net proceeds therefrom (including redemption of the
13 1/2% Notes) and the Exchange Offer (i) U.S. Can
Corporation would have had no outstanding Senior
Indebtedness or Senior Subordinated Indebtedness
(excluding the Exchange Notes and the Notes), (ii)
Senior Indebtedness of the Guarantor would have
been approximately $84.9 million, (iii) the
Guarantor would have no Senior Subordinated
Indebtedness (excluding the Subsidiary Guaranties),
(iv) secured indebtedness of the Company and the
Guarantor would have been approximately $84.9
million, and (v) all liabilities and indebtedness
of the Guarantor (excluding the Subsidiary
Guaranties) would have been approximately $224.7
million.

Sinking Fund............... None.

Optional Redemption........ The Exchange Notes will be redeemable at the option
of the Company, in whole at any time or in part
from time to time, after October 15, 2001, on at
least 30 but not more than 60 days prior notice, at
the redemption prices set forth herein plus accrued
and unpaid interest, if any, through the redemption
date.

Change of Control.......... Upon a Change of Control (as defined), each holder
of Exchange Notes will have the right to require
the Company to repurchase all or

16
<PAGE> 17

part of such holder's Exchange Notes at a price
equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest, if any,
to the date of repurchase. The Company's obligation
to repurchase the Exchange Notes is guaranteed on a
senior subordinated basis by the Subsidiary
Guarantors.

Certain Covenants.......... The Indenture contains certain covenants that,
among other things, limit the ability of the
Company and its Restricted Subsidiaries (as
defined) to (i) incur additional Indebtedness, (ii)
pay dividends or make other distributions with
respect to Capital Stock (as defined) of the
Company, (iii) sell assets of the Company or its
Restricted Subsidiaries, or (iv) restrict the
ability of any Restricted Subsidiary to pay
dividends or make any other distributions in
respect of its Capital Stock. In addition, the
Indenture contains certain covenants that, among
other things, limit the ability of the Company and
its Subsidiary Guarantors to (a) incur Indebtedness
which is senior to or ranks pari passu with the
Exchange Notes or the Subsidiary Guaranties, as the
case may be, (b) create certain liens, or (c) enter
into certain mergers and consolidations.

Escrow Account............. In connection with the issuance of the Notes, the
Company deposited approximately $109.7 million in a
segregated account in escrow (the "Escrow
Account"). The Escrow Agent (as defined) invested
the funds deposited in the Escrow Account in U.S.
Government Obligations (as defined) and disbursed
such funds from the Escrow Account, on January 15,
1997, in order to provide for the redemption of the
13 1/2% Notes. Notice of the Required Redemption
was given to the Trustee on November 25, 1996
pursuant to the provisions of the indenture under
which the 13 1/2% Notes were issued. Amounts in the
Escrow Account accrued interest to the Company's
benefit. The 13 1/2% Notes were redeemed on January
15, 1997. Amounts remaining in the Escrow Account
following redemption of the 13 1/2% Notes were paid
to the Company.

Exchange Offer;
Registration Rights...... In the event that applicable law or interpretations
of the staff of the Commission do not permit the
Company to effect the Exchange Offer, or if certain
holders of the Notes are not eligible to
participate in, or do not receive the benefit of,
the Exchange Offer, the Registration Rights
Agreement provides that the Company and the
Guarantor will use all reasonable efforts to cause
to become effective a shelf registration statement
with respect to the resale of the Notes and to keep
such shelf registration statement effective until
three years after the Issue Date or such shorter
period ending when all the Notes have been sold
thereunder. The interest rate on the Notes is
subject to increase under certain circumstances if
the Company and the Guarantor are not in compliance
with their obligations under the Registration
Rights Agreement. See "Exchange Offer; Registration
Rights."

For additional information regarding the Exchange Notes (including defined
terms) see "Description of Exchange Notes."

17
<PAGE> 18

RISK FACTORS

See "Risk Factors," which begins on page 21, for a discussion of certain
factors that should be considered by prospective investors, as well as the other
information set forth in this Prospectus, before investing in the Exchange
Notes.

18
<PAGE> 19

SUMMARY CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL DATA

Set forth below is certain summary consolidated historical financial data
of the Company for the three years ended December 31, 1995 which has been
audited, and for the nine-month periods ended October 1, 1995 and September 29,
1996 and as of September 29, 1996, and certain pro forma financial data for
certain of such dates and periods which has not been audited. The pro forma
financial data gives effect to the transactions referenced in notes (f) and (g)
below, is unaudited, does not reflect actual numbers and is not necessarily
indicative of future results or what results would have been had the
transactions actually been consummated at the indicated dates. The summary
consolidated financial data should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," the
Consolidated Financial Statements of the Company, the Unaudited Pro Forma
Condensed Consolidated Statements of Operations, related notes and other
financial information included elsewhere in this Prospectus. See "Index to
Financial Statements."

<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31, ---------------------------
-------------------------------- OCTOBER 1, SEPTEMBER 29,
1993 1994 1995 1995 1996
-------- -------- -------- ---------- -------------
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Net sales................................ $455,127 $563,153 $626,485 $474,387 $ 538,316
Cost of sales............................ 392,652 481,676 555,478 419,072 470,745
-------- -------- -------- -------- --------
Gross income......................... 62,475 81,477 71,007 55,315 67,571
Selling, general and administrative
expenses............................... 20,270 24,798 27,369 20,590 21,103
Overhead reduction provision(a).......... -- -- 8,000 -- --
-------- -------- -------- -------- --------
Operating income..................... 42,205 56,679 35,638 34,725 46,468
Interest expense on borrowings........... 19,576 21,829 24,513 18,388 19,513
Amortization of deferred financing
costs.................................. 1,052 1,307 1,543 1,135 1,132
Consolidation expense(b)................. 622 463 327 245 --
Other expense............................ 648 1,117 1,708 1,216 1,483
-------- -------- -------- -------- --------
Income before income taxes, minority
interest and extraordinary item... 20,307 31,963 7,547 13,741 24,340
Provision for income taxes............... 8,775 13,393 3,608 5,939 10,352
-------- -------- -------- -------- --------
Income before minority interest and
extraordinary item................ 11,532 18,570 3,939 7,802 13,988
Minority interest(c)..................... (608) -- -- -- --
-------- -------- -------- -------- --------
Income before extraordinary item..... 10,924 18,570 3,939 7,802 13,988
Extraordinary item -- loss from early
extinguishment of debt, net of income
taxes.................................. (3,402) -- -- -- --
-------- -------- -------- -------- --------
Net income........................... $ 7,522 $ 18,570 $ 3,939 $ 7,802 $ 13,988
======== ======== ======== ======== ========
OTHER DATA:
Capital expenditures..................... $ 22,010 $ 32,516 $ 31,379 $ 24,382 $ 23,400
EBITDA(d)................................ 58,492 76,925 68,625 53,659 68,697
Net cash from operating activities....... 29,860 44,300 24,792 10,847 2,797
Net cash from investing activities....... (28,557) (88,488) (64,157) (52,887) (101,628)
Net cash from financing activities....... $ (1,346) $ 44,283 $ 39,378 $ 42,074 $ 102,635
Ratio of earnings to fixed charges(e).... 1.90x 2.25x 1.26x 1.64x 2.08x
PRO FORMA OPERATING DATA(F):
Net sales................................ $774,942 $ 644,678
Gross income............................. 89,414 80,364
Operating income......................... 44,563 53,007
Interest expense on borrowings........... 33,818 26,363
Income before extraordinary item......... 3,472 13,212
EBITDA(d)................................ $ 84,684 $ 77,852
Ratio of earnings to fixed charges(e).... 1.18x 1.77x
</TABLE>

(See footnotes on following page)

19
<PAGE> 20

<TABLE>
<CAPTION>
AS OF SEPTEMBER 29,
1996(G)
------------------------
ACTUAL PRO FORMA
-------- ---------
(000'S OMITTED)
<S> <C> <C>
BALANCE SHEET DATA:
Current assets............................................................ $235,826 $235,826
Total assets.............................................................. 624,156 629,036
Current liabilities....................................................... 144,834 138,583
Total debt (including current maturities)................................. 350,152 366,759
Total stockholders' equity................................................ 96,872 91,396
</TABLE>

- -------------------------
(a) The Company recorded a pretax charge of approximately $8.0 million in the
fourth quarter of 1995 related to actions taken to reduce overhead and to
eliminate redundant manufacturing capacity. See Note 7 of the "Notes to
Consolidated Financial Statements."

(b) Annual consolidation expense charges to income represent interest costs
related to the reserves established for plant closings and are based on
U.S. Can's incremental borrowing rate at the time the discounted reserves
were established.

(c) Minority interest represents participation of the former holder of U.S.
Can's Class 1 Preferred Stock, by virtue of its accretion right, in the
earnings of U.S. Can. All remaining shares of Class 1 Preferred Stock were
redeemed in connection with the Company's initial public equity offering in
March 1993.

(d) Earnings before overhead reduction provision, interest expense, income
taxes, depreciation and amortization ("EBITDA") is presented because it is
commonly used by certain investors and analysts to analyze and compare on
the basis of operating performance and to determine a company's ability to
service and incur debt. EBITDA excludes the effects of minority interests
and extraordinary items. EBITDA is not a measure of financial performance
under generally accepted accounting principles and does not necessarily
indicate that cash flow will be sufficient to fund cash requirements.
Accordingly, EBITDA should not be considered in isolation from or as a
substitute for net income, cash flows from operating activities or other
consolidated income or cash flow statement data prepared in accordance with
generally accepted accounting principles or as a measure of profitability
or liquidity. EBITDA, as reflected above, is not the same as "EBIDTA" as
defined in the Indenture for the Exchange Notes. See "Description of
Exchange Notes."

(e) The ratio of earnings to fixed charges is expressed as the ratio of fixed
charges plus income before income taxes, minority interest and
extraordinary item to fixed charges. Fixed charges include interest on
borrowings, amortization of deferred financing costs, consolidation
expense, and the interest portion of rent expense.

(f) The pro forma operating data reflect the Acquisitions, the Offering and the
application of the net proceeds thereof to retire certain indebtedness of
the Company (including the 13 1/2% Notes) and the Exchange Offer as if such
transactions occurred on January 1, 1995. See "Summary -- Recent
Developments" and the Unaudited Condensed Consolidated Statements of
Operations and related notes thereto included elsewhere in this Prospectus.
Upon the depositing of approximately $109.7 million of the proceeds from
the Offering into the Escrow Account (which amount included sufficient
funds to complete the redemption (after considering interest income on such
amounts)), the Company deemed the 13- 1/2% Notes to be extinguished and
therefore recorded an after-tax extraordinary charge of $5.5 million in
October 1996. The $9.1 million pre-tax charge represents the difference
between the amount deposited in the Escrow Account and the carrying value
of the 13- 1/2% Notes, related accrued interest and related unamortized
deferred financing costs. The 13- 1/2% Notes were actually redeemed on
January 15, 1997.

(g) The pro forma balance sheet data reflect the Offering and the application
of the net proceeds thereof to retire certain indebtedness of the Company
(including the 13 1/2% Notes) and the Exchange Offer as if such
transactions occurred on September 29, 1996. See "Summary -- Recent
Developments" and "Capitalization."

<TABLE>
<CAPTION>
TOTAL
CURRENT TOTAL CURRENT TOTAL STOCKHOLDERS'
ASSETS ASSETS LIABILITIES DEBT EQUITY
--------- --------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C>
Actual as of September 29, 1996..... $ 235,826 $ 624,156 $ 144,834 $ 350,152 $96,872
Net Offering proceeds............... 268,125 275,000 -- 275,000 --
Paydown bank debt................... (158,393) (158,393) -- (158,393) --
Retire 13 1/2% Notes................ (109,732) (112,577) (7,101) (100,000) (5,476)
Accrue other debt offering costs.... -- 850 850 -- --
--------- --------- --------- --------- -------
Pro forma as of September 29,
1996.............................. $ 235,826 $ 629,036 $ 138,583 $ 366,759 $91,396
========= ========= ========= ========= =======
</TABLE>

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<PAGE> 21

RISK FACTORS

Prospective investors should consider carefully the specific factors set
forth below, as well as the other information set forth elsewhere in this
Prospectus before investing in the Exchange Notes.

LEVERAGED FINANCIAL POSITION; DEBT SERVICE OBLIGATIONS

The Company is highly leveraged. On a pro forma basis after giving effect
to the Offering and the application of the proceeds thereof (including the
redemption of the 13 1/2% Notes) and the Exchange Offer, as of September 29,
1996, the Company's total debt would have been approximately $366.8 million and
stockholders' equity would have been $91.4 million.

The Company will require substantial operating cash flow to fund future
payments of principal and interest on its indebtedness, ongoing working capital
needs and capital expenditures. Cash flow from operations for the twelve months
ended September 29, 1996, as adjusted for interest payments of $25.4 million
during that period, was approximately $42.2 million. On a pro forma basis after
giving effect to the Offering and the application of the proceeds thereof
(including the redemption of the 13 1/2% Notes) and the Exchange Offer, and
assuming current interest rates, principal and interest requirements (net of
related income tax benefits and excluding such amounts due under the Revolving
Credit Facility) are expected to be approximately $40.1 million in 1997, $44.0
million in 1998, $25.6 million in 1999 and $20.5 million in 2000. Using cash
flow from operations for the twelve-month period ended September 29, 1996 (as
adjusted for interest payments during that period) as a benchmark, assuming no
increase or decrease in that cash flow from operations and based on the
assumptions set forth above, the Company's cash flow from operations at the
level generated during this period would approximate or exceed principal and
interest (net of income taxes) requirements (excluding for the Revolving Credit
Facility) for the years 1997 through 2000.

While the borrowings under the Revolving Credit Facility have and would be
expected to continue to fluctuate over any annual period, based on the average
borrowings for the twelve months ended September 29, 1996, on a pro forma basis
after giving effect to the Offering and the application of a portion of the
proceeds to repay outstanding indebtedness under the Revolving Credit Facility
and based on current interest rates, annual after-tax interest payments as
disclosed above would increase by approximately $4.5 million. All amounts
outstanding under the Revolving Credit Facility are due in April 1998.

U.S. Can's revolving line of credit (the "Revolving Credit Facility"),
issued under the Credit Agreement, dated April 29, 1994, as amended, (the
"Senior Credit Agreement"), among U.S. Can, Bank of America Illinois, as
successor Agent, and the lenders named therein (collectively, the "Senior
Lenders"), matures in April 1998. Following a mandatory decrease in the
revolving credit commitment amount pursuant to the terms of the Senior Credit
Agreement, and a voluntary decrease, requested by U.S. Can, both occurring on
October 18, 1996, the total revolving credit commitment amount under the
Revolving Credit Facility is $95 million as of the date of this Prospectus. U.S.
Can may, subject to restrictions imposed by its existing indebtedness, incur
additional indebtedness to finance expansion of its business through
acquisitions and investments in other companies. See "Description of Certain
Indebtedness -- Senior Credit Agreement."

The Company's leverage has important consequences to Holders of the
Exchange Notes and the Notes, including the following: (i) the Company's ability
to obtain additional financing in the future for working capital, capital
expenditures, acquisitions, or general corporate purposes may be impaired; (ii)
a portion of the Company's cash flow from operations must be dedicated to the
payment of the principal of and interest on its existing indebtedness; (iii)
certain of the Company's borrowings, principally those of U.S. Can under the
Senior Credit Agreement, are at variable rates of interest, which may make the
Company vulnerable to increases in interest rates; and (iv) the terms of certain
of the Company's indebtedness permit its creditors to accelerate payments upon
certain events of default or a change of control of U.S. Can or the Company. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Interest Rates" for a discussion of the effect of changes in
interest rates. As

21
<PAGE> 22

of September 29, 1996, on a pro forma basis after giving effect to the Offering
and the application of the proceeds therefrom (including redemption of the
13 1/2% Notes) and the Exchange Offer, 12.8% of the aggregate borrowings of the
Company and its subsidiaries would have been floating rate obligations and 87.2%
of the Company's borrowings would have been fixed rate obligations, with a range
of interest rates from 3.7% to 10.4% per annum.

SUBORDINATION OF EXCHANGE NOTES AND THE SUBSIDIARY GUARANTIES; ASSET
ENCUMBRANCE; HOLDING COMPANY STRUCTURE

The Exchange Notes will be subordinated in right of payment to all present
and future Senior Indebtedness of the Company, including the principal, premium
(if any) and interest with respect to Senior Indebtedness. The Exchange Notes
will rank pari passu with all present and future Senior Subordinated
Indebtedness of the Company including the Notes, if any, and will rank senior to
all other subordinated indebtedness of the Company. In addition, the Subsidiary
Guaranties will be subordinated in right of payment to all existing and future
Senior Indebtedness of the Subsidiary Guarantors (as defined), will rank pari
passu with all existing and future Senior Subordinated Indebtedness of the
Subsidiary Guarantors and will rank senior to all other subordinated
indebtedness of the Subsidiary Guarantors. Except with respect to limitations on
consolidated Indebtedness that the Company may incur, the Indenture does not
limit the ability of the Company to incur Senior Indebtedness or restrict the
ability of the Company to transfer assets to and among its Restricted
Subsidiaries. As of September 29, 1996, on a pro forma basis, after giving
effect to the Offering and the application of the net proceeds therefrom
(including the redemption of the 13 1/2% Notes) and the Exchange Offer, the
Company and the Guarantor would have had approximately $84.9 million of Senior
Indebtedness outstanding. Consequently, in the event of a bankruptcy,
liquidation, dissolution, reorganization or similar proceeding with respect to
the Company, assets of the Company and the Guarantor will be available to pay
obligations of the Exchange Notes only after all Senior Indebtedness of the
Company and the Guarantor has been paid in full, and there can be no assurance
that there will be sufficient assets to pay amounts due on all or any of the
Exchange Notes. The holders of any indebtedness of the Company's subsidiaries
other than the Subsidiary Guarantors will be entitled to payment thereof from
the assets of such subsidiaries prior to the holders of any general unsecured
obligations of the Company, including the Exchange Notes. See "Description of
Exchange Notes -- Subordination of Exchange Notes," "-- Subordination of
Subsidiary Guaranties" and "-- Subsidiary Guaranty."

The Exchange Notes are also unsecured and will be effectively subordinated
to any secured Indebtedness (as defined) of the Company and the Guarantor, which
on a pro forma basis as of September 29, 1996, represented all of the Senior
Indebtedness of the Company and the Guarantor, of $84.9 million, as more fully
described above. As of the date of this Prospectus, secured Indebtedness
outstanding under the Senior Credit Agreement is secured by liens on the
accounts receivable and inventory of the Guarantor. The ability of the Guarantor
to comply with the provisions of the Senior Credit Agreement may be affected by
events beyond either the Guarantor's or the Company's control. The breach of any
such provisions could result in a default under the Senior Credit Agreement, in
which case, depending on the actions taken by the Senior Lenders or their
successors or assignees, such lenders could elect to declare all amounts
borrowed under the Revolving Credit Facility, together with accrued interest, to
be due and payable, and the Company and the Guarantor could be prohibited from
making payments of interest and principal on the Exchange Notes until the
default is cured or all Senior Indebtedness is paid or satisfied in full. If the
Guarantor were unable to repay such borrowings, such Senior Lenders could
proceed against the collateral, which constitutes substantially all of the
assets of the Company. If the indebtedness under the Revolving Credit Facility
were to be accelerated, there can be no assurance that the assets of the
Guarantor would be sufficient to repay in full such indebtedness and pay
dividends to the Company in an amount sufficient to allow the Company to satisfy
its obligations under the Exchange Notes and pay the other indebtedness of the
Guarantor, including the Subsidiary Guaranties. See "Description of Certain
Indebtedness -- Senior Credit Agreement" and "Description of Exchange
Notes -- Subordination of Exchange Notes" and "-- Subsidiary Guaranty."

22
<PAGE> 23

The Company is a holding company which derives all of its operating income
from the Guarantor, its sole direct subsidiary and the only Subsidiary Guarantor
as of the date of this Prospectus. The Holders of the Exchange Notes will have
no direct claim against the Subsidiary Guarantors other than the claim created
by the Subsidiary Guaranties, which may be subject to legal challenge in the
event of the bankruptcy of the subsidiary. See "-- Fraudulent Conveyance." If
such a challenge were upheld, the Subsidiary Guaranties would be invalidated and
unenforceable. To the extent that the Subsidiary Guaranties are not enforceable,
the rights of Holders of the Exchange Notes to participate in any distribution
of assets of the Subsidiary Guarantors upon liquidation, bankruptcy,
reorganization or otherwise may, as is the case with other unsecured creditors
of the Company, be subject to prior claims of creditors of the Subsidiary
Guarantors. Even if the Subsidiary Guaranties were not subject to a legal
challenge, the Subsidiary Guaranties would be subject to the prior claim of
secured creditors of the Subsidiary Guarantor, if any. The Company must rely on
dividends and other payments from U.S. Can to generate the funds necessary to
meet its obligations, including the payment of principal and interest on the
Exchange Notes. The Indenture contains covenants that restrict the ability of
the Company's subsidiaries to enter into any agreement limiting certain
distributions and transfers, including dividends to the Company. However, the
ability of U.S. Can to pay dividends to the Company and make other payments may
be subject to certain statutory, contractual and other restrictions including,
specifically, negative covenants in U.S. Can's Senior Credit Agreement which
limit its ability to pay dividends depending on U.S. Can's financial condition
as well as restrictions which would arise as a result of legal limitations and
economic and business constraints on the amount of cash flow generated by U.S.
Can which would then be available to distribute to the Company in the form of
dividends. See "Description of Certain Indebtedness."

COMPLIANCE WITH RESTRICTIVE COVENANTS

The Senior Credit Agreement, the indenture under which the 13 1/2% Notes
were issued and the Indenture impose financial and other restrictions on the
Company and U.S. Can, including limitations on the incurrence of additional
Indebtedness, on investments and limitations on the sale of assets. The Senior
Credit Agreement also requires U.S. Can to make periodic payments of interest
and outstanding principal, including from the proceeds of certain asset sales.
The Senior Credit Agreement also requires U.S. Can to maintain certain financial
ratios, including interest coverage and leverage ratios, and to maintain a
minimum level of consolidated cash flow. There can be no assurance that these
requirements will be met in the future. If they are not, the Senior Lenders
under the Senior Credit Agreement would be entitled to declare the indebtedness
thereunder immediately due and payable. Additionally, in the event of any
material default by U.S. Can under the Senior Credit Agreement, a material
default would similarly be deemed to occur under the terms of the Exchange Notes
and the Notes. Upon the occurrence of a material default under the Indenture, an
Event of Default (as defined on page 102 of this Prospectus) may be declared and
principal and interest may be declared to be immediately due and payable.
Additionally, the Trustee may pursue any available remedy to collect payment of
principal and interest on the Securities or to enforce performance of any
provision of the Indenture. See "Description of Certain Indebtedness" and
"Description of Exchange Notes -- Events of Default."

FRAUDULENT CONVEYANCE

If a court in a lawsuit brought by an unpaid creditor or representative of
creditors, such as a trustee in bankruptcy, or the Company as a
debtor-in-possession, were to determine under relevant federal or state
fraudulent conveyance statutes that the Company did not receive fair
consideration or reasonably equivalent value for incurring indebtedness,
including the Exchange Notes and the Notes, and that, at the time of such
incurrence, the Company (i) was insolvent, (ii) was rendered insolvent by reason
of such incurrence or grant, (iii) was engaged in a business or transaction for
which the assets remaining with the Company constituted unreasonably small
capital or (iv) intended to incur, or believed that it would incur, debts beyond
its ability to pay such debts as they matured, then such court, subject to
applicable statutes of limitation, could void the Company's obligations under
the Exchange Notes and the Notes,

23
<PAGE> 24

subordinate the Exchange Notes and the Notes to other indebtedness of the
Company or take other action detrimental to the Holders of the Exchange Notes
and the Notes.

The measure of insolvency for these purposes will depend upon the governing
law of the relevant jurisdiction. Generally, however, a company will be
considered insolvent for these purposes if the sum of that company's debts is
greater than the fair value of all of that company's property or if the present
fair salable value of that company's assets is less than the amount that will be
required to pay its probable liability on its existing debts as they become
absolute and matured. Moreover, regardless of solvency, a court could void an
incurrence of indebtedness, including the Exchange Notes and the Notes, if it
determined that such transaction was made with the intent to hinder, delay or
defraud creditors. In addition, a court could subordinate indebtedness,
including the Exchange Notes and the Notes, to the claims of all existing and
future creditors on similar grounds. The Company believes that, after giving
effect to the Offering and the Exchange Offer, the Company is, as of the date of
this Prospectus, (i) neither insolvent nor rendered insolvent by the incurrence
of indebtedness in connection with the Offering and the Exchange Offer, (ii) in
possession of sufficient capital to run its business effectively and (iii)
incurring debts within its ability to pay as the same mature or become due.

In addition, the Subsidiary Guaranties may be subject to review under
relevant federal and state fraudulent conveyance and similar statutes in a
bankruptcy or reorganization case or a lawsuit brought by or on behalf of
creditors of the Subsidiary Guarantors. In such a case, the analysis set forth
above would generally apply, except that the Subsidiary Guaranties could also be
subject to the claim that, since the Subsidiary Guaranties were incurred for the
benefit of the Company (and only indirectly for the benefit of the Subsidiary
Guarantor), the obligations of the Subsidiary Guarantors thereunder were
incurred for less than reasonably equivalent value of fair consideration. A
court could void the Subsidiary Guarantors' obligation under the Subsidiary
Guaranties, subordinate the Subsidiary Guaranties to other indebtedness of a
Subsidiary Guarantor or take other action detrimental to the Holders of the
Notes. See "Description of Certain Indebtedness" and "Description of Exchange
Notes."

RISK RELATING TO BUSINESS INTEGRATION IN EUROPE AND OTHER ACQUISITIONS

Europe is a new geographic market for the Company and one in which the
Company has no prior business experience. The Company faces challenges and
business integration issues with USC Europe as it does with domestic
acquisitions. Although qualified and trained personnel are employed by USC
Europe, there can be no assurance that USC Europe will be able to retain such
employees or hire suitable replacements in the event they should leave the
employ of USC Europe. The lack of European business experience coupled with the
possible loss of senior European managers or the inability of the Company's
current managers to effectively manage the additional responsibilities of a
European operation could have a material adverse impact on USC Europe's future
performance. See "Business -- Labor" and "--Acquisitions."

While the Company believes it has been successful in integrating the
acquisitions it has made in the past, there can be no assurance that either
recent domestic acquisitions such as AMS and the CPI Group or the international
acquisition of USC Europe, or any future acquisitions, will be integrated as
successfully. See "Business -- Acquisitions."

FOREIGN CURRENCY FLUCTUATIONS

To the extent that the Company obtains financing in United States dollars
(such as the Exchange Notes and the Notes) and receives revenues and incurs
expenses in the development, construction and operation of USC Europe in local
currencies, the Company will encounter currency exchange rate risks. While the
Company may consider entering into transactions to hedge the risk of exchange
rate fluctuations, there can be no assurance that the Company will engage in
such transactions, or if the Company decides to engage in such transactions,
that they will be successful and that shifts in the currency exchange rates will
not have an adverse effect on the Company's financial condition or its ability
to repay principal or interest on the Exchange Notes and the Notes. The
Indenture may, in certain circumstances, limit the exchange rate hedging
transactions into which the Company or any Restricted

24
<PAGE> 25

Subsidiary may enter. See "Description of Exchange Notes -- Certain
Covenants -- Limitation on Indebtedness."

CUSTOMER RELATIONSHIPS

The Company is currently establishing a new manufacturing facility in the
United Kingdom at an initial investment of approximately $20 million to be
invested over the next two to three years. Additionally, approximately $8.5
million has been spent to acquire a building and property in the United Kingdom
to house the new facility. The plant represents an expansion into the European
market based on the receipt of a letter of intent from Gillette to enter into a
multi-year container purchase relationship for supply to Gillette's North
Atlantic Group. The loss of Gillette as a customer or a decrease in the demand
for Gillette's products which are packaged in the Company's containers could
result in a significant loss of expected revenues related to the new facility
and a reduction in the value of the Company's substantial investment in the
facility. See "Business -- Customers and Sales Force" and "-- Recent Property
Developments" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources -- Historical" and
"-- After the Offering and Exchange Offer."

COMPETITION

The general packaging segment of the metal container industry, the
Company's primary business, is very competitive. The Company's ability to
compete may be affected negatively by the fact that some of the Company's
competitors have greater financial resources than the Company. The principal
methods of competition in the general packaging industry are price, quality and
service. Price competition in the industry is vigorous and limits the Company's
ability to increase prices. While capital investments have permitted the Company
to reduce costs through operating efficiencies, thereby improving profitability,
there can be no assurance that the Company will be able to continue to improve
profit margins in the future in this manner. The Company's products also face
competition from aluminum, glass and plastic containers. Reduction in the cost
of raw materials in any of these industries could make the Company's products
more expensive in relation to these products and thus less competitive. It is
not generally the practice in the industry for customers to enter into long-term
contracts which require customers to purchase a specified number of containers.
Consequently, the Company faces greater competitive risk than might otherwise be
the case.

In connection with the acquisition of USC Europe, the Company's purchase
agreement with Crown contains a non-competition period provision (the
"Non-Compete"). For one year from September 11, 1996, Crown is prohibited from
selling aerosol cans to customers who were, prior to the purchase of USC Europe
by the Company, served by USC Europe. Excepted from this Non-Compete are
customers who, with the approval of the Commission of European Communities and
in good faith, decline to purchase aerosol cans from USC Europe. In addition,
Crown may sell aerosol cans to customers of USC Europe, but only to the extent
that Crown's sales do not lessen the volume of business historically supplied to
such customers by USC Europe. There can be no assurance that the Company will
continue to supply such customers or that it will successfully compete for such
business following the expiration of the Non-Compete, or that customers will
not, in good faith, refuse to purchase products from USC Europe during the term
of the Non-Compete. See "Business--Competition."

ENVIRONMENTAL MATTERS

United States

A variety of propellants are used in the Company's principal product,
aerosol cans. These propellants include hydrofluorocarbons, compressed gases
(for example, carbon dioxide and nitrous oxide), and volatile organic compounds
such as propane, butane and isobutane (individually, "VOC" and collectively
"VOCs"). The United States Environmental Protection Agency (the "EPA") has been
empowered, since November 1995, to control or prohibit any activity which
results in emissions of VOCs from consumer and commercial products. The EPA
asserts that VOC emissions can contribute to the formation

25
<PAGE> 26

of lower atmosphere ozone (a component of smog) under certain conditions.
Similarly, the European Union ("EU") issued regulations in 1994 that established
a phased-in schedule for limiting the production, sale, and use of certain
ozone-depleting "regulated substances," including chlorofluorocarbons,
hydrofluorocarbons, halons and other halogenous products. Four of the states
with the most severe lower atmosphere ozone problems, California, New York,
Texas and Massachusetts, have issued regulations to require a phased-in
reduction in the use of VOCs in aerosol products, and other jurisdictions are
considering similar laws or regulations. Such EU, federal, state and local
regulations have caused consumer product manufacturers (the Company's customers)
to reformulate either their products, the propellants used therein or both.
Management has been informed by customers that reformulation of both products
and propellants is possible, and, in fact, many of the Company's customers have
successfully formulated their products to meet the relevant standards in
California and New York. The Company expects that its European customers will
similarly begin to reformulate their products, the propellants used therein or
both, as the Company's major customers serve both U.S. and the European markets.
However, there can be no assurance that all customers will be able to effect
such reformulation in either products or propellants with satisfactory results.
If it is not possible for them to do so, the viability of aerosol cans as
delivery containers for consumer products could be seriously jeopardized and the
Company could be materially adversely affected.

The processes involved in the lithography and certain aspects of the
manufacture of steel containers have historically involved the use and handling
of materials now classified as hazardous substances under various laws. These
laws, which include the Comprehensive Environmental Response, Compensation and
Liability Act or 1980, as amended, may expose owners and operators of facilities
involved in lithography and the manufacture of steel containers to potential
liability for the cost to clean up or remedy any environmental contamination
resulting from such substances relating to those businesses from or on their
facilities. It is possible that the Company's insurance coverage may extend to
certain environmental liabilities, but the Company has not been able to estimate
such coverage due to the complexity and uncertainty inherent in such an
estimate. In addition, the Company has obtained indemnities against certain
liabilities in connection with its recent acquisitions. However, the statements
related to environmental liabilities made by the Company in this Prospectus are
made without regard to any potential insurance recovery or recovery of amounts
from indemnitors.

The Company understands that the groundwater in San Leandro, California
(formerly a site of one of the Company's can assembly facilities) is
contaminated at shallow and intermediate depths, and that the area of concern
partially extends to the groundwater below the facility formerly owned by the
Company. The California Regional Water Quality Control Board originally examined
contamination issues involving the site but did not, in 1989-91, require any
remediation. The Company did expend approximately $375,000 in voluntary ground
remediation of a potential contamination site on this property at that time. The
California Department of Toxic Substances Control ("CDTSC") identified regional
groundwater contamination concerns for this area and has been trying to define
and delineate the areas of possible contamination and the sources of the
contamination on a regional basis. In late April 1996, the CDTSC issued to
certain of the past and present owners of this facility, including U.S. Can, an
order directing such owners to conduct remediation activities at this site;
however, no specific form of remediation was indicated. Representatives of the
Company met with the CDTSC in response to the order and agreed to undertake
additional site assessment work with the purpose of producing a site
characterization to determine with greater focus the nature of the
contamination. In January 1997, the Company received results from on-site
investigations conducted by an independent environmental consultant. Those
results indicated that, while no evidence of soil contamination in the studied
areas was found, there is a substantial probability that soil beneath one area
of the facility has had an impact on site groundwater. Additionally, groundwater
in the vicinity has been impacted by contaminants which appear to be migrating
on-site from upgradient sources. Recently, the Company received a notice from
the CDTSC requiring that it deliver a site characterization report on the site
sampling and investigative results no later than February 3, 1997. The San
Leandro facility was closed in 1989 and was sold, except for a related parcel of
land, in 1994. The remaining parcel was sold in 1995. In connection with the
sale, the Company agreed to indemnify the purchaser against any environmental
claims related to the Company's ownership of the property. There can be no
assurance that the Company will not incur material costs and expenses in
connection with the CDTSC order.

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<PAGE> 27

Europe

The USC Europe Acquisition includes five aerosol can-making operations
located in the United Kingdom, France, Spain and Germany and can-making
equipment and assets in Italy. The Company has retained an independent
environmental consultant to perform an initial environmental inventory and Crown
has provided disclosure on environmental matters relating to each plant and
site. In connection with this acquisition, no subsurface sampling was performed
to identify possible contamination. Several of the facilities have been
operating at their locations for more than ten years and, according to a survey
conducted by an independent environmental consultant, it is likely there have
been releases of hazardous substances at these locations in the past. The
operations in Southall, UK and Schwedt, Germany are in historically
industrialized areas, and there is potential for area-wide contamination
involving adjacent sites. The Company lacks an operating knowledge of these
facilities and there can be no assurance that there are not significant
environmental liabilities unknown to the Company.

The Company's facilities and operations in Europe are subject to a wide
variety of jurisdictional environmental laws and regulations including those
related to air emissions, waste water discharge and chemical and hazardous waste
management and disposal ("Environmental Laws"). For a discussion of European
regulation of aerosol propellants in consumer products, see "Environmental
Matters -- United States" on the previous page. These Environmental Laws differ
among the various countries in which the USC Europe operations are located.
Based on its review of the initial environmental audit performed by an
independent environmental consultant and the environmental disclosure provided
by Crown, the Company believes the operations of USC Europe are in substantial
compliance, or are in the process of being brought into substantial compliance,
with the applicable Environmental Laws of the various countries. However, the
countries involved, including Spain (which is currently seeking entrance into
the European Common Market), are, on the whole, moving towards a uniform
application of environmental regulations and compliance procedures, and there
can be no assurance that USC Europe's activities will continue to be in
substantial compliance with such regulations and procedures in the future.

RELIANCE ON TIN-PLATED STEEL

Tin-plated steel accounted for approximately 87.8% of the Company's total
raw material purchases during the first nine months of 1996. Negotiations with
the Company's domestic tin-plated steel suppliers occur once per year. At that
time, the prices for tin-plated steel are set for the next year. There are no
limits on the increases negotiated each year, but due to the competitive nature
of the steel industry and the volume of tin-plated steel purchased by the
Company in the United States, the Company has historically negotiated raw
materials price increases which are lower than those publicly announced by its
suppliers. However, no assurance can be given that the Company will continue to
be able to do so in the future. For 1997, the Company's domestic tin-plated
steel suppliers have announced a price increase of 2 3/4%. See "Business -- Raw
Materials."

With respect to the USC Europe operations, the Company has only limited
prior purchasing history with its tin plate suppliers. No assurance can be given
that USC Europe will be able to continue to purchase its tin plate requirements
from such existing sources at reasonable prices.

Many of U.S. Can's multi-year supply agreements with its customers permit
it to pass through announced price increases in steel costs. If the Company is
unable to pass through any future steel price increases to its customers under
these agreements, or negotiate USC Europe supply contracts in the same manner,
and if the Company is unable to reduce its costs in other ways, such increases
could have an adverse impact on the Company's operating results.

CHANGE OF CONTROL

Upon a Change of Control (as defined on page 106 of this Prospectus), each
Holder of the Exchange Notes or Notes will have the right to require the Company
to repurchase all or any part of such Holder's Exchange Notes or Notes at a
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase. However, the occurrence of a Change
of Control

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would constitute a default under the Senior Credit Agreement which would
prohibit the purchase of the Exchange Notes by the Company in the event of a
Change of Control unless and until such time as U.S. Can's (as Guarantor)
indebtedness under the Senior Credit Agreement was repaid in full. The Company's
failure to purchase the Exchange Notes or Notes would result in a default under
the Indenture and under the Senior Credit Agreement (which, if accelerated,
would also constitute an Event of Default as defined under the Indenture). Upon
the declaration of an Event of Default, the outstanding principal and interest
on the Exchange Notes and Notes may be declared immediately due and payable. A
Change of Control would have adverse consequences for the Company and the
Holders of the Exchange Notes and Notes because there can be no assurance that
the Company and the Guarantor would have sufficient financial resources
available to satisfy all of their obligations under the Senior Credit Agreement
and the Exchange Notes or Notes. See "Description of Indebtedness -- Senior
Credit Agreement" and "Description of Exchange Notes -- Change of Control."
Clause (d) of the definition of "Change of Control" under "Description of
Exchange Notes" includes a sale, lease, exchange or other transfer of "all or
substantially all" of the assets of the Company to a person or group of persons.
There is little case law interpreting the phrase "all or substantially all" in
the context of an indenture. Because there is no precise established definition
of this phrase, the ability of a holder of Exchange Notes or Notes to require
the Company to repurchase such Exchange Notes or Notes as a result of a sale,
lease, exchange or other transfer of all or substantially all of the Company's
assets to a person or group of persons may be uncertain. Subject to the
covenants described in "Description of Exchange Notes", the Company could, in
the future, enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not constitute a Change of
Control under the Indenture, but that could increase the amount of indebtedness
outstanding at such time or otherwise affect the Company's capital structure or
credit ratings. See "Description of Exchange Notes -- Change of Control."

LACK OF PUBLIC MARKET FOR THE EXCHANGE NOTES

The Notes are currently owned by a relatively small number of beneficial
owners. The Notes have not been registered under the Securities Act or any state
securities laws and, unless so registered and to the extent not exchanged for
the Exchange Notes, may not be offered or sold except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws.

The Exchange Notes will constitute a new issue of securities for which
there is currently no active trading market. If the Exchange Notes are traded
after their initial issuance, they may trade at a discount from their initial
offering price, depending upon prevailing interest rates, the market for similar
securities and other factors including general economic conditions and the
financial condition of the Company. Although the Exchange Notes will generally
be permitted to be resold or otherwise transferred by nonaffiliates of the
Company without compliance with the registration and prospectus delivery
requirements of the Securities Act, the Company does not intend to apply for a
listing or quotation of the Exchange Notes on any securities exchange or stock
market. The Initial Purchasers have informed the Company that they currently
intend to make a market in the Exchange Notes. However, the Initial Purchasers
are not obligated to do so, and any such market making may be discontinued at
any time without notice. In addition, such market-making activity will be
subject to the limits imposed under the Exchange Act. See "Exchange Offer;
Registration Rights." Accordingly, there can be no assurance as to the
development or liquidity of any market for the Exchange Notes, or, in the case
of non-tendering Holders of Notes, the trading market for the Notes following
the Registered Exchange Offer. If no trading market develops or is maintained,
Holders of Exchange Notes may experience difficulty in reselling Exchange Notes
or may be unable to sell them.

The liquidity of, and trading market for, the Notes or the Exchange Notes
also may be adversely affected by general declines in the market for similar
securities. Such a decline may adversely affect such liquidity and trading
markets independent of the financial performance of, and prospects for, the
Company.

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For a more detailed description of certain of the Company's outstanding
indebtedness and loan covenants related thereto which could limit the Company's
flexibility, see "Description of Certain Indebtedness."

EXCHANGE OFFER PROCEDURES

Issuance of the Exchange Notes in exchange for Notes pursuant to the
Exchange Offer will be made only after a timely receipt by the Exchange Agent of
such Notes, a properly completed and duly executed Letter of Transmittal and all
other required documents. Therefore, Holders of the Notes desiring to tender
such Notes in exchange for Exchange Notes should allow sufficient time to ensure
timely delivery. The Company is under no duty to give notification of defects or
irregularities with respect to the tenders of Notes for exchange. Notes that are
not tendered or are tendered but not accepted will, following the consummation
of the Exchange Offer, continue to be subject to the existing restrictions upon
transfer thereof and, upon consummation of the Exchange Offer, the registration
rights under the Registration Rights Agreement will terminate as to any
non-tendering Note holder eligible to participate in the Exchange Offer with
only the limited exceptions pertaining to Initial Purchasers or Holders who were
not eligible to participate in the Exchange Offer for whom rights for a
subsequent shelf registration statement of a post-effective amendment to this
Registration Statement will remain. In addition, any Holder of Notes who tenders
in the Exchange Offer for the purpose of participating in a distribution of the
Exchange Notes may be deemed to have received restricted securities and, if so,
will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale. Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Notes, where such Notes were acquired by such broker-dealer as a result of
market-marking activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Notes.
To the extent that Notes are tendered and accepted in the Exchange Offer, the
trading market for untendered and tendered but unaccepted Notes could be
adversely affected. See "The Exchange Offer."

RESTRICTIONS ON TRANSFER

The Notes were offered and sold by the Company in a private offering exempt
from registration pursuant to the Securities Act and have been resold pursuant
to Rule 144A under the Securities Act and to a limited number of other
institutional "accredited investors" (as defined in Rule 501(a), (1), (2), (3)
or (7) under the Securities Act). As a result, the Notes may not be reoffered or
resold by purchasers except pursuant to an effective registration statement
under the Securities Act, or pursuant to an applicable exemption from such
registration, and the Notes are legended to restrict transfer as aforesaid. Each
Holder (other than any Holder who is an affiliate or promoter of the Company)
who duly exchanges Notes for Exchange Notes in the Exchange Offer will receive
Exchange Notes that are freely transferable under the Securities Act. Holders of
Notes who participate in the Exchange Offer should be aware, however, that if
they accept the Exchange Offer for the purpose of engaging in a distribution,
the Exchange Notes may not be publicly reoffered or resold without complying
with the registration and prospectus delivery requirements of the Securities
Act. As a result, each Holder of Notes accepting the Exchange Offer will be
deemed to have represented, by its acceptance of the Exchange Offer, that it
acquired the Exchange Notes in the ordinary course of business and that it is
not engaged in, and does not intend to engage in, a distribution of the Exchange
Notes. If existing Commission interpretations permitting free transferability of
the Exchange Notes following the Exchange Offer are changed prior to
consummation of the Exchange Offer, the Company will use its best efforts to
register the Notes for resale under the Securities Act. See "Summary -- The
Exchange Offer" and "Exchange Offer; Registration Rights."

The Notes currently may be sold pursuant to the restrictions set forth in
Rule 144A under the Securities Act or pursuant to another available exemption
under the Securities Act without registration under the Securities Act. To the
extent that Notes are tendered and accepted in the Exchange Offer, the trading
market for the untendered and tendered but unaccepted Notes could be adversely
affected.

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<PAGE> 30

LIMITATION ON SUITS BY HOLDERS OF EXCHANGE NOTES

The Indenture under which the Notes were issued includes negative covenants
which restrict the ability of a Holder of the Notes, or ultimately the Exchange
Notes, to bring an action against the Company or a Subsidiary Guarantor. Thus, a
Holder would not be able to seek a remedy under the Indenture, even in the case
of an Event of Default, where these procedures and limitations were not
otherwise followed. Specifically, a Holder may not pursue any remedy with
respect to the Indenture or the Exchange Notes unless: (i) such Holder gives to
the Trustee written notice stating that an Event of Default is continuing; (ii)
the Holders of at least 25% in aggregate principal amount of the Notes and
Exchange Notes make a written request to the Trustee to pursue the remedy; (iii)
such Holder or Holders offer to the Trustee reasonable security or indemnity
against any loss, liability or expense; (iv) the Trustee does not comply with
the request within 60 days after receipt of the request and the offer of
security or indemnity; and (v) the Holders of a majority in aggregate principal
amount of the Notes and Exchange Notes do not give the Trustee a direction
inconsistent with the request during such 60-day period. A Holder may not use
the Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder. See "Description of Exchange Notes
- -- Limitation on Suits."

EXCHANGE NOTES HELD IN GLOBAL FORM

Notes held in book-entry form will be exchanged for Exchange Notes
represented by a single global certificate evidencing such Exchange Note (the
"Global Exchange Note") which will be registered in the name of the Depository
Trust Company or its nominee (the "Depository"). Holders will receive a credit
on the records of the Depository evidencing that Holder's ownership interest in
the Global Exchange Note (the "Beneficial Owner"). Ownership of beneficial
interest in such, Global Exchange Note will be shown on, and the transfer of
such ownership interest will be effected only through, records maintained by the
Depository. The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, transfer or pledge
beneficial interests in Global Exchange Notes.

So long as the Depository, or its nominee, is the registered owner of a
Global Exchange Note, the Depository or its nominee, as the case may be, will be
considered the sole owner or holder of the Exchange Note represented by such
Global Exchange Note for all purposes under the Indenture. Except as provided
below, beneficial owners in a Global Exchange Note will not be entitled to have
the Exchange Notes represented by such Global Exchange Notes registered in their
names, will not receive or be entitled to receive physical delivery of the
Exchange Notes in definitive form and will not be considered the owners or
holders thereof under the Indenture. Accordingly, each Holder owning a
beneficial interest in a Global Exchange Note must rely on the procedures of the
Securities Depository.

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<PAGE> 31

THE EXCHANGE OFFER

The following discussion sets forth or summarizes what the Company believes
to be the material terms of the Exchange Offer, including those set forth in the
Letter of Transmittal distributed with this Prospectus. This summary is
qualified in its entirety by reference to the full text of the documents
underlying the Exchange Offer (including the Indenture, the Registration Rights
Agreement and the Escrow Agreement), copies of which are filed as exhibits to
the Registration Statement on Form S-4 of which this Prospectus is a part and to
the Company's and the Guarantor's quarterly report on Form 10-Q filed with the
Commission on November 13, 1996, and are incorporated herein by reference.

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

The Notes were sold by the Company on October 17, 1996, and were
subsequently resold to qualified institutional buyers pursuant to Rule 144A
under the Securities Act and to institutional investors that are accredited
investors in a manner exempt from registration under the Securities Act. In
connection with the Note Offering, the Company entered into the Registration
Rights Agreement, which requires, among other things, that promptly following
the Issue Date the Company and the Guarantor (i) file with the Commission a
registration statement under the Securities Act with respect to an issue of new
notes of the Company identical in all material respects (other than transfer
restrictions) to the Notes (which obligation has been satisfied by the filing of
the Registration Statement of which this Prospectus is a part), (ii) use their
best efforts to cause such registration statement to become effective under the
Securities Act and (iii) upon the effectiveness of that registration statement,
offer to the Holders of the Notes the opportunity to exchange their Notes for a
like principal amount of Exchange Notes, which would be issued without a
restrictive legend and may be reoffered and resold by the holder without
restrictions or limitations under the Securities Act (other than any such holder
that is an "affiliate" of the Company within the meaning of Rule 405 under the
Securities Act). The term "Holder" with respect to the Exchange Offer means any
person in whose name the Notes are registered on the books of the Company or any
other person who has obtained a properly completed bond power from the
registered holder.

Any Notes tendered and exchanged in the Exchange Offer will reduce the
principal amount of Notes outstanding. Following the consummation of the
Exchange Offer, Holders of the Notes who did not tender their Notes generally
will not have any further registration rights under the Registration Rights
Agreement, and such Notes will continue to be subject to certain restrictions on
transfer. Accordingly, the liquidity of the market for such Notes could be
adversely affected. The Notes are currently eligible for sale pursuant to Rule
144A through the PORTAL System of the National Association of Securities
Dealers, Inc. Because the Company anticipates that most Holders of Notes will
elect to exchange such Notes for Exchange Notes due to the absence of
restrictions on the resale of Exchange Notes under the Securities Act, the
Company anticipates that the liquidity of the market for any Notes remaining
after the consummation of the Exchange Offer may be substantially limited.

TERMS OF THE EXCHANGE OFFER

Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time on the
Expiration Date. The Company will issue $1,000 principal amount of Exchange
Notes in exchange for each $1,000 principal amount of outstanding Notes accepted
in the Exchange Offer. Holders may tender some or all of their Notes pursuant to
the Exchange Offer. However, Notes may be tendered only in integral multiples of
$1,000.

The form and terms of the Exchange Notes are the same as the form and terms
of the Notes except that (i) the Exchange Notes have been registered under the
Securities Act and hence will not bear legends restricting the transfer thereof
and (ii) the holders of the Exchange Notes generally will not be entitled to
certain rights under the Registration Rights Agreement, which rights generally
will terminate upon consummation of the Exchange Offer. The Exchange Notes will
evidence the same debt as the Notes and will be entitled to the benefits of the
Indenture.

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<PAGE> 32

Holders of Notes do not have any appraisal or dissenters' rights under the
Delaware General Corporation Law or the Indenture in connection with the
Exchange Offer. The Company intends to conduct the Exchange Offer in accordance
with the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder, including Rule 14e-1.

The Company shall be deemed to have accepted validly tendered Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering Holders for the
purpose of receiving the Exchange Notes from the Company.

If any tendered Notes are not accepted for exchange because of an invalid
tender, the occurrence of certain other events set forth herein or otherwise,
the certificates for any such unaccepted Notes will be returned, without
expense, to the tendering Holder thereof as promptly as practicable after the
Expiration Date.

Holders who tender Notes in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Notes pursuant to
the Exchange Offer. The Company will pay all charges and expenses, other than
transfer taxes in certain circumstances, in connection with the Exchange Offer.
See "-- Fees and Expenses."

EXPIRATION DATE; EXTENSIONS; AMENDMENTS

The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
March 13, 1997, unless the Company, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended. The Company does not presently
intend to extend the Exchange Offer beyond March 16, 1997, in any event.

To extend the Exchange Offer, the Company will notify the Exchange Agent of
any extension by oral or written notice, followed by a public announcement
thereof no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date.

The Company reserves the right, in its reasonable judgment, (i) to delay
accepting any Notes, to extend the Exchange Offer or to terminate the Exchange
Offer if any of the conditions set forth below under "-- Conditions" shall not
have been satisfied, by giving oral or written notice of such delay, extension
or termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by a public announcement
thereof. If the Exchange Offer is amended in a manner determined by the Company
to constitute a material change, the Company will promptly disclose such
amendment by means of a prospectus supplement that will be distributed to the
registered Holders, and, depending upon the significance of the amendment and
the manner of disclosure to the registered Holders, the Company will extend the
Exchange Offer for a period of five to ten business days if the Exchange Offer
would otherwise expire during such five to ten business day period.

If the Company does not consummate the Exchange Offer, or, in lieu thereof,
the Company does not file and cause to become effective a resale shelf
registration for the Notes within the time periods set forth herein, liquidated
damages over and above the stated interest rate of 0.50% per annum for the first
ninety (90) days, and increasing thereafter by 0.25% per annum at the end of
each subsequent 90-day period (but in no event exceeding 2.00% per annum) will
accrue and be payable on the Notes either temporarily or permanently. See
"Exchange Offer; Registration Rights."

Without limiting the manner in which the Company may choose to make public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, the Company shall have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by making a timely release
to the Dow Jones News Service.

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INTEREST ON EXCHANGE NOTES

The Exchange Notes will bear interest from October 17, 1996, the date of
issuance of the Notes that are tendered in exchange for the Exchange Notes (or
the most recent Interest Payment Date to which interest on such Notes has been
paid). Accordingly, holders of Notes that are accepted for exchange will not
receive interest that is accrued but unpaid on the Notes at the time of tender,
but such interest will be payable on the first Interest Payment Date after the
Expiration Date. Interest on the Exchange Notes will be payable semiannually on
each April 15 and October 15, commencing on April 15, 1997.

PROCEDURES FOR TENDERING

Only a Holder of Notes may tender such Notes in the Exchange Offer. To
tender in the Exchange Offer, a Holder must complete, sign and date the Letter
of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed
if required by the Letter of Transmittal and mail or otherwise deliver such
Letter of Transmittal or such facsimile, together with the Notes and any other
required documents, to the Exchange Agent so as to be received by the Exchange
Agent at the address set forth below prior to 5:00 p.m., New York City time, on
the Expiration Date. Delivery of the Notes may be made by book-entry transfer in
accordance with the procedures described below. Confirmation of such book-entry
transfer must be received by the Exchange Agent prior to the Expiration Date.

By executing the Letter of Transmittal, each Holder will make to the
Company the representation set forth below in the second paragraph under the
heading "-- Resale of Exchange Notes."

The tender by a Holder and the acceptance thereof by the Company will
constitute an agreement between such Holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.

THE METHOD OF DELIVERY OF NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN
OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO
LETTER OF TRANSMITTAL OR NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY
REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR
NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.

Any beneficial owner whose Notes are registered in the name of a broker,
dealer, commercial bank, trust company or other nominee and who wishes to tender
should contact the registered Holder promptly and instruct such registered
Holder to tender on such beneficial owner's behalf.

Signatures on the Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Notes tendered pursuant thereto are tendered (i) by a registered
Holder who has not completed the box entitled "Special Registration
Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or
(ii) for the account of an Eligible Institution. In the event that signatures on
a Letter of Transmittal or a notice of withdrawal, as the case may be, are
required to be guaranteed, such guarantee must be by a member firm of a
registered national securities exchange or of the National Association of
Securities Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution" within
the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution").

If the Letter of Transmittal is signed by a person other than the
registered Holder of any Notes listed therein, such Notes must be endorsed or
accompanied by a properly completed bond power, signed by such registered Holder
as such registered Holder's name appears on such Notes with the signature
thereon guaranteed by an Eligible Institution.

If the Letter of Transmittal or any Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or

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<PAGE> 34

representative capacity, such persons should so indicate when signing, and
unless waived by the Company, evidence satisfactory to the Company of their
authority to so act must be submitted with the Letter of Transmittal.

The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish accounts with respect to
the Notes at the DTC for the purpose of facilitating the Exchange Offer, and
subject to the establishment thereof, any financial institution that is a
participant in the DTC may make book-entry delivery of the Notes by causing the
DTC to transfer such Notes into the Exchange Agent's account with respect to the
Notes in accordance with the DTC's procedures for such transfer. Although
delivery of the Notes may be effected through book-entry transfer into the
Exchange Agent's account at the DTC, a Letter of Transmittal properly completed
and duly executed with any required signature guarantee and all other required
documents must in each case be transmitted to and received or confirmed by the
Exchange Agent at its address set forth below on or prior to the Expiration
Date, or, if the guaranteed delivery procedures described below are complied
with, within the time period provided under such procedures. Delivery of
documents to the DTC does not constitute delivery to the Exchange Agent.

All questions as to the validity, form, eligibility (including time of
receipt), acceptance of tendered Notes and withdrawal of tendered Notes will be
determined by the Company in its sole discretion, which determination will be
final and binding. The Company reserves the absolute right to reject any and all
Notes not properly tendered or any Notes the Company's acceptance of which
would, in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular Notes. The Company's interpretation of the terms and conditions
of the Exchange Offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Notes must be cured within such
time as the Company shall determine. Although the Company intends to notify
Holders of defects or irregularities with respect to tenders of Notes, none of
the Company, the Exchange Agent or any other person shall incur any liability
for failure to give such notification. Tenders of Notes will not be deemed to
have been made until such defects or irregularities have been cured or waived.
Any Notes received by the Exchange Agent that are not properly tendered and as
to which the defects or irregularities have not been cured or waived will be
returned by the Exchange Agent to the tendering Holders, unless otherwise
provided in the Letter of Transmittal, as soon as practicable following the
Expiration Date.

GUARANTEED DELIVERY PROCEDURES

Holders who wish to tender their Notes and (i) whose Notes are not
immediately available, (ii) who cannot deliver their Notes, the Letter of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the Expiration
Date, may effect a tender if:

(a) the tender is made through an Eligible Institution;

(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the Holder, the certificate number(s)
of such Notes and the principal amount of Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within three New York
Stock Exchange trading days after the Expiration Date, the Letter of
Transmittal (or facsimile thereof), together with the certificate(s)
representing the Notes (or a confirmation of book-entry transfer of such
Notes into the Exchange Agent's account at the DTC) and any other documents
required by the Letter of Transmittal, will be deposited by the Eligible
Institution with the Exchange Agent; and

(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Notes in proper form for transfer (or a confirmation of book-entry transfer
of such Notes into the Exchange Agent's account at the DTC) and all other

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<PAGE> 35

documents required by the Letter of Transmittal, are received by the
Exchange Agent within three New York Stock Exchange trading days after the
Expiration Date.

Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to Holders who wish to tender their Notes according to the guaranteed
delivery procedures set forth above.

WITHDRAWALS OF TENDERS

Except as otherwise provided herein, tenders of Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date.

To withdraw a tender of Notes in the Exchange Offer, a written or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at the
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal must (i) specify the name of the
person having deposited the Notes to be withdrawn (the "Depositor"), (ii)
identify the Notes to be withdrawn (including the certificate number(s) and
principal amount of such Notes, or, in the case of notes transferred by
book-entry transfer, the name and number of the account at the DTC to be
credited), (iii) be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal by which such Notes were tendered
(including any required signature guarantees) or be accompanied by documents of
transfer sufficient to have the Trustee register the transfer of such Notes into
the name of the person withdrawing the tender and (iv) specify the name in which
any such Notes are to be registered, if different from that of the Depositor.
All questions as to the validity, form and eligibility (including time or
receipt) of such notices will be determined by the Company, whose determination
shall be final and binding on all parties. Any Notes so withdrawn will be deemed
not to have been validly tendered for purposes of the Exchange Offer and no
Exchange Notes will be issued with respect thereto unless the Notes so withdrawn
are validly retendered. Any Notes which have been tendered but which are not
accepted for exchange will be returned to the Holder thereof without cost to
such Holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Notes may be retendered by
following one of the procedures described above under "-- Procedures for
Tendering" at any time prior to the Expiration Date.

CONDITIONS

Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or to exchange Exchange Notes for, any
Notes, and may terminate or amend the Exchange Offer as provided herein before
the acceptance of such Notes, if:

(a) any law, statute, rule, regulation or interpretation by the staff
of the Commission is proposed, adopted or enacted, which, in the reasonable
judgment of the Company, might materially impair the ability of the Company
to proceed with the Exchange Offer or materially impair the contemplated
benefits of the Exchange Offer to the Company; or

(b) any governmental approval has not been obtained, which approval
the Company shall, in its reasonable judgment, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.

If the Company determines in its reasonable judgment that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Notes and
return all tendered Notes to the tendering Holders, (ii) extend the Exchange
Offer and retain all Notes tendered prior to the expiration of the Exchange
Offer, subject, however, to the rights of Holders to withdraw such Notes (see
"-- Withdrawals of Tenders") or (iii) waive such unsatisfied conditions with
respect to the Exchange Offer and accept all properly tendered Notes which have
not been withdrawn. If such waiver constitutes a material change to the Exchange
Offer, the Company will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered Holders, and, depending
upon the significance of the waiver and the manner of disclosure to the
registered Holders, the Company will extend the Exchange Offer for a

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<PAGE> 36

period of five to 10 business days if the Exchange Offer would otherwise expire
during such five to 10 business-day period.

EXCHANGE AGENT

Harris Trust and Savings Bank will act as Exchange Agent for the Exchange
Offer with respect to the Notes.

Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal for the Notes and requests for
copies of Notice of Guaranteed Delivery should be directed to the Exchange
Agent, addressed as follows:

<TABLE>
<S> <C>
BY HAND: BY OVERNIGHT COURIER:
Harris Trust and Savings Bank Harris Trust and Savings Bank
Receive Window 77 Water Street, 4th Floor
77 Water Street, 5th Floor New York, NY 10005
New York, NY 10005
BY MAIL: BY FACSIMILE:
Harris Trust and Savings Bank Harris Trust and Savings Bank
Wall Street Station (212) 701-7636
P.O. Box 1023 (212) 701-7640
New York, NY 10268-1023 Confirm by Telephone
(212) 701-7663
</TABLE>

FEES AND EXPENSES

The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail by the Exchange Agent who will be
paid a reasonable and customary fee for its solicitation services. However,
additional solicitation may be made by telephone, facsimile or in person by
officers and regular employees of the Company and its affiliates and by persons
so engaged by the Exchange Agent.

The Company will pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith and pay other registration expenses, including fees and
expenses of the Trustee, filing fees, blue sky fees and printing and
distribution expenses.

The Company will pay all transfer taxes, if any, applicable to the exchange
of the Notes pursuant to the Exchange Offer. If, however, certificates
representing the Exchange Notes or the Notes for principal amounts not tendered
or accepted for exchange are to be delivered to, or are to be issued in the name
of, any person other than the registered Holder of the Notes tendered, or if
tendered Notes are registered in the name of any person other than the person
signing the Letter of Transmittal, or if a transfer tax is imposed for any
reason other than the exchange of the Notes pursuant to the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered Holder
or any other person) will be payable by the tendering Holder.

ACCOUNTING TREATMENT

The Exchange Notes will be recorded at the same carrying value as the
Notes, which is the aggregate principal amount of the Notes, as reflected in the
Company's accounting records on the date of exchange. Accordingly, no gain or
loss for accounting purposes will be recognized in connection with the Exchange
Offer. The expenses of the Exchange Offer will be amortized over the term of the
Exchange Notes.

36
<PAGE> 37

RESALE OF EXCHANGE NOTES

Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that Exchange
Notes issued pursuant to the Exchange Offer in exchange for Notes may be offered
for resale, resold and otherwise transferred by any holder of such Exchange
Notes (other than any such holder which is an "affiliate" of the Company within
the meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such Exchange Notes are acquired in the ordinary course of such holder's
business and such holder does not intend to participate, and has no arrangement
or understanding with any person to participate, in the distribution of such
Exchange Notes. Any holder who tenders in the Exchange Offer with the intention
to participate, or for the purpose of participating, in a distribution of the
Exchange Notes may not rely on the position of the staff of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13, 1988) and
Morgan Stanley & Co., Incorporated (available June 5, 1991), or similar
no-action letters, but rather must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. In addition, any such resale transaction should be covered by an
effective registration statement containing the selling security holders
information required by Item 507 of Regulation S-K of the Securities Act. Each
broker-dealer that receives Exchange Notes for its own account in exchange for
Notes, where such Notes were acquired by such broker-dealer as a result of
market-making activities or other trading activities, may be a statutory
underwriter and must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes.

By tendering in the Exchange Offer, each Holder will represent to the
Company that, among other things, (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of business of the
person receiving such Exchange Notes, whether or not such person is the
registered Holder, (ii) neither the Holder nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of such Exchange Notes and (iii) the Holder and such other person acknowledge
that if they participate in the Exchange Offer for the purpose of distributing
the Exchange Notes (a) they must, in the absence of an exemption therefrom,
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale of the Exchange Notes and cannot
rely on the no-action letters referenced above and (b) failure to comply with
such requirements in such instance could result in such Holder or such other
person incurring liability under the Securities Act for which such Holder or
such other person is not indemnified by the Company. Further, by tendering in
the Exchange Offer, each Holder and such other person that may be deemed an
"affiliate" (as defined under Rule 405 of the Securities Act) of the Company
will represent to the Company that such Holder and such other person understand
and acknowledge that the Exchange Notes may not be offered for resale, resold or
otherwise transferred by that Holder or such other person without registration
under the Securities Act or an exemption therefrom.

CONSEQUENCES OF FAILURE TO EXCHANGE

As a result of the making of this Exchange Offer, the Company will have
fulfilled one of its obligations under the Registration Rights Agreement, and
Holders of Notes who do not tender their Notes, except for certain instances
involving the Initial Purchasers or Holders who are not eligible to participate
in the Exchange Offer, will not have any further registration rights under the
Registration Rights Agreement or otherwise. Accordingly, any Holder of Notes
that does not exchange that Holder's Notes for Exchange Notes will continue to
hold the untendered Notes and will be entitled to all the rights and limitations
applicable thereto under the Indenture, except to the extent that such rights or
limitations, by their terms, terminate or cease to have further effectiveness as
a result of the Exchange Offer.

The Notes that are not exchanged for Exchange Notes pursuant to the
Exchange Offer will remain restricted securities. Accordingly, such Notes may be
resold only (i) to the Company (upon redemption thereof or otherwise), (ii)
pursuant to an effective registration statement under the Securities Act, (iii)
so long as the Notes are eligible for resale pursuant to Rule 144A under the
Securities Act, to a qualified institutional buyer within the meaning of Rule
144A under the Securities Act in a transaction

37
<PAGE> 38

meeting the requirements of Rule 144A, (iv) outside the United States to a
foreign person pursuant to the exemption from the registration requirements of
the Securities Act provided by Regulation S thereunder, (v) pursuant to an
exemption from registration under the Securities Act provided by Rule 144
thereunder (if available) or (vi) to an institutional accredited investor in a
transaction exempt from the registration requirements of the Securities Act, in
each case in accordance with any applicable securities laws of any state of the
United States or other jurisdiction. See "Risk Factors -- Restrictions on
Transfer."

OTHER

Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Notes are urged to consult
their financial and tax advisors in making their own decision on what action to
take.

The Company may in the future seek to acquire untendered Notes in open
market or privately negotiated transactions, through subsequent exchange offers
or otherwise. The Company has no present plans to acquire any Notes that are not
tendered in the Exchange Offer or to file a registration statement to permit
resales of any untendered Notes.

In any state where the Exchange Offer does not fall under a statutory
exemption to the blue sky rules, the Company has filed the appropriate
registrations and notices, and has made the appropriate requests, to permit the
Exchange Offer to be made in such State.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES
OF THE EXCHANGE OFFER

The following discussion is based upon current provisions of the Internal
Revenue Code of 1986, as amended, applicable Treasury regulations, judicial
authority and administrative rulings and practice. There can be no assurance
that the Internal Revenue Service (the "IRS") will not take a contrary view, and
no ruling from the IRS has been or will be sought. Legislative, judicial or
administrative changes or interpretations may be forthcoming that could alter or
modify the statements and conditions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences to Holders. Certain Holders of the Notes (including insurance
companies, tax-exempt organizations, financial institutions, broker-dealers,
foreign corporations and persons who are not citizens or residents of the United
States) may be subject to special rules not discussed below. Each Holder of a
Note should consult his, her or its own tax advisor as to the particular tax
consequences of exchanging such Holder's Notes for Exchange Notes, including the
applicability and effect of any state, local or foreign tax laws.

The issuance of the Exchange Notes to Holders of the Notes pursuant to the
terms set forth in this Prospectus will not constitute an exchange for United
States federal income tax purposes. Consequently, no gain or loss would be
recognized by Holders of the Notes upon receipt of the Exchange Notes, and
ownership of the Exchange Notes will be considered a continuation of ownership
of the Notes. For purposes of determining gain or loss upon the subsequent sale
or exchange of the Exchange Notes, a Holder's basis in the Exchange Notes should
be the same as such Holder's basis in the Notes exchanged therefor. A Holder's
holding period for the Exchange Notes should include the Holder's holding period
for the Notes exchanged therefor. The issue price, original issue discount
inclusion and other tax characteristics of the Exchange Notes should be
identical to the issue price, original issue discount inclusion and other tax
characteristics of the Notes exchanged therefor.

See also "Certain Federal Income Tax Considerations."

38
<PAGE> 39

CAPITALIZATION

The following table sets forth the unaudited capitalization of the Company
as of September 29, 1996, on an actual basis and on a pro forma basis giving
effect to the Offering and the application of the net proceeds thereof
(including redemption of the 13 1/2% Notes) and the Exchange Offer (assuming
that all Notes are exchanged for Exchange Notes). See "Summary -- Recent
Developments." This table should be read in conjunction with the Company's
audited Consolidated Financial Statements and the Notes thereto and the
Company's Unaudited Interim Consolidated Financial Statements and the Notes
thereto appearing elsewhere in this Prospectus. See "Index to Financial
Statements."

<TABLE>
<CAPTION>
ACTUAL PRO FORMA
-------- ---------
(000'S OMITTED)
<S> <C> <C>
Current maturities of long-term debt and short-term debt............. $ 17,946 $ 17,946
-------- --------
Long-term debt:
Senior Debt:
Revolving Credit Facility(a).................................... 98,100 7,014
Acquisition Facility(a)......................................... 67,307 --
Term Loan....................................................... 18,250 18,250
Secured equipment notes......................................... 8,453 8,453
Industrial revenue bonds........................................ 7,500 7,500
Capital lease obligations....................................... 31,220 31,220
Mortgages and other............................................. 1,376 1,376
Subordinated debt:
Notes(b)........................................................ -- --
Exchange Notes.................................................. -- 275,000
13 1/2% Notes(a)................................................ 100,000 --
-------- --------
Total long-term debt....................................... 332,206 348,813
-------- --------
Stockholders' equity:
Common stock, 12,902 shares issued................................. 129 129
Paid-in capital, net of treasury common stock and unearned
restricted stock................................................ 102,599 102,599
Retained deficit(c)................................................ (5,856) (11,332)
-------- --------
Total stockholders' equity................................. 96,872 91,396
-------- --------
Total capitalization....................................... $447,024 $ 458,155
======== ========
</TABLE>

- ---------------
(a) Upon the October 17, 1996, completion of the Offering, the Company used the
$268.1 million of net proceeds from such offering (i) to pay off the balance
outstanding under the Acquisition Facility, (ii) to establish the Escrow
Account and (iii) to pay down the outstanding balance under the Revolving
Credit Facility.

(b) Assumes that all Notes will be exchanged for a like amount of Exchange Notes
in the Exchange Offer.

(c) The increase in pro forma retained deficit reflects the after tax effect of
the extraordinary charge which the Company recorded on October 17, 1996, the
date of consummation of the Offering. Upon the depositing $109.7 million of
the proceeds from the Offering into the Escrow Account (which amount
included sufficient funds to complete the redemption (after considering
interest income on such amounts)), the Company deemed the 13 1/2% Notes to
be extinguished. The $9.1 million pre-tax charge represents the difference
between the amount deposited in the Escrow Account and the carrying value of
the 13 1/2% Notes, related accrued interest and related unamortized deferred
financing costs.

39
<PAGE> 40

SELECTED CONSOLIDATED HISTORICAL DATA

Set forth below is selected summary historical consolidated financial data
of the Company as of and for the five years ended December 31, 1995 which has
been audited, and as of and for the nine-month periods ended October 1, 1995 and
September 29, 1996 which is unaudited. The selected consolidated financial data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Consolidated Financial
Statements of the Company and related notes and other financial information
included elsewhere in this Prospectus. See "Index to Financial Statements."

<TABLE>
<CAPTION>
FOR THE
NINE MONTHS ENDED
FOR THE YEAR ENDED DECEMBER 31, --------------------------
---------------------------------------------------- OCTOBER 1, SEPTEMBER 29,
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- ---------- -------------
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Net sales.................................. $351,178 $396,604 $455,127 $563,153 $626,485 $ 474,387 $ 538,316
Cost of sales.............................. 307,030 346,193 392,652 481,676 555,478 419,072 470,745
-------- -------- -------- -------- -------- -------- --------
Gross income........................... 44,148 50,411 62,475 81,477 71,007 55,315 67,571
Selling, general and administrative
expenses................................. 20,996 19,671 20,270 24,798 27,369 20,590 21,103
Overhead reduction provision(a)............ -- -- -- -- 8,000 -- --
-------- -------- -------- -------- -------- -------- --------
Operating income....................... 23,152 30,740 42,205 56,679 35,638 34,725 46,468
Interest expense on borrowings............. 17,250 21,940 19,576 21,829 24,513 18,388 19,513
Amortization of deferred financing costs... 960 962 1,052 1,307 1,543 1,135 1,132
Consolidation expense(b)................... 1,433 887 622 463 327 245 --
Other expense.............................. 648 648 648 1,117 1,708 1,216 1,483
-------- -------- -------- -------- -------- -------- --------
Income before income taxes, minority
interest, extraordinary item and
cumulative effect of accounting
change............................... 2,861 6,303 20,307 31,963 7,547 13,741 24,340
Provision for income taxes................. 1,716 3,056 8,775 13,393 3,608 5,939 10,352
-------- -------- -------- -------- -------- -------- --------
Income before minority interest,
extraordinary item and cumulative
effect of accounting change.......... 1,145 3,247 11,532 18,570 3,939 7,802 13,988
Minority interest(c)....................... (5,937) (2,825) (608) -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Income (loss) before extraordinary item
and cumulative effect of accounting
change............................... (4,792) 422 10,924 18,570 3,939 7,802 13,988
Extraordinary item-loss from early
extinguishment of debt, net of income
taxes.................................... (5,244) -- (3,402) -- -- -- --
Cumulative effect of accounting change, net
of income taxes(d)....................... -- (12,537) -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income (loss)...................... $(10,036) $(12,115) $ 7,522 $ 18,570 $ 3,939 $ 7,802 $ 13,988
======== ======== ======== ======== ======== ======== ========
PRIMARY PER SHARE DATA(E):
Income (loss) before extraordinary item and
cumulative effect of accounting change... $ (1.37) $ (0.15) $ 1.16 $ 1.73 $ 0.31 $ 0.61 $ 1.07
Extraordinary item......................... (1.22) -- (0.37) -- -- -- --
Cumulative effect of accounting change..... -- (2.83) -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income (loss).......................... $ (2.59) $ (2.98) $ 0.79 $ 1.73 $ 0.31 $ 0.61 $ 1.07
======== ======== ======== ======== ======== ======== ========
Weighted average shares outstanding
(000's).................................. 4,287 4,428 9,212 10,714 12,839 12,833 13,070
OTHER DATA:
Capital expenditures....................... $ 13,775 $ 17,185 $ 22,010 $ 32,516 $ 31,379 $ 24,382 $ 23,400
EBITDA(f).................................. $ 36,957 $ 46,371 $ 58,492 $ 76,925 $ 68,625 $ 53,659 $ 68,697
Net cash from operating activities......... $ 18,961 $ 30,270 29,860 44,300 24,792 10,847 2,797
Net cash from investing activities......... $(13,368) $(46,104) (28,557) (88,488) (64,157) (52,887) (101,628)
Net cash from financing activities......... $ (362) $ 10,424 (1,346) 44,283 39,378 42,074 102,635
Ratio of earnings to fixed charges(g)...... 1.14x 1.26x 1.90x 2.25x 1.26x 1.64x 2.08x
</TABLE>

40
<PAGE> 41

<TABLE>
<CAPTION>
AS OF
AS OF DECEMBER 31, ---------------------------
-------------------------------------------------------- OCTOBER 1, SEPTEMBER 29,
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- ---------- -------------
(000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets.................. $ 76,004 $ 84,609 $ 99,551 $134,279 $147,185 $144,166 $ 235,826
Total assets.................... 243,411 280,184 306,588 400,724 455,436 449,665 624,156
Current liabilities............. 41,210 58,139 70,171 95,475 98,237 91,447 144,834
Total debt (including current
maturities)................... 192,900 202,668 182,822 200,646 244,576 246,685 350,152
Total stockholders' equity
(deficit)(h).................. (31,903) (44,000) 18,509 74,910 81,827 85,187 96,872
</TABLE>

(b) Annual consolidation expense charges to income represent interest costs
related to the reserves established for plant closings and are based on U.S.
Can's incremental borrowing rate at the time the discounted reserves were
established.

(d) Effective January 1, 1992, the Company changed its method of accounting for
postretirement benefits, other than pension, and its method of accounting
for income taxes. The accounting change for such postretirement benefits
resulted in a net non-cash charge of $12.5 million and decreased operating
income in 1992 by $1.2 million. The accounting change for income taxes was
immaterial in amount.

(e) Primary net income per common share amounts are computed by dividing net
income applicable to common stock (computed as net income less dividends
earned during the period on the Company's preferred stock and accretion on
the Company's redeemable warrants, such stock and warrants outstanding only
through March 1993) by the weighted average common shares and common
equivalent shares outstanding during the periods. Such average shares
include common shares outstanding and common shares subject to outstanding
dilutive stock options and stock purchase warrants. All shares issued in
1992 were treated as outstanding for all reported periods. In 1995, 1994 and
1993, common equivalent shares had a dilutive effect primarily from the
assumed exercise of certain outstanding stock options. See Note 8 on the
"Notes to Consolidated Financial Statements."

(f) Earnings before overhead reduction provision, interest expense, income
taxes, depreciation and amortization ("EBITDA") is presented because it is
commonly used by certain investors and analysts to analyze and compare on
the basis of operating performance and to determine a company's ability to
service and incur debt. EBITDA excludes the effects of minority interests
and extraordinary items. EBITDA is not a measure of financial performance
under generally accepted accounting principles and does not necessarily
indicate that cash flow will be sufficient to fund cash requirements.
Accordingly, EBITDA should not be considered in isolation from or as a
substitute for net income, cash flows from operating activities or other
consolidated income or cash flow statement data prepared in accordance with
generally accepted accounting principles or as a measure of profitability or
liquidity. EBITDA, as reflected above, is not the same as "EBIDTA" as
defined in the Indenture for the Exchange Notes. See "Description of
Exchange Notes."

(g) The ratio of earnings to fixed charges is expressed as the ratio of fixed
charges plus income before income taxes, minority interest, extraordinary
item and cumulative effect of accounting change to fixed charges. Fixed
charges include interest on borrowings, amortization of deferred financing
costs, consolidation expense, and the interest portion of rent expense.

(h) The significant increases in stockholders' equity in 1993 and 1994 were
primarily due to the Company's initial public equity offering in March 1993
and the Company's equity offering in November 1994, which resulted in net
increases of $48.6 million and $34.2 million, respectively.

41
<PAGE> 42

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In March 1993, the Company completed an initial public offering (the "IPO")
of Common Stock and contributed the net proceeds of $48.6 million to the capital
of U.S. Can. The net proceeds were used by U.S. Can to redeem preferred stock,
prepay outstanding debt and pay a prepayment penalty and other fees related to
that debt. In conjunction with the IPO, certain warrants, preferred stock, debt
and stock options of the Company were exercised, converted or exchanged for
shares of Common Stock. In November 1994, the Company completed a second public
offering of Common Stock and contributed the net proceeds of $34.2 million to
the capital of U.S. Can. The net proceeds were used by U.S. Can to prepay a
portion of the outstanding balance of its revolving line of credit.

Since 1993, the Company has made a number of acquisitions. In 1993, the
Company acquired certain assets of Olsher Metals Processing Corporation
("Olsher") and Spencer Container Inc. ("Spencer"). In 1994, the Company acquired
the stock of Steeltin and the assets of two affiliated companies, Eastern Metal
Decorating, Inc. ("EMD") and Eastern Container Company, Inc. ("ECC") (Steeltin,
EMD and ECC collectively referred to hereinafter as "Steeltin"); assets from
Midwest Can Company ("Midwest"); the stock of Ellisco; the stock of Rollason
Engineering & Manufacturing, Inc. ("Rollason"); the assets of a lithography
plant from Ball Corporation; and the metal packaging operations of Grafco
Industries Limited Partnership ("Grafco"). In 1995, the Company acquired the
stock of Plastite, Hunter Container Corporation ("Hunter") and Metal Litho
International and the assets of a related partnership ("MLI"), as well as
certain assets of Prospect Industries Corporation ("Prospect"). In April 1996,
the Company acquired the assets of AMS. The stock of the CPI Group and the stock
and assets of USC Europe were acquired in August 1996 and September 1996,
respectively. See "-- Acquisitions" and "Business -- Acquisitions."

In connection with the USC Europe Acquisition, consummated on September 11,
1996, Crown provided to the Company audited balance sheets and income statements
for USC Europe for the years 1993 through 1995. However, the various entities
which constitute USC Europe historically have been organized in a manner that
does not permit consolidation or combining of individual capital accounts, and
the financing and cash management for the various entities were centralized with
Crown or CMB in a manner that did not permit identification of cash flows at the
USC Europe level prior to the USC Europe Acquisition. Consequently, the Company
is unable to provide historical statements of cash flows and historical
statements of changes in stockholder's equity for USC Europe for the periods
prior to the USC Europe Acquisition, and therefore the Company cannot meet the
requirements of Rules 3-02 and 3-04 of Regulation S-X to file statements of cash
flows and statements of changes in stockholder's equity for USC Europe. The
staff of the Commission, in a letter dated September 19, 1996, has indicated
that so long as the Company presents financial information concerning USC Europe
consisting of combined statements of financial position and combined statements
of operations prepared in conformity with United States Generally Accepted
Accounting Principles ("GAAP") for all periods specified by Rules 3-02 and 3-05
of Regulation S-X, the staff of the Commission will not object to the Company's
presentation of financial data regarding USC Europe. However, the Commission
staff has stated that, in light of the significance of USC Europe to the
Company, narrative discussion of the operating cash flow characteristics of USC
Europe, quantified to the extent practicable, should be provided. The Commission
staff also stated that historical investing and financing transactions that
would be material to a shareholder's understanding of the operations of USC
Europe should also be disclosed and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" of the Company should include
discussion of the reasonably likely effects of the acquisition of USC Europe on
the Company's cash flows, liquidity, capital resources and results of
operations. For information with respect to these matters, see "-- Liquidity and
Capital Resources -- Historical."

The financial statements for USC Europe supplied by Crown and included in
this Prospectus have been prepared in accordance with international accounting
principles issued by the International Accounting Standards Committee. These
principles, as applied to the USC Europe combined financial statements included
as part of this Prospectus, do not differ materially from GAAP with the
exception of

42
<PAGE> 43

certain disclosure requirements. Such combined financial statements are not
intended to be a complete presentation of USC Europe's financial position or
cash flows. See "Index to Financial Statements."

RESULTS OF OPERATIONS

Nine-Month Period Ended September 29, 1996 vs. Nine-Month Period Ended October
1, 1995

Net Sales

Net sales for the nine-month period ended September 29, 1996 totaled $538.3
million, an increase of 13.5% over the corresponding period in 1995. Sales gains
for the year-to-date period reflect volume gained through acquisitions
(approximately $53.8 million) as well as volume growth in substantially all of
the Company's products. The Company has realized additional sales as a result of
the MLI, Plastite, Hunter and Prospect acquisitions in 1995 and the AMS and CPI
Group acquisitions in 1996.

Gross Income

Gross income of $67.6 million for the first nine months of 1996 was $12.3
million, or 22.2%, higher than gross income for the first nine months of 1995.
The AMS and CPI Group acquisitions and higher margins on certain products
contributed to this increase. Gross margin increased to 12.6% of net sales in
the first nine months of 1996 from 11.7% of net sales in the first nine months
of 1995 despite a significant advance purchase of steel in late 1994 which
resulted in the Company not realizing the full impact of the 1995 steel price
increase in the first quarter of 1995. Volume gains with stable costs
contributed to improved performance.

Operating Income

The Company's operating income of $46.5 million for the first nine months
of 1996 was $11.7 million, or 33.8%, higher than operating income for the first
nine months of 1995. Income was favorably impacted by increased sales, improved
margins and the effect of an overhead reduction program begun in late 1995.
Operating income as a percent of net sales was 8.6% for the first nine months of
1996 as compared to 7.3% for the first nine months of 1995. The Company
experienced a slight increase in selling, general and administrative expenses
period to period. However, these expenses as a percent of net sales decreased
from 4.3% of net sales in the first nine months of 1995 to 3.9% of net sales in
the first nine months of 1996. Increased diversification into metal services,
plastics and Europe is expected to temporarily restrain margin growth until
those new operations are assimilated into the Company.

Interest and Other Expenses

Interest expense on borrowings increased by approximately $1.1 million in
the first nine months of 1996 as compared to the first nine months of 1995. The
increase is a result of increased borrowing, primarily to finance the Company's
acquisitions. Amortization of deferred financing costs and other expense
remained flat in the first nine months of 1996 as compared to the first nine
months of 1995.

Net Income

Due to the factors discussed above, net income was $14.0 million, up 79.3%,
in the first nine months of 1996. Primary earnings per share were $1.07 for the
first nine months of 1996, compared to $0.61 per share in the first nine months
of 1995. Weighted average shares outstanding increased slightly from period to
period.

Year Ended December 31, 1995, as Compared to Year Ended December 31, 1994

Net Sales

Net sales for the year ended December 31, 1995, totaled $626.5 million, an
increase of 11.2% over net sales in 1994. The 1994 acquisition of Ellisco and
acquisitions completed in 1995 were the primary factors contributing to the
sales growth. Increased volume in metal services also contributed to the sales

43
<PAGE> 44

growth. 1995 sales of aerosol containers were down slightly, while sales of
round and general line containers increased slightly, compared to 1994. The
Company believes the weak demand in its core product lines was due to summer
weather conditions unfavorable for outdoor activities and painting and due to
inventory adjustments by major retailers which use the Company's products. The
Company experienced some increased demand in aerosol and round paint containers
in the fourth quarter of 1995 but demand did not return fully to more
traditional levels until December.

Gross Income

Gross income for 1995 was $71.0 million, 12.9% lower than gross income in
1994. Weak second half demand for aerosol, round and general line containers
resulted in underutilization of manufacturing capacity. This underutilization
and lower than anticipated income contributions from certain 1995 acquisitions
contributed to the decrease in gross income. Competitive pressures in the face
of weak demand precluded the Company from fully recovering cost increases with
corresponding increases in selling prices. Gross margin decreased from 14.5% of
net sales in 1994 to 11.3% of net sales in 1995.

Operating Income

During the fourth quarter of 1995, the Company recorded an $8.0 million
pretax charge for a plant consolidation and overhead reduction program. The
primary components of the charge include costs associated with severance
packages and the cessation of manufacturing at the Saddle Brook, New Jersey
facility. Selling, general and administrative expenses increased by $2.6 million
in 1995, as compared to 1994, due to acquisitions and the costs associated with
the terminated Massilly, S.A. ("Massilly") investment. This provision, the
increase in selling, general and administrative expenses and the factors
described above resulted in operating income of $35.6 million for 1995, compared
to $56.7 million in 1994. Operating income before the overhead reduction
provision was $43.6 million. Selling, general and administrative expenses, as a
percentage of net sales, were 4.4% for both 1995 and 1994.

Interest and Other Expenses

Interest expense on borrowings increased by $2.7 million in 1995, as
compared to 1994. The increase is a result of increased borrowing primarily to
finance the Ellisco acquisition in 1994 and the MLI, Plastite, Prospect and
Hunter acquisitions in 1995, net of the effect of using the net proceeds from
the Company's public offering of Common Stock in 1994 to reduce debt.
Amortization of deferred financing costs and other expense also increased in
1995. The increase was primarily a result of new borrowings and goodwill
amortization related to acquisitions.

Net Income

As a result of the factors discussed above, the Company recorded net income
of $3.9 million ($0.31 per share) in 1995, compared to $18.6 million ($1.73 per
share) in 1994. Net income was adversely affected by $4.8 million ($0.38 per
share) as a result of the overhead reduction provision.

Year Ended December 31, 1994, as Compared to Year Ended December 31, 1993

Net Sales

Net sales for the year ended December 31, 1994, totaled $563.2 million, an
increase of 23.7% over 1993 net sales. Increased unit volumes in aerosol
containers, round and general line, metal services and custom and specialty
products were the principal factors contributing to the sales growth. The
increase in volume for the period was attributable in significant part to the
acquisitions of Steeltin and Ellisco, both of which were completed in the first
quarter of 1994. The acquisition of Olsher in May 1993 also contributed to this
increase in volume.

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Gross Income

Gross income in 1994 was $81.5 million, 30.4% higher than gross income for
the prior year. The aforementioned increased unit volumes, resulting primarily
from acquisitions, modest price increases on certain products and operating
efficiencies resulting from ongoing capital expenditure programs, were major
factors that contributed to the increase in gross income. The increase was
partially offset by a $0.5 million charge for an early-retirement program
offered to certain employees. Gross margin increased to 14.5% from 13.7%
year-to-year due to modest price increases on certain products and operating
efficiencies.

Operating Income

Operating income of $56.7 million for the year ended December 31, 1994 was
$14.5 million, or 34.3%, greater than operating income for the year ended
December 31, 1993. Operating income as a percent of net sales was 10.1% for 1994
as compared to 9.3% for 1993. Selling, general and administrative expenses
increased in absolute terms in 1994 as compared to 1993 due, in part, to the
acquisitions of Steeltin, Ellisco and Rollason. However, these expenses as a
percentage of net sales declined from 4.5% of net sales in 1993 to 4.4% of net
sales in 1994 due to the fixed nature of a majority of the Company's selling,
general and administrative expenses.

Interest and Other Expenses

Interest expense on borrowings increased by $2.3 million in 1994 from 1993.
The increase is a result of increased borrowing in 1994 primarily to facilitate
the Steeltin and Ellisco acquisitions, net of the effects of the use of proceeds
from the Company's public offering of Common Stock in 1994 to reduce debt.
Amortization of deferred financing costs and other expense increased in 1994 as
compared to 1993. The increase is primarily a result of new borrowings and
goodwill amortization related to the Steeltin and Ellisco acquisitions.

Income Before Minority Interest and Extraordinary Item

Income before minority interest and extraordinary item increased to $18.6
million (3.3% of net sales) for 1994 from $11.5 million (2.5% of net sales) for
1993. Increased unit volumes from acquisitions and operating efficiencies
resulting from the Company's ongoing capital expenditure programs contributed to
income gains.

Net Income

The Company had net income of $18.6 million in 1994 compared to net income
of $7.5 million in 1993. Increased net sales, better profitability due to
operating efficiencies, the absence of a charge for minority interest and the
absence of costs related to the early extinguishment of debt in 1994 contributed
to the increase in net income. In 1993, as a result of the retirement of the
Company's 12% senior term notes, certain prepayment penalties and deferred
financing costs were expensed as an extraordinary loss. This charge equaled $3.4
million on an after-tax basis. The results for 1993 also reflected $0.6 million
of the minority interest of the holders of U.S. Can's Class 1 Preferred Stock
par value $.01 per share (the "Class 1 Preferred Stock"). All remaining shares
of U.S. Can's Class 1 Preferred Stock were redeemed, and earned but unpaid
dividends thereon were paid, in March 1993 with a portion of the proceeds of the
IPO.

LIQUIDITY AND CAPITAL RESOURCES

Historical

During the last three fiscal years and for the nine months ended September
29, 1996, the Company has met its liquidity needs primarily through internally
generated cash flows, borrowings under its credit lines and proceeds of
securities offerings. Principal liquidity needs have included operations,
repayment

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<PAGE> 46

of indebtedness and related interest, redemption of preferred stock, capital
expenditures and acquisitions. The Company entered into the sale of the Notes on
October 17, 1996 in order to replace the 13- 1/2% Notes with lower-interest
debt, in order to retire the temporary financing obtained in connection with
several acquisitions in 1996, including the USC Europe Acquisition, and in order
to make a change to the Company's capital structure to shift to a longer-term,
fixed rate financing structure from shorter term, variable rate bank financing.

From 1991 to 1994, the Company improved its cash flow from operations
through increased unit volumes, improved operating efficiencies, control of
selling, general and administrative costs and careful management of inventory
and receivables. Cash flow in 1995 was negatively impacted by higher material
costs, competitive pricing, weak demand in major markets and retail inventory
adjustments. The Company actively manages its working capital as both
inventories and receivables increase due to increased sales. The USC Europe
Acquisition will have an adverse impact on consolidated inventory turns and
receivable days outstanding due to business practices in Europe.

In April 1994, U.S. Can entered into the Senior Credit Agreement providing
a $130 million line of credit, consisting of the $95 million Revolving Credit
Facility and a $35 million senior term loan (the "Term Loan"). The Senior Credit
Agreement replaced the former $65 million revolving credit facility as well as
two supplemental credit facilities, and initial borrowings under the Senior
Credit Agreement were used to repay those facilities. Funds available under the
Senior Credit Agreement have been used for working capital and other general
corporate purposes, including acquisitions. Obligations under the Senior Credit
Agreement are secured by U.S. Can's inventories and accounts receivable, and the
Term Loan is also secured by a mortgage on United States Can Company's Elgin,
Illinois plant and certain equipment located at that plant.

In early April 1996, the Senior Lenders provided a temporary $10 million
increase in the Revolving Credit Facility due to seasonal inventory
requirements. In late April 1996, the Senior Lenders provided an additional
temporary $20 million increase in the Revolving Credit Facility to fund the
acquisition of AMS. In July 1996, the Senior Lenders provided the Company with
an additional line of credit (the "Acquisition Facility") to fund certain
permitted acquisitions, including the Acquisitions. In connection with the USC
Europe Acquisition, the Company pledged 65% of the stock of the European
subsidiaries pursuant to the amended terms of the Senior Credit Agreement. All
of the supplemental facilities, including the Acquisition Facility, were
terminated on October 17, 1996, the closing date of the Offering described
below. See "Description of Certain Indebtedness."

Under the terms of the Senior Credit Agreement, $11 million of the term
loan had been repaid as of October 31, 1996. As of September 29, 1996, U.S. Can
had borrowings of $191.4 million outstanding under the Senior Credit Agreement,
$11.7 million in letters of credit had been issued pursuant thereto, and $15.2
million of unused credit (excluding unused credit under the Acquisition
Facility) remained available thereunder. As of November 7, 1996, following the
termination of the supplemental facilities, U.S. Can had borrowings of $34.0
million outstanding under the Senior Credit Agreement, $11.7 million in letters
of credit had been issued pursuant thereto, and $73.3 million of unused credit
remained available thereunder.

On October 17, 1996, U.S. Can Corporation sold $275 million principal
amount of Notes in a private placement. Of the $268.1 million net proceeds to
the Company from the Offering, (i) approximately $109.7 million was deposited in
an escrow account to be employed solely for the purpose of redeeming the
Company's outstanding 13 1/2% Notes on or immediately after January 15, 1997,
the first date for optional redemption thereof by the Company, and for paying
all remaining interest thereon; (ii) approximately $67.3 million of the net
proceeds were used to repay all outstanding indebtedness under the Acquisition
Facility; and (iii) approximately $91.1 million of the net proceeds were used to
repay a portion of the Revolving Credit Facility.

The Company's capital expenditures for the nine months ended September 29,
1996 were $23.4 million, and totaled $31.4 million in 1995, $32.5 million in
1994 and $22.0 million in 1993. In each case,

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<PAGE> 47

these capital expenditures included investments in new can production lines,
paint can line enhancements, advanced lithography technology and computer
integrated manufacturing, to increase manufacturing capacity, reduce changeover
times and improve productivity. The Company has also invested capital in plant
expansions and the installation of state-of-the-art end-making presses and
automated packaging equipment.

USC Europe has met its liquidity needs since January 1995 principally
through internally generated cash flows or advances from its previous owners.
Working capital increased to $25.1 million as of June 30, 1996 from $24.4
million and $15.0 million as of December 31, 1995 and 1994, respectively. Net
income plus non-cash depreciation and amortization charges and less the change
in working capital amounted to $4.5 million and ($0.5 million) for the six
months ended June 30, 1996 and the year ended December 31, 1995, respectively.
Based on information provided to the Company by Crown, capital expenditures for
USC Europe were approximately $4.6 million, $8.5 million and $4.8 million for
the six months ended June 30, 1996 and the years ended December 31, 1995 and
1994, respectively. Indebtedness of USC Europe decreased from $12.6 million as
of December 31, 1994 to $10.8 million as of December 31, 1995 and $8.9 million
as of June 30, 1996. Changes to Crown's net investment in USC Europe, excluding
the effect of net income on such investment, was an increase of $11.2 million
during the year ended December 31, 1995 and a decrease of $2.2 million during
the six months ended June 30, 1996. Based on USC Europe's performance in the six
months ended June 30, 1996, the Company expects that USC Europe will increase
the Company's consolidated cash flows, enhance its liquidity and improve
consolidated results of operations.

After the Offering and Exchange Offer

After giving effect to the Offering and the application of the net proceeds
therefrom (including redemption of the 13 1/2% Notes) and the Exchange Offer,
the Company's total debt as of September 29, 1996 would have been approximately
$366.8 million, and scheduled principal payments (excluding principal payments
due under the Revolving Credit Facility) would have been approximately $4.6
million for the nine-months ended September 29, 1996, and $20.2 million, $25.3
million, $7.5 million and $2.8 million for the years 1997, 1998, 1999 and 2000,
respectively. All amounts outstanding under the Revolving Credit Facility are
required to be repaid in 1998. Management believes that, through the Offering
and the Exchange Offer, the Company has and will improve its capital structure
and increase its ability to finance its capital requirements. Management
believes these transactions have and will improve the Company's capital
structure, and, as a result, the Company will be able to commit greater
resources to its capital programs and reduce financing costs, thereby improving
its cash flow.

On a pro forma basis after giving effect to the Acquisitions, the Offering
and the application of the net proceeds therefrom (including the redemption of
the 13 1/2% Notes) and the Exchange Offer, interest expense on borrowings, net
income and earnings per share for the nine months ended September 29, 1996 would
have been $26.4 million, $13.2 million and $1.01, respectively. These pro forma
amounts represent an increase of $2.6 million, a decrease of $1.7 million and a
decrease of $0.13, respectively, from the pro forma amounts after giving effect
only to the Acquisitions and an increase of $6.9 million, a decrease of $0.8
million and a decrease of $0.06, respectively, from historical amounts. The
Company expects that the increase in borrowings to finance the Acquisitions and
the refinancing of certain borrowings in conjunction with the Offering and the
Exchange Offer will increase annual after-tax interest expense by approximately
$4.5 million.

In 1996, the Company expects to spend $40 to $45 million on capital
expenditures, including those in Europe. The Company expects to spend
approximately $300 million on capital expenditures during the five years
commencing in 1997 in roughly equal annual amounts. The Company expects to make
capital expenditures principally for improvements in the productivity and
quality of lithography operations, continued technological enhancement of
existing equipment, automation of existing processes, computer-integrated
manufacturing techniques, quality and service improvements, facility expansion,
and, if necessary to meet demand, additional can-making capacity. For the new
facility in the United Kingdom, the Company will invest $20 million over the
next two to three years establishing a state-of-the-

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art manufacturing operation. The Company's capital investments have historically
yielded reduced operating costs and improved the Company's profit margins, and
management believes that it will be able to reduce operating costs and improve
profit margins through future capital investments. Management believes that cash
flow from operations, amounts available under its senior credit facilities and
proceeds from equipment financings should provide sufficient funds for this
five-year capital expenditure program. The Indenture restricts the ability of
the Company to incur indebtedness to use for capital expenditures.

Following completion of the Offering and the application of the net
proceeds thereof management believes that cash flow from operations, amounts
available under its revolving lines of credit and proceeds from equipment
financings should provide sufficient funds to meet short-term and long-term
capital expenditure and debt amortization requirements, and other cash needs in
the ordinary course of business. The Company believes it will be able to
refinance the Revolving Credit Facility on or prior to maturity. If future
strategic acquisition opportunities arise, the Company would expect to finance
them though some combination of cash, stock and/or debt financing.

ACQUISITIONS

In January 1994, U.S. Can acquired the stock of Steeltin and assets of two
related companies. Steeltin was subsequently merged into U.S. Can. The total
cost of this transaction was approximately $19.1 million in cash, plus the
assumption of approximately $1.6 million of debt. In March 1994, U.S. Can
acquired the stock of Ellisco from CSS Industries, Inc. and certain minority
shareholders for approximately $32.2 million. Ellisco was merged into U.S. Can.

In the first quarter of 1995, U.S. Can acquired the stock of MLI and the
stock of Plastite for an aggregate amount of approximately $17.4 million in
cash, plus the assumption of debt and certain future contingent payments. Both
MLI and Plastite were subsequently merged into U.S. Can. In April 1995, U.S. Can
acquired certain assets from Prospect for approximately $8.8 million, and, in
May 1995, U.S. Can acquired the stock of Hunter for approximately $4.0 million,
plus the assumption of certain debt. Hunter was subsequently merged into U.S.
Can.

In April 1996, U.S. Can completed the acquisition of assets of AMS from
Alltrista for a purchase price of approximately $14.9 million. Subsequent to the
purchase of the AMS assets, U.S. Can negotiated for the purchase of additional
assets, including inventory and supplies from Alltrista. In June, 1996, U.S. Can
purchased such additional assets from AMS for a total of approximately $8
million on an installment basis with the final payment of $2.2 million being
paid on October 25, 1996 using borrowings made by U.S. Can under the Revolving
Credit Facility.

In August 1996, U.S. Can completed the acquisition of all of the
outstanding stock of the CPI Group for approximately $15.1 million subject to
potential future contingent payments which payments are not to exceed $1
million. Potential contingent payments are equal to 50% of the amount, if any,
by which an amount representing adjusted gross profit of the CPI Group in 1996
and 1997 exceeds such amount for the year 1995. Subsequent to the acquisition,
the CPI Group companies were merged into U.S. Can.

The Company completed the USC Europe Acquisition on September 11, 1996. USC
Europe has aerosol can businesses located in the United Kingdom, France, Spain
and Germany, as well as certain aerosol can-making equipment in Italy. The
purchase price included $52.8 million in cash and the assumption of net
indebtedness totaling $5.8 million, subject to a post-closing adjustment for
changes in working capital between April 30, 1996 and the closing of the USC
Europe Acquisition on September 11, 1996.

The Company may, subject to restrictions imposed by certain existing
indebtedness, incur additional indebtedness to finance expansion of its presence
in the packaging industry through acquisitions and investments in other
companies. For a description of such restrictions, see "Description of Certain
Indebtedness" and "Description of Exchange Notes." Management believes the
operating efficiencies resulting from the Company's capital expenditure program
will generate additional cash which may be used to finance acquisitions,
investments and new business initiatives.

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ENVIRONMENTAL MATTERS

The Company's domestic and foreign operations are subject to extensive
governmental regulatory requirements relating to environmental protection. As
part of its compliance effort, management has commissioned outside technical
consultants to work in concert with the Company's internal environmental group
to implement a company-wide environmental auditing program. Based on the 1995
audit results and reports prepared in connection with the AMS acquisition and
the subsequent CPI Group and USC Europe acquisitions, management believes that
the Company's current operations are in substantial compliance with applicable
environmental laws and regulations, the violation of which could have a material
adverse effect on the Company. The Company is in the process of integrating USC
Europe into its environmental management system and will be evaluating its
ongoing compliance responsibilities during this process. There can be no
assurance, however, that currently unknown matters, new laws and regulations or
stricter interpretations of existing laws and regulations will not materially
affect the Company's business or operations in the future.

The Company has made, and expects to continue to make, significant capital
expenditures to upgrade its facilities in accordance with current and pending
environmental regulations. Most notably, the Company has undertaken an
approximately $5.7 million program (of which $3.9 million had been spent as of
September 29, 1996) to upgrade its lithography centers to comply with scheduled
Clean Air Act requirements in the United States. In the United Kingdom, a
thermal oxidizer has been ordered and will be installed at USC Europe Southall
facility in Middlesex, England at an estimated cost of approximately $800,000 to
comply with air emissions regulations there.

As of September 29, 1996, the Company's reserves for future ascertainable
costs of environmental remediation in the United States were approximately
$360,000. Management does not believe that such costs, if any, in excess of the
reserve will have a material adverse affect on the Company's results of
operations or financial condition. In making this assessment, the Company
considered all information available to it including its and other companies'
reported prior experience in dealing with such matters, data released by the EPA
and reports by independent environmental consultants regarding certain matters.
In estimating the ascertainable costs of environmental remediation, management
has not taken into account (i) any potential insurance recovery or (ii)
indemnification rights to which it may be entitled. In conjunction with its
acquisitions, the Company routinely obtains indemnification for environmental
matters from the sellers. Such indemnification is typically subject to varying
"baskets" or deductibles and maximum limitations and is ultimately subject to
the credit-worthiness of the indemnitor.

With respect to the USC Europe facilities, no subsurface sampling has been
performed to identify possible contamination. Several of the facilities have
been operating at their locations for more than ten years and according to a
survey conducted by an independent environmental consultant it is likely that
there have been releases of hazardous substances at these locations in the past.
The Company lacks an operating knowledge of these facilities and there can be no
assurance that there are not significant environmental liabilities unknown to
the Company. However, management has been advised by an independent
environmental consultant familiar with United Kingdom and German law and policy
with respect to remediation requirements, that the local authorities are
unlikely to propose or enforce stringent remediation requirements which would
affect the commercial viability of either the German or the British facilities
given their location in heavily industrialized areas. Moreover, the Company has
been indemnified by Crown as to environmental conditions at these sites.
Management believes that any future requirement to remediate these sites will
not have a material adverse effect on the Company's financial condition or
results of operations.

In June 1996, the Company completed the purchase of three facilities from
Alltrista. Substantial soil and groundwater contamination has been identified
beneath the former Alltrista facility in Chicago, Illinois caused by underground
storage tank releases. Prior to the purchase by the Company, Alltrista had
proposed a risk assessment to the Illinois Environmental Protection Agency (the
"IEPA") to obtain a determination that no remediation is required. The IEPA has
not responded to that request. In evaluating the site the Company has identified
additional sub-surface issues which were not included in the risk assessment. In
the acquisition agreement between the Company and Alltrista, Alltrista agreed to

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indemnify the Company for costs of remediation either required to be performed
by law or reasonably required to market and sell the property at or near its
appraised value, as well as compliance costs that relate back to Alltrista's
operation of AMS.

In 1995, the Company acquired the stock of the Hunter Corporation based in
Vernalis, California and entered into a lease of the facility with Norman
Hunter, the former stockholder. Significant groundwater contamination involving
chlorinated solvents has been identified beneath the facility. Mr. Hunter has
been performing investigations of the contamination and has agreed to indemnify
the Company for required remediation up to an amount representing the full
purchase price paid to Mr. Hunter. While management believes Mr. Hunter will
finance and complete any necessary remediation at the Vernalis facility, there
can be no assurance that the Company will not incur costs or liability in
connection with such remediation; however, based on information available as of
the date of this Prospectus, management does not believe that aggregate
remediation costs or other liability in connection with the possible
contamination at this site would have a material adverse effect on the Company's
financial condition or results of operations.

As a result of its acquisition of the stock of the CPI Group, the Company
is operating a leased plastics molding facility in Newnan, Georgia. Prior to its
acquisition by the Company, CPI Plastics Inc. entered into a Consent Order with
the Georgia Department of Environmental Protection to operate a groundwater
remediation system at the Newnan site. The former stockholders of CPI Plastics
Inc. have retained liability for remediation and monitoring of the groundwater
contamination and agreed to indemnify the Company with respect thereto. While
management believes that such former stockholders will finance and complete any
necessary remediation and monitoring at the Newnan facility, there can be no
assurances that the Company will not incur costs or liability in connection with
such remediation; however, based on information available as of the date of this
Prospectus, management does not believe that aggregate remediation costs or
other liability in connection with the possible contamination at this site would
have a material adverse effect on the Company's financial condition or results
of operations.

The Company understands that the groundwater in San Leandro, California
(formerly a site of one of the Company's can assembly facilities) is
contaminated at shallow and intermediate depths, and that the area of concern
partially extends to the groundwater below the facility formerly owned by the
Company. The California Regional Water Quality Control Board originally examined
contamination issues involving the site but did not, in 1989-91, require any
remediation. The Company did expend approximately $375,000 in voluntary ground
remediation of a potential contamination site on this property at that time. The
California Department of Toxic Substances Control ("CDTSC") identified regional
groundwater contamination concerns for this area and has been trying to define
and delineate the areas of possible contamination and the sources of the
contamination on a regional basis. In late April 1996, the CDTSC issued to
certain of the past and present owners of this facility, including U.S. Can, an
order directing such owners to conduct remediation activities at this site;
however, no specific form of remediation was indicated. Representatives of the
Company met with the CDTSC in response to the order and agreed to undertake
additional site assessment work with the purpose of producing a site
characterization to determine with greater focus the nature of the
contamination. In January 1997, the Company received results from on-site
investigations conducted by an independent environmental consultant. Those
results indicated that, while no evidence of soil contamination in the studied
areas was found, there is a substantial probability that soil beneath one area
of the facility has had an impact on site groundwater. Additionally, groundwater
in the vicinity has been impacted by contaminants which appear to be migrating
on-site from upgradient sources. Recently, the Company received a notice from
the CDTSC requiring that they deliver a site characterization report on the site
sampling and investigative results no later than February 3, 1997. The San
Leandro facility was closed in 1989 and was sold, except for a related parcel of
land, in 1994. The remaining parcel was sold in 1995. In connection with the
sale, the Company agreed to indemnify the purchaser against any environmental
claims related to the Company's ownership of the property. There can be no
assurance that the Company will not incur material costs and expenses in
connection with the CDTSC order.

In connection with a 1993 asset purchase, the Company entered into an
Administrative Consent Order ("ACO") with the New Jersey Department of
Environmental Protection ("NJDEP"). The ACO requires U.S. Can to investigate and
remediate certain environmental concerns at the Saddle Brook, New Jersey
facility. As provided in the ACO, U.S. Can is entitled to reimbursement for the
cost of such

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activities on a quarterly basis from an escrow account into which $3 million was
deposited by U.S. Can as part of its purchase price for the assets. The ACO
limits U.S. Can's liability under New Jersey environmental laws in this respect
to the $3 million deposited in the escrow account. This limitation does not,
however, limit U.S. Can's liability for clean-up costs resulting from its own
activities in the event of a sale, or other transfer of control, of U.S. Can or
the facility. However, in 1995, the NJDEP approved the closure of the
manufacturing facility based on the remediation performed pursuant to the ACO.
The Company recently submitted its closure plan to the NJDEP documenting that
the clean-up is complete, and is awaiting the NJDEP's approval of the closure.
The costs incurred to achieve the closure described in the plan were
substantially less than the $3 million in escrow.

As a potentially responsible party ("PRP") at the Galaxy-Spectron Superfund
site in Elkton, Maryland, the Company is legally responsible, jointly and
severally with the other members of the PRP group, for the cost of remediation
of this site. The Company and other PRPs have entered into certain
liability-sharing agreements, the terms of which have been approved by the EPA.
The Company represents approximately 0.1% of the total known volume at the site.
Pursuant to these agreements and the Company's liability allocation, the Company
expects that its share of the remaining remediation costs will be de minimis. In
September 1995, U.S. Can and more than 600 other PRPs received a special Notice
for Negotiations for Remedial Investigation/Feasibly Study ("RI/FS") from the
EPA. This notice sets a period for PRPs to negotiate a consent agreement with
the EPA to conduct the RI/FS for determining the final remedy at the Spectron
Superfund site. On November 21, 1995, the Company responded to this Special
Notice by submitting a form supplied by the PRP Group stating that the Company
would be interested in participating in a settlement as a de minimis settlor.
The Company has not received any response to this submittal.

The Company recently received a General Notice of Liability letter dated
November 14, 1996 from the EPA regarding the Malvern TCE Superfund Site
(Chemclene Corporation) located in Malvern, Pennsylvania. This notice was
addressed to management at Ellisco Industries, the stock of which was purchased
by the Company in March 1994. The letter alleges that Ellisco is one of a number
of PRPs at the site. The Company acquired the stock of Ellisco in 1994 and as of
the date of this Prospectus, the Company is evaluating information regarding the
site to determine the extent, if any, of its liability.

On November 18, 1996 the Company became aware of a notice of General
Liability letter issued by the New Jersey Department of Environmental Protection
dated November 22, 1995 identifying the Company as a Potentially Responsible
Party under the New Jersey Spill Compensation and Control Act with respect to a
release of hazardous materials at the Barone Barrel & Drum Company in Paterson,
New Jersey. These documents indicate that the state has incurred approximately
$300,000 in costs to remove hazardous materials from this site. These documents
also indicate the appropriate party in interest to have received this notice was
Jersey Steel Drum Corporation which may be related to Prospect Industries
Corporation. The Company purchased the assets of Prospect Industries Corporation
in April 1995. Prospect Industries is one of a number of PRPs and at the time of
this Prospectus, the Company is evaluating information regarding the site to
determine the extent, if any, of its liability.

On August 30, 1996, the Company received a General Notice of Potential
Liability from the EPA regarding the Master Metals, Inc. site in Cleveland,
Ohio. The letter alleges that the Company is a PRP in that it generated
hazardous materials disposed at the site. The Company is one of a number of PRPs
and, as of the date of this Prospectus, it is evaluating information regarding
the site to determine the extent, if any, of its liability. Based on information
available as of the date of this Prospectus, management does not believe that
aggregate remediation costs or other liability in connection with the possible
contamination at this site would have a material adverse effect on the Company's
financial condition or results of operations.

A portion of U.S. Can's facility at Burns Harbor, Indiana is regulated as a
treatment, storage or disposal facility ("TSDF") under the Federal Resource
Conservation and Recovery Act. The Company installed a soil vapor extraction and
air sparging system to remediate soil and groundwater contamination in order to
complete the closure of the TSDF in accordance with a closure plan approved by
the Indiana Department of Environmental Management. Management estimates that
total future monitoring activities will cost approximately $125,000 which will
be expended over a five-year period.

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With respect to each of the matters discussed above, there can be no
assurance that the Company will not be required to pay environmental compliance
costs or to incur liabilities that may be material in amount. Based on
information available as of the date of this Prospectus, management does not
believe that aggregate remediation costs or other liability in connection with
the possible contamination at these sites would have a material adverse effect
on the Company's financial condition or results of operations. Further, although
at this time there are no environmental compliance costs which Management
believes to be material there can be no assurance that the Company will not be
required to pay environmental compliance costs or to incur liabilities that may
be material in amount due to matters which arise in the future or matters which
are not known to the Company as of the date of this Prospectus.

LITIGATION

On February 28, 1995, Continental Holdings Inc. ("CHI"), an affiliate of
Peter Kiewit Sons', Inc. ("Kiewit"), filed a Complaint against U.S. Can and
others in the United States District Court, District of New Jersey, asserting
claims based upon alleged indemnity and reimbursement obligations of U.S. Can to
Kiewit, as successor interest to Continental Can Company, USA, Inc. ("CCC"),
arising from the 1987 acquisition by U.S. Can of the general packaging business
of CCC. These alleged obligations relate to environmental liabilities,
reimbursable insurance deductibles and reinsurance amounts, and certain personal
injury claims and employment discrimination claims. The Complaint includes
counts for breach of contract, declaratory judgment, indemnification and
contribution, certain statutory remedies, state environmental law remedies and
unjust enrichment. CHI seeks unspecified compensatory damages, consequential and
incidental damages, interest, attorneys' fees and costs of litigation, equitable
relief, environmental response costs, and restitution. No aggregate dollar
amount of damages is specified in the Complaint. However, in an initial
discovery disclosure served on U.S. Can, CHI alleged that its damages to the
date of such disclosure were approximately $4.4 million. U.S. Can has filed an
Answer to the Complaint, asserted affirmative defenses, and made counterclaims
against CHI seeing reimbursement for expenses and accruals relating to
postretirement medical and life insurance benefits for former employees of CCC,
and expenses incurred as a result of CCC's breach of its contractual
indemnification obligation to U.S Can. The case has been transferred to the
United Stares District Court for the Northern District of Illinois. U.S. Can
believes it has meritorious defenses to all of CHI's claims.

For a discussion of the San Leandro, California remediation order, the
Master Metals, Inc. site in Cleveland, Ohio, the Malvern TCE Superfund Site in
Malvern, PA, and the Barone Barrel & Drum Company site in Newark, NJ, see
"-- Environmental Matters."

The Company is involved in various other environmental and legal actions
and administrative proceedings. Management is of the opinion that their outcome
will not have a material effect on the Company's financial position or results
of operations.

SEASONALITY

The Company's business on the whole is not affected to any significant
degree by seasonal variations, although quarterly sales and earnings tend to be
slightly stronger starting in early spring (second quarter) and extending
through late summer (third quarter). Aerosol sales tend not to fluctuate during
the year, with only relatively minor spring and summer increases related to
household products and insect repellents. Paint sales tend to be stronger in
spring and early summer due to the favorable weather conditions. Portions of the
custom and specialty products line tend to vary seasonally, because holiday
sales result in improvement late in the year.

INTEREST RATES

Management does not believe that interest rate fluctuations have a material
effect on the Company's results of operations and financial condition. As of
September 29, 1996, 58.5% of the Company's borrowings were floating rate
obligations. To the extent that there is a rise in interest rates on the
floating rate obligations, the Company's future reported results of operations
could be adversely affected. There are numerous methods available to the
Company, including, but not limited to, interest rate caps and swaps, to
mitigate the effect of significant movements in interest rates. Management
regularly monitors interest rate movements and the costs associated with
interest rate protection and intends, if

52
<PAGE> 53

appropriate, to utilize one or more of these methods in the future. In the past,
management has adopted strategies to increase the Company's floating-rate
exposure to benefit from declining rates. Currently, the Company holds no
interest rate swaps or other derivative financial instruments but, in an effort
to try to protect against the effects of changes in currency rates, resulting
from conducting business in various European currencies, the Company may enter
into currency hedging transactions in the future. The Indenture may, in certain
circumstances, limit the Company's ability to enter into such currency hedging
transactions. See "Description of Exchange Notes -- Certain Covenants --
Limitation on Indebtedness."

NEW ACCOUNTING PRONOUNCEMENTS

Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of," was issued in March 1995, and is to be adopted by the Company in 1996
retroactively effective to January 1, 1996. This new pronouncement establishes
standards on when to review long-lived assets and certain identifiable
intangible assets for impairment and how to measure that impairment. Management
has not determined the impact, if any, that adoption of this standard will have
on the Company's financial position or results of operations but does not expect
the impact to be material.

SFAS No. 123, "Accounting for Stock-Based Compensation," was issued in
October 1995, and is to be adopted by the Company in 1996. This new
pronouncement establishes financial accounting and reporting standards for
stock-based employee compensation plans and requires a fair value based method
to determine the compensation cost of such plans. Management has determined that
the Company will not adopt the accounting method prescribed by the new standard,
but will, as allowed by the standard, only provide supplemental pro forma
disclosure of the effect of such adoption in its 1996, and future, annual
financial statement footnotes.

INFLATION

Historically, the Company has not always been able to immediately offset
increases in tin plate prices with price increases on the Company's products.
However, in most years, a combination of factors has permitted the Company to
improve its profitability notwithstanding these conditions. The Company's
capital spending programs and manufacturing process upgrades have increased
operating efficiencies and thereby reduced the Company's unit cost of
production. In addition, historically, the Company has been able to negotiate
lower price increases than those announced by its major suppliers. See
"Business -- Raw Materials." The operating efficiencies and reduced unit cost of
production which have been achieved through the Company's capital spending
programs have mitigated the impact of inflation on the Company's cost structure.
In 1995, higher material costs were one of the factors contributing to the
Company's reported earnings. Management does not believe inflation will have a
material adverse impact on the Company in the next several quarters.

CUSTOMER RELATIONSHIPS/AEROSOL CONTAINERS

Aerosol containers accounted for 47.7% of the Company's sales for the nine
months ended September 29, 1996. A significant reduction in the number of
aerosol containers used by the Company's customers could have a material adverse
effect on the Company and, in particular, its European operations which are
comprised solely of aerosol manufacturing facilities. See "Risk
Factors -- Environmental Matters."

The Company's plan to establish a manufacturing facility in Merthyr Tydfil
in the United Kingdom at an initial investment of approximately $20 million over
the next two to three years was begun on the strength of an agreement on the
material terms of a long-term supply arrangement with Gillette. The loss of
Gillette as a customer or a material reduction in the benefits to the Company
expected under this arrangement would have an adverse impact on the
profitability of that facility and the Company's ability to recoup the start-up
costs of establishing the facility.

The Company's relationships with its customers are critical to its
business. A significant portion of the Company's annual net sales is
attributable to repeat customers. The loss of a significant number of such
customers could have a material adverse effect on the Company.

53
<PAGE> 54

BUSINESS

The Company is a leading manufacturer of steel containers for personal
care, household, automotive, paint and industrial products in the United States
and, following the USC Europe Acquisition, holds a strong second place in the
European steel aerosol market, accounting for approximately 24% of all steel
aerosol containers sold in Europe. The Company manufactures a wide variety of
aerosol containers, round and general line cans for paints and coatings, other
general line containers such as pails and drums, and a large variety of custom
and specialty products. The Company also manufactures a number of plastic paint
cans, pails, and drums, expanding customer packaging options and reaching new
markets.

The Company conducts its principal business operations in the general
packaging (non-food and non-beverage) segment of the metal container industry.
The Company's aerosol cans, round and general line cans and custom and specialty
and other containers are sold to many well-known consumer products manufacturers
in the United States and Europe, including Sherwin-Williams, S.C. Johnson & Son,
Inc., Gillette, Glidden, Procter & Gamble, Reckitt & Coleman and Henkel. These
customers are among the largest customers of the Company. Additionally, the
Company has expanded its operations in the plastic container market (2.1% of
sales in 1995 and 6.6% of sales through the nine month period ended September
29, 1996) and has expanded its metal services.

The Company's business consists of four major product groups: (i) aerosol
cans, (ii) paint and general line containers, (iii) metal services, and (iv)
custom and specialty products. The following table sets forth the percentage of
sales contributed by each of these groups for the first six months of 1996 and
each of the last two fiscal years:

<TABLE>
<CAPTION>
FIRST
NINE
MONTHS
OF 1996 1995 1994
------- ---- ----
<S> <C> <C> <C>
Aerosol..................................................... 47.7% 50.8% 56.6%
Paint and general line (including plastic).................. 28.8 28.2 28.7
Metal services.............................................. 13.0 10.0 5.3
Custom and specialty products, and other.................... 10.5 11.0 9.4
</TABLE>

AEROSOL

The Company is the leader in sales of aerosol containers in the United
States, accounting for nearly one out of every two aerosol cans sold
domestically. Aerosol containers represent the Company's largest product line.
Aerosol containers are used to package personal care, household, automotive,
paint and various other products and are sold to virtually all of the major
United States consumer products companies, including Gillette, S.C. Johnson &
Son, Inc., Procter & Gamble, Reckitt & Coleman and Henkel. The Company offers a
wide range of aerosol containers in order to meet its customers' requirements,
including stylized necked-in aerosol containers and barrier pack cans used for
products such as shaving gel.

The Company recently completed the acquisition of USC Europe, which is made
up of the former operations of several aerosol can businesses previously owned
by Crown. In 1995, USC Europe accounted for 24% of the European steel aerosol
market and, if run as a stand-alone operation, would have comprised the second
largest aerosol producer in Europe, behind only the merged operations of Crown
and its affiliate, CarnaudMetalbox, S.A. ("CMB"). USC Europe's manufacturing
facilities are located at Southall and Tredegar in the United Kingdom, Laon in
France, Schwedt in Germany and Reus in Spain. Assets purchased for aerosol
can-making are currently located at Crown's plant in Voghera outside of Milan,
Italy but will be moved to another location (recently identified by the Company
within Voghera) through a staged transition that provides for the needed aerosol
production in the interim. The Company has also begun the development of a site
in the United Kingdom for a new aerosol container manufacturing facility as a
result of receiving a letter of intent for a long-term purchase commitment by
Gillette. See "-- Recent Property Developments."

54
<PAGE> 55

PAINT AND GENERAL LINE

The Company's paint and general line products consist of containers such as
round cans for paint and coatings, oblong cans for turpentine and charcoal
lighter and pails and other containers for industrial and consumer products.
Among U.S. Can's largest customers for its paint and general line containers are
Sherwin-Williams and Glidden. In August 1996, after reaching agreement on the
material terms of a long-term supply arrangement with one of its major paint and
coatings customers, the Company completed the acquisition of a site in the
Dallas, Texas area and is establishing a new paint and general line
manufacturing plant. See "-- Customers and Sales Force." This Texas facility
will initially produce gallon round paint cans for the coatings industry. In the
future, if circumstances warrant, the Company may expand this facility to
include other container manufacturing. See "-- Properties."

Management estimates that U.S. Can holds the number two position in the
United States, on a unit volume basis, in paint and general line containers,
which accounted for approximately 28.8% of the Company's sales for the
nine-month period ended September 29, 1996. U.S. Can's products accounted for
approximately 41.5% of all steel round and general line containers sold in the
United States during the same period.

The Company has expanded into plastic container manufacturing to offer its
customers a wider choice of packaging options. The Company is the nation's
largest producer of plastic paint cans, supplying such customers as PPG
Industries Inc. In August 1996, U.S. Can completed its acquisition of the CPI
Group, which manufactures molded drums and pails along with various other
plastic containers. The Plastite and CPI Group acquisitions have enabled the
Company to serve significant new customers including Olin Corporation, maker of
swimming pool chemicals, and petro-chemical producers such as Amoco Corp.,
Valvoline International, Inc. and Texaco Inc. whose products utilize plastic
packaging. Additionally, through this expansion into plastic containers, other
well known companies such as United States Gypsum Co. which uses plastic
packaging for its spackling joint compound, were added as new customers of the
Company. Management believes U.S. Can's plastics capability provides the
opportunity to serve existing customers with a wider product line and to attract
a broader customer base by expanding the packaging options the Company can
offer.

METAL SERVICES

Management believes that the Company is the leading supplier of metal
coating and decorating to third party customers in the United States. The
Company's metal services operations also provide secondary steel and other tin
mill services for customers inside and outside of the container business. The
Company operates full service metal decorating and service facilities serving a
variety of customers including Ross Laboratories, Houston Foods Co., and Golden
Harvest, as well as companies within the container and packaging industry,
including Silgan Containers Corp., Ball Corporation and White Cap, Inc. Revenues
from metal services accounted for approximately 10.0% of sales in 1995 and
approximately 13.0% of sales through the first nine months of 1996. The Company
provides customers with the advantages of quality lithography, large press size,
substantial experience in metal coating and lithography coupled with operational
advantages, including total capacity and convenient geographic positioning that
allow the Company to be sensitive to delivery costs and time constraints.
Recently, the Company increased its shearing, slitting, coating and lithography
capacity through the acquisition of AMS, which more than doubled the Company's
pro forma sales in metal services.

The metal services business consists of metal decorating and tin mill
services. In metal decorating, metal services competes with a few smaller metal
decorating firms and the lithography operations of the other major can
companies. The tin mill service center market is fragmented and shared by a
large number of firms. Management believes the Company's investment in
lithography capacity and technology, reputation for quality, experience in metal
decorating, and strategically located plants provide the Company with
significant advantages relative to its competitors.

55
<PAGE> 56

CUSTOM AND SPECIALTY

The Company significantly increased its presence in the custom and
specialty products market in 1994 and has expanded its product lines to include
a wide array of functional and decorative containers and tins, caps and
closures, and metal housewares and collectible items, serving such customers as
Wyeth Laboratories, Keebler Co. Inc. and Wal-Mart Stores, Inc. Included in this
line are hermetic containers and slipcover tins of both three-piece and seamless
construction, manufactured in round and off-round configurations; standard and
custom closures, fitments, and stampings; and metal trading cards, posters,
serving trays, canister sets, dust pans and waste baskets. The Company has
recently secured contracts for promotional containers in the cosmetic and retail
accessory markets including the metal packaging for Liz Claiborne Inc.'s new
Curve Perfume. The Company will also produce the specialized metal tins to be
used as packaging for Fossil, Inc.'s new line of accessories. The Company's
management expects continued growth in the highly customized, value-added
segment of packaging products and also expects to expand its operations in
licensed products, building on the current licensed lines of collectibles that
includes Norman Rockwell and The Saturday Evening Post. The Company believes it
offers the industry's widest range of this type of product, enabling it to
compete as a full service metal decoration and specialty products provider
within an industry with a large number of manufacturers none of whom competes
across its entire product spectrum with the Company. Competition is based
principally on quality, service, geographical proximity to customers and price.
The Company believes it has the ability to compete favorably in each aspect of
its custom and specialty business.

In 1996, custom and specialty products have seen a significant expansion in
the highly customized promotional container market and growth in its licensed
product operations. These businesses contributed sales of approximately $56
million or 10.0% of sales of the Company for the nine month period ended
September 29, 1996.

ENGINEERING CENTER

The Company acquired the Orlando Machine Engineering Center ("OMEC") from
Rollason in 1994. OMEC manufactures the full line of Callahan manufacturing
machinery and a variety of other new can manufacturing equipment ranging from
small bench model seamers to large production presses, as well as specialized
equipment such as water testers, and compound lining machines. OMEC also offers
a wide range of value-added, rebuilt can-making machinery, including feeders,
slitters, flangers, seamers, liners, presses and scroll shears.

OMEC has an extensive overhaul capacity. This capacity permits OMEC to
offer rebuilt equipment ranging from individual presses to complete can lines.

OMEC utilizes the latest in computer-controlled technology to design and
build high quality tool and die sets for the can industry. OMEC also provides
technical support to the can manufacturing industry, and is a leading supplier
of quality spare parts for the full Callahan line, for Bruderer and Bliss
presses, Angelous seamers and many other major names. OMEC's engineering
department is geared to develop a wide variety of new equipment from
customer-supplied samples or specifications.

OMEC's extensive capabilities allow U.S. Can to perform in-house overhaul,
repair and engineering support services formerly contracted to outside machine
shops.

BUSINESS STRATEGY

Management believes that further growth of the Company will be achieved by
building on its market leadership, continuing to reduce manufacturing costs
while increasing efficiencies, and making selective acquisitions. The Company
has, for the past several years, realized additional sales as a result of its
significant acquisition activity. As part of its future growth strategy, the
Company intends to continue to provide quality products and excellent service to
the leading consumer and industrial products companies in the United States and
Europe. These customers require packaging that provides reliability with
excellent aesthetic characteristics at a competitive cost. In addition, by
broadening its product offerings

56
<PAGE> 57

and expanding its geographic presence, the Company can serve businesses that
have not historically been customers and can more cost effectively serve
additional locations of existing clients. The Company can also compete more
effectively by reducing manufacturing costs and enhancing operating efficiencies
through investments in capital equipment and technology. Management believes
that the strategic deployment of capital enables the Company to improve its
overall profitability by leveraging the economics of scale inherent in the
manufacture of containers. The Company intends to continue to improve the
operating margins of its business through the integration of recent acquisitions
in the United States and Europe. While the Company has historically aggressively
sought acquisitions to implement its growth strategies, these objectives have
largely been met with the consummation of the Acquisitions in 1996. However, the
Company plans to continue to evaluate and selectively pursue acquisitions which
it believes are strategically important to meeting its customers needs,
attracting new customers, adding new products, complementing its existing
business and expanding its geographic reach. This strategy should allow the
Company to better serve its existing clients, attract new customers and take
advantage of the overall consolidation in the general packaging industry.

As part of its commitment to capital investment in technology, the Company
has made and expects to continue to make significant capital expenditures to
upgrade its facilities in accordance with current and pending environmental
regulations. Approximately 7% of the Company's capital budget is environmentally
related. A program dedicating approximately $5.7 million to upgrade the
Company's lithography centers to comply with scheduled Clean Air Act
requirements has been undertaken, of which $3.9 million was already spent as of
September 29, 1996. In the United Kingdom, at the Company's Southall facility, a
thermal oxidizer has been ordered and will be installed at an estimated cost of
approximately $800,000 to comply with air emissions regulations there. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Environmental Matters."

ACQUISITIONS

The Company was formed in 1983 through the purchase of the container
division of Sherwin-Williams by an investor group led by William J. Smith, the
Company's Chairman, President and Chief Executive Officer. Strategic
acquisitions were key to the Company's historic growth strategy. The Company
more than doubled its sales in its first four years by acquiring the aerosol and
paint and general line manufacturing facilities of Southern Can Company and the
general packaging business of CCC.

Since 1983, the Company has completed a total of twenty-two acquisitions.
Initially the Company's acquisition strategy focused on aerosol and paint and
general line can making operations. More recently, growth has focused on
expanding into related products and line extensions as well as new market areas.
These acquisitions have strengthened and expanded the Company's product lines
and geographical presence and have enabled it to serve the needs of an expanding
list of major customers. The Company's management has consistently been able to
improve the operating margins of acquired businesses through consolidation,
operating synergies, cost reduction and increased manufacturing efficiency.

For a discussion of the Company's intentions with respect to future
acquisitions, see "-- Business Strategy."

The following table lists the Company's acquisitions since 1983 all of
which were purchased by the Company's United States operating entity, U.S. Can:

<TABLE>
<CAPTION>
YEAR COMPLETED BUSINESS OR ASSETS ACQUIRED PRODUCT LINES PURCHASE PRICE
- -------------- --------------------------- ------------- --------------
<S> <C> <C> <C>
1985..... # Southern Can Company Aerosol $ 32.0 million(1)
1986..... * General Can Paint and General $ 0.4 million
Company -- Alsip Line
1987..... # CCC General Packaging Aerosol/Paint and $ 65.0 million(2)
Business General Line
1988..... * General Can Custom and Specialty $ 1.1 million
1992..... * ANC -- Sparrows Point Metal Services $ 7.3 million
1992..... * Fein Container Corporation Paint and General $ 7.0 million
Line
</TABLE>

57
<PAGE> 58
<TABLE>
<CAPTION>
YEAR COMPLETED BUSINESS OR ASSETS ACQUIRED PRODUCT LINES PURCHASE PRICE
- -------------- --------------------------- ------------- --------------
<S> <C> <C> <C>
1992..... * ANC -- General Packaging Aerosol/Paint and $ 14.7 million
General Line
1993..... * Olsher Metals Processing Metal Services $ 8.8 million(1)
Corporation
1993..... * Spencer Containers, Inc. Custom and Specialty $ 0.1 million
1994..... @ Steeltin Can Corporation Custom and $ 20.7 million(1)
Specialty/Metal
Services/Paint and
General Line
1994..... * Alsip facility from Ball Metal Services $ 4.6 million
Corporation
1994..... * Midwest Can Company Oblong Containers $ 0.5 million
1994..... # Ellisco, Inc. Custom and $ 32.2 million
Specialty/Metal
Services
1994..... # Rollason Engineering and Packaging Industry $ 1.4 million(3)
Manufacturing, Inc. Equipment
Overhaul/Repair
1994..... * Grafco Industries, L.P. Custom and Specialty $ 1.1 million
1995..... # Metal Litho International Metal Services $ 14.3 million(1)
1995..... * Prospect Industries Paint and General $ 8.8 million
Corporation Line
1995..... # Hunter Container Custom and Specialty $ 6.5 million(1)
Corporation
1995..... # Plastite Corporation Plastics $ 7.3 million(4)
1996..... @ Alltrista Metal Services Metal Services $ 14.9 million(5)
Division
1996..... # CPI Group Plastics $ 15.1 million(6)
1996..... @ USC Europe Aerosol $ 52.8 million(7)
1997..... * Owens-Illinois Closures, Custom and Specialty $ 10.0 million(8)
Inc.
</TABLE>

- ------------------------

* Indicates acquisition of assets of the business by U.S. Can.
# Indicates acquisition of stock of the entity. In all cases of stock
acquisitions, except USC Europe, the entities were subsequently merged into
the purchasing entity U.S. Can. USC Europe which is comprised of individual
operating entities in each country (United Kingdom, France, Germany, Spain
and Italy), is operated as a group of wholly-owned direct and indirect
subsidiaries of U.S. Can.
@ Indicates acquisition of stock of an entity together with additional or
subsequent asset acquisition by U.S. Can.
(1) Included assumption of debt in conjunction with acquisition.
(2) Included $55.0 million face amount of Class 1 Preferred Stock of the
Company.
(3) Included $1.0 million in the Company's Common Stock and assumption of debt
in conjunction with acquisition.
(4) Plus future contingencies not to exceed $2.5 million in the aggregate.
(5) In a related transaction, U.S. Can purchased inventory from Alltrista for
approximately $8.0 million which is being paid for on an installment basis.
(6) Plus future contingencies not to exceed $1.0 million in the aggregate.
(7) Included assumption of $5.8 million in net indebtedness and subject to a
post-closing adjustment for changes in working capital from April 30, 1996
to September 11, 1996, the closing date of the USC Europe Acquisition.
(8) Subject to a post-closing adjustment for inventory acquired plus future
contingencies not to exceed $1.5 million in the aggregate.

PRODUCTS

Management believes that U.S. Can offers the widest range of aerosol,
round, general line and specialty metal containers in the general packaging
industry in the United States. U.S. Can is the leader in all of the major
aerosol categories, including personal care, household, automotive and spray
paint containers.

The operations of USC Europe accounted for production of 558 million of the
approximately 2.3 billion steel aerosol cans produced in Europe in 1995. These
aerosol cans covered the five most popular diameters in the European market: 45,
49, 52, 57 and 65 millimeter cans. These diameters,

58
<PAGE> 59

supplemented by various heights, enable USC Europe to offer customers a full
range of cost efficient sizes.

The Company emphasizes quality and breadth of product line in marketing its
aerosol containers. Full-color, quality lithographed containers are available in
a wide range of styles and sizes. The Company's necked-in containers (aerosol
cans where the plastic cap is flush with the metal exterior of the can) offer a
distinctive look preferred by consumers and provide other advantages in form and
function. In barrier packaging (which involves separating the product from the
can's propellant), the Company provides marketers with piston and bag-in-can
containers.

The Company's round paint cans, oblong containers, pails and specialty
containers are provided in the industry's widest choice of sizes, ranging from
one-quarter pint to six and one-half gallons, and features a variety of inside
linings. Also included in the Company's general line are a wide range of open-
top and AccuPor(R) metal cans used primarily for automotive products.
Additionally, with the acquisition of Plastite in 1995, the Company has become
the leader in the production of plastic paint cans, manufacturing plastic gallon
round cans and two sizes of plastic pails. The CPI Group acquisition has
expanded the Company's plastic product line to include molded drums and pails
along with various other plastic containers and products, including products
used in the agricultural and farming industries.

The Company's custom and specialty products line consists of a wide array
of functional and decorative containers, tins, caps and closures, and metal
housewares and collectible items. Included in this line are hermetic containers
and slipcover tins of both three-piece and seamless construction, manufactured
in round and off-round configurations; standard and custom closures, fitments,
and stampings; and metal trading cards, posters, serving trays, canister sets,
dust pans and waste baskets. The Company has recently secured significant
contracts for promotional containers in the cosmetic and retail accessory
markets. These products signal an expansion of the custom and specialty products
into areas not traditionally supplied by the metal packaging industry, such as
perfume and jewelry. The Company also expects to expand its operations in
licensed products, building on the current licensed lines of collectibles. The
Company believes it offers the industry's widest range of related products
within this product grouping.

CUSTOMERS AND SALES FORCE

As of September 1, 1996, in the United States, the Company had
approximately 8,000 customers for its products, as compared to approximately
6,600 and 6,500 customers as of December 31, 1995 and 1994 respectively. The
Company's 10 largest customers accounted for approximately 32.4% of sales for
the first nine months of 1996, and 33.3% and 35.1% of sales in 1995 and 1994,
respectively. No customer accounted for more than 10% of the Company's sales for
the first nine months of 1996, or in 1995 or 1994. Sales to Sherwin-Williams and
its affiliates amounted to approximately 12% of sales in 1993. Sales to Olin
Corporation accounted for 30.6% of the sales of the CPI group for the first nine
months of 1996.

The Company supplies containers for leading producers of personal care,
household, automotive, paint and industrial products, many of whom have been
customers of the Company or its predecessor companies for decades. Set forth
below is a representative sampling of the Company's customers and products it
supplies to them as follows; however, the sales to certain of these customers
are not significant:

<TABLE>
<CAPTION>
COMPANY PRODUCTS
------- --------
<S> <C>
AEROSOL (UNITED STATES)
Alberto-Culver Company................. Alberto VO5, Consort, Static Guard
Cheeseborough-Pond's Co................ Rave, Aqua-Net, Brut
CPC International Inc.................. Niagara
Dial Corp.............................. Breck, Magic Sizing, Dial Antiperspirant,
Renuzit
</TABLE>

59
<PAGE> 60
<TABLE>
<CAPTION>
COMPANY PRODUCTS
------- --------
<S> <C>
Diversified Brands..................... Krylon, Dupli-Color
DowBrands Inc.......................... Spray 'N Wash, Dow Oven Cleaner, Dow
Bathroom Cleaner
Faultless Company...................... Faultless Spray Starch
Gillette............................... Right Guard, Foamy, White Rain, The Dry
Look, Series Shave Cream/Gel
Helene Curtis, Inc..................... Degree, Suave, Finesse, Salon Selectives
Leeming/Pacquin, Inc................... Barbasol, Pure Silk
Procter & Gamble....................... Noxema, Sure, Secret, Old Spice
Reckitt & Coleman...................... Wizard Dry Breezes, Lysol, Easy On
Starch, Easy Off Oven Cleaner
S.C. Johnson & Son, Inc................ Raid, Edge, Glade, Pledge, Off!,
Skintimate
Sherwin-Williams....................... Spray-on Paint
AEROSOL (EUROPE)
Boots Company.......................... Antiperspirant, Ocean Blue Shaving Foam
Helene Curtis, Inc..................... Salon Selectives
Henkel................................. Various Personal Care Products
Holt Lloyd............................. Duplicolor, Halfords
Kanebo................................. Hairspray
L'Oreal S.A............................ Studio Ultra Fixing Spray
Menken Dairy........................... Whip cream
NLN.................................... Arbre Vert products
Reckitt & Coleman...................... Woolite, Mr. Sheen, Wizzard
Revlon................................. Hairspray
Sara Lee Corporation................... Williams Shaving Cream
Tetrosyl............................... Carplan, Duco
3M..................................... Spraymonat
Unilever............................... Various personal care products
WD40 Co................................ WD40
PAINT AND GENERAL LINE
Amoco Corp............................. Various petroleum products
Behr Process Co........................ Behr Paint
Duron Paint............................ Duron Paint
E.I. du Pont de Nemours & Company...... Various du Pont products
Glidden................................ Spread Satin, Spread Lustre
Kikkoman Company....................... Vegetable oils, soy sauce, teriyaki sauce
Olin Corporation....................... Pool chemicals
PPG Industries, Inc.................... Olympic Stain, Pittsburgh Paint, Lucite
Porter Paint Co........................ Porter Paint
Sherwin-Williams....................... SuperPaint, Dutch Boy, Weatherbeater
Texaco Inc............................. Petroleum products
The Thompson/Minwax Company............ Thompson's Water Seal, Minwax
U.S. Gypsum............................ Drywall compound, spackle
Valvoline International, Inc........... Various petroleum products
Wm Barr & Co. Inc...................... Solvent, coatings, chemicals
CUSTOM AND SPECIALTY
Borden Inc............................. Prince Sauce lids
Cherrydale Farms Inc................... Decorative tins
CUI Inc................................ Metal collector cards
European Coffee Classics Inc........... Melitta Coffee containers
Huls America Inc....................... Fuel additive containers
</TABLE>

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<PAGE> 61
<TABLE>
<CAPTION>
COMPANY PRODUCTS
------- --------
<S> <C>
Keebler Co., Inc....................... Cracker tins
Springwater Cookies.................... Cookie tins
Target Stores.......................... Various home & seasonal decorative
products
Wal-Mart Stores, Inc................... Various home & seasonal decorative
products
METAL SERVICES
Golden Harvest......................... Lithographed metal for popcorn tins
Houston Foods.......................... Lithographed metal for popcorn tins
Ross Labs.............................. Coated metal for baby formula cans
Silgan Containers Corp................. Lithographed metal for food cans
White Cap Inc.......................... Lithographed metal for metal closures,
lids
</TABLE>

In accordance with industry practice, the Company enters into both one-year
and multi-year supply agreements with its major customers. These agreements
specify the number of containers a customer will purchase (or the mechanism for
determining such number), pricing, volume discounts (if any) and, in the case of
many of the Company's multi-year supply agreements, a provision permitting the
Company to pass through announced price increases in certain raw material costs.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Inflation." In September, 1996, U.S. Can entered into a container
supply agreement with a major coatings customer. Under this agreement, this
customer purchases round containers for its plants in several locations
throughout the United States. This customer has agreed to purchase certain
estimated quantities of round containers per contract year. This agreement
extends until March, 2001, subject to termination for material breach by either
party. Under this agreement, prices and volumes may be adjusted due to changes
in certain raw materials cost, certain competitive offers and/or availability of
new types of containers. U.S. Can has established a paint and general line
manufacturing facility in the Dallas, Texas area to accommodate the increased
demand of this customer. Other customers are also being serviced from this
plant. See "-- Recent Property Developments." The Company has also received a
multi-year commitment from Gillette to purchase necked-in aerosol cans for
Gillette's North Atlantic Group. In October 1996, U.S. Can received written
confirmation of Gillette's intention to purchase certain annual unit volumes of
aerosol cans from U.S. Can, including U.S. Can's European operations, through
1998, with the option to extend for an additional period, subject to price
adjustment for actual volumes purchased. U.K. Can Limited has entered into a
long-term lease agreement with an option to purchase the facility for a nominal
price at the end of the lease for a 320,000 square foot facility in Merthyr
Tydfil, Wales for the establishment of a new manufacturing facility there. It is
not U.S. Can's policy to have any plant devoted exclusively to one customer and
management plans to service other customers from this facility. See "-- Recent
Property Developments." In metal services, in connection with the acquisition of
AMS, the Company entered into a long-term agreement to supply tin plate to
Alltrista's home canning business from the Company's metal services facilities
in Chicago.

In the United States, U.S. Can markets its products primarily through a
sales force comprised of inside and outside sales representatives. Beginning in
1994, the sales force was reorganized to reflect the Company's increased
presence in Metal Services and Custom and Specialty Products. The sales force is
comprised of five groups -- the Aerosol Sales group, the Paint and General Line
Sales group, the Metal Services Sales group, the Custom and Specialty Sales
group and the OMEC sales group. In total, as of June 30, 1996, the Company had
66 outside sales representatives and 55 inside sales representatives working in
the domestic market. In Europe, USC Europe has an experienced force in all five
countries. The Company has eight inside sales representatives and 6 outside
sales representatives working in Europe. Management believes that this
experienced sales force with extensive customer relationships is a significant
competitive advantage.

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<PAGE> 62

RAW MATERIALS

The Company's principal raw materials are tin-plated steel ("tin plate")
and coatings and inks used to print its customers' designs and logos onto the
tin plate. U.S. Can purchases tin plate principally from domestic steel
manufacturers, with a minor portion purchased from Asian and European mills.
Both U.S. Can and USC Europe primarily rely on local mills to satisfy their
plants' tin plate requirements, but may also buy metal from other suppliers. Tin
plate accounted for approximately 85% of U.S. Can's total raw material purchases
in 1995. Periodically, U.S. Can's major suppliers announce increases in prices
for tin plate and in September 1996 they announced an increase of 2 3/4% in the
price for the tin plated steel, effective January 5, 1997. Historically, U.S.
Can has been able to negotiate lower price increases than those announced by its
major suppliers. However, there can be no assurance that U.S. Can will be
successful in negotiating lower price increases with respect to future price
increases. Many of U.S. Can's multi-year supply agreements with its customers
permit it to pass through announced price increases in certain raw material
costs. However, historically, U.S. Can has not always been able to offset
immediately increases in tin plate prices with price increases on its products.
See "-- Customers and Sales Force" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Inflation."

The Company believes that adequate quantities of tin plate will continue to
be available from steel manufacturers. The individual suppliers of raw materials
accounting for more than 10% of the total steel used by U.S. Can in the first
half of 1996 were United States Steel Corporation, LTV Corporation and Weirton
Steel Corporation. The percentage of total raw materials supplied to U.S. Can by
each of these suppliers ranged from approximately 23% to approximately 35% for
the nine month period ended September 29, 1996.

Periodically, USC Europe's major suppliers have announced price increases
for tin plate. Historically, Crown and CMB have on occasion been able to
negotiate lower price increases and/or later effective dates than those
announced by their major suppliers. However, there can be no assurance that USC
Europe will be successful in negotiating lower price increases or later
effective dates with respect to future price increases, if any. Although supply
agreements with customers often permit USC Europe to pass on announced raw
material cost increases in form of higher prices, USC Europe has not always been
able to offset fully increases in tin plate prices.

The Company has not historically entered into written supply contracts with
steel makers and believes that other can manufacturers follow the same practice.
The Company allocates its purchases among steel makers on the basis of price and
performance, and uses a structured quality and service rating system which
monitors each supplier's performance on a quarterly basis. Typically, the
Company reaches an oral agreement with each of its domestic tin plate suppliers
on the volume of the Company's purchases and pricing once per calendar year,
based on good faith estimates. Pricing is subject to renegotiation if the steel
maker's raw material costs increase or decrease. In the last five years, the
annual steel price agreements have not been renegotiated for any reason.
Agreements with foreign steel makers are substantially similar. See, "Risk
Factors -- Reliance on Tin-Plated Steel."

The Company's second largest raw material expense is for coatings and inks,
which are used to print designs and logos onto the tin plate prior to assembly.
Coatings and inks accounted for approximately 9% of U.S. Can's raw material
costs in fiscal year 1995 and are purchased from domestic suppliers. Based on
the ready availability of these materials in the past and the number of
manufacturers which continue to make these products, management does not
anticipate any lack of availability of coatings and inks in the foreseeable
future.

The Company's plastic products are produced from two main types of resin,
which is a petroleum or natural gas product. High density polyethylene resin is
used to make pails, drums and agricultural products. 100% post-consumer use
recycled polyethylene or polypropolene resin is used in the production of the
Plastite line of paint cans. The price of resin fluctuates significantly and
management believes that it is industry standard practice, as well as the
Company's contractual obligation in many of its supply agreements, to pass on
increases and decreases in resin prices to the customer.

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<PAGE> 63

LABOR

As of July 31, 1996, in the United States, the Company employed
approximately 4,106 salaried and hourly employees. At that date, there were a
total of 2,635 employees who were members of various labor unions, including the
United Steelworkers of America ("USWA"), the International Association of
Machinists ("IAM"), Local 810 Steel, Metals, Alloys and Hardware Fabricators and
Warehousemen (affiliated with the International Brotherhood of Teamsters
("Teamsters")), the Sheet Metal Workers of America ("SMWA"), Graphic
Communications International Union ("GCIU"), International Leather Goods,
Plastic, Novelty and Service Workers Union, and the International Union of
Electronic, Electrical, Salaried, Machine and Furniture Workers, AFL-CIO
("IUE"). Unionized employees constitute approximately 64% of the Company's total
workforce. Currently, the Company is engaged in negotiations at its Newnan,
Georgia, plant with the International Leather Goods, Plastics, Novelty and
Service Workers Union, Local No. 359 regarding the labor agreement for
approximately 95 employees which expired on September 15, 1996. The Company is
also scheduling negotiations at its Midwest Litho Center in Alsip, Illinois,
regarding the agreement with the GCIU which involves approximately 20 employees.
Early next year, negotiations will be scheduled with the USWA at its Chicago
Metal Services plant in Illinois regarding the agreement covering about 100
employees which expires March 21, 1997.

The Company's labor agreement with a local unit of the GCIU covering
approximately 83 employees at the Trenton, New Jersey Litho Center was renewed
for a three-year period effective March, 1996. The labor agreement with the USWA
covering approximately 100 employees at the Columbiana, Ohio, plant was renewed
for three years in April. In June, 1995 U.S. Can reached a four-year agreement
with a local USWA unit of 310 employees at its Tallapoosa, Georgia,
manufacturing facility. A four-year agreement was also reached with the SMWA in
October, 1995 covering approximately 146 employees at the Company's Horsham,
Pennsylvania facility. Also in October 1995, an initial three-year agreement
covering approximately 42 employees at the Morrow, Georgia plant was reached
with the USWA. Recently, the Company also negotiated a four-year agreement for
approximately 135 employees represented by the IUE at the North Brunswick, New
Jersey operation.

USC Europe employed approximately 650 people at the end of 1995. The
Company believes that its workforce is skilled and committed, as demonstrated
over the last five years by increasing productivity and very limited work
stoppage due to labor disputes. In line with common European practices, all
plants are unionized, although union membership is declining at Laon and Reus.
The management of the Company believes that labor relations are excellent at all
plants. Each of USC Europe's plants is managed by an experienced management
team, comprising in most cases a general manager, plant manager, sales manager
and finance manager.

In the United States, the Company has followed a labor strategy designed to
enhance its flexibility and productivity through constructive relations with its
employees and collective bargaining units. Elements of this strategy have
included implementation of flexible staff schedules, plant-level profit sharing
plans and plants staffed entirely by salaried workers. Management believes the
401(k) plan first negotiated at U.S. Can's Elgin, Illinois plant is unique in
the packaging industry and provides incentives for local performance, while
reducing the Company's exposure to defined benefit plan costs traditionally
bargained for by unions. In 1993, the Company expanded this 401(k) plan to
include U.S. Can's Horsham, Pennsylvania, Green Bay, Wisconsin, and Sparrows
Point, Maryland, manufacturing facilities. In 1994, the USWA local bargaining
unit of the Burns Harbor, Indiana plant and the IAM local bargaining unit of the
Danville, Illinois plant were also added to the 401(k) plan. In 1995 the USWA
bargaining unit in Tallapoosa, Georgia and the IUE unit at North Brunswick, New
Jersey were also included in the 401(k) plan.

Management believes the Company and its employees have benefited from
dealing directly with local unions in order to tailor their contracts to local
employee issues. In the future, management intends to negotiate separately with
the unions at acquired plants to reach individual site contracts with the
respective local unions. This policy has the effect of staggering renewal
negotiations with the various bargaining units. Management believes the
Company's relations with its employees and their collective

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<PAGE> 64

bargaining units are generally good, as evidenced by the fact that the Company
has had only two work stoppages in its history: a five-day work stoppage at the
Horsham, Pennsylvania facility in November, 1992, and a one-day work stoppage at
the now-closed San Leandro, California facility in June, 1988.

COMPETITION

The principal methods of competition in the general packaging industry are
price, quality and service. The Company believes that it competes favorably in
each of these areas. See "Risk Factors -- Competition." Price competition in the
industry is vigorous and limits the Company's ability to increase prices.
Generally, customers of all general line containers are demanding more
consistent product availability with shorter lead times. Because aerosol cans
are used for personal care, household and other packaged products, and because
they are pressurized, aerosol cans are more sensitive to quality, can decoration
and other consumer-oriented features than paint and general line containers.

Competition has increased in the general packaging industry as a result of
mature markets, customer consolidations and consolidation within the container
industry. In steel aerosol containers, U.S. Can competes primarily with Crown
and Ball Corporation both of whom are large and have greater financial resources
than the Company. USC Europe competes in the steel aerosol market with the
combined Crown and CMB operations (subject to the terms of a one-year
Non-Compete, summarized below), the German container manufacturer
Schmalbach-Lubeca/Continental Can Europe, the German aerosol manufacturer Staehl
and a group of other smaller regional producers. Domestically, U.S. Can also
competes with Advanced Monobloc and two other smaller firms which manufacture
aluminum aerosol containers. In Europe USC Europe competes with aluminum aerosol
container manufacturers Alusuisse-Lonza Holding AG/Boxal and Pechiney
International, S.A./Cebal.

The USC Europe acquisition by the Company represented the sale by Crown of
various aerosol operations in Europe which sale was mandated by the stipulation
of the European Economic Communities European Merger Task Force in connection
with Crown's merger with CarnaudMetalbox. The mandate provides various
conditions to the terms of the sale by Crown, including limitations on
competition for customers of the various aerosol operations. Thus, in compliance
with the terms of the stipulation, the terms of the Company's agreement with
Crown to purchase USC Europe include a Non-Compete. For one year, Crown is
prohibited from selling aerosol cans to customers who were, prior to the
purchase, served by USC Europe. Excepted from this Non-Compete are customers
who, with the approval of the Commission of European Communities and in good
faith, decline to purchase aerosol cans from USC Europe. Crown may compete for
customers of USC Europe, but only to the extent that such competition does not
lessen the volume of products historically purchased from USC Europe by such
customers.

In paint and general line, the Company competes primarily with Brockway
Standard Inc. and one smaller, private firm. The Company's products also face
competition from aluminum, glass and plastic containers. In 1995, the Company
entered the plastic container line through the acquisition of Plastite. In 1996,
the Company expanded its plastics operations by acquiring the CPI Group.

Because shipping costs associated with the delivery of cans from outside
North America would add a major additional component of cost, the industry has
historically had relatively little competition from offshore manufacturers.
Management believes that this condition is unlikely to change in the foreseeable
future.

Custom and specialty products compete with a large number of container
manufacturers and closure suppliers; it does not compete across its entire
product spectrum with any single company. Competition is based principally on
price, quality and service, geographical proximity to customers, production
capability, with varying degrees of intensity according to the specific product
category. The Company believes it has the ability to compete favorably in each
aspect of the custom and specialty business as market conditions may require.

Metal services divides its business into metal decorating and tin mill
services. In metal decorating, metal services competes with a few smaller metal
decorating firms and the litho operations of the other

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major can companies. The tin mill service center market is fragmented and shared
by a large number of firms. Management believes the Company's investment in
litho capacity and technology, reputation for quality, experience in metal
decorating, and strategically located plants provide the Company with
significant advantages relative to its competitors.

PROPERTIES

The Company has thirty-nine manufacturing facilities located domestically
in twelve states and in five countries abroad, many of which are strategically
positioned near principal customers and suppliers. In Europe, USC Europe has
production locations in the five largest regional markets, including the United
Kingdom, France, Spain, Italy and Germany. Management believes that, due to the
substantial transportation costs involved in shipping empty cans over long
distances, its large number of facilities and their strategic locations near
customers are a major competitive advantages. The following table sets forth
certain information with respect to these plants as of December 31, 1996.

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<PAGE> 66

<TABLE>
<CAPTION>
LOCATION SIZE STATUS FUNCTION
- ------------------------- --------------- ------- -------------------------------------
<S> <C> <C> <C>
UNITED STATES
Elgin, IL................ 481,346 sq. ft. Owned Manufacture and assembly of a full
range of aerosol cans, round gallons
and oblong cans of all sizes.
Chicago, IL.............. 266,269 sq. ft. Owned Steel slitting and shearing, coating
and lithography.
Tallapoosa, GA........... 228,080 sq. ft. Owned Manufacture and assembly of a full
range of aerosol cans and round
gallons.
Commerce, CA............. 215,860 sq. ft. Leased Manufacture and assembly of aerosol
cans, oblong cans and round quarts
and gallons.
Sparrows Point, MD....... 211,670 sq. ft. Leased Steel shearing, coating and
lithography.
Glen Dale, WV(2)......... 210,000 sq. ft. Owned Manufacture of metal caps and
closures.
Burns Harbor, IN......... 180,000 sq. ft. Leased Steel shearing, coating and
lithography.
Hubbard, OH.............. 174,970 sq. ft. Owned Manufacture and assembly of a full
range of round and General line cans.
Baltimore, MD............ 150,000 sq. ft. Leased Assembly of round cans.
Horsham, PA.............. 132,000 sq. ft. Owned Assembly of aerosol cans and
manufacture of ends.
Racine, WI............... 130,000 sq. ft. Owned Assembly of aerosol cans.
Brookfield, OH........... 129,900 sq. ft. Leased Steel slitting, shearing and
processing.
Green Bay, WI............ 127,000 sq. ft. Leased Assembly of aerosol cans.
Columbiana, OH........... 121,000 sq. ft. Leased Manufacture of custom and specialty
products.
Morrow, GA............... 110,160 sq. ft. Leased Manufacture of plastic containers.
Baltimore, MD............ 110,000 sq. ft. Owned Assembly of specialty cans.
Weirton, WV.............. 108,000 sq. ft. Leased Steel shearing, coating and
lithography.
North Brunswick, NJ...... 106,326 sq. ft. Leased Manufacture and assembly of pails.
Danville, IL(3).......... 100,000 sq. ft. Owned Assembly of aerosol cans and
manufacture of ends.
Wheeling, WV(4).......... 100,000 sq. ft. Leased Manufacture of metal caps and
closures.
Trenton, NJ.............. 98,700 sq. ft. Leased Steel shearing, coating and
lithography.
Newnan, GA............... 95,000 sq. ft. Leased Manufacture plastic pails and farming
products.
Fern Park, FL............ 90,081 sq. ft. Leased Manufacture and overhaul of packaging
equipment and parts.
Alsip, IL................ 90,000 sq. ft. Owned Steel shearing, coating and
lithography.
Dallas, TX............... 86,000 sq. ft. Owned Manufacture of paint and general line
cans.
Alsip, IL................ 64,349 sq. ft. Leased Assembly of round flat-top and screw-
neck cans of all sizes.
Warren, OH............... 58,000 sq. ft. Leased Coating and lithography.
Alliance, OH............. 52,000 sq. ft. Leased Manufacture plastic pails and farming
products.
Baltimore, MD............ 45,000 sq. ft. Leased Manufacture of specialty tins and
components.
New Castle, PA........... 22,750 sq. ft. Owned Coating and lithography.
Jerseyville, IL.......... 24,000 sq. ft. Leased Manufacture plastic pails and farming
products.
Vernalis, CA............. 24,000 sq. ft. Leased Manufacture of specialty metal
containers.
</TABLE>

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<TABLE>
<CAPTION>
LOCATION SIZE STATUS FUNCTION
- ------------------------- --------------- ------- -------------------------------------
<S> <C> <C> <C>
Tallapoosa, GA........... 21,400 sq. ft. Owned Sporri Development Center; assembly
of a variety of specialty cans,
including small-size aerosol cans.
EUROPE
Merthyr Tydfil, UK....... 320,000 sq. ft. Leased(5) Manufacture and assembly of aerosol
cans.
Southall, UK............. 253,000 sq. ft. Owned Manufacture and assembly of aerosol
cans.
Laon, France............. 220,000 sq. ft. Leased Manufacture and assembly of aerosol
cans.
Reus, Spain.............. 182,250 sq. ft. Owned Manufacture and assembly of aerosol
cans.
Tredegar, UK............. 90,350 sq. ft. Owned Steel shearing and coating
operations.
Schwedt, Germany......... 35,500 sq. ft. Leased Manufacture and assembly of aerosol
cans.
Voghera, Italy(5)........ 45,200 sq. ft. Lease Manufacture and assembly of aerosol
Pending cans.
</TABLE>

- ---------------

(1) Purchased August 16, 1996; expected date of manufacturing capability is
mid-1997.
(2) Subject to a mortgage in favor of The First National Bank of Danville.
(3) Purchased July 31, 1996; expected date of manufacturing capability is
January, 1997.
(4) The property at Merthyr Tydfil is subject to a 999 year lease with a
pre-paid option to buy which becomes exercisable in January 2007. Up to that
time, the Landlord may require the Company to purchase the property for a
payment of 1L British Sterling.
(5) Lease executed on December 18, 1996. Partial occupancy was taken January 15,
1997 with full occupancy expected during the first quarter of 1997.

Currently, the Company's facility under construction at Merthyr Tydfil is
subject to a pledge of the leasehold interests and personal property located
thereon to secure amounts outstanding under a credit agreement entered into with
General Electric Capital Corporation on December 20, 1996. The Company's
facility in Laon, France is subject to a pledge of the leasehold interests
pursuant to a lease financing arrangement with Sogaibail, S.A.

In addition to its manufacturing facilities, the Company owns approximately
22 acres of undeveloped land in Raeford, North Carolina; leases 37,734 square
feet of office space in Oak Brook, Illinois to house its corporate headquarters;
leases approximately 102,400 square feet of office and warehouse space in
Baltimore, Maryland to house a custom and specialty sales office and
distribution center; and leases approximately 58,200 square feet of office and
warehouse space in Saddle Brook, New Jersey to house East Coast aerosol and
paint and general line sales and a general line distribution center. An
additional building in Saddle Brook which formerly housed manufacturing
operations is awaiting disposition by the Company which is evaluating its
options. The Company owns a 118,000 square-foot building in Philadelphia,
Pennsylvania which is currently leased to a tenant. The Company also owns a
145,000 square foot building in Baltimore, Maryland and a 68,000 square foot
building in Trussville, Alabama which are for sale.

With the exception of Italy, where aerosol can making equipment will need
to be relocated from the Crown plant in Voghera to a new local site, management
believes the Company's facilities are adequate for its present needs and that
its properties are generally in good condition, well-maintained and suitable for
their intended use. All of the manufacturing plants described in the table above
are operating in regular service with one or more shifts per day. The Company
continuously evaluates the composition of its various manufacturing facilities
in light of current and expected market conditions and demand. While no plans
currently exist to further consolidate plant operations, such actions may be
deemed appropriate in the future.

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RECENT PROPERTY DEVELOPMENTS

On January 2, 1997 the Company acquired certain assets from O-I which
include machinery, equipment, inventory and raw materials of O-I's Erie,
Pennsylvania metal business. O-I will operate these lines for up to one year,
pending relocation into one or more of U.S. Can's plants.

On December 18, 1996, the Company entered into a lease of certain property,
a building and improvements in Voghera, Italy, to transfer the aerosol can
manufacturing operations currently housed in Crown's facility in Voghera. The
Company took partial occupancy of the building on January 15, 1997 and
anticipates that full transfer of manufacturing capability to the new facility
will occur during the first quarter of 1997.

The Company executed a long-term lease agreement, with an option to
purchase the site, for a 320,000 square foot building in Dragon Parc industrial
development area in Merthyr Tydfil, Wales in the United Kingdom for the
establishment of an aerosol can manufacturing facility on November 29, 1996. The
facility will be used to house the Company's aerosol operations to supply the
requirements of Gillette to service its long-term purchase commitment and to
supply other aerosol can customers in Europe.

On August 16, 1996, the Company completed its acquisition of a site in the
Dallas, Texas area for the establishment of a paint and general line
manufacturing plant. The decision to expand manufacturing capabilities in the
Southwest followed the Company's agreement with one of its major coating
customers on the material terms of a long-term supply arrangement. As of
September 30, 1996, the Company and this customer entered into a definitive
long-term supply agreement. See "-- Customers and Sales Force." This Texas
facility will initially produce gallon round paint cans for the coatings
industry. In the future, if circumstances warrant, the Company may expand this
facility to include production of certain of its other products.

On July 31, 1996, the Company completed its acquisition of a facility in
Glen Dale, West Virginia for the transfer of its manufacturing operations
currently located at a leased facility in Wheeling, West Virginia. The facility
will initially be used to house the operations transferred from the facility in
Wheeling, which manufactures caps and closures. In the future, the Company may
expand this facility to include additional manufacturing capabilities for the
production of specialty products.

LEGAL PROCEEDINGS AND REGULATORY MATTERS

The Company is involved in a number of legal proceedings arising in the
ordinary course of business. Management does not believe that these proceedings
will have a material adverse effect on the business or financial condition of
the Company either individually or in the aggregate.

On February 28, 1995, CHI, an affiliate of Kiewit, filed a Complaint
against U.S. Can and others in the United States District Court, District of New
Jersey, asserting claims based upon alleged indemnity obligations of U.S. Can to
Kiewit, as successor in interest to CCC, arising from the 1987 acquisition by
U.S. Can of the general packaging business of CCC. These alleged indemnity
obligations relate to environmental liabilities, reimbursable insurance
deductibles and reinsurance amounts, and certain personal injury and employment
discrimination claims. The Complaint includes counts for breach of contract,
declaratory judgment, indemnification and contribution, certain statutory
remedies, state environmental law remedies and unjust enrichment. CHI seeks
unspecified compensatory damages, consequential and incidental damages,
interest, attorneys' fees and costs of litigation, equitable relief,
environmental response costs, and restitution. No aggregate dollar amount of
damages is specified in the Complaint. However, in an initial discovery
disclosure served on U.S. Can, CHI alleged that its damages to the date of such
disclosure were approximately $4.4 million. U.S. Can has filed an Answer to the
Complaint, asserted affirmative defenses and made counterclaims against CHI
seeking reimbursement for expenses and accruals relating to postretirement
medical and life insurance benefits for former employees of CCC, and expenses
incurred as a result of CCC's breach of its contractual indemnification
obligations to U.S. Can. The case has been transferred to the United States
District Court for the Northern District of Illinois. U.S. Can believes it has
meritorious defenses to all of CHI's claims. See, "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Litigation".

CarnaudMetalbox Aerosols, S.A., part of USC Europe, now owned by the
Company, is subject to two potentially material claims. Each of these claims are
covered by an indemnification agreement with Crown

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<PAGE> 69

should any uninsured portion of such claims exceed one million French francs (or
approximately $200,000). One claim involves a lawsuit filed in Federal District
Court in Texas for unstated monetary damages for injuries allegedly incurred in
connection with the explosion of a can of hair spray allegedly produced by
CarnaudMetalbox Aerosols, S.A. The second claim involves a notification from a
customer of a complaint alleging defective aerosol cans which were manufactured
by CarnaudMetalbox Aerosols, S.A. No information is available to establish the
magnitude of any legal claim should the customer institute legal action.

The NLRB has issued a decision finding the Company in violation of certain
sections of the National Labor Relations Act as a result of the Company's
closure of certain facilities in 1991 and failure to offer inter-plant job
opportunities to affected employees. Management does not believe that the
resolution of this matter will have a material adverse effect on the Company's
financial condition or results of operations.

Aerosol containers, the Company's principal product, have historically been
subject to criticism on environmental grounds. Thus, while the Company believes
that aerosol can technology is environmentally sound, future additional
unfavorable legislation or regulation relating to aerosols could reduce the
number of aerosol containers used by the Company's customers, which could have a
material adverse effect on the Company. Several states have enacted legislation
requiring reformulation of aerosol product propellants to limit the use of VOCs,
and many of the Company's customers have responded to meet such relevant new
standards. The Company is also subject to potential liability for the costs of
environmental remediation. This liability may be based upon the ownership or
operation of industrial facilities where contaminants may be found, regardless
of whether the Company has contributed to the contamination. See "Risk
Factors -- Environmental Matters."

For a discussion of the Master Metals, Inc. site in Cleveland, Ohio, the
Malvern TCE Superfund Site in Malvern, Pennsylvania, and the Barone Barrel &
Drum Company site in Newark, New Jersey see "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Environmental
Matters."

For additional information with respect to certain environmental matters,
see "Risk Factors -- Environmental Matters" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Environmental
Matters."

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<PAGE> 70

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth certain information as of September 15, 1996
with respect to each person who is an executive officer or director of the
Company or U.S. Can, as indicated below.

<TABLE>
<CAPTION>
NAME AGE TITLE
- ------------------------------------------- --- -------------------------------------------
<S> <C> <C>
William J. Smith........................... 70 Chairman of the Board, President and Chief
Executive Officer, Company and U.S. Can
Frank J. Galvin............................ 55 Executive Vice President, Operations and
Assistant Secretary, Company and U.S. Can
Timothy W. Stonich......................... 49 Executive Vice President, Finance, Chief
Financial Officer and Secretary, Company
and U.S. Can
Charles E. Foster.......................... 52 Senior Vice President, Custom and Specialty
Products, U.S. Can
Lawrence T. Messina........................ 51 Senior Vice President, International, U.S.
Can
William J. Smith, Jr....................... 37 Senior Vice President, Aerosol Operations,
U.S. Can
Peter J. Andres............................ 53 Vice President, Treasurer and Assistant
Secretary, Company and U.S. Can
Anthony F. Bonadonna....................... 54 Vice President, Human Resources, Company
and U.S. Can
John R. McGowan............................ 54 Vice President and Controller, Company and
U.S. Can
Calvin W. Aurand, Jr....................... 66 Director, Company
Benjamin F. Bailar......................... 62 Director, Company and U.S. Can
Eugene B. Connolly, Jr..................... 64 Director, Company
Carl Ferenbach............................. 54 Director, Company
Ricardo Poma............................... 50 Director, Company
Francisco A. Soler......................... 50 Director, Company and U.S. Can
Michael J. Zimmerman....................... 46 Director, Company
</TABLE>

The Company's Board of Directors (the "Board of Directors") is divided into
three classes serving staggered three-year terms. Each director of the Company
is elected at the annual meeting at which such class stands for election and
serves until the annual meeting of the Company's stockholders at which such
class stands for reelection and until their successors are duly elected and
qualified. Messrs. Poma and Zimmerman were reelected at the most recent Annual
Meeting of the Company's stockholders (the "Annual Meeting") held on April 25,
1996. Messrs. Smith, Connolly and Bailar are serving three-year terms expiring
at the 1997 Annual Meeting; and Messrs. Aurand, Soler and Ferenbach are serving
three-year terms expiring at the 1998 Annual Meeting.

In connection with the IPO, the Company entered into an agreement (the
"Stockholders Agreement") with all of its stockholders immediately prior to the
IPO (the "Restricted Stockholders") pursuant to which each of Salomon Brothers
Inc ("Salomon Brothers"), and Messrs. Smith, Poma and Soler, for so long as each
such Restricted Stockholder owns beneficially at least 175,000 shares of Common
Stock, has the right to submit a name to the Board of Directors to be included
in the slate of nominees for election to the Board of Directors. In accordance
with the Stockholders Agreement, in 1992, Salomon Brothers designated Mr.
Zimmerman, who at the time was an employee of Salomon Brothers, to

70
<PAGE> 71

serve as a director and his current term expires at the 1999 Annual Meeting. Mr.
Zimmerman left Salomon Brothers in 1996, although he remains a director of the
Company. Following Mr. Zimmerman's departure from Salomon Brothers, Salomon
Brothers has not designated a new director. In accordance with the Stockholders
Agreement Mr. Smith designated himself and was elected at the Company's 1994
Annual Meeting to serve a three-year term expiring at the 1997 Annual Meeting;
Mr. Poma designated himself and was elected to serve a three-year term expiring
at the 1999 Annual Meeting; and Mr. Soler designated himself and was elected at
the Company's 1995 Annual Meeting to serve a three-year term expiring at the
1998 Annual Meeting. The Stockholders Agreement provides that if a designee
ceases to serve for any reason, the party who submitted the name of such
designee has the right to name such designee's successor for approval by the
Board of Directors to fill the vacancy on the Board of Directors, and any
director so chosen shall hold office for a term expiring at the Annual Meeting
at which the term of office of the class to which such director has been added
expires and until such director's successor has been duly elected and qualified.

BUSINESS EXPERIENCE

The following information is provided as of September 15, 1996 for each
executive officer or director of the Company or U.S. Can:

Calvin W. Aurand, Jr. has served as a Director of the Company since
February 1995. In April 1995, Mr. Aurand retired as Chairman of the Board
of Banta Corporation ("Banta"), Menasha, Wisconsin, a printing company
where he was employed for over five years. Mr. Aurand also served as
President and Chief Executive Officer of Banta. Prior to joining Banta, Mr.
Aurand was President and Chief Operating Officer of American Bank Note
Company, New York; President and Chief Executive Officer of Charles P.
Young Company, New York; President and Chief Operating Officer of
Stecker-Traung-Schmidt Corporation, Detroit; and had held key financial
positions in Bemis Company, Minneapolis. Mr. Aurand is a Director of
Riverside Paper Corp., Schiele Graphics Corp., and Shepard Poorman
Communications Inc.

Benjamin F. Bailar has served as a Director of the Company and U.S.
Can since July 1986 and November 1987, respectively. Since 1987, Dean
Bailar has served as Dean of the Jones Graduate School of Administration at
Rice University. He is also a Director of Dana Corporation, Smith
International, Inc. and Trico Marine Services Inc.

Eugene B. Connolly, Jr. has served as a Director of the Company since
June 1993. Mr. Connolly retired in April 1996 as the Chairman of USG
Corporation ("USG") a Fortune 500 company with subsidiaries that are market
leaders in the production of gypsum wallboard, joint compound and related
gypsum products such as ceiling tile and grid, a position he had held since
June 1990. He served as Chief Executive Officer of USG from June 1990 until
January 1996. In addition, Mr. Connolly served as President of USG for the
period of April-December 1993, President and Chief Executive Officer
(January 1990-May 1990), Executive Vice-President (1987-1989), President
and Chief Executive Officer of USG Interiors (March 1987-March 1989) and
President and Chief Executive Officer of DAP Inc. (July 1988-March 1989).
Mr. Connolly also serves as a Director of LaSalle National Bank, The Pepper
Companies and Zenith Electronics.

Carl Ferenbach has served as a Director of the Company since 1983. Mr.
Ferenbach is the Managing Director of Berkshire Partners LLC. From March
1986 until June 1996, he was a general partner of Berkshire Partners,
Boston, Massachusetts, a private partnership sponsoring and investing in
private company acquisitions and recapitalizations and managing four
investment funds. Mr. Ferenbach also serves as a Director of Wisconsin
Central Transportation Corporation; Trico Marine Services Inc., which
operates offshore marine oil service vessels in the Gulf of Mexico; Tranz
Rail Holdings Limited, a holding company that owns Trans Rail Limited,
which is the principal provider of rail transportation services in New
Zealand; NPR, Inc., which operates container ships between Puerto Rico and
the United States; Castle Tower Corporation, which provides site locations
and services to the wireless communications industry; and English, Welsh
and Scottish Railways

71
<PAGE> 72

Ltd., which controls certain freight rail assets in the United Kingdom. He
was, until its sale in 1994, a Director and Chairman of the Board of
Loveshaw Corp., a privately held corporation engaged in the manufacture of
packaging equipment. Mr. Ferenbach also served as a director of Community
Capital Bank until his resignation in December of 1994.

Ricardo Poma has served as a Director of the Company since 1983. Mr.
Poma is Managing Partner and Chief Executive Officer of Poma Hermanos de
C.V., a family holding company involved in automobile distribution, hotels,
real estate development and manufacturing. Mr. Poma has held this position
since June 1979. Mr. Poma is also Vice Chairman of International Bancorp of
Miami, Inc.; a member of the Advisory Board of Bain Capital, an investment
fund; and President of the School for Economics and Business, a private
university in El Salvador. Mr. Poma is a member of the Nominating and
Corporate Governance (Chairman), Audit and Finance Committees of the Board.

Francisco A. Soler has served as a Director of the Company and U.S.
Can since 1983. Mr. Soler is Chairman of International Bancorp of Miami,
Inc. and HBS Finance Corporation. Mr. Soler has held these positions since
1985 and 1974, respectively. Mr. Soler is also Vice-Chairman of
All-American Bottling Corporation, a privately held corporation, Chairman
of the Harbour Club Ltd., London, England, Director of Harbour Club Milano
Spa., and Chairman of Northern Star Ski Corporation, East Burke, Vermont.

Michael J. Zimmerman has served as a Director of the Company since
December 1992. Mr. Zimmerman is a Senior Vice President of Continental
Grain Company and President of its ContiInvestments business unit. Prior to
May, 1996 he was a Managing Director of Salomon Brothers and Salomon
Brothers Holding Company from 1985 to 1996 and an employee of Salomon
Brothers since 1976. Mr. Zimmerman is a member of the Finance Committee of
the Board.

William J. Smith has served as Chairman, President and Chief Executive
Officer of the Company and its wholly-owned subsidiary, U.S. Can, since
1983. Mr. Smith has over 40 years of experience in the packaging business.
He began his career in packaging with American Can Company ("American
Can"), serving at various times as an employee and manager at several of
its plants. In 1972, Mr. Smith was named General Manager of General
Packaging at American Can. In 1974, he became Senior Vice
President -- Technology of American Can. In this capacity, Mr. Smith
assumed responsibility for Research and Development, Engineering,
Manufacturing Technology and Productivity. In 1981, Mr. Smith became
Executive Vice President of American Can's Paper Sector, which had sales of
approximately $1.3 billion at that time. Mr. Smith was also named Chairman
of American Can's Operating Committee, a position with functions comparable
to those of a Chief Operating Officer. Mr. Smith retired from American Can
in 1983. Mr. Smith serves as a Trustee of Syracuse University.

Frank J. Galvin has served as Executive Vice President -- Operations
of the Company and U.S. Can since February 1991. From April 1987 to
February 1991, Mr. Galvin served as Senior Vice President -- Sales and
Marketing for U.S. Can. Prior thereto, Mr. Galvin served as General Manager
of the Midwest Division of CCC. Mr. Galvin's other positions at CCC
included Director of Finance for Central Operations and National Sales
Manager for the General Packaging Division.

Timothy W. Stonich has served as Executive Vice President -- Finance
and Chief Financial Officer of the Company and U.S. Can since December
1992. From July 1987 to December 1992, Mr. Stonich served as Senior Vice
President -- Finance of the Company and U.S. Can and Chief Financial
Officer of U.S. Can. He has served as Secretary of the Company and U.S. Can
since February 1991. From March 1986 to July 1987, Mr. Stonich served as
Senior Vice President and Chief Financial Officer of Linc Financial
Services, Inc., Chicago, a lessor of medical and telecommunications
equipment. Mr. Stonich's previous positions include Treasurer of the Marmon
Group, a diversified manufacturing company; Vice President and General
Manager of Pullman Leasing Company, a company engaged in the full service
leasing of railcars; and Commercial Banking Officer with Harris Trust and
Savings Bank.

72
<PAGE> 73

Charles E. Foster has served as Senior Vice President -- Custom and
Specialty Products of U.S. Can since February 1996. Mr. Foster had served
as Vice President and Group Executive -- Custom and Specialty Products of
U.S. Can from April 1994 to February 1996. From 1985 until April 1994, Mr.
Foster served as President of Ellisco Inc., a division of CSS Industries,
Inc.

Lawrence T. Messina has served as Senior Vice
President -- International of U.S. Can since February 1996. Mr. Messina had
served as Vice President -- Western and Machine Center Operations since
September 1994, and Group Executive overseeing U.S. Can's International
operations since December 1995. Mr. Messina has also served as Vice
President and General Manager -- Paint and Oblong from April 1992 to
September 1994, and as Director of Operations for U.S. Can's Commerce and
Bayside, California plants from 1990 to 1992. Mr. Messina joined U.S. Can
in March 1988 as Area Sales Director -- U.S. Can West.

William J. Smith, Jr. tendered his resignation effective January 1,
1997. He had served as Senior Vice President -- Aerosol Operations of U.S.
Can since February 1996. Mr. Smith had served as Vice President -- Elgin
and Midwest Operations since January 1994, and as Managing Director of
Elgin Operations from February 1992 to January 1994. Prior to that time,
Mr. Smith served as Director of Operations -- Pennsylvania Operations from
December 1988 to February 1992 and as Associate Director -- Pennsylvania
Operations from December 1987 to December 1988.

Peter J. Andres has served as U.S. Can's Treasurer since September
1987, Vice President since January 1988, and Assistant Secretary since
January 1990. He has served as Vice President, Treasurer and Assistant
Secretary of the Company since January 1990. From March to August 1987, Mr.
Andres served as Director of Financial Services of U.S. Can. Prior to
joining U.S. Can, Mr. Andres held a number of financial and sales positions
during his 18-year tenure with American Can.

Anthony F. Bonadonna has served as Vice President -- Human Resources
of U.S. Can since July 1994. Mr. Bonadonna served as Vice President, Human
Resources for Kraft General Foods' Commercial Products Group from 1990
through 1994. Prior to that, Mr. Bonadonna was Corporate Director,
Industrial Relations of Miller Brewing Company from 1984 to 1990.

John R. McGowan has served as Vice President and Controller of U.S.
Can since August 1989. Mr. McGowan joined U.S. Can in May 1987 and served
as Vice President -- Planning for U.S. Can from September 1987 to July
1989. Prior to joining U.S. Can, Mr. McGowan held a number of financial and
management positions during his 25-year tenure with CCC. Mr. McGowan was
employed in CCC's general packaging operations as Division
Manager -- Finance from February to May 1987 and from February 1982 to
January 1987, as Division Controller.

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<PAGE> 74

EXECUTIVE COMPENSATION

The following tables set forth (a) the compensation paid or accrued by the
Company and U.S. Can to the Chief Executive Officer ("CEO") and each of the four
most highly compensated executive officers of the Company, other than the CEO,
serving at December 31, 1995 (the "named executive officers") for services
rendered to the Company and U.S. Can in all capacities during fiscal years 1995,
1994 and 1993, (b) certain information relating to restricted stock awards made
to the named executive officers, other than the CEO, in 1995, (c) certain
information relating to option grants made to the named executive officers in
1994 and 1993, and (d) certain information relating to options exercised in 1995
and options held by the named executive officers at December 31, 1995. Neither
the Company or U.S. Can made grants of freestanding stock appreciation rights
("SARs") in fiscal years 1995, 1994 or 1993, nor did the Company or U.S. Can
make any awards in fiscal years 1995, 1994 or 1993 under any long-term incentive
plan ("LTIP").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
AWARDS
ANNUAL COMPENSATION ----------------------- PAYOUTS
--------------------------------- RESTRICTED SECURITIES -------
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
SALARY BONUS COMPENSATION AWARDS OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR $ $ $ ($)(B) SARS(#) ($) ($)
- ----------------------------------- ---- -------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
William J. Smith................... 1995 $800,000 none $111,556(a) none none none $350,000(c)
President and Chief Executive 1994 $800,000 none $114,952(a) none none none $350,000(c)
Officer of U.S. Can and the 1993 $800,000 none $111,195(a) none 75,000 none $350,000(c)
Company
Frank J. Galvin.................... 1995 $275,000 none $ 10,445(d) $431,250 none none $ 27,603(e)
Executive Vice President, 1994 $264,711 $75,000 $ 9,834(d) none none none $ 30,106(e)
Operations and Assistant 1993 $250,096 $65,000 $ 9,834(d) none 55,000 none $ 28,480(e)
Secretary of U.S. Can and the
Company
Timothy W. Stonich................. 1995 $235,000 none $ 10,445(d) $431,250 none none $ 23,979(e)
Executive Vice President, 1994 $224,711 $90,000 $ 9,834(d) none none none $ 25,935(e)
Finance, Secretary and Chief 1993 $210,077 $55,000 $ 7,868(d) none 45,000 none $ 24,907(e)
Financial Officer of U.S. Can and
the Company
Charles E. Foster(f)............... 1995 $178,970 none none $ 71,875 none none $ 12,008(e)
Senior Vice President, Custom and 1994 $137,981 $35,000 none none 20,000 none $ 9,871
Specialty Products of U.S. Can
Anthony F. Bonadonna(g)............ 1995 $163,385 none 5,741(d) 57,500 none none $ 8,747(e)
Vice President, Human Resources 1994 $ 78,096 25,000 2,700(d) none 20,000 none $ 5,977
of U.S. Can
Raymond J. Parker.................. 1995 $167,500 none $ 5,416(d) $ 57,500 none none $ 14,477(e)
Vice President -- Engineering, 1994 $157,115 $33,000 none none none none $ 16,934(e)
Europe of USC Europe(h) 1993 $152,692 $25,000 none none 17,500 none $ 17,613(e)
</TABLE>

- ---------------

(a) Mr. Smith's perquisites and other personal benefits totalled $66,365 in
1995. $21,738 of this amount was for housing and related expenses, and
$21,600 was for an airline travel pass. No other perquisite or personal
benefit received by Mr. Smith had a value in excess of 25% of his total
perquisites and other personal benefits for 1995. $45,191 of the amount
shown represents the amount reimbursed in 1995 for the payment of taxes in
respect of perquisites and personal benefits. Mr. Smith's perquisites and
other personal benefits totalled $68,928 in 1994. $22,184 of this amount was
for housing and related expenses, and $21,600 was for an airline travel
pass. No other perquisite or personal benefit received by Mr. Smith had a
value in excess of 25% of his total perquisites and other personal benefits
for 1994. $46,024 of the amount shown represents the amount reimbursed in
1994 for the payment of taxes in respect of perquisites and personal
benefits. Mr. Smith's perquisites and other personal benefits totalled
$67,165 in 1993. $21,138 of this amount was for housing and related
expenses, and $21,060 was for an airline travel pass. No other perquisite or
personal benefit received by Mr. Smith had a value in excess of 25% of his
total perquisites and other personal benefits for 1993. $44,030 of the
amount shown represents the amount reimbursed in 1993 for the payment of
taxes in respect of perquisites and personal benefits.
(b) On December 31, 1995, Messrs. Smith, Galvin, Stonich, Foster, Parker and
Bonadonna held 430,633, 56,998, 73,197, 5,000, 21,339 and 4,000 shares,
respectively, of restricted Common Stock having a market value, based on the
closing price of the Common Stock on such date, of $5,813,951, $769,473,
$988,160, $67,500, $288,077 and $54,000, respectively.
(c) The amount shown represents the premium paid by U.S. Can pursuant to the
Nonqualified Supplemental Benefit Plan for William J. Smith (the
"Nonqualified Supplemental Benefit Plan"). The Nonqualified Supplemental
Benefit Plan provides certain pre-retirement death benefits and
postretirement annuity benefits. Its principal provisions establish a
lump-sum death benefit, payable if Mr. Smith dies prior to retirement, equal
to four times Mr. Smith's annual base salary in effect on the date
immediately preceding his death, and an annual supplemental retirement
benefit, payable at increasing rates between 20%

74
<PAGE> 75

and 50% of his final annual base salary if Mr. Smith retires between ages 66
and 72. The retirement benefits will be payable, upon Mr. Smith's death, to
Mr. Smith's spouse during her lifetime. The principal source for payment of
the death benefit is a life insurance policy on Mr. Smith's life in the face
amount of $4 million which he has purchased and on which U.S. Can is
currently paying the premium. U.S. Can may use the insurance policy as a
source for paying the supplemental retirement obligation to Mr. Smith and
his surviving spouse, and Mr. Smith will be required to transfer ownership
of the policy to U.S. Can at the time of his retirement after reaching age
72.
(d) The amounts shown represent amounts reimbursed in 1995, 1994 and 1993 for
the payment of taxes in respect of perquisites and personal benefits. No
perquisites or other personal benefits have been reported for 1995, 1994 or
1993 for Messrs. Galvin, Stonich, Foster and Parker because the aggregate
amount of perquisites and personal benefits is less than the lower of
$50,000 and ten percent of the total annual salary and bonus reported for
each such named executive officer.
(e) U.S. Can has made these contributions or payments for the benefit of the
executive to U.S. Can's Salaried Employees Savings and Retirement
Accumulation Plan ("SRAP") and pursuant to two nonqualified plans in respect
of fiscal years 1995, 1994 and 1993. Included in the 1995 and 1994 amounts
for Messrs. Galvin and Stonich, and in the 1995 amount for Mr. Parker, are
premium payments made by U.S. Can on whole life insurance with adjustable
term protection for these named executive officers under a non-qualified
plan that supplements U.S. Can's regular 401(k) plan. Under this plan, each
named executive officer may have U.S. Can withhold from his earnings an
amount equal to the maximum withholding amount under U.S. Can's qualified
plan, offset by his qualified contributions (which were limited to $9,240 in
1995). U.S. Can guarantees an 8% rate of return on each executive's excess
contributions made under this plan if he retires at age 55 or older or a 5%
rate of return if he retires before age 55. U.S. Can purchases, owns and is
the beneficiary on a life insurance policy for the executive. U.S. Can pays
the executive an annual retirement benefit for 15 years and will use the
cash value of each policy to pay this benefit. If an executive dies prior to
retirement, U.S. Can will pay the executive's beneficiary an annual survivor
benefit for 15 years. Also included in the 1995, 1994 and 1993 amounts for
Messrs. Galvin and Stonich, the 1995 and 1994 amounts for Mr. Parker, and
the 1995 amount for Mr. Foster and Mr. Bonadonna are U.S. Can contributions
to a nonqualified benefit replacement plan. Under this plan, U.S. Can
accrues money for retirement contributions that could not be allocated to
the named executive's SRAP account because of Internal Revenue Service
limits. The accruals earn interest equivalent to the greater of the rate of
return yielded by one of two of the SRAP investment funds. A lump sum
benefit is payable upon termination or death.
(f) Mr. Foster was not an employee of the Company or U.S. Can at any time prior
to March 30, 1994, and therefore no compensation information is provided for
1993 or the first three months of 1994.
(g) Mr. Bonadonna was not an employee of the Company or U.S. Can at any time
prior to July 11, 1994, and therefore no compensation information is
provided for 1993 or the first six months of 1994.
(h) Mr. Parker was, until September 1, 1996 Vice President, Technology and
Facilities of U.S. Can. See "Management -- Business Experience."

AGGREGATED OPTION/SAR EXERCISES IN 1995
AND 1995 FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/ OPTIONS/SARS AT
SARS AT FY-END (#) FY-END ($)(A)
SHARES VALUE --------------------- --------------------
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------- ------------ ----------- --------------------- --------------------
<S> <C> <C> <C> <C>
William J. Smith............. 115,000 $ 1,487,188 51,667/23,333 $48,438/$21,875
Frank J. Galvin.............. None N/A 67,889/22,111 $248,646/$40,729
Timothy W. Stonich........... None N/A 59,000/16,000 $297,313/$23,000
Charles E. Foster(b)......... None N/A 8,344/11,656 N/A
Anthony F. Bonadonna(b)...... None N/A 20,000/7,083 N/A
Raymond J. Parker............ None N/A 20,055/7,445 $50,802/$14,980
</TABLE>

- ---------------

(a) This amount is the aggregate of the number of in-the-money options
multiplied by the difference between the mean of the high and low trading
prices of the Common Stock on the New York Stock Exchange on December 29,
1995 (the last trading session in 1995), and the exercise price for that
option.
(b) Mr. Foster's and Mr. Bonadonna's options were not in-the-money at fiscal
year-end 1995 and, therefore, no fiscal year-end values are shown.

EMPLOYMENT AGREEMENTS

The Company has entered into an employment agreement with William J. Smith
(the "Smith Agreement"), pursuant to which the Company will employ Mr. Smith as
Chief Executive Officer of the Company through June 30, 1998, at an annual base
salary of $800,000, together with the same benefits referenced in the Summary
Compensation Table herein, and additional benefits under the Nonqualified
Supplemental Benefit Plan. The Smith Agreement provides that, should the Company
decide to terminate Mr. Smith's employment without cause, he will be entitled to
receive his base salary and the benefits

75
<PAGE> 76

described above for a period of three years or through June 30, 1998, whichever
is less. Mr. Smith is also entitled to disability benefits equal to two years of
base salary.

U.S. Can has entered into employment agreements with Messrs. Galvin and
Stonich. The employment agreements will continue in effect until terminated by
U.S. Can or the employee. U.S. Can has agreed to pay Mr. Galvin at his current
base salary of $300,000 per year during the term of his agreement, and Mr.
Stonich at his current base salary of $260,000 per year during the term of his
agreement, together with the same benefits provided to other officers of U.S.
Can. Messrs. Galvin and Stonich each may voluntarily terminate his employment at
any time, upon 30 days' written notice to U.S. Can. U.S. Can may also terminate
the employment agreements upon 30 days' written notice, but if U.S. Can
terminates either Mr. Galvin's or Mr. Stonich's employment without cause, U.S.
Can must pay a severance allowance to the departing employee equal to 24 months
of such employee's base salary and insurance benefits. Messrs. Galvin and
Stonich or their designated beneficiaries will also be entitled to receive up to
two years of base salary upon permanent disability or death. In addition, the
agreements require Messrs. Galvin and Stonich to refrain from disclosing
confidential information acquired in connection with their employment at U.S.
Can and to abstain from competing with U.S. Can during the term of employment
and for a period of two years thereafter upon termination.

U.S. Can entered into an employment agreement with Mr. Foster in connection
with its acquisition of Ellisco. This agreement remains in effect until March
30, 1997, unless earlier terminated by U.S. Can or Mr. Foster. U.S. Can has
agreed to pay Mr. Foster at his current base salary of $187,000 per year during
the term, together with the same benefits provided to other officers of U.S.
Can. Mr. Foster may voluntarily terminate his employment at any time upon 30
days' written notice to U.S. Can. U.S. Can may also terminate this employment
agreement with cause, effective immediately, or without cause, effective 30 days
after written notice to Mr. Foster. If U.S. Can terminates Mr. Foster's
employment without cause, Mr. Foster is eligible to receive severance payments
equal to the greater of the base salary Mr. Foster would receive if he served
the full three-year term of his agreement or the severance payments he would
otherwise receive under U.S. Can's severance pay plan then in effect for
similarly situated employees. In addition, this agreement requires Mr. Foster to
refrain from disclosing confidential information acquired in connection with his
employment at U.S. Can and, unless terminated by U.S. Can without cause, to
abstain from competing with U.S. Can during the term of employment and for a
period of two years thereafter.

U.S. Can entered into an employment agreement with Mr. Bonadonna when he
joined U.S. Can. This agreement will continue in effect until terminated by Mr.
Bonadonna or U.S. Can. U.S. Can has agreed to pay Mr. Bonadonna at his current
base salary of $180,000 per year during the term, together with the benefits
received by other officers of U.S. Can. Mr. Bonadonna may unilaterally terminate
his employment with U.S. Can, effective 30 days after written notice to U.S.
Can. Mr. Bonadonna's employment may also be terminated by U.S. Can without
cause, effective 30 days after written notice to Mr. Bonadonna, or with cause,
effective immediately. If U.S. Can or its successor or assignee terminate Mr.
Bonadonna's employment without cause for any reason other than total and
permanent disability, Mr. Bonadonna will receive 18 months' severance pay and
certain insurance benefits. If Mr. Bonadonna ceases to be employed due to total
and permanent disability he will be entitled to receive severance pay in an
amount that, together with any disability insurance pay he receives, equals the
severance pay he would otherwise have received if he were terminated without
cause for any reason other than total and permanent disability. In the event of
Mr. Bonadonna's death while employed by U.S. Can his designated beneficiary or
estate would be entitled to receive a death benefit equal to one and a half
times his base salary in effect prior thereto. In addition, Mr. Bonadonna's
employment agreement requires him not to compete with U.S. Can or disclose U.S.
Can's confidential information for certain time periods following termination of
his employment.

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<PAGE> 77

CHANGE-IN-CONTROL AGREEMENTS

The Company and U.S. Can have entered into change-in-control agreements
with each of the named executive officers, other than the Chief Executive
Officer, which provide certain benefits to a named executive officer terminated
or constructively terminated within two years following a change in control. A
change in control is defined as the acquisition by any person or group of 20% or
more of the Common Stock, a merger or consolidation in which the Company does
not survive as an independent company, a sale of all or substantially all of the
assets of the Company or the liquidation or dissolution of the Company. Under
these agreements, a named executive officer is deemed to have been
constructively terminated if he is assigned any duties inconsistent in any
material respect with his duties before a change in control, or the Company
takes any other action which results in a diminution in any material respect of
the named executive's position, authority, duties or responsibilities that were
in effect before a change in control. The change-in-control agreements with
Messrs. Galvin and Stonich provide that, if the executive is terminated or
constructively terminated within two years following a change in control, the
vesting of all his restricted stock awards will be accelerated to the effective
date of such termination. The change-in-control agreements with Messrs. Foster,
Bonadonna and Parker provide that, if the executive is terminated or
constructively terminated within two years following a change in control, the
vesting of all his restricted stock awards will be accelerated to the effective
date of such termination, he will receive severance pay equal to two times the
greater of his base salary then in effect or his base salary in effect before
the change in control, he will receive a pro-rated bonus for the year in which
terminated or constructively terminated based upon the actual number of days he
worked and he will continue to receive the same health and welfare benefits he
received at any time within 120 days of the change in control for two years
following the date of such termination.

PRINCIPAL STOCKHOLDERS

United States Can Company has one class of capital stock outstanding, the
U.S. Can Common Stock (as defined). The Company owns 1,000 shares of the U.S.
Can Common Stock, which constitutes 100% of the issued and outstanding shares of
U.S. Can Common Stock. The Company is a Delaware corporation whose only business
interest is its ownership in United States Can Company.

The following table sets forth, as of November 30, 1996 (unless otherwise
indicated by footnote), the number and percentage of shares of Common Stock
beneficially owned by (i) each person known by the Company to own beneficially
more than 5% of the outstanding shares of the Company's Common Stock, (ii) each
director of the Company, (iii) each named executive officer and (iv) all
directors and executive officers of the Company and U.S. Can as a group. Unless
otherwise indicated in a footnote, each person possesses sole voting and
investment power with respect to the shares indicated as beneficially owned.
Unless otherwise indicated, the business address of each person is 900 Commerce
Drive, Oak Brook, Illinois 60521.

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<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
-----------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT
- --------------------------------------------------------------------- --------- -------
<S> <C> <C>
Ricardo Poma(5)(8)................................................... 918,000 7.10%
Lomas de San Francisco
San Salvador, El Salvador
President and Fellows of Harvard College............................. 684,600(3) 5.30%
c/o Harvard Management Company, Inc.
600 Atlantic Avenue
Boston, MA 02210
and
Harvard Yenching Institute
2 Divinity Avenue
Cambridge, MA 02138
William J. Smith(4)(5)............................................... 614,523(6) 4.73%
Francisco A. Soler(5)(9)............................................. 422,100 3.27%
Harbour Club
Watermeadow Lane
London SW6 2RR
Carl Ferenbach(5).................................................... 82,992 *
One Boston Place
Boston, Massachusetts 02108
Benjamin F. Bailar(5)................................................ 35,000(7) *
Old Kent Bank-Chicago, Trustee
233 South Wacker Drive
Chicago, Illinois 60606
Calvin W. Aurand, Jr.(5)............................................. 1,500 *
225 Main Street
Menasha, Wisconsin 54952
Eugene B. Connolly, Jr.(5)........................................... 1,000 *
c/o USG Corporation
125 South Franklin Street
Chicago, Illinois 60606
Michael J. Zimmerman(5).............................................. 1,000 *
c/o Continental Grain Company
277 Park Avenue
New York, New York 10172
Frank J. Galvin(4)................................................... 145,612(10) 1.12%
Timothy W. Stonich(4)................................................ 145,543(11) 1.12%
Raymond J. Parker(4)................................................. 51,188(12) *
Charles E. Foster(4)................................................. 22,524(13) *
Anthony F. Bonadonna(4).............................................. 18,688(14) *
All directors and executive officers as a group (17 persons)......... 2,559,716(15) 18.61%
</TABLE>

- ---------------
* The percentage of shares beneficially owned does not exceed 1% of the
Common Stock.
(1) The Prudential Insurance Company of America ("Prudential") has sole voting
and dispositive power over 682,300 of these shares, and shared voting and
dispositive power over 313,600 of these shares. These shares are held for
the benefit of Prudential's clients by its separate accounts, registered
investment companies, subsidiaries and/or other affiliates. This
information is taken from Prudential's Schedule 13G dated February 14,
1996, and is as of December 31, 1995.
(2) Neuberger & Berman L.P. ("Neuberger") has sole voting power over 560,600 of
these shares and shared voting power over 72,900 of these shares. Neuberger
has shared dispositive power over all of these shares. This information was
taken from Neuberger's Amendment No. 3 to Schedule 13G dated February 12,
1996, and is as of December 31, 1995.

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<PAGE> 79

(3) President and Fellows of Harvard College ("Fellows") owns beneficially
671,000 of these shares and Harvard Yenching Institute ("Yenching") owns
beneficially 13,600 of these shares. The Fellows and Yenching have elected
to report their ownership as a group and this information is taken from
their Schedule 13G dated February 13, 1996, and is as of December 31, 1995.
(4) The named individual is an executive officer.
(5) The named individual is a director of the Company and/or U.S. Can.
(6) Includes 68,910 shares subject to currently exercisable options. Mr. Smith
sold 25,000 shares on December 6, 1996 pursuant to a plan of personal asset
diversification.
(7) Dean Bailar has sole investment power with respect to the trust in which
the shares are held.
(8) Salcorp Ltd. ("Salcorp") is the record holder of 426,000 of these shares
and Katsura, S.A. ("Katsura") is the record holder of 60,000 of these
shares. Mr. Poma is the sole stockholder of both Salcorp and Katsura, and
is therefore deemed the beneficial owner of these shares. The remaining
432,000 shares are owned by Barcel Corporation ("Barcel"). Mr. Poma is the
Trustee for United Capital Trust, a family trust which owns all of the
stock of Barcel. Mr. Poma disclaims the beneficial ownership of 86,400 of
these shares held by Barcel in the United Capital Trust.
(9) 422,100 of these shares are owned beneficially by Windsor International
Corporation ("Windsor"), Atlas World Carriers S.A. ("Atlas") and The World
Financial Corporation S.A. ("World"), corporations affiliated or associated
with Mr. Soler or certain of Mr. Soler's relatives, which hold 181,100,
123,000 and 118,000 shares of Common Stock, respectively. Mr. Soler may be
deemed the beneficial owner of all shares held by Windsor, Atlas and World.
(10) Includes 85,534 shares subject to currently exercisable options.
(11) Includes 71,346 shares subject to currently exercisable options.
(12) Includes 26,079 shares subject to currently exercisable options.
(13) Includes 12,524 shares subject to currently exercisable options.
(14) Includes 11,688 shares subject to currently exercisable options.
(15) Includes 343,711 shares subject to currently exercisable options.

CERTAIN TRANSACTIONS

U.S. Can and the Company have agreed that U.S. Can will pay the Company's
operating expenses, which consist primarily of meeting expenses and directors'
fees for the Company's directors. U.S. Can made payments to the Company for such
expenses of approximately $416,000 in 1995.

Various amounts were loaned to the Company by U.S. Can prior to 1994 to
fund various transactions of the Company. The loans became repayable to U.S. Can
in minimum annual installments of $850,000 beginning in March 1992, with a final
payment in December 1998, or until all amounts are repaid in full, if earlier.
The Company has been making such annual payments in the form of Common Stock
contributions into the SRAP. Amounts due from the Company are included as
"Long-Term Receivable from Parent" in U.S. Can's balance sheet, net of the
amount classified as current. At December 31, 1995, the balance of this
receivable was approximately $1.5 million. In March 1995, the Company
contributed shares of Common Stock, valued at approximately $1,063,000, into the
SRAP as partial payment of this debt. In March 1996, the Company contributed
shares of Common Stock, valued at approximately $425,000, into the SRAP as
partial payment of this debt.

Salomon Brothers has acted as adviser to the Company and during the last
two fiscal years the Company paid Salomon Brothers $833,000 in investment
banking, underwriting and advisory fees. In addition the Company paid Salomon
Brothers an advisory fee of $811,112 in connection with the USC Europe
Acquisition and Salomon Brothers received a purchase price discount totalling
$4,640,625 as an Initial Purchaser in connection with the Offering.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company has two authorized classes of capital stock: the preferred
stock and the Common Stock. The number of authorized shares of Common Stock is
50,000,000 and the number of authorized shares of preferred stock is 10,000,000.
As of August 31, 1996, the Company had issued and outstanding 12,933,636 shares
of the Common Stock. The Capital Stock of U.S. Can consists of 1,000 shares of
Common Stock, par value $.01 per share (the "U.S. Can Common Stock"), all of
which is owned by the Company.

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<PAGE> 80

COMMON STOCK

Each share of Common Stock entitles the holder thereof to one vote in the
election of directors and all other matters submitted to a vote of the Company's
stockholders. Holders of Common Stock do not have cumulative voting rights.

Subject to any preferential rights of any outstanding shares of preferred
stock, holders of shares of Common Stock are entitled to receive, pro rata based
on the number of shares held, cash dividends when, as and if declared by the
Board of Directors from funds legally available for such purpose. However, the
Company does not expect to pay cash dividends in the foreseeable future. As a
holding company, the ability of the Company to pay dividends is dependent upon
the receipt of dividends or other payments from U.S. Can. The Senior Credit
Agreement and the Indenture limit U.S. Can's ability to pay dividends or
otherwise transfer cash to the Company. See "Description of Certain
Indebtedness." The Indenture will also limit the Company's ability to pay
dividends on the Common Stock. See "Description of Exchange Notes -- Certain
Covenants -- Limitation on Restricted Payments."

In the event of a liquidation of the Company, holders of shares of Common
Stock are entitled to receive, pro rata based on the number of shares held, all
of the assets remaining available for distribution to holders of Common Stock
after payment of all prior claims, including any preferential liquidation rights
of any preferred stock then outstanding.

Holders of shares of Common Stock have no preemptive rights to subscribe to
additional shares of any such class or other securities of the Company. All
outstanding shares of Common Stock are fully paid and nonassessable.

PREFERRED STOCK

The Company's certificate of incorporation (the "Certificate of
Incorporation") authorizes the Board of Directors to establish one or more
series of preferred stock (the "Preferred Stock") and to determine, with respect
to any series of Preferred Stock, the terms and rights of such series, including
(i) the designation of the series, (ii) the number of shares of the series,
which number the Board may thereafter (except where otherwise provided in a
preferred stock designation) increase or decrease (but not below the number of
shares thereof then outstanding), (iii) whether dividends, if any, will be
cumulative or noncumulative and the dividend rate of the series, (iv) the dates
on which dividends, if any, will be payable, (v) the redemption rights and price
or prices, if any, for shares of the series, (vi) the terms and amounts of any
sinking fund provided for the purchase or redemption of shares in the series,
(vii) the amounts payable on shares of the series in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Company, (viii) whether the shares of the series will be convertible into shares
of any other class or series, or any other security, of the Company or any other
corporation, and if so, the specification of such other class or series or such
other security, the conversion price or prices or rate or rates, any adjustments
thereof, the date or dates as of which such shares shall be convertible and all
other terms and conditions upon which such conversion may be made, (ix)
restrictions on the issuance of shares of the same series or of any other class
or series, and (x) the voting rights, if any, of the holders of such series. The
authorized shares of Preferred Stock, as well as shares of Common Stock, will be
available for issuance without further action by the Company's stockholders,
unless such action is required by applicable law or the rules of any stock
exchange or automated quotation system on which the Company's securities may be
listed or traded.

Although the Board of Directors has no intention at the present time of
doing so, it could issue a series of Preferred Stock that could, depending on
the terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. The Board will make any determination to issue such
shares based on its judgment as to the best interests of the Company and its
stockholders. The Board, in so acting, could issue Preferred Stock having terms
that could discourage an acquisition attempt or other transaction that some, or
a majority, of the Company's stockholders might believe to be in their best
interests or in which stockholders might receive a premium for their stock over
the then current market price of such stock.

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<PAGE> 81

OPTIONS AND INCENTIVE PLANS

In April 1994, the Board of Directors of the Company adopted the 1994 Stock
Option Plan of U.S. Can Corporation (the "1994 Option Plan"). This plan
supplemented the Company's 1993 Stock Option Plan which provided for the grant
of options totalling in the aggregate amount of no more than 500,000 shares of
the Common Stock. The 1994 Option Plan provides for the grant of options to
certain employees of the Company for an aggregate amount of no more than 50,000
shares of the Common Stock. In April 1995, the Board of Directors of the Company
adopted the Equity Incentive Plan of U.S. Can Corporation (the "Equity Incentive
Plan"). The Equity Incentive Plan provides for the grant of options, stock
appreciation rights and shares of restricted stock to directors, officers and
other key executives, employees and independent contractors of the Company and
its subsidiaries. In the aggregate, no more than 650,000 shares of Common Stock
may be issued or transferred under the Equity Incentive Plan upon the exercise
of an instrument thereunder. As of October 31, 1996, certain officers and
employees of the Company held options for the purchase of 833,875 shares of
Common Stock. These options were granted in 1984, 1987, 1991, 1993, 1994, 1995
and 1996, and are exercisable at a weighted-average exercise price of $13.53 per
share. As of October 31, 1996, 721,300 of these options were fully vested and
exercisable. See Note 13 to Consolidated Financial Statements.

STOCK PURCHASE PLAN

The Company maintains an annual non-qualified employee stock purchase plan
(the "Stock Purchase Plan") available to all salaried employees and certain
designated groups of hourly employees. The purpose of the plan is to promote
increased employee stock ownership in the Company and to provide a benefit to
employees. Participating employees are able to purchase shares of Common Stock
through payroll deductions. Each annual Stock Purchase Plan is in effect for a
one-year period. Eligible employees are able to elect to purchase shares of
Common Stock at a price equal to the current market price, less a 15% discount,
in an amount up to 7.5% of each participating employee's salary. Fifteen days
prior to the exercise date, each participant has the option to complete the
purchase of shares under the Stock Purchase Plan or to withdraw the amounts
withheld from the employee's salary pursuant to the plan. During 1995 and 1994,
the Corporation issued Common Stock valued at $1,569,000 and $1,660,000,
respectively, related to the Stock Purchase Plan. The Stock Purchase Plan
established for the 1995 -- 1996 plan year has an exercise price of $17.2125 per
share.

THE DELAWARE GENERAL CORPORATION LAW

The Company is a Delaware corporation subject to Section 203 of the
Delaware General Corporation Law (the "GCL"). Section 203 provides that, subject
to certain exceptions specified therein, a corporation shall not engage in any
business combination with any "interested stockholder" for a three-year period
following the date that such stockholder becomes an interested stockholder
unless (i) prior to such date, the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an interested stockholder, (ii) upon consummation of
the transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced (excluding
certain shares), or (iii) on or subsequent to such date, the business
combination is approved by the board of directors of the corporation and by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder. Except as specified in Section 203 of
the GCL, an interested stockholder is defined to include (x) any person that is
the owner of 15% or more of the outstanding voting stock of the corporation, or
is an affiliate or associate of the corporation and was the owner of 15% or more
of the outstanding voting stock of the corporation at any time within three
years immediately prior to the relevant date and (y) the affiliates and
associates of any such person. Under certain circumstances, Section 203 of the
GCL makes it more difficult for an "interested stockholder" to effect various
business combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions

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imposed thereunder. The Certificate of Incorporation does not exclude the
Company from the restrictions imposed under Section 203 of the GCL.

CERTIFICATE OF INCORPORATION; BYLAWS

The Certificate of Incorporation and the bylaws of the Company (the
"Bylaws") contain certain provisions that could make the acquisition of the
Company by means of a tender offer, a proxy contest or otherwise more difficult.
Set forth below is a brief description of certain of these provisions.

Classified Board. The Certificate of Incorporation and the Bylaws provide
that the Board of Directors will be divided into three classes of directors,
with the classes to be as nearly equal in number as possible. As a result,
approximately one-third of the Board of Directors will be elected each year. The
classification of directors will have the effect of making it more difficult for
stockholders to change the composition of the Board of Directors. The
Certificate of Incorporation provides that, subject to any right of holders of
Preferred Stock to elect additional directors under specified circumstances, the
number of directors will be fixed in the manner provided in the Bylaws. The
Bylaws provide that, subject to any rights of holders of Preferred Stock to
elect directors under specified circumstances, the number of directors will be
fixed from time to time exclusively pursuant to a resolution adopted by
directors constituting a majority of the total number of directors that the
Company would have if there were no vacancies on the Board of Directors, but
must consist of not more than ten or less than six directors. Pursuant to such a
resolution, the number of directors has been fixed at eight. In addition, the
Certificate of Incorporation and the Bylaws provide that, subject to any rights
of holders of Preferred Stock, and unless the Board otherwise determines, any
vacancies will be filled only by the affirmative vote of a majority of the
remaining directors, though less than a quorum.

Removal of Directors. Under the GCL, unless otherwise provided in the
Certificate of Incorporation, directors serving on a classified board may be
removed by the stockholders only for cause. In addition, the Certificate of
Incorporation and the Bylaws provide that directors may be removed only for
cause and only upon the affirmative vote of holders of at least 80% of the
voting power of all the then outstanding shares of stock entitled to vote
generally in the election of directors ("Voting Stock"), voting together as a
single class.

Stockholder Action. The Certificate of Incorporation and the Bylaws
provide that, subject to the rights of any holders of Preferred Stock,
stockholder action can be taken only at an annual or special meeting of
stockholders and may not be taken by written consent in lieu of a meeting. The
Bylaws provide that, subject to the rights of holders of any series of Preferred
Stock, special meetings of stockholders can be called only by the Chairman of
the Board of Directors or the Board of Directors pursuant to a resolution
adopted by two or more directors at a meeting at which a majority of the total
number of directors which the Company would have if there were no vacancies is
present. Stockholders are not permitted to call a special meeting or to require
that the Board of Directors call a special meeting of stockholders. Moreover,
the business permitted to be conducted at any special meeting of stockholders is
limited to the business before the meeting pursuant to the notice of meeting
given by the Company.

Advance Notice Procedures. The Bylaws establish an advance notice
procedure for stockholders to make nominations of candidates for election as
directors, or to bring other business before an annual meeting of stockholders
of the Company (the "Stockholder Notice Procedure"). The Stockholder Notice
Procedure provides that only persons who are nominated by, or at the direction
of, the Board of Directors, or by a stockholder who has given timely written
notice to the Secretary of the Company prior to the meeting at which directors
are to be elected, will be eligible for election as directors of the Company.
The Stockholder Notice Procedure also provides that at an annual meeting only
such business may be conducted as has been brought before the meeting by, or at
the direction of, the Chairman of the Board of Directors or by a stockholder who
has given timely written notice to the Secretary of the Company of such
stockholder's intention to bring such business before such meeting. Under the
Stockholder Notice Procedure, for notice of stockholder nominations to be made
at an annual meeting to be timely, such

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notice must be received by the Company not less than 60 days nor more than 90
days prior to the first anniversary of the previous year's annual meeting (or if
the date of the annual meeting is advanced by more than 30 days or delayed by
more than 60 days from such anniversary date, not earlier than the 90th day
prior to such meeting and not later than the later of (x) the 60th day prior to
such meeting and (y) the 10th day after public announcement of the date of such
meeting is first made). Notwithstanding the foregoing, in the event that the
number of directors to be elected is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board of Directors by the Company at least 70 days prior to the
first anniversary of the preceding year's annual meeting, a stockholder's notice
will be timely, but only with respect to nominees for any new positions created
by such increase, if it is received by the Company not later than the 10th day
after such public announcement is first made by the Company. Under the
Stockholder Notice Procedure, for notice of a stockholder nomination to be made
at a special meeting at which directors are to be elected to be timely, such
notice must be received by the Company not earlier than the 90th day before such
meeting and not later than the later of (x) the 60th day prior to such meeting
and (y) the 10th day after the public announcement of the date of such meeting
is first made. In addition, under the Stockholder Notice Procedure, a
stockholder's notice to the Company proposing to nominate a person for election
as a director or relating to the conduct of business other than the nomination
of directors must contain certain specified information. If the Chairman of the
Board or other officer presiding at a meeting determines that a person was not
nominated, or other business was not brought before the meeting, in accordance
with the Stockholder Notice Procedure, such person will not be eligible for
election as a director, or such business will not be conducted at such meeting,
as the case may be.

Liability of Directors; Indemnification. The Certificate of Incorporation
provides that a director will not be personally liable for monetary damages to
the Company or its stockholders for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
paying a dividend or approving a stock repurchase or redemption in violation of
Section 174 of the GCL or (iv) for any transaction from which the director
derived an improper personal benefit. The Certificate of Incorporation also
provides that each current or former director, officer, employee or agent of the
Company, or each such person who is or was serving or who had agreed to serve at
the request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise (including
the heirs, executors, administrators or estate of such person), will be
indemnified by the Company to the full extent permitted by the GCL from time to
time in effect. The Certificate of Incorporation also provides that such
indemnification provisions are not to be deemed exclusive of any other rights to
which those indemnified may be entitled.

Amendment. The Certificate of Incorporation provides that the affirmative
vote of the holders of at least 80% of the voting power of the outstanding
shares of Voting Stock, voting together as a single class, is required to amend
provisions of the Certificate of Incorporation relating to (i) the prohibition
of stockholder action without a meeting, (ii) the number, election and term of
the Company's directors, and (iii) the filling of vacancies and the removal of
directors. The Certificate of Incorporation further provides that the Bylaws may
be amended by the Board or by the affirmative vote of the holders of at least
80% of the outstanding shares of Voting Stock, voting together as a single
class.

The description set forth above is intended as a summary only and is
qualified in its entirety by reference to the Certificate of Incorporation and
the Bylaws, copies of which have been filed with the Commission. See "Available
Information."

The Common Stock of the Company has been listed on the New York Stock
Exchange since April 7, 1995, trading under the symbol "USC." Prior to that
time, the Common Stock was included in the Nasdaq National Market under the
trading symbol "USCN."

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TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Harris Trust and
Savings Bank, 311 West Monroe Street, Chicago, Illinois, 60606.

DESCRIPTION OF CERTAIN INDEBTEDNESS

The summaries contained herein of certain provisions of the indebtedness of
U.S. Can do not purport to be complete and are qualified in their entirety by
reference to the provisions of the various agreements which are filed as
exhibits with the Commission.

SENIOR CREDIT AGREEMENT

On April 29, 1994, U.S. Can entered into the Senior Credit Agreement with a
group of banks providing a $130 million line of credit consisting of a $95
million revolving credit facility and the $35 million Term Loan. Under the terms
of the Senior Credit Agreement, $9 million of the Term Loan had been repaid as
of July 30, 1996. The weighted average interest rate of the loans outstanding
under the Senior Credit Agreement was 6.39% and 6.66% at September 29, 1996 and
December 31, 1996, respectively. Funds available under the Senior Credit
Agreement have been used for working capital and other general corporate
purposes, including acquisitions. The loans outstanding under the Senior Credit
Agreement bear interest at a floating rate equal to, at the election of U.S.
Can, one of the following: (i) the Base Rate per annum (8.25% at October 31,
1996), or (ii) based on the current pricing ratio, a reserve-adjusted Eurodollar
rate plus 1.000% per annum, for specified interest periods (selected by U.S.
Can) of one, two, three or six months. The "Base Rate" is the higher of: (i) the
Federal Funds rate plus 0.50% per annum or (ii) the rate of interest publicly
announced from time to time by Bank of America Illinois, Chicago, Illinois as
its "reference rate." For letters of credit issued under the Senior Credit
Agreement, U.S. Can pays fees equal to: (a) the applicable Eurodollar Margin,
currently 1.0% per annum, multiplied by the aggregate face amount outstanding on
each such letter of credit and (b) an amount payable to the issuing bank equal
to 0.2% per annum of the aggregate face amount outstanding on each such letter
of credit, both of which are payable quarterly in arrears. Currently, U.S. Can
is required to pay a commitment fee of 0.325% per annum of the average daily
unused portion of each lender's commitment under the Senior Credit Agreement.
Obligations under the Senior Credit Agreement are secured by United States Can
Company's inventories and accounts receivable, and the Term Loan while it was
outstanding was also secured by a mortgage on, and certain equipment located at,
U.S. Can's Elgin, Illinois plant.

In early April 1996, the Senior Lenders provided a temporary $10 million
increase in the Revolving Credit Facility due to seasonal inventory
requirements. In late April 1996, the Senior Lenders provided an additional
temporary $20 million increase in the Revolving Credit Facility to fund the
acquisition of AMS. In July 1996, the Senior Lenders provided the Company with
an additional line of credit (the Acquisition Facility) to fund certain
permitted acquisitions including the Acquisitions. In connection with the USC
Europe Acquisition, the Company pledged 65% of the stock of the European
subsidiaries pursuant to the amended terms of the Senior Credit Agreement. All
of the supplemental facilities, including the Acquisition Facility, were
terminated on October 17, 1996, the closing date of the Offering described
below, and at that time the pledge of 65% of the stock of the European
subsidiaries was terminated.

As of September 29, 1996, U.S. Can had borrowings of $191.4 million
outstanding under the Senior Credit Agreement, $11.7 million in letters of
credit had been issued pursuant thereto, $15.2 million of unused credit remained
available thereunder (excluding unused credit under the Acquisition Facility)
and $11 million of the Term Loan had been repaid as of October 31, 1996. As of
December 31, 1996, U.S. Can had borrowings of $34.7 million outstanding under
the Senior Credit Agreement, $11.8 million in letters of credit had been issued
pursuant thereto, and $48.5 million of unused credit remained available
thereunder. The decrease in outstanding borrowings under the Senior Credit
Agreement was primarily due to the application on October 17, 1996 of a portion
of the proceeds from the Offering to pay down such borrowings. The Company
extinguished the Term Loan on December 16, 1996 using funds from additional
borrowings under the Revolving Credit Facility. As of September 29, 1996, U.S.
Can was in

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compliance with all restrictive covenants of the Senior Credit Agreement and its
other long-term debt agreements.

The terms of the Senior Credit Agreement impose restrictions that affect,
among other things, U.S. Can's ability to (i) incur additional indebtedness,
(ii) create liens on assets, (iii) sell assets, (iv) engage in mergers,
acquisitions or consolidations, (v) make investments, (vi) pay dividends or make
distributions and (vii) engage in certain transactions with affiliates and
subsidiaries. The Senior Credit Agreement also requires U.S. Can to comply with
certain financial ratios and tests.

Under and pursuant to the Senior Credit Agreement, U.S. Can may pay cash
dividends on account of any shares of any class of capital stock of U.S. Can (or
on any warrants, options or rights with respect thereto) in an amount not to
exceed 25% of Net Income (as defined in the Senior Credit Agreement) in any
given fiscal year, but in any event not more than 25% of consolidated cumulative
Net Income attributable to the period commencing subsequent to April 29, 1994,
and ending on the date of such proposed cash dividends; provided that either:
(i) the Term Loan has been indefeasibly paid in full in cash or (ii) the
Leverage Ratio (as defined in the Senior Credit Agreement) as of the last day of
the last fiscal quarter of such fiscal year does not exceed 3.50 to 1.00; and,
provided further, that no Default or Event of Default (as defined in the Senior
Credit Agreement) exists immediately prior to any such cash dividend or would
result therefrom. Notwithstanding the foregoing, in no event may U.S. Can pay
such cash dividends prior to the later to occur of (a) April 29, 1995, and (b)
the delivery of the annual audited consolidated financial statements to the
banks for the fiscal year ended in which either of the conditions contained in
clauses (i) or (ii) above has been satisfied.

The Senior Credit Agreement also contains subjective covenants providing
that U.S. Can would be in default if, in the judgment of the lenders, there is a
material adverse change in the financial condition of U.S. Can. Management is
not aware of, nor does it anticipate, any facts, events or occurrences which
could reasonably be expected to have a material adverse effect on the operations
of U.S. Can that would cause the lenders to demand repayment of the amounts
borrowed under the Senior Credit Agreement prior to April 29, 1998. Accordingly,
the borrowings thereunder have been classified as long-term debt.

SENIOR SUBORDINATED NOTES

In connection with the Offering and as required by the indenture under
which the Notes were issued, the Company entered into the Amended and Restated
Escrow Agreement by and among, the Company, The First National Bank of Chicago,
as escrow agent (the "Escrow Agent") and Harris Trust and Savings Bank, as
Trustee, dated as of October 17, 1996, (as amended and restated, the "Escrow
Agreement"). Pursuant to the Escrow Agreement and the Indenture, the Company
irrevocably deposited with the Escrow Agent approximately $109.7 million
proceeds from the Offering equal to the principal due, plus premium, upon the
optional redemption of the 13 1/2% Notes, together with certain additional
amounts relating to interest to be paid on the 13 1/2% Notes. Pursuant to the
Escrow Agreement, these funds were disbursed for the redemption of the 13 1/2%
Notes on January 15, 1997, at the instruction of the Trustee.

The 13 1/2% Notes were issued on December 26, 1991. All of the $100 million
of 13 1/2% Notes originally issued are still outstanding; however upon the
deposit of a portion of the proceeds from the Offering into the Escrow Account,
the Company deemed the 13 1/2% Notes to be extinguished and recorded the effect
thereof, and on January 15, 1997 the Company redeemed the 13 1/2% Notes and
extinguished its duties under the 13 1/2% Indenture.

OTHER INDEBTEDNESS

At October 27, 1996, the Company, on a consolidated basis, had an aggregate
principal amount of $58.4 million in other outstanding indebtedness (excluding
the Notes, the 13 1/2% Notes and the loans outstanding under the Senior Credit
Agreement), which includes industrial revenue bonds, capital lease obligations,
secured equipment notes, mortgages and other senior obligations.

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<PAGE> 86

LOAN COVENANTS

The discretion of management of the Company with respect to certain
business matters is limited by covenants contained in the instruments governing
a substantial portion of the Company's indebtedness. The restrictions imposed on
the Company by the Senior Credit Agreement and the 13 1/2% Indenture are
described above. The Company's failure to comply with any of the covenants,
described above and under "Description of Exchange Notes," and restrictions
under its debt agreements, or to make the required payments of interest and
principal, would result in a default thereunder, which in turn could cause such
indebtedness (and by reason of cross-acceleration provisions, certain of its
other indebtedness) to be declared immediately due and payable. In addition, if
U.S. Can is in default under the Senior Credit Agreement, the lenders thereunder
would be entitled to terminate their lending commitments. Certain equipment
financings are secured by liens on certain of U.S. Can equipment. See "Risk
Factors -- Leveraged Financial Position; Debt Service Obligations."

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DESCRIPTION OF EXCHANGE NOTES

The Exchange Notes will be issued under the Indenture under which the Notes
were issued.

The terms of the Exchange Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). The Exchange Notes are subject to
all such terms, and reference is made to the Indenture and the Trust Indenture
Act for a statement of those terms. Copies of the Indenture and the form of
Exchange Notes have been filed as exhibits to this Registration Statement and
the Company's and U.S. Can's Joint Quarterly Report on Form 10-Q for the quarter
ended September 29, 1996 and are available upon request to the Company at the
address set forth under "Information Incorporated by Reference."

The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all of the provisions of the Indenture and the Exchange Notes,
including the definitions of certain terms therein and those terms made a part
thereof by the Trust Indenture Act. Capitalized terms used in this section and
not otherwise defined below have the respective meanings assigned to them in the
Indenture (a list of the definitions of which appear beginning at page 105 of
this Prospectus).

GENERAL

The Exchange Notes are general unsecured senior subordinated obligations of
the Company and will be limited to $275.0 million aggregate principal amount.
The Exchange Notes will be issued in fully registered form only, without
coupons, in denominations of $1,000 and integral multiples thereof. No service
charge will be made for any registration of transfer of Exchange Notes, but the
Company may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.

The payment of principal, premium, if any, and interest on the Exchange
Notes is unconditionally guaranteed on a senior subordinated and unsecured basis
by the Subsidiary Guarantors (the "Subsidiary Guaranties"). See "-- Subsidiary
Guaranty." Currently, U.S. Can is the only Subsidiary Guarantor.

PAYMENT TERMS

The Exchange Notes will mature on October 15, 2006 and will bear interest
at a rate of 10 1/8% per annum until maturity, payable semiannually on April 15
and October 15 of each year, commencing April 15, 1997, to the persons who are
registered holders of the Exchange Notes at the close of business on the April 1
or October 1 immediately preceding such interest payment date. The Company will
pay interest on overdue principal at 1% per annum in excess of such rate, and it
will pay interest on overdue installments of interest at such higher rate to the
extent lawful.

The Indenture provides that interest on the Exchange Notes will be computed
on the basis of a 360-day year of twelve 30-day months. Initially, the Trustee
will act as Paying Agent and Registrar. Principal and interest will be payable
initially at the offices of the Trustee but, at the option of the Company,
interest may be paid by check mailed to the Holders at their addresses as they
appear in the Note register. The Exchange Notes may be presented for
registration of transfer and exchange at the offices of the Registrar, which
initially will be the offices of the Trustee. The Company or any domestically
incorporated Wholly Owned Subsidiary may act as Paying Agent and Registrar, and
the Company may change the Paying Agent or Registrar without prior notice to
Holders. As of the date of this Prospectus, it is not contemplated that any
other subsidiary of the Company will become a Subsidiary Guarantor.

The interest rate on the Exchange Notes is subject to increase in certain
circumstances if the Company does not file a registration statement relating to
the Registered Exchange Offer on a timely basis (which requirement has been
satisfied by the filing with the Commission of the Registration Statement), if
the registration statement is not declared effective on a timely basis or if
certain other conditions are not satisfied, all as further described under
"Exchange Offer; Registration Rights."

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SUBSIDIARY GUARANTY

The Subsidiary Guarantor unconditionally guarantees, jointly and severally,
on a senior subordinated basis to each Holder and the Trustee, the full and
prompt performance of the Company's obligations under the Indenture and the
Exchange Notes, including the payment of principal of, and interest on, the
Exchange Notes. As of the date of this Prospectus, United States Can Company, as
the Company's only Domestic Restricted Subsidiary, is the only Subsidiary
Guarantor. There may, in the future, be additional Subsidiary Guarantors. See
"-- Certain Covenants -- Future Subsidiary Guarantors." The obligations of each
Subsidiary Guarantor are limited to the maximum amount which, after giving
effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guaranty or pursuant to its
contribution obligations under the Indenture, will result in the obligations of
such Subsidiary Guarantor under its Subsidiary Guaranty not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law. Each
Subsidiary Guarantor that makes a payment or distribution under a Subsidiary
Guaranty shall be entitled to a contribution from each other Subsidiary
Guarantor in an amount pro rata, based on the net assets of each Subsidiary
Guarantor, determined in accordance with GAAP.

Each Subsidiary Guarantor may consolidate with or merge into or sell its
assets to the Company without limitation, or with other Persons upon the terms
and conditions set forth in the Indenture. See "-- Merger, Consolidation and
Sale of Assets." In the event all of the capital stock of a Subsidiary Guarantor
other than the Guarantor is sold by the Company and the sale complies with the
provisions set forth in "-- Certain Covenants -- Limitation on Asset
Dispositions," the Subsidiary Guarantor's Subsidiary Guaranty will be released.

SUBORDINATION OF EXCHANGE NOTES

The Exchange Notes are subordinated in right of payment, as set forth in
the Indenture, to the prior payment in full, in cash or cash equivalents, of all
existing and future Senior Indebtedness of the Company. The Exchange Notes shall
in all respects rank pari passu with all other Senior Subordinated Indebtedness
of the Company including the Notes and only Indebtedness of the Company which is
Senior Indebtedness shall rank senior to the Exchange Notes. Except with respect
to limitations on consolidated Indebtedness that the Company may incur, the
Indenture does not limit the ability of the Company to incur Senior Indebtedness
or restrict the ability of the Company to transfer assets to and among its
Restricted Subsidiaries. As described below, in the event of bankruptcy,
liquidation or reorganization of the Company, the assets of the Company will be
available to make payments on the Exchange Notes only after all Senior
Indebtedness has been paid in full, and there may not be sufficient assets
remaining to pay amounts due on the Exchange Notes. In the event of any payment
or distribution of the assets of the Company in any foreclosure, dissolution,
winding up, liquidation or reorganization, holders of any secured Indebtedness
will have a secured prior claim to the assets of the Company and its
Subsidiaries.

Under certain circumstances, as described below, holders of Senior
Indebtedness may block payments on the Exchange Notes. Any claims by Holders
against the assets of the Company's subsidiaries (except the Subsidiary
Guarantors) would be subordinate to all existing and future obligations thereof
(including trade payables and preferred stock, if any, of such subsidiaries). As
of September 29, 1996, after giving effect to the Offering and application of
the net proceeds thereof (including the redemption of the 13 1/2% Notes) and the
Exchange Offer, aggregate Senior Indebtedness of the Company and the Guarantor
was $84.9 million (all of which is secured Indebtedness) and the Company and the
Guarantor had no outstanding Senior Subordinated Indebtedness (other than the
Notes and related Subsidiary Guaranties and giving effect to the redemption of
the 13 1/2% Notes). Indebtedness and other liabilities of subsidiaries of the
Company that are not Subsidiary Guarantors, on an adjusted basis, aggregated
approximately $40.0 million as of September 29, 1996. Assuming subsequent
incurrence by U.S. Can of all available amounts under the Senior Credit
Agreement, there would have been approximately $172.2 million of indebtedness
and other liabilities of the Company's

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<PAGE> 89

subsidiaries to which the Exchange Notes would have been effectively
subordinated as of September 29, 1996, after giving effect to the Offering and
the application of the net proceeds thereof (including redemption of the 13 1/2%
Notes and the termination of the supplemental facilities), and the Exchange
Offer.

Upon any payment or distribution of the assets of the Company to creditors
upon a total or partial liquidation or a total or partial dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property: (a) holders of Senior
Indebtedness will be entitled to receive payment in full of the Senior
Indebtedness before Holders will be entitled to receive any payment of principal
of or interest on the Exchange Notes; and (b) until the Senior Indebtedness is
paid in full, any distribution to which Holders would be entitled but for this
provision will be made to holders of Senior Indebtedness as their interests may
appear, except that Holders may receive shares of stock and any debt securities
that are subordinated to Senior Indebtedness to at least the same extent as the
Exchange Notes.

The Company may not pay the principal of or interest on the Exchange Notes
or make any deposit for the purpose of the discharge of its liabilities under
the Indenture and may not repurchase, redeem or otherwise retire any Exchange
Notes (collectively, "pay the Exchange Notes") if (a) any Senior Indebtedness is
not paid when due, or (b) any other default on Senior Indebtedness occurs and
the maturity of such Senior Indebtedness is accelerated in accordance with its
terms unless, in either case, (i) the default has been cured or waived and any
such acceleration has been rescinded, or (ii) such Senior Indebtedness has been
paid in full. During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Exchange Notes for a period (a "Payment
Blockage Period") commencing upon the receipt by the Company and the Trustee of
written notice of such default from the Representative of any Designated Senior
Indebtedness specifying an election to effect a Payment Blockage Period (a
"Blockage Notice") and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) by
repayment in full of such Designated Senior Indebtedness or (iii) because the
default giving rise to such Blockage Notice is no longer continuing).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the next preceding sentence), unless
the holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Exchange Notes after such
Payment Blockage Period. Not more than one Blockage Notice may be given in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness during such period.

In the event of the Company's insolvency, liquidation, reorganization,
dissolution or other proceedings, funds which would otherwise be payable to
Holders will be paid to the holders of Senior Indebtedness to the extent
necessary to pay the Senior Indebtedness in full. Moreover, creditors of the
Company who are holders of Senior Indebtedness may recover more, ratably, than
the Holders, and creditors of the Company who are not holders of Senior
Indebtedness or of the Exchange Notes may recover less, ratably, than holders of
the Senior Indebtedness and may recover more, ratably, than the Holders.

There is currently no Indebtedness of the Company that is subordinated to
the Exchange Notes, and the Company has no current plans to issue any
Indebtedness that would be subordinated to the Exchange Notes.

The terms of the subordination provisions described above will not apply to
payments from money or the proceeds of U.S. Government Obligations held in trust
by the Trustee for the payment of principal of

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and interest on the 13 1/2% Notes pursuant to the provisions described under
"-- Establishment of Escrow Account."

SUBORDINATION OF SUBSIDIARY GUARANTIES

The Subsidiary Guaranties are subordinated in right of payment, as set
forth in the Indenture, to the prior payment in full, in cash or cash
equivalents, of all existing and future Senior Indebtedness of Subsidiary
Guarantors. As of September 29, 1996, after giving effect to the Exchange Offer,
the Offering and the application of the net proceeds thereof (including the
redemption of the 13 1/2% Notes and the termination of the supplemental
facilities) there would have been outstanding $84.9 million of Senior
Indebtedness of Subsidiary Guarantors to which the Subsidiary Guaranties would
be subordinated. The Subsidiary Guaranties shall in all respects rank pari passu
with all other Senior Subordinated Indebtedness of Subsidiary Guarantors and
only Indebtedness of the Subsidiary Guarantors which is Senior Indebtedness of
Subsidiary Guarantors shall rank senior to the Subsidiary Guaranties. Except
with respect to limitations on consolidated Indebtedness that the Company and
its Restricted Subsidiaries (including the Subsidiary Guarantors) may incur, the
Indenture does not limit the ability of the Subsidiary Guarantors to incur
additional Senior Indebtedness or restrict the ability of the Subsidiary
Guarantors to transfer assets to and among their Restricted Subsidiaries. As
described below, in the event of bankruptcy, liquidation or reorganization of
the Subsidiary Guarantors, the assets of the Subsidiary Guarantors will be
available to make payments under the Subsidiary Guaranties only after all Senior
Indebtedness of Subsidiary Guarantors has been paid in full, and there may not
be sufficient assets remaining to pay amounts due on the Subsidiary Guaranties.
As of the date of this Prospectus, substantially all of the Senior Indebtedness
of Subsidiary Guarantors is secured by substantially all the assets of the
Subsidiary Guarantors. In the event of any payment or distribution of the assets
of the Subsidiary Guarantors in any foreclosure, dissolution, winding up,
liquidation or reorganization, holders of the secured Indebtedness will have a
secured prior claim to the assets of the Subsidiary Guarantors and their
Subsidiaries.

Under certain circumstances, as described below, holders of Senior
Indebtedness of Subsidiary Guarantors may block payments on the Subsidiary
Guaranties. Any claims by Holders against the assets of Subsidiaries of the
Subsidiary Guarantors would be subordinate to all existing and future
obligations (including trade payables and preferred stock, if any) of such
Subsidiaries.

Upon any payment or distribution of the assets of the Subsidiary Guarantors
to creditors upon a total or partial liquidation or a total or partial
dissolution of the Subsidiary Guarantors or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to any Subsidiary
Guarantors or its property: (i) holders of Senior Indebtedness of Subsidiary
Guarantors shall be entitled to receive payment in full of such Senior
Indebtedness before Holders shall be entitled to receive any payment under the
Subsidiary Guaranties; and (ii) until the Senior Indebtedness of Subsidiary
Guarantors is paid in full, any distribution to which Holders would be entitled
but for this provision shall be made to holders of such Senior Indebtedness as
their interests may appear, except that Holders may receive shares of stock and
any debt securities that are subordinated to Senior Indebtedness of Subsidiary
Guarantors to at least the same extent as the Subsidiary Guaranties.

The Subsidiary Guarantors may not pay the principal of or interest on the
Exchange Notes pursuant to the Subsidiary Guaranties or make any deposit for the
purpose of the discharge of their liabilities under the Indenture and may not
repurchase, redeem or otherwise retire any Exchange Notes pursuant to the
Subsidiary Guaranties (collectively, "pay the Exchange Notes") if (i) any Senior
Indebtedness of Subsidiary Guarantors is not paid when due or (ii) any other
default on Senior Indebtedness of Subsidiary Guarantors occurs and the maturity
of such Designated Senior Indebtedness of Subsidiary Guarantors is accelerated
in accordance with its terms unless, in either case, (a) the default has been
cured or waived and any such acceleration has been rescinded or (b) such Senior
Indebtedness of Subsidiary Guarantors has been paid in full. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the preceding sentence) with respect to any Designated Senior Indebtedness of
Subsidiary Guarantors pursuant to which the maturity thereof may be accelerated

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immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Subsidiary Guarantors may not pay the Exchange Notes for a period (a "Subsidiary
Guarantor Payment Blockage Period") commencing upon the receipt by the
Subsidiary Guarantors and the Trustee of written notice of such default from the
Representative of any Designated Senior Indebtedness of Subsidiary Guarantors
specifying an election to effect a Subsidiary Guarantor Payment Blockage Period
(a "Subsidiary Guarantor Blockage Notice") and ending 179 days thereafter (or
earlier if such Subsidiary Guarantor Payment Blockage Period is terminated (i)
by written notice to the Trustee and the Subsidiary Guarantors from the Person
or Persons who gave such Subsidiary Guarantor Blockage Notice, (ii) by repayment
in full of such Designated Senior Indebtedness of Subsidiary Guarantors or (iii)
because the default giving rise to such Subsidiary Guarantors Blockage Notice is
no longer continuing). Notwithstanding the provisions described in the
immediately preceding sentence (but subject to the provisions contained in the
next preceding sentence), unless the holders of such Senior Indebtedness of
Subsidiary Guarantors or the Representative of such holders shall have
accelerated the maturity of such Designated Senior Indebtedness of Subsidiary
Guarantors, the Subsidiary Guarantors may resume payments under the Subsidiary
Guaranties after such Subsidiary Guarantor Payment Blockage Period. Not more
than one Subsidiary Guarantor Blockage Notice may be given in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of Subsidiary Guarantors during such period.

In the event of a Subsidiary Guarantor's insolvency, liquidation,
reorganization, dissolution or other proceedings, funds which would otherwise be
payable to Holders will be paid to the holders of Senior Indebtedness of
Subsidiary Guarantors to the extent necessary to pay the Senior Indebtedness of
Subsidiary Guarantors in full. Moreover, creditors of the Subsidiary Guarantors
who are holders of Senior Indebtedness of Subsidiary Guarantors may recover
more, ratably, than the Holders, and creditors of the Subsidiary Guarantors who
are not holders of Senior Indebtedness of Subsidiary Guarantors or of the
Exchange Notes may recover less, ratably, than holders of the Senior
Indebtedness of Subsidiary Guarantors and may recover more, ratably, than the
Holders.

There is currently no Indebtedness of the Subsidiary Guarantors that is
subordinated to the Subsidiary Guaranties, and the Subsidiary Guarantors have no
current plans to issue any Indebtedness that would be subordinated to the
Subsidiary Guaranties.

ESTABLISHMENT OF ESCROW ACCOUNT

In connection with the issuance of the Notes, the Company deposited
approximately $109.7 million, received as proceeds from the sale of the Notes
which is being held by The First National Bank of Chicago, as Escrow Agent, in
the Escrow Account. The Escrow Agent invested the funds deposited in the Escrow
Account in U.S. Government Obligations and will, when instructed by the Company
and the Trustee, disburse such funds from the Escrow Account only on or after
January 15, 1997 (but in no event later than January 22, 1997) in order to
provide for the redemption of the 13 1/2% Notes. U.S. Can provided notice to the
trustee under the Indenture for the 13 1/2% Notes that the redemption would be
scheduled to occur on January 15, 1997. Any amounts remaining in the Escrow
Account following redemption of the 13 1/2% Notes shall be paid to the Company.
See "-- Certain Covenants -- Establishment of Escrow Account."

OPTIONAL REDEMPTION

The Exchange Notes will not be redeemable at the option of the Company
prior to October 15, 2001. On or after that date, the Exchange Notes will be
redeemable at the option of the Company, in whole at any time or in part from
time to time, on at least 30 but not more than 60 days prior notice, mailed by
first-class mail to the Holders at their registered addresses, at the redemption
prices (expressed in percentages of principal amount) specified below plus
accrued and unpaid interest, if any, through the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest

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on the relevant interest payment date), if redeemed during the 12-month period
beginning October 15 of the years indicated below:

<TABLE>
<CAPTION>
YEAR PERCENTAGE
----------------------------------------------------------------- ----------
<S> <C>
2001............................................................. 105.063%
2002............................................................. 103.375%
2003............................................................. 101.688%
2004 and thereafter.............................................. 100.000%
</TABLE>

In the case of any partial redemption, selection of the Exchange Notes for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate (and which complies with applicable legal and securities exchange
requirements), although no Exchange Note of $1,000 in original principal amount
or less will be redeemed in part. If any Exchange Note is to be redeemed in part
only, the notice of redemption relating to such Exchange Note shall state the
portion of the principal amount thereof to be redeemed. A new Exchange Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Exchange Note.

MANDATORY SINKING FUND

There are no mandatory sinking fund payments for the Exchange Notes.

CHANGE OF CONTROL

Upon a Change of Control, as defined on page 106 of this Prospectus, each
Holder shall have the right to require that the Company repurchase all or any
part of such Holder's Exchange Notes at a repurchase price in cash equal to 101%
of the principal amount thereof plus accrued and unpaid interest, if any,
through the date of repurchase. See "Risk Factors -- Change of Control." In the
event that at the time of such Change of Control the terms of the Bank
Indebtedness or other Senior Indebtedness restrict or prohibit the repurchase of
Exchange Notes pursuant to this provision, then prior to the mailing of the
notice to Holders provided for in the next paragraph below but in any event
within 30 days following any Change of Control, the Company covenants to (a)
repay in full all Bank Indebtedness or such other Senior Indebtedness to the
extent required to permit the repurchase of Exchange Notes pursuant to this
provision or (b) obtain the requisite consent under the agreements governing the
Bank Indebtedness or such other Senior Indebtedness to permit the repurchase of
the Notes as provided for in the next paragraph.

Within 30 days following any Change of Control, the Company shall send, by
first-class mail to each Holder, a notice to each Holder with a copy to the
Trustee stating:

(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Exchange Notes at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase;

(2) the circumstances and relevant facts regarding such Change of
Control which the Company in good faith believes will enable Holders to
make an informed decision (which at a minimum will include information with
respect to pro forma historical income, cash flow and capitalization, each
after giving effect to such Change of Control, events causing such Change
of Control and the date such Change of Control is deemed to have occurred);

(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and

(4) the instructions determined by the Company, consistent with this
provision, that a Holder must follow in order to have its Exchange Notes
purchased, together with the information contained in the next paragraph
(and including any related materials).

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Holders electing to have an Exchange Note purchased will be required to
surrender the Exchange Note, with an appropriate form duly completed, to the
Company at the address specified in the notice at least five Business Days prior
to the purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than three Business Days prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Exchange Note which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Exchange Note purchased.

On the purchase date, all Exchange Notes purchased by the Company under
this provision shall be delivered by the Trustee for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.

The Change of Control purchase feature is a result of negotiations between
the Company and the Initial Purchasers. Management has no present intention to
engage in a transaction involving a Change of Control, although it is possible
that the Company would decide to do so in the future. Subject to the limitations
discussed below, the Company could, in the future, enter into certain
transactions, including acquisitions, refinancings or other recapitalizations,
that would not constitute a Change of Control under the Indenture, but that
could increase the amount of indebtedness outstanding at such time or otherwise
affect the Company's capital structure or credit ratings.

The occurrence of certain of the events which would constitute a Change of
Control would constitute a default under the Credit Agreement. Future Senior
Indebtedness of the Company may contain prohibitions of certain events which
would constitute a Change of Control or require such Senior Indebtedness to be
repurchased upon a Change of Control. Moreover, the exercise by the Holders of
their right to require the Company to repurchase the Exchange Notes could cause
a default under such Senior Indebtedness, even if the Change of Control itself
does not, due to the financial effect of such repurchase on the Company.
Finally, the Company's ability to pay cash to the Holders upon a repurchase may
be limited by the Company's then existing financial resources. There can be no
assurance that sufficient funds will be available when necessary to make any
repurchases required in connection with a Change of Control. The Company's
failure to purchase the Exchange Notes in connection with a Change in Control
would result in a default under the Indenture which would, in turn, constitute a
default under the Credit Agreement. In such circumstances, the subordination
provisions in the Indenture would likely restrict payment to the Holders of the
Exchange Notes. See "Risk Factors -- Change of Control."

The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Exchange Notes pursuant to the
covenant described hereunder. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under such covenant by virtue thereof.

The Company's obligations to repurchase the Exchange Notes upon a Change of
Control will be guaranteed on a senior subordinated basis by the Subsidiary
Guarantors pursuant to the Subsidiary Guaranties. Such Guaranty will be
subordinated to Senior Indebtedness of Subsidiary Guarantors to the same extent
described above under "-- Subordination of Subsidiary Guaranties."

BOOK-ENTRY, DELIVERY AND FORM

The Exchange Notes will be issued in exchange for the Notes (and related
Subsidiary Guaranties) and initially will be represented by a single global
certificate evidencing the Exchange Notes (the "Global Exchange Note").
Notwithstanding the foregoing, Notes held in certificated form will be exchanged
solely for Exchange Notes in certificated form. As of the date of this
Prospectus $3.45 million aggregate principal amount of Notes were held in
certificated form. The Global Exchange Note will be deposited with, or on behalf
of, the Depository and registered in the name of the Depository or its nominee.
Except as set forth below, the Global Exchange Note may be transferred, in whole
and not in part, only to the Depository or another nominee of the Depository.
Investors may hold their beneficial interests in the

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Global Exchange Note directly through the Depository if they have an account
with the Depository or indirectly through organizations which have accounts with
the Depository.

The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and "a clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. The
Depository was created to hold securities of institutions that have accounts
with the Depository ("participants") and to facilitate the clearance and
settlement of securities transactions among its participants in such securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depository's participants include securities brokers and dealers (which may
include the Initial Purchasers), banks, trust companies, clearing corporations
and certain other organizations. Access to the Depository's book-entry system is
also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
whether directly or indirectly.

Upon the issuance of the Global Exchange Note, the Depository will credit,
on its book-entry registration and transfer system, the principal amount of the
Exchange Notes of the individual beneficial interests represented by such Global
Exchange Note to the accounts of participants. Ownership of beneficial interests
in the Global Exchange Note will be limited to participants or persons that may
hold interests through participants. Ownership of beneficial interests in the
Global Exchange Note will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depository
(with respect to participants' interests) and such participants (with respect to
the owners of beneficial interests in the Global Exchange Note other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to transfer or pledge
beneficial interests in the Global Exchange Note.

So long as the Depository, or its nominee, is the registered holder and
owner of the Global Exchange Note, the Depository or such nominee, as the case
may be, will be considered the sole legal owner and holder of the related
Exchange Notes for all purposes of such Exchange Notes and the Indenture. Except
as set forth below, owners of beneficial interests in the Global Exchange Note
will not be entitled to have the Exchange Notes represented by the Global
Exchange Note registered in their names, will not receive or be entitled to
receive physical delivery of certificated Exchange Notes in definitive form and
will not be considered to be the owners or holders of any Exchange Notes under
the Global Exchange Note. The Company understands that under existing industry
practice, in the event an owner of a beneficial interest in the Global Exchange
Note desires to take any action that the Depository, as the holder of the Global
Exchange Note, is entitled to take, the Depository would authorize the
participants to take such action, and that the participants would authorize
beneficial owners owning through such participants to take such action or would
otherwise act upon the instructions of beneficial owners owning through them.

Payment of principal of and interest on Exchange Notes represented by the
Global Exchange Note registered in the name of and held by the Depository or its
nominee will be made to the Depository or its nominee, as the case may be, as
the registered owner and holder of the Global Exchange Note.

The Company expects that the Depository or its nominee, upon receipt of any
payment of principal of or interest on the Global Exchange Note, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Exchange
Note as shown on the records of the Depository or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in the
Global Exchange Note held through such participants will be governed by standing
instructions and customary practices and will be the responsibility of such
participants. The Company will not have any responsibility or liability for any
aspect of the records relating to, or payments made on account of, beneficial
ownership interests in the Global Exchange Note for any Exchange Note or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests or for any other aspect of the relationship between the
Depository and its participants

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or the relationship between such participants and the owners of beneficial
interests in the Global Exchange Note owned through such participants.

Unless and until it is exchanged in whole or in part for certificated
Exchange Notes in definitive form, the Global Exchange Note may not be
transferred except as a whole by the Depository to a nominee of such Depository
or by a nominee of such Depository to such Depository or another nominee of such
Depository.

Although the Depository has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Exchange Note among participants
of the Depository, it is under no obligation to perform or continue to perform
such procedures, and such procedures may be discontinued at any time. Neither
the Trustee nor the Company will have any responsibility for the performance by
the Depository or its participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.

CERTIFICATED NOTES

The Exchange Notes represented by the Global Exchange Note are exchangeable
for certificated Exchange Notes in definitive form of like tenor as such
Exchange Notes in denominations of U.S. $1,000 and integral multiples thereof if
(i) the Depository notifies the Company that it is unwilling or unable to
continue as Depository for the Global Exchange Note or if at any time the
Depository ceases to be a clearing agency registered under the Exchange Act,
(ii) the Company in its discretion at any time determines not to have all of the
Exchange Notes represented by the Global Exchange Note or (iii) a default
entitling the holders of the Exchange Notes to accelerate the maturity thereof
has occurred and is continuing. Any Exchange Note that is exchangeable pursuant
to the preceding sentence is exchangeable for certificated Exchange Notes
issuable in authorized denominations and registered in such names as the
Depository shall direct. Subject to the foregoing, the Global Exchange Note is
not exchangeable, except for a Global Exchange Note of the same aggregate
denomination to be registered in the name of the Depository or its nominee.

CERTAIN COVENANTS

The Indenture contains covenants including, among others, the following:

Limitation on Indebtedness. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness, unless
such Indebtedness is Permitted Indebtedness.

Limitation on Restricted Payments. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly (a) declare or pay
any dividend on, or make any distribution in respect of, any Capital Stock of
the Company, except for dividends or distributions payable solely in Capital
Stock of the Company (other than Disqualified Stock); (b) purchase, redeem,
retire or acquire for value any Capital Stock of the Company or any Affiliate of
the Company (other than a Restricted Subsidiary); (c) purchase, repurchase,
redeem, defease or acquire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Obligation (other
than in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case, due within one year of the date of
acquisition); or (d) make any Investment (other than Permitted Investments) in
any Person, (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being herein referred to
as a "Restricted Payment") if at the time of and after giving effect to the
proposed Restricted Payment: (i) any Default or Event of Default has occurred
and is continuing; (ii) the Company could not incur at least $1.00 of additional
Indebtedness pursuant to clause (i) of the definition of Permitted Indebtedness;
or (iii) the aggregate amount expended or declared for all Restricted Payments
after the Issue Date exceeds (without duplication) the sum of (v) 50% of the
Consolidated Net Income accrued during the period (treated as one accounting
period) from the first day of the fiscal quarter in which the Notes are issued
to the end of the most recent fiscal quarter ending at least 45 days prior to
the date of such Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit) and minus 100% of the amount

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of any write-downs, write-offs, other negative revaluations and other negative
extraordinary charges not otherwise reflected in Consolidated Net Income during
such period, (w) 100% of the aggregate Net Cash Proceeds received by the Company
from the issuance or sale of its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than an issuance or a sale to a Subsidiary
of the Company or an employee stock ownership plan or trust), (x) the amount by
which Indebtedness of the Company or its Restricted Subsidiaries is reduced on
the Company's balance sheet upon the conversion or exchange (other than by a
Subsidiary) subsequent to the Issue Date, of any Indebtedness of the Company or
its Restricted Subsidiaries convertible or exchangeable for Capital Stock (other
than Disqualified Stock) of the Company, (y) an amount equal to the net
reduction in Investments resulting from dividends, repayments of loans or
advances or other transfers of assets (to the extent not included in
Consolidated Net Income), in each case, to the Company or any Restricted
Subsidiary, not to exceed the amount of Investments previously made that were
included as Restricted Payments, and (z) $40.0 million.

The foregoing limitations will not prevent the Company from: (a) paying a
dividend on its Capital Stock within 60 days after the declaration thereof, if,
on the declaration date, the Company could have paid such dividend in compliance
with the Indenture; (b) redeeming, repurchasing, defeasing, acquiring or
retiring for value, Subordinated Obligations from proceeds of Refinancing
Indebtedness permitted by clause (xi) of the definition of Permitted
Indebtedness; (c) acquiring, redeeming or retiring Capital Stock or Subordinated
Obligations of the Company in exchange for, or in connection with a
substantially concurrent issuance of, Capital Stock of the Company (other than
Disqualified Stock); and (d) repurchasing or redeeming shares of, or options to
purchase shares of, Capital Stock of the Company or stock appreciation rights
from officers, directors and employees (or the heirs of such persons) of the
Company or any Restricted Subsidiary whose employment has terminated or who have
died or retired or become disabled or upon the vesting of stock appreciation
rights, so long as the aggregate amount of such payments in any fiscal year does
not exceed $5.0 million. Payments made pursuant to clauses (b) and (c) of this
paragraph shall be excluded from the calculation of the amount available for
Restricted Payments, provided that the proceeds from the issuance of Capital
Stock of the Company pursuant to clause (c) of this paragraph shall not increase
the amount available for Restricted Payments.

Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, cause to exist or become effective or
enter into any encumbrance or restriction (other than pursuant to law or
regulation) on the ability of any Restricted Subsidiary (i) to pay dividends or
make any other distributions in respect of its Capital Stock or pay any debt or
other obligation owed to the Company or any other Restricted Subsidiary; (ii) to
make loans or advances to the Company or any other Restricted Subsidiary; or
(iii) to transfer any of its property or assets to the Company or any other
Restricted Subsidiary. Such limitation will not apply (a) with respect to
clauses (i), (ii) and (iii), to encumbrances and restrictions (1) in existence
under or by reason of any agreements (not otherwise described in clause (3) and
other than those contained in the indenture governing the 13 1/2% Notes) in
effect on the Issue Date, (2) relating to Indebtedness of a Restricted
Subsidiary and existing at such Restricted Subsidiary at the time it became a
Restricted Subsidiary if such encumbrance or restriction was not created in
connection with or in anticipation of the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company, (3) pursuant to the Credit Agreement,
provided that such restrictions or encumbrances are no less favorable to the
Holders than those restrictions or encumbrances pursuant to the Credit Agreement
as in effect on the Issue Date, provided further, however, that the provisions
of the Credit Agreement permit distributions to the Company for the purpose of,
and in an amount sufficient to fund, the payment of principal due at maturity
and interest in respect of the Exchange Notes (provided, in either case, that
such payment is due or to become due within 30 days from the date of such
distribution) at a time when there does not exist an event which after notice or
passage of time or both would permit the lenders under the Credit Agreement to
declare all amounts thereunder due and payable, (4) which result from the
renewal, refinancing, extension or amendment of an agreement referred to in
clauses (a)(1), (2) and (6) and in

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clauses (b)(1) and (2) provided, such encumbrance or restriction is no more
restrictive to such Restricted Subsidiary and is not materially less favorable
to the Holders than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced, (5) pursuant to the
indenture governing the 13 1/2% Notes (while such 13 1/2% Notes remain
outstanding as permitted under "-- Required Redemption of 13 1/2% Notes"),
provided, that such restrictions or encumbrances are no less favorable to
Holders than those restrictions or encumbrances pursuant to such indenture as in
effect on the Issue Date or (6) relating to Indebtedness incurred pursuant to
clause (xi) of the definition of Permitted Indebtedness, and (b) with respect to
clause (iii) only, to (1) any encumbrance or restriction relating to
Indebtedness that is permitted to be Incurred and secured pursuant to the
provisions under "-- Limitation on Indebtedness" and "-- Limitation on Liens"
that limits the right of the debtor to dispose of the assets or property
securing such Indebtedness, (2) any encumbrance or restriction in connection
with an acquisition of property, so long as such encumbrance or restriction
relates solely to the property so acquired and was not created in connection
with or in anticipation of such acquisition, (3) customary provisions
restricting subletting or assignment of leases and customary provisions in other
agreements that restrict assignment of such agreements or rights thereunder or
(4) customary restrictions contained in asset sale agreements limiting the
transfer of such assets pending the closing of such sale.

Limitation on Asset Dispositions. The Company shall not, and shall not
permit any Restricted Subsidiary to, make any Asset Disposition unless (i) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Disposition at least equal to the Fair Market Value, as determined in good
faith by the Board of Directors, the determination of which shall be evidenced
by a Certified Resolution (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition; (ii)
at least 80% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents provided,
however, that any securities or notes received by the Company or such Restricted
Subsidiary in connection with such Asset Disposition that are converted by the
Company or such Restricted Subsidiary into cash or cash equivalents within 10
business days of the date of such Asset Disposition shall be deemed to be cash
equivalents; (iii) the Company delivers an Officers' Certificate to the Trustee
certifying that such Asset Disposition complies with clauses (i) and (ii); and
(iv) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary, as the
case may be) (a) first, to the extent the Company elects (or is required by the
terms of any Senior Indebtedness), to prepay, repay or purchase Senior
Indebtedness or Senior Indebtedness of Subsidiary Guarantors (in each case other
than Indebtedness owed to the Company or an Affiliate of the Company) or, if the
Asset Disposition is made by a Foreign Restricted Subsidiary, Senior
Indebtedness of a Foreign Restricted Subsidiary, within 270 days from the later
of the date of such Asset Disposition or the receipt of such Net Available Cash;
(b) second, to the extent of the balance of Net Available Cash after application
in accordance with clause (a), to the extent the Company or such Restricted
Subsidiary elects, to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary) within 270 days
from the later of such Asset Disposition or the receipt of such Net Available
Cash; (c) third, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (a) and (b) (which balance should
constitute "Excess Proceeds"), to make an Offer (as defined) to purchase
Exchange Notes and other pari passu Indebtedness (if required) pursuant to and
subject to the conditions of the following paragraph; provided, however that in
connection with any prepayment, repayment or purchase of Indebtedness pursuant
to clause (a) or (c) above, the Company or such Restricted Subsidiary shall
retire such Indebtedness and shall cause the related loan commitment (if any) to
be permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased. Pending application of Net Available Cash pursuant to this
provision, such Net Available Cash shall be invested in Temporary Cash
Investments.

The Indenture provides that, when the aggregate amount of Excess Proceeds
exceeds $15.0 million (including interest earned thereon), the Company will
apply the Excess Proceeds to the repayment of the Notes and any other pari passu
Indebtedness outstanding with similar provisions requiring the

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Company to make an offer to purchase such Indebtedness with the proceeds from
any Asset Disposition as follows: (A) the Company will make an offer to purchase
(an "Offer") from all Holders in accordance with the procedures set forth in the
Indenture in the maximum principal amount (expressed as a multiple of $1,000) of
Notes and Exchange Notes that may be purchased out of an amount (the "Note
Amount") equal to the product of such Excess Proceeds multiplied by a fraction,
the numerator of which is the outstanding principal amount of the Notes and
Exchange Notes, and the denominator of which is the sum of the outstanding
principal amount of the Notes and Exchange Notes and such pari passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price (as defined) of all Notes and Exchange Notes tendered)
and (B) to the extent required by such pari passu Indebtedness to reduce
permanently the principal amount of such pari passu Indebtedness, the Company
will make an offer to purchase or otherwise repurchase or redeem pari passu
Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu Debt Amount")
equal to the Excess Proceeds over the Note Amount; provided that in no event
will the Company be required to make a Pari Passu Offer in a Pari Passu Debt
Amount exceeding the principal amount of such Pari Passu Indebtedness plus the
amount of any premium required to be paid to repurchase such Pari Passu
Indebtedness. The offer price for the Notes will be payable in cash in an amount
equal to 100% of the principal amount of the Notes and Exchange Notes plus
accrued and unpaid interest, if any, to the date (the "Offer Date") such Offer
is consummated (the "Offered Price"), in accordance with the procedures set
forth in the Indenture. To the extent that the aggregate Offered Price of the
Notes and Exchange Notes tendered pursuant to the Offer is less than the Note
Amount relating thereto or the aggregate amount of Pari Passu Indebtedness that
is purchased in a Pari Passu Offer is less than the Pari Passu Debt Amount, the
Company may use any remaining Excess Proceeds for general corporate purposes. If
the aggregate principal amount of Notes and Pari Passu Indebtedness surrendered
by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and Exchange Notes to be purchased on a pro rata basis. Upon
the completion of the purchase of all the Notes and Exchange Notes tendered
pursuant to an Offer and the completion of a Pari Passu Offer, the amount of
Excess Proceeds, if any, shall be reset at zero.

Promptly, and in any event within 10 days after the Company becomes
obligated to make an Offer, the Company shall be obligated to deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Notes or Exchange Notes purchased by the
Company either in whole or in part (subject to proration as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of
$1,000 of principal amount, at the applicable purchase price. The notice shall
specify a purchase date not less than 30 days nor more than 60 days after the
date of such notice (the "Purchase Date") and shall contain information
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum will
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of the Company filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions (or corresponding successor reports)
(collectively, the "Reports"), (ii) a description of material developments in
the Company's business subsequent to the date of the latest of the Reports, and
(iii) if material, appropriate pro forma financial information) and all
instructions and materials necessary to tender such Notes or Exchange Notes
pursuant to the Offer, together with the information contained in the next
following paragraph.

Not later than the date upon which written notice of an Offer is delivered
to the Trustee as provided below, the Company shall deliver to the Trustee an
Officers' Certificate as to (i) the Offered Price, (ii) the allocation of the
Net Available Cash from the Asset Dispositions pursuant to which such Offer is
being made and (iii) the compliance of such allocation with the provisions
described herein. On such date, the Company shall also irrevocably deposit with
the Trustee or with a paying agent (or, if the Company is acting as its own
paying agent, segregate and hold in trust) in Temporary Cash Investments an
amount equal to the Offered Price to be held for payment in accordance with the
provisions of this provision. Upon the expiration of the period for which the
Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee the Notes, Exchange Notes or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee shall, on the
Purchase Date,

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mail or deliver payment to each tendering Holder in the amount of the purchase
price. In the event that the aggregate purchase price of the Notes and Exchange
Notes delivered by the Company to the Trustee is less than the Offered Price,
the Trustee shall deliver the excess to the Company immediately after the
expiration of the Offer Period.

Holders electing to have a Note or Exchange Note purchased will be required
to surrender the such Note, or Exchange Note with an appropriate form duly
completed, to the Company at the address specified in the notice at least five
Business Days prior to the Purchase Date. Holders will be entitled to withdraw
their election it the Trustee or the Company receives not later than three
Business Days prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note and Exchange Note which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have such
Note purchased. If, at the expiration of the Offer Period, the aggregate
principal amount of Notes and Exchange Notes surrendered by Holders exceeds the
Offered Price, the Company shall select the Notes to be purchased on a pro rata
basis (with such adjustments as may be deemed appropriate by the Company so that
only Notes and Exchange Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased). Holders whose Notes or Exchange Notes are
purchased only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes or Exchange Notes surrendered.

At the time the Company delivers Notes or Exchange Notes to the Trustee
which are to be accepted for purchase, the Company will also deliver an
Officers' Certificate stating that such Notes are to be accepted by the Company
pursuant to and in accordance with the terms of this provision. A Note shall be
deemed to have been accepted for purchase at the time the Trustee, directly or
through an agent, mails or delivers payment therefor to the surrendering Holder.

The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes or Exchange Notes
pursuant to the covenant described hereunder. To the extent that the provisions
of any securities laws or regulations conflict with the provisions of the
covenant described hereunder, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under such covenant by virtue thereof.

Limitation on Transactions with Affiliates. The Company will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, conduct any
business or enter into any transaction or series of transactions with or for the
benefit of any Affiliate, unless (a) the terms of such transaction or series of
transactions are (i) set forth in writing, (ii) in the best interest of the
Company or such Restricted Subsidiary, and (iii) no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an unrelated third party; and (b) with
respect to a transaction or series of transactions involving aggregate payments
or value in excess of $3.0 million, the Board of Directors of the Company
(including a majority of the Disinterested Directors thereof) approves such
transaction or series of transactions and, in its good faith judgment, believes
that such transaction or series of transactions complies with clause (a) this
paragraph, as evidenced by a Certified Resolution delivered to the Trustee. The
provisions described above shall not prohibit (i) any Restricted Payment
permitted to be paid pursuant to "-- Limitation on Restricted Payments" above,
(ii) any issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment arrangements,
stock options and stock ownership plans approved by the Board of Directors of
the Company (including a majority of the Disinterested Directors thereof), (iii)
any transaction pursuant to any contract in existence on the Issue Date, (iv)
loans or advances to employees in the ordinary course of business in accordance
with past practices of the Company, not to exceed $1.0 million per employee and
$3.0 million in the aggregate, (v) the payment of reasonable fees to directors
of the Company and its Restricted Subsidiaries who are not employees of the
Company or its Restricted Subsidiaries, (vi) any transaction between the Company
and a Restricted Subsidiary or between Restricted Subsidiaries or (vii) the
making of payments to Salomon Brothers Inc or its Affiliates for investment
banking services.

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Limitation on Layered Indebtedness. The Company will not, and will not
permit any Subsidiary Guarantor to, directly or indirectly, Incur any
Indebtedness that is subordinate in right of payment to any other Indebtedness
of the Company or such Subsidiary Guarantor, as the case may be, unless such
Indebtedness is subordinate in right of payment to, or ranks pari passu with,
the Exchange Notes in the case of the Company or the Subsidiary Guaranties in
the case of the Subsidiary Guarantors.

The Subsidiary Guarantors will not, directly or indirectly, Guaranty any
Indebtedness of the Company that is subordinated in right of payment to any
other Indebtedness of the Company unless such Guaranty is subordinate in right
of payment to, or ranks pari passu with, the Subsidiary Guaranties.

Limitation on Liens. The Company will not, and will not permit any
Subsidiary Guarantor to, directly or indirectly, Incur any Lien of any kind,
other than Permitted Liens, on or with respect to any property or assets now
owned or hereafter acquired or any interest therein or any income or profits
therefrom to secure Indebtedness that is subordinate in right of payment to, or
ranks pari passu with, in the case of the Company, the Exchange Notes or Notes,
or, in the case of the Subsidiary Guarantors, the Subsidiary Guaranties, unless
the Exchange Notes and Notes are secured prior to (in the case of any
Indebtedness that is subordinated in right of payment), or equally and ratably
with (in the case of any Indebtedness that ranks pari passu), the Indebtedness
so secured.

Ownership of United States Can Company. Except as provided under
"-- Subsidiary Guaranty," the Company will at all times maintain its 100%
ownership of the Capital Stock of United States Can Company.

Establishment of Escrow Account. Immediately upon the receipt by the
Company of the proceeds from the issuance of the Notes, the Company pursuant to
the requirements of the Indenture deposited with the Escrow Agent (as defined in
the Escrow Agreement) the amount of principal and call premium necessary to
redeem the 13 1/2% Notes on January 22, 1997, plus the amount of any interest to
be paid on the 13 1/2% Notes through January 22, 1997, from such proceeds (the
"Escrow Funds") by wire transfer of immediately available funds. Except as
provided under "-- Required Redemption of 13 1/2% Notes," such deposit is
irrevocable.

Required Redemption of 13 1/2% Notes. The Company shall timely take all
actions necessary or desirable to effect the Required Redemption (including the
giving of any notice to the holders of the 13 1/2% Notes in the manner in which
such notice is required to be given to effect such redemption pursuant to the
indenture governing such 13 1/2% Notes, which notice was given on November 25,
1996), shall effect such Required Redemption as promptly as practicable on or
after January 15, 1997 (but in no event later than January 22, 1997) and shall
use the Escrow Fund to effect such Required Redemption.

No later than the date on which notice of the Required Redemption is first
given to the holders of the 13 1/2% Notes pursuant to the preceding paragraph,
the Company shall deliver an Officer's Certificate to the Trustee stating that
the 13 1/2% Notes are to be redeemed pursuant to the provisions of this
paragraph and setting forth the anticipated date of such Required Redemption.
Upon receipt of such Officer's Certificate, the Trustee shall join with the
Company in directing the Escrow Agent by written notice to release from escrow
(on the specified date and pursuant to the provisions of the Escrow Agreement)
sufficient funds to effect the Required Redemption and to transfer such funds to
the account specified in such written notice (the "Redemption Account").

If the date on which the Company is to effect the Required Redemption
pursuant to the notice to be given under the preceding paragraph is after
January 15, 1997, then the Company shall pay all interest due and payable on the
13 1/2% Notes on January 15, 1997 from the Escrow Funds on January 15, 1997. In
such event, the Company shall specify in the Officer's Certificate referred to
in the previous paragraph that all interest due and payable on the 13 1/2% Notes
on January 15, 1997 shall be paid from the Escrow Funds on such date and the
Trustee shall join with the Company in directing the Escrow Agent by written
notice to release from the Escrow Account on such date sufficient funds to make
such interest payment in full.

If, on the date of the Required Redemption, the Escrow Funds are
insufficient to effect the Required Redemption, the Company shall immediately
deliver, by wire transfer of immediately available funds,

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funds that, when added to the Escrow Funds, will be sufficient to effect the
Required Redemption. Any portion of the Escrow Funds remaining after the
Required Redemption shall be immediately paid over to the Company.

Future Subsidiary Guarantors. The Company shall cause each Domestic
Restricted Subsidiary created or acquired after the Issue Date to execute and
deliver to the Trustee a supplemental indenture pursuant to which such
Restricted Subsidiary will Guaranty payment of the Notes and the Exchange Notes
on the same terms and conditions as those set forth in the Indenture. Each
Subsidiary Guaranty will be limited in amount to an amount not to exceed the
maximum amount that can be guarantied by the applicable Subsidiary Guarantor
without rendering such Subsidiary Guaranty voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. As of the Issue Date, United States
Can Company is the only Domestic Restricted Subsidiary.

Commission Reports. The Company and the Guarantor shall file with the
Trustee and provide the Holders at the Company's and the Guarantor's expense,
within 15 days after filing them with the Commission, copies of their annual
report and other reports which the Company and the Guarantor are required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be required to remain subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall continue to file with the Commission and provide the Trustee and Holders
and prospective Holders (upon request) with the annual reports and other reports
which are specified in Sections 13 and 15(d) of the Exchange Act; provided,
however, that the Company and the Guarantor shall not be required to file any
report, document or other information with the Commission if the Commission does
not permit such filing. The Company and the Guarantor also shall comply with the
other provisions of sec. 314(a) of the TIA.

MERGER, CONSOLIDATION AND SALE OF ASSETS

Neither the Company nor United States Can Company shall merge or
consolidate with or into any other entity (other than a merger of a Subsidiary
Guarantor into the Company or another Subsidiary Guarantor) or sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of
their assets unless (a) the entity formed by or surviving any such consolidation
or merger (if other than the Company or any Subsidiary Guarantor) or to which
such sale, transfer or conveyance is made (the "Surviving Entity") shall be a
corporation organized and existing under the laws of the United States of
America and such corporation expressly assumes, by supplemental indenture
satisfactory to the Trustee, all obligations of the Company or the Subsidiary
Guarantor, as the case may be, pursuant to the Indenture; (b) immediately before
and after giving effect to such transaction or series of transactions on a pro
forma basis, no Default or Event of Default (and no event that, after notice or
lapse of time, or both, would become an Event of Default) shall have occurred
and be continuing; (c) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including, without limitation, any
Indebtedness incurred or anticipated to be incurred in connection with such
transaction or series of transactions), the Company or the Surviving Entity, as
the case may be, would be able to incur at least $1.00 of additional debt
pursuant to clause (i) of the definition of Permitted Indebtedness and (d) the
Company shall have delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with the Indenture.

Notwithstanding the foregoing, no other Subsidiary Guarantor shall merge or
consolidate with or into any other entity or sell, convey, assign, transfer,
lease or otherwise dispose of all or substantially all of its assets unless the
Company and its remaining Restricted Subsidiaries are in compliance with the
provisions of subclauses (b), (c) and (d) above.

The Surviving Entity shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or the Subsidiary Guarantor, as
the case may be, under the Indenture, but the Company or U.S. Can, as the case
may be, in the case of a lease, shall not be released from the obligation to pay
the principal of and interest on the Notes or the Exchange Notes.

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Notwithstanding the foregoing clauses (b), (c) and (d), any Domestic
Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company or any other Domestic Restricted
Subsidiary, and any Foreign Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties or assets to (i) any other
Foreign Restricted Subsidiary or (ii) the Company or any Domestic Restricted
Subsidiary, provided that the surviving company or the transferee entity, as
applicable, in such consolidation, merger or transfer is the Company or such
Domestic Restricted Subsidiary.

EVENTS OF DEFAULT

An "Event of Default" occurs if: (i) the Company and the Subsidiary
Guarantors default in any payment of interest on any Note or Exchange Note when
the same becomes due and payable, and such default continues for a period of 30
days; (ii) the Company and the Subsidiary Guarantors (a) default in the payment
of the principal of any Note or Exchange Note when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration or otherwise,
or (b) fail to redeem or purchase Notes or Exchange Notes when required pursuant
to the Indenture or the Notes or Exchange Notes; (iii) the Company or any
Subsidiary Guarantor fails to comply with the provisions of "-- Merger,
Consolidation and Sale of Assets" above; (iv) the Company or any Subsidiary
Guarantor, as the case may be, fails to comply with "-- Change of Control"
above, and subsection "-- Limitation on Indebtedness," "-- Limitation on
Restricted Payments," "-- Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries," "-- Limitation on Asset Dispositions,"
"-- Limitation on Layered Indebtedness," "-- Limitation on Transactions with
Affiliates," "-- Limitation on Liens," "-- Future Subsidiary Guarantors"
"-- Ownership of United States Can Company" or "-- Establishment of Escrow
Account" in "-- Certain Covenants" (other than a failure to purchase Notes when
required under "-- Certain Covenants -- Change of Control" or "-- Certain
Covenants -- Limitation on Asset Dispositions") of the Indenture and such
failure continues for 30 days after the notice specified below or the Company
fails to give the notice specified below; (v) the Company or any Subsidiary
Guarantor fails to comply with any of its agreements in the Notes, Exchange
Notes or the Indenture (other than those referred to in (i), (ii), (iii) or (iv)
above) and such failure continues for 60 days after the notice specified below
or the Company fails to give the notice specified below; (vi) the principal, any
premium or accrued and unpaid interest of Indebtedness of the Company or any
Restricted Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default, the
total amount of such Indebtedness unpaid or accelerated exceeds $10.0 million at
the time and such default continues for 10 days; (vii) the Company, any
Subsidiary Guarantor or any Foreign Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law: (a) commences a voluntary case; (b) consents
to the entry of an order for relief against it in an involuntary case; (c)
consents to the appointment of a Custodian of it or for any substantial part of
its property; or (d) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws relating to
insolvency; (viii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (a) is for relief against the Company, any
Subsidiary Guarantor or any Foreign Significant Subsidiary in an involuntary
case; (b) appoints a Custodian of the Company, any Subsidiary Guarantor or any
Foreign Significant Subsidiary or for any substantial part of the Company's, any
Subsidiary Guarantor's or any Foreign Significant Subsidiary's property; or (c)
orders the winding up or liquidation of the Company or any Subsidiary Guarantor
or any Foreign Significant Subsidiary; or any similar relief is granted under
any foreign laws and the order or decree remains unstayed and in effect for 60
days; (ix) any judgment or decree for the payment of money in excess of $10.0
million at the time is entered against the Company or any Restricted Subsidiary
and is not discharged and either (a) an enforcement proceeding has been
commenced by any creditor upon such judgment or decree or (b) there is a period
of 60 days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof stayed
and, in the case of (a) or (b), such default continues for 10 days; (x) any
Subsidiary Guaranty is held to be unenforceable or invalid or ceases to be in
full force and effect; or (xi) the 13 1/2% Notes are not redeemed by the latest
date provided there for under "Certain Covenants -- Required Redemption of
13 1/2% Notes" (xii) the Company shall breach any material representation,

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warranty or agreement set forth in, or otherwise not comply with the provisions
of, the Escrow Agreement, or the Escrow Agreement shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect (except as a result of the complete performance thereof).

ACCELERATION

If an Event of Default (other than an Event of Default specified in clauses
(vii) or (viii) in "Events of Default" above with respect to the Company or any
Subsidiary Guarantor) occurs and is continuing, the Trustee by notice to the
Company, or the Holders of at least 25% in aggregate principal amount of the
Notes and Exchange Notes by notice to the Company and the Trustee, may declare
the principal of and accrued interest on all the Exchange Notes to be due and
payable. Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default specified in clauses (vii) or (viii)
above with respect to the Company or any Subsidiary Guarantor occurs, the
principal of and interest on all the Notes and Exchange Notes shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders. The Holders of a majority in
aggregate principal amount of the Notes and Exchange Notes by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

LIMITATION ON SUITS

A Holder may not pursue any remedy with respect to the Indenture or the
Exchange Notes unless: (i) such Holder gives to the Trustee written notice
stating that an Event of Default is continuing; (ii) the Holders of at least 25%
in aggregate principal amount of the Notes and Exchange Notes make a written
request to the Trustee to pursue the remedy; (iii) such Holder or Holders offer
to the Trustee reasonable security or indemnity against any loss, liability or
expense; (iv) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and (v) the
Holders of a majority in aggregate principal amount of the Notes and Exchange
Notes do not give the Trustee a direction inconsistent with the request during
such 60-day period.

A Holder may not use the Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.

RIGHTS OF HOLDERS TO RECEIVE PAYMENT

Notwithstanding any other provision of the Indenture, the right of any
Holder to receive payment of principal of and interest on the Exchange Notes
held by such Holder, on or after the respective due dates expressed in the
Exchange Notes, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.

DISCHARGE OF INDENTURE AND DEFEASANCE

When (i) the Company delivers to the Trustee all outstanding Exchange Notes
and Notes (other than Exchange Notes and Notes replaced because of mutilation,
loss, destruction or wrongful taking) for cancellation or (ii) all outstanding
Exchange Notes and Notes have become due and payable, whether at maturity or as
a result of the mailing of a notice of redemption as described above, and the
Company irrevocably deposits with the Trustee funds sufficient to pay at
maturity or upon redemption all outstanding Exchange Notes and Notes, including
interest thereon, and if in either case the Company pays all other sums payable
hereunder by the Company, then the Indenture shall, subject to certain surviving
provisions, cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of the Indenture on demand of the Company accompanied
by an Officers' Certificate and an Opinion of Counsel and at the cost and
expense of the Company.

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Subject to conditions to defeasance described below and the survival of
certain provisions, the Company at any time may terminate (i) all its
obligations under the Exchange Notes and Notes and the Indenture ("legal
defeasance option") or (ii) its obligations under certain restrictive covenants
and the related Events of Default ("covenant defeasance option"). The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.

If the Company exercises its legal defeasance option, payment of the
Exchange Notes and the Notes may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of the
Exchange Notes and the Notes may not be accelerated because of an Event of
Default specified in clause (ii) of the immediately preceding paragraph.

The Company may exercise its legal defeasance option or its covenant
defeasance option only if:

(a) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal and interest on
the Exchange Notes and the Notes to maturity or redemption, as the case may
be; and

(b) certain other conditions, including delivery of certain opinions
of counsel, are met.

TRANSFER AND EXCHANGE

Holders may transfer or exchange Exchange Notes and Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents, and the Company may
require a Holder to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar is not required to transfer or exchange any Exchange
Note or Note selected for redemption, or any Exchange Note or Note for a period
of 15 days before a selection of Notes to be redeemed, or any Exchange Note or
Note for a period of 15 days before an interest payment date. The registered
holder of an Exchange Note or Note may be treated as the owner of it for all
purposes.

AMENDMENT AND SUPPLEMENT

Subject to certain exceptions, the Indenture, the Exchange Notes, the Notes
or the Subsidiary Guaranties may be amended or supplemented by the Company or
the Subsidiary Guarantors and the Trustee with the consent of the Holders of at
least a majority in aggregate principal amount of such then outstanding Exchange
Notes and Notes. Without notice to or the consent of any Holder, the Company,
the Subsidiary Guarantors and the Trustee may amend the Indenture or the
Exchange Notes or Notes, among other things, to cure any ambiguity, defect or
inconsistency; to provide for the assumption of the Company's or a Subsidiary
Guarantor's obligations to Holders by a Surviving Entity; to provide for
uncertificated Exchange Notes or Notes in addition to or in place of
certificated Exchange Notes or Notes; or to make any change that does not
adversely affect the rights of any Holder. Without the consent of each Holder
affected, the Company may not reduce the principal amount of Exchange Notes or
Notes the Holders of which must consent to an amendment of the Indenture; reduce
the rate or extend the time for payment of interest on any Exchange Notes or
Note; reduce the principal of or extend the fixed maturity of any Exchange Notes
or Note; reduce the premium payable upon the redemption of any Exchange Notes or
Note or change the time at which any Exchange Note or Note may or shall be
redeemed; reduce the premium payable upon the repurchase of any Exchange Notes
or Note upon a Change of Control; make any Exchange Notes or Note payable in
money other than that stated in the Exchange Notes or Note; make any change in
the provisions concerning waiver of Defaults or Events of Default by Holders of
the Exchange Notes or Notes or rights of Holders to receive payment of principal
or interest; make any change in the subordination provisions in the Indenture
that affects the rights of any Holder; or release the Company or the Subsidiary
Guarantors from its obligations under the Exchange Notes or Notes or the
Subsidiary Guaranties (except pursuant to the provisions described above in " --
Merger, Consolidation and Sale of Assets") or make any change in the Exchange
Notes or Notes that would adversely affect the rights of any Holder.

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NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS

No director, officer, employee or stockholder, as such, of the Company, the
Subsidiary Guarantors or the Trustee (as in case may be) shall have any personal
liability in respect of the obligations of the Company, the Subsidiary
Guarantors or the Trustee (as the case may be) under the Exchange Notes or the
Indenture by reason of his or its status as such.

THE TRUSTEE

Harris Trust and Savings Bank is the Trustee under the Indenture.

The Indenture provides that, except during the continuance of an Event of
Default, the Trustee will perform only such duties as are specifically set forth
in the Indenture. During the existence of an Event of Default, the Trustee will
exercise such of the rights and powers vested in it under the Indenture and use
the same degree of care and skill in its exercise as a prudent Person would
exercise under the circumstances in the conduct of such Person's own affairs.

CERTAIN DEFINITIONS

Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture and the Trust Indenture Act for
the full definition of all such terms, as well as any other terms used herein
for which no definition is provided.

"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) Capital Stock of a
Person that becomes a Restricted Subsidiary as a result of the acquisition of
such Capital Stock by the Company or another Restricted Subsidiary; or (iii)
Capital Stock constituting a minority interest in any Person that at such time
is a Restricted Subsidiary; provided, however, that, in the case of clauses (ii)
and (iii), such Restricted Subsidiary is primarily engaged in a Related
Business.

"Affiliate" of any specified Person means (i) any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any other Person who is a director or
officer (a) of such specified Person, (b) of any subsidiary of such specified
Person or (c) of any Person described in clause (i) above. For the purposes of
this definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of the section "Certain Covenants -- Limitation on
Transactions with Affiliates" only, "Affiliate" shall also mean any beneficial
owner of shares representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Voting Stock (whether or not currently exercisable) and any Person
who would be an Affiliate of any such beneficial owner pursuant to the first
sentence hereof.

"Asset Disposition" means any direct or indirect sale including a
Sale/Leaseback Transaction, lease, transfer, conveyance or other disposition (or
series of related sales, Sale/Leaseback Transactions, leases, transfers,
conveyances or dispositions) of shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares), property or other assets
(each referred to for the purposes of this definition as a "disposition") by the
Company or any of its Restricted Subsidiaries other than (a) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (b) a disposition of property or assets
at Fair Market Value in the ordinary course of business and consistent with past
practices of the Company or any of its Restricted Subsidiaries, as applicable,
(c) a disposition with a Fair Market Value and a sale price of less than $5.0
million, (d) for purposes of the provisions of " -- Certain Covenants --
Limitation on Asset Dispositions" only, a disposition subject to the limitations
set forth under " -- Certain Covenants -- Limitation on Restricted Payments" and
(e) when used with respect to the Company or the Guarantor,

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any Asset Disposition pursuant to "-- Merger, Consolidation and Sale of Assets"
which constitutes a disposition of all or substantially all of the Company's or
the Guarantor's property.

"Attributable Indebtedness" means Indebtedness deemed to be Incurred in
respect of a Sale/Leaseback Transaction and shall be, at the date of
determination, the greater of (i) the fair market value of the property subject
to such Sale/Leaseback Transaction (as determined in good faith by the Board of
Directors) or (ii) the present value (discounted at the actual rate of interest
implicit in such transaction, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).

"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock and the
amount of such payment by (ii) the sum of all such payments.

"Bank Indebtedness" means any and all amounts payable under or in respect
of the Credit Agreement, as amended (or refinanced or replaced) from time to
time, including principal, premium (if any), interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or the Guarantor whether or not a claim
for post-filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts payable
thereunder or in respect thereof.

"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.

"Capital Expenditure Indebtedness" means Indebtedness issued to finance the
purchase or construction of any assets acquired (other than from an Affiliate)
or constructed after the Issue Date (a) to the extent the purchase or
construction prices for such assets are or should be included in "addition to
property, plant or equipment" in accordance with GAAP, (b) if the acquisition or
construction of such assets is not part of any acquisition of a person or
business unit and (c) if such Indebtedness is issued within 360 days of the
acquisition or completion of construction of such assets.

"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP; and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation 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 upon which such lease may be terminated by the lessee without payment of a
penalty.

"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible or exchangeable into such
equity.

"Certified Resolution" means a duly adopted resolution of the Board of
Directors in full force and effect at the time of determination and certified as
such by the Secretary or an Assistant Secretary of the Company.

"Change of Control" means the occurrence of any of the following events:
(a) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than one or more Permitted Holders or an underwriter
engaged in a firm commitment underwriting in connection with a public offering
of the Voting Stock of the Company, is or becomes the "beneficial owner" (as
such term is used in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 35% of the

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total voting power of the Voting Stock of the Company; (b) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of 66 2/3% of the directors
of the Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office, (c) the Company consolidates or merges with or into
any other Person, other than a consolidation or merger (i) with a Wholly Owned
Subsidiary or a Permitted Holder or (ii) pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property with the effect that the beneficial owners of the
outstanding Voting Stock of the Company immediately prior to such transaction,
beneficially own, directly or indirectly, more than 50% of the total voting
power of the Voting Stock of the surviving corporation immediately following
such transaction, or (d) the Company or any of its Restricted Subsidiaries,
directly or indirectly, sells, assigns, conveys, transfers, leases, or otherwise
disposes of, in one transaction or a series of related transactions, all or
substantially all of the property or assets of the Company and its Restricted
Subsidiaries to any Person or group of related Persons (as such term is used in
Section 13(d) of the Exchange Act), other than the Company, a Wholly Owned
Subsidiary or a Permitted Holder. See "Risk Factors -- Change of Control."

"Commission" means the Securities and Exchange Commission.

"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters ending at least 45 days prior to the date of
such determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (a) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
Consolidated Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such Indebtedness had
been Incurred on the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first
day of such period, (b) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Asset Disposition, the EBITDA for such period shall be reduced by an
amount equal to the EBITDA (if positive) directly attributable to the assets
which are the subject of such Asset Disposition for such period, or increased by
an amount equal to the EBITDA (if negative), directly attributable thereto for
such period as if such Asset Disposition had occurred on the first day of such
period and Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period as if such Asset Disposition had occurred on the first day of such period
(or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period as if such Asset Disposition had occurred on
the first day of such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after such sale), (c) if
since the beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted Subsidiary
(or any Person which becomes a Restricted Subsidiary) or an acquisition of
assets, including any acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period and (d) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Asset
Disposition or any Investment that would have

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required an adjustment pursuant to clause (b) or (c) above if made by the
Company or a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition or Investment occurred on the first
day of such period. For purposes of this definition, whenever pro forma effect
is to be given to an acquisition of assets, the pro forma calculations the
amount of income or earnings relating thereto and the amount of Consolidated
Interest Expense associated with any Indebtedness Incurred in connection
therewith, shall be determined in good faith by a responsible financial or
accounting officer of the Company and as further contemplated by the definition
of pro forma. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any Interest Rate
Protection Agreement applicable to such Indebtedness if such Interest Rate
Protection Agreement has a remaining term in excess of 12 months).

"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Subsidiaries, plus, to the extent
not included in such interest expense, (i) interest expense attributable to
Capital Lease Obligations, (ii) amortization of debt discount and debt issuance
cost, (iii) capitalized interest, (iv) non-cash interest expense, (v) accrued
interest, (vi) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing, (vii) to the
extent any Indebtedness of any Person is guaranteed by the Company or any
Subsidiary, the aggregate amount of interest paid or accrued by such other
Person during such period attributable to such Indebtedness; (viii) net costs
associated with Interest Rate Agreements and Currency Exchange Agreements
(including, in each case, amortization of fees), (ix) the interest portion of
any deferred obligation, (x) Preferred Stock dividends in respect of all
Preferred Stock of the Company and its Subsidiaries and Redeemable Stock of the
Company held by Persons other than the Company or a Wholly Owned Subsidiary,
(xi) fees payable in connection with financings to the extent not included in
(ii) above, including commitment, availability and similar fees and (xii) the
cash contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust; provided, however, that there shall be excluded therefrom
any such interest expense of any Unrestricted Subsidiary to the extent the
related Indebtedness is not guaranteed or paid by the Company or any Restricted
Subsidiary.

"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its Subsidiaries; provided, however, that there shall not be
included in such Consolidated Net Income (i) any net income (loss) of any Person
if such Person is not a Restricted Subsidiary, except that (a) subject to the
limitations contained in (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
a Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(b) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income, (ii) any net income (loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition, (iii) any net income (loss) of any
Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that (a)
subject to the limitations contained in (iv) below, the Company's equity in the
net income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash that could
have been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend (subject, in the case of
a dividend to another Restricted Subsidiary, to the limitation contained in this
clause) and (b) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such Consolidated
Net Income, (iv) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its
consolidated Subsidiaries (including pursuant to any Sale/Leaseback

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Transaction) which is not sold or otherwise disposed of in the ordinary course
of business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person, (v) any extraordinary gain or
loss and (vi) the cumulative effect of a change in accounting principles.

Notwithstanding the provisions of clause (iii) in the preceding paragraph,
in the event that Consolidated Net Income is being calculated with respect to
the Company or any Surviving Entity (a) for purposes of determining whether the
Company or any Surviving Entity could Incur at least $1.00 of additional
Indebtedness pursuant to clause (i) of the definition of Permitted Indebtedness
for purposes of (i) clause (ii) under "-- Certain Covenants -- Limitation on
Restricted Payments," (ii) clause (c) under " -- Merger, Consolidation and Sale
of Assets" or (iii) the definition of "Unrestricted Subsidiary" or (b) pursuant
to clause (iii)(v) under "-- Certain Covenants -- Limitation on Restricted
Payments," restrictions on the payment of dividends or the making of
distributions to the Company by United States Can Company referred to in clause
(a)(3) of the second sentence under "-- Certain Covenants -- Limitation on
Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries"
shall be disregarded.

Notwithstanding the provisions of clause (iii) in the first paragraph of
this definition, in the event that Consolidated Net Income is being calculated
with respect to the Company for purposes of determining whether the Incurrence
of Indebtedness proposed to be Incurred is permissible under clause (i) of the
definition of Permitted Indebtedness, then (i) if such proposed Indebtedness is
proposed to be Incurred by United States Can Company or any Subsidiary thereof
that is a Restricted Subsidiary, restrictions on the payment of dividends or the
making of distributions to the Company by United States Can Company referred to
in clause (a)(3) of the second sentence under "-- Certain Covenants --
Limitation on Dividends and Other Payment Restrictions Affecting Restricted
Subsidiaries" shall be disregarded and (ii) if such proposed Indebtedness is
proposed to be Incurred by the Company or any Subsidiary of the Company (other
than United States Can Company and its Subsidiaries) that is a Restricted
Subsidiary, restrictions on the payment of dividends or the making of
distributions to the Company by United States Can Company referred to in clause
(a)(3) of the second sentence under "-- Certain Covenants -- Limitation on
Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries"
shall be disregarded, provided that the lenders pursuant to the Credit Agreement
modify the Credit Agreement to allow for the payment of dividends or the making
of distributions to the Company in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due and
payable or, in the case of a proposed Incurrence of Indebtedness by a
Subsidiary, in an amount sufficient to fund capital contributions or other
Investments to or in such Subsidiary in amounts sufficient to pay the scheduled
principal and interest payments on such proposed Indebtedness when due and
payable so long as there does not exist an event which after notice or passage
of time or both would permit the lenders under the Credit Agreement to declare
all amounts thereunder due and payable.

"Credit Agreement" means that certain Credit Agreement, dated April 29,
1994, as amended, among the Guarantor and the syndicate of banks named therein,
including the $97.0 million acquisition facility, and any extensions, revisions,
refinancings or replacements thereof by a bank or a syndicate of banks.

"Currency Exchange Agreement" means, in respect of any person, any foreign
currency swap agreement or other agreement pursuant to which the Company or any
of its Subsidiaries hedge their exposure to foreign currency exchange rates in
connection with their business operations.

"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.

"Designated Senior Indebtedness" means any Senior Indebtedness which, at
the date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25.0 million and is specifically designated by the Company
in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of the Indenture and has been
designated as

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"Designated Senior Indebtedness" for purposes of the Indenture in an Officers'
Certificate received by the Trustee.

"Designated Senior Indebtedness of Subsidiary Guarantors" means (i) with
respect to the Guarantor, the Bank Indebtedness and (ii) any other Senior
Indebtedness of Subsidiary Guarantors which, at the date of determination, has
an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least $25.0
million and is specifically designated by the Subsidiary Guarantors in the
instrument evidencing or governing such Senior Indebtedness of Subsidiary
Guarantors as "Designated Senior Indebtedness of Subsidiary Guarantors" for
purposes of the Indenture and has been designated as "Designated Senior
Indebtedness of Subsidiary Guarantors" for purposes of the Indenture in an
Officers' Certificate received by the Trustee.

"Disinterested Director" means a director of the Company other than a
director (i) who is an employee of the Company or a Subsidiary of the Company,
or (ii) who is a party, or who is a director, officer, employee or Affiliate (or
is related by blood or marriage to any such person) of a party, to the
transaction in question, and who is, in fact, independent in respect of such
transaction.

"Disqualified Stock" of a Person means Redeemable Stock of such Person as
to which the maturity, mandatory redemption, conversion or exchange or
redemption at the option of the holder thereof occurs, or may occur, on or prior
to the first anniversary of the Stated Maturity of the Notes.

"Domestic Restricted Subsidiary" means any Restricted Subsidiary of the
Company other than a Foreign Restricted Subsidiary.

"EBITDA" means, for any period, the sum for such period, of Consolidated
Net Income plus, to the extent reflected in the income statement of such Person
for such period from which Consolidated Net Income is determined, without
duplication, (i) Consolidated Interest Expense, (ii) provision for plant
closing, (iii) income tax expense, (iv) depreciation expense, (v) amortization
expense and (vi) any charge related to any premium or penalty paid in connection
with redeeming or retiring any Indebtedness prior to its Stated Maturity.

"Escrow Account" has the meaning given in the Escrow Agreement.

"Escrow Agreement" means that certain Escrow Agreement dated as of October
17, 1996 by and among the Company, the Escrow Agent, and the Trustee
substantially in the form of Exhibit C to the Indenture.

"Escrow Funds" has the meaning set forth in "-- Certain Covenants --
Establishment of Escrow Account."

"Fair Market Value" means, with respect to any asset or property, the price
which could be negotiated in an arms'-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined, except as otherwise provided, if such property or asset has a Fair
Market Value of less than $3.0 million, by any Officer of the Company or (ii) if
such property or asset has a Fair Market Value in excess of $3.0 million, by a
majority of the Board of Directors of the Company and evidenced by a Certified
Resolution, dated within 30 days of the relevant transaction.

"Foreign Restricted Subsidiary" means any Restricted Subsidiary of the
Company which is not organized under the laws of the United States of America or
any state thereof or the District of Columbia.

"Foreign Significant Subsidiary" means any Foreign Restricted Subsidiary of
the Company meeting the standards specified in Rule 1-02(w) of the Regulation
S-X promulgated by the Commission as in effect on the Issue Date.

"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the Issue Date, including those set forth in (i)
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (ii) statements and

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pronouncements of the Financial Accounting Standards Board and (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
the Indenture shall be computed in conformity with GAAP consistently applied.

"Guaranty" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of any
other Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, however, that the term
"Guaranty" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guaranty" used as a verb has a
corresponding meaning.

"Holder" means the Person in whose name an Exchange Note or Note is
registered on the Registrar's books.

"Incur" means issue, assume, Guaranty, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be incurred by such
Subsidiary at the time it becomes a Subsidiary. The terms "Incurred",
"Incurrence" and "Incurring" shall each have a correlative meaning.

"Indebtedness" means, with respect to any Person on any date of
determination (without duplication),

(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money;

(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments;

(iii) all Capitalized Lease Obligations and Attributable Indebtedness
of such Person;

(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion
of such services;

(v) all obligations of such Person in respect of letters of credit,
banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other
than obligations described in clauses (i) through (iv) above) entered into
in the ordinary course of business of such Person to the extent such
letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment on
the letter of credit;

(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary, any Preferred Stock (but excluding, in each
case, any accrued dividends);

(vii) all indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such indebtedness is assumed by such Person;
provided, however, that the amount of such indebtedness shall be the lesser
of (a) the fair market value of such asset at such date of determination
and (b) the amount of such indebtedness of such other Persons;

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(viii) all indebtedness of other Persons to the extent guaranteed by
such Person; and

(ix) to the extent not otherwise included in this definition,
obligations in respect of Interest Rate Agreements and Currency Exchange
Agreements.

The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.

"Interest Rate Agreement" means, in respect of a Person, any interest rate
swap agreement, interest rate option agreement, interest rate cap agreement,
interest rate collar agreement, interest rate floor agreement or other similar
agreement or arrangement.

"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person) or other
extension of credit (including by way of Guaranty or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of the definition of
"Unrestricted Subsidiary" and the limitations set forth in "-- Certain Covenants
- -- Limitation on Restricted Payments", (i) "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the Fair Market Value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time that such Subsidiary is so redesignated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its Fair Market Value at the time of such
transfer. In determining the amount of any Investment in respect of any property
or assets other than cash, such property or asset shall be valued at its Fair
Market Value at the time of such Investment (unless otherwise specified in this
definition), as determined in good faith by the Board of Directors, whose
determination shall be evidenced by a Certified Resolution.

"Issue Date" means the date on which the Notes are originally issued.

"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof) or any Sale/Leaseback Transaction.

"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to such properties or assets or received in any other noncash form) therefrom,
in each case net of (i) all legal, title and recording tax expenses, commissions
and other fees and expenses incurred, and all federal, state, provincial,
foreign and local taxes required to be paid or accrued as a liability under
GAAP, as a consequence of such Asset Disposition, (ii) all payments made on any
Indebtedness which is secured by any assets subject to such Asset Disposition,
in accordance with the terms of any Lien upon such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset Disposition, or
by applicable law, be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) the deduction of appropriate amounts to be provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the assets disposed of in such Asset Disposition and retained by the
Company or any Restricted Subsidiary after such Asset Disposition.

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"Net Cash Proceeds", with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.

"Officer" means the Chairman of the Board, President, Executive Vice
President -- Operations, Chief Financial Officer, Treasurer or Controller of the
Company.

"Officers' Certificate" means a certificate signed by two Officers at least
one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company.

"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be outside counsel to the Company or
an employee of or outside counsel to the Trustee.

"pari passu", as applied to the ranking of any Indebtedness of a Person in
relation to other Indebtedness of such Person, means that each such Indebtedness
either (i) is not subordinate in right of payment to any Indebtedness or (ii) is
subordinate in right of payment to the same Indebtedness as is the other, and is
so subordinate to the same extent, and is not subordinate in right of payment to
each other or to any Indebtedness as to which the other is not so subordinate.

"Permitted Holder" means William J. Smith, Ricardo Poma, Carl Ferenbach and
Francisco A. Soler or any Person of which the foregoing "beneficially owns" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) voting securities
representing at least 75% of the total voting power of all classes of Capital
Stock of such Person (exclusive of any matters as to which class voting rights
exist).

"Permitted Indebtedness" is defined to include: (i) Indebtedness incurred
if, after giving pro forma effect to the Incurrence and application of the
proceeds thereof, the Consolidated Coverage Ratio exceeds 2.0 to 1.0 if such
determination is being made prior to the third anniversary of the Issue Date, or
2.5 to 1.0, if such determination is being made thereafter; (ii) Indebtedness
Incurred pursuant to the Credit Agreement in an amount outstanding at any time
not to exceed $130.0 million; (iii) Capital Expenditure Indebtedness incurred in
an aggregate principal amount not to exceed $15.0 million in any fiscal year of
the Company; (iv) Indebtedness under Interest Rate Agreements and Currency
Exchange Agreements, entered into for the purpose of limiting interest rate or
foreign exchange risk, as the case may be, provided that the obligations under
such agreements are related to payment obligations on Permitted Indebtedness;
(v) Indebtedness of the Company to any Restricted Subsidiary or of any
Restricted Subsidiary to the Company or any other Restricted Subsidiary (but
only so long as such Indebtedness is held by the Company or such Restricted
Subsidiary); (vi) Indebtedness evidenced by the Notes and the Subsidiary
Guaranties; (vii) Indebtedness outstanding immediately after the issuance of the
Notes and the application of the proceeds thereof (other than the 13 1/2%
Notes); (viii) Indebtedness evidenced by the 13 1/2% Notes, but only to the
extent outstanding on or prior to the latest date on which the Company may
effect the Required Redemption in compliance with "-- Certain Covenants --
Required Redemption of 13 1/2% Notes" (regardless of whether such Required
Redemption is actually effected); (ix) Indebtedness under reimbursement
obligations in respect of letters of credit incurred in the ordinary course of
business or pursuant to self-insurance obligations; (x) Indebtedness incurred by
Foreign Restricted Subsidiaries with respect to such Subsidiaries' working
capital requirements in an aggregate principal amount outstanding at any one
time not to exceed $10.0 million; (xi) Refinancing Indebtedness incurred with
respect to Indebtedness referred to in clauses (i), (iii), (vi) and (vii) of
this paragraph, and (xii) Indebtedness not otherwise permitted to be incurred
pursuant to the Limitation on Indebtedness covenant in an aggregate principal
amount not to exceed at any one time outstanding $15.0 million.

"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) a Restricted Subsidiary or a Person which will, upon the
making of such Investment, become a Restricted Subsidiary; provided, however,
that the primary business of such Restricted Subsidiary is a Related Business;
(ii) another Person if as a result of such Investment such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a

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Restricted Subsidiary; provided, however, that such Person's primary business is
a Related Business; (iii) Temporary Cash Investments; (iv) receivables owing to
the Company or any Restricted Subsidiary, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; provided, however, that such trade terms may include such
concessionary trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances; (v) payroll, travel and similar advances to
cover matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the ordinary
course of business; (vi) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary, as the case may be, not to exceed $1.0 million per
employee and $3.0 million in the aggregate; and (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments.

"Permitted Liens" means, with respect to any Person, (i) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (ii) Liens imposed by
law, such as carriers', warehousemen's and mechanics' Liens, in each case for
sums not yet due or being contested in good faith by appropriate proceedings, or
other Liens arising out of judgments or awards against such Person with respect
to which such Person shall then be prosecuting an appeal or other proceedings
for review; (iii) Liens for property taxes not yet due or payable or subject to
penalties for non-payment and which are being contested in good faith by
appropriate proceedings; (iv) Liens in favor of issuers of surety bonds or
letters of credit issued pursuant to the request of and for the account of such
Person in the ordinary course of its business; (v) minor survey exceptions,
minor encumbrances, easements or reservations of, or rights of others for,
licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real property or Liens incidental to the conduct of the business of such Person
or to the ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (vi) Liens existing on the Issue Date; (vii) Liens on
property or shares of stock of a Person at the time such Person becomes a
Subsidiary; provided, however, that any such Lien may not extend to any other
property owned by the Company or any Restricted Subsidiary; provided further
that such Liens are not Incurred in anticipation of or in connection with the
transaction or series of related transactions pursuant to which such Person
became a Restricted Subsidiary; and (viii) Liens on property at the time the
Company or a Subsidiary acquired the property, including any acquisition by
means of a merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that any such Lien may not extend to any other
property owned by the Company or any Restricted Subsidiary; provided further
that such Liens are not incurred in anticipation of or in connection with the
acquisition of such property; (ix) Liens to secure any refinancing, refunding,
extension, renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements) as a whole, or in part, of any
Indebtedness secured by any Lien referred to in the foregoing clauses (vi),
(vii) and (viii); provided, however, that (x) such new Lien shall be limited to
all or part of the same property that secured the original Lien (plus
improvements on such property) and (y) the Indebtedness secured by such Lien at
such time is not increased to any amount greater than the sum of (A) the
outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clauses (vi), (vii) and (viii) at the time the
original Lien became a Permitted Lien under the Indenture and (B) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement.

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"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.

"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.

"Principal" of a Note or Exchange Note means the principal of the Note or
Exchange Note plus the premium, if any, payable on the Note or Exchange Note
which is due or overdue or is to become due at the relevant time.

"Pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms hereof, a calculation in accordance with Article 11
of Regulation S-X promulgated under the Securities Act (to the extent
applicable), as interpreted in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
or otherwise a calculation made in good faith by the Board of Directors after
consultation with the independent certified public accountants of the Company,
as the case may be.

"Redeemable Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event (i) matures
or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(ii) is convertible or exchangeable for Indebtedness or Disqualified Stock or
(iii) is redeemable at the option of the holder thereof, in whole or in part.

"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness existing on the date of the Indenture or
Incurred in compliance with the Indenture (including Indebtedness of the Company
that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of
any Restricted Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing Indebtedness;
provided, however, that (i) the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced, (ii)
the Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced, (iii) such Refinancing Indebtedness is
Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced and (iv)
if the Indebtedness of the Company or a Restricted Subsidiary being refinanced
is subordinated to other Indebtedness of the Company or a Restricted Subsidiary
in any respect, such Refinancing Indebtedness is subordinated at least to the
same extent; provided further, however, that Refinancing Indebtedness shall not
include (a) Indebtedness of a Subsidiary that refinances Indebtedness of the
Company or (b) Indebtedness of the Company or a Restricted Subsidiary that
refinances Indebtedness of an Unrestricted Subsidiary.

"Related Business" means any business related, or complementary (as
determined in good faith by the Board of Directors), to the business of the
Company and the Restricted Subsidiaries on the Issue Date.

"Representative" means the trustee, agent or representative (if any) for an
issue of Senior Indebtedness.

"Required Redemption" means the redemption of the entire principal amount
outstanding of the 13 1/2% Notes in accordance with the provisions of the
Indenture and the indenture governing the 13 1/2% Notes.

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"Restricted Subsidiary" means (i) United States Can Company, (ii) U.S.C.
Europe N.V., (iii) Thuvine Duiven B.V., (iv) U.S.C. Holding U.K. Ltd., (v) U.K.
Can Ltd., (vi) U.S.C. Europe U.K. Ltd., (vii) U.S.C. Europe Italia, S.r.l.,
(viii) U.S.C. France Holding, S.A.S., (ix) CarnaudMetalbox Aerosols S.A. (to be
known as U.S.C. Aerosols France, S.A.S.), (x) Can Beteiligungs GmbH, (xi) Can
Verwaltungs GmbH, (xii) U.S.C. Aerosoldosen Deutschland GmbH & Co. KG, (xiii)
U.S. Can Espana Holding SCpA, (xiv) CMB Aerosoles S.A. (to be known as U.S.C.
Europe Espana SCpA), (xv) any other Subsidiary of the Company that is not
designated by the Board of Directors to be an Unrestricted Subsidiary and (xvi)
an Unrestricted Subsidiary which is redesignated as a Restricted Subsidiary as
permitted pursuant to the definition of "Unrestricted Subsidiary."

"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.

"Senior Indebtedness" means all Indebtedness of the Company including
interest thereon, whether outstanding on the date of the Indenture or thereafter
issued, unless in the instrument creating or evidencing the same or pursuant to
which the same is outstanding it is provided that such obligations are not
superior in right of payment to the Notes or Exchange Notes; provided, however,
that Senior Indebtedness shall not include (i) any obligation of the Company to
any Subsidiary, (ii) any liability for federal, state, local or other taxes owed
or owing by the Company, (iii) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including Guaranties
thereof or instruments evidencing such liabilities), (iv) any Indebtedness,
Guaranty or obligation of the Company which is subordinate or junior in any
respect to any other Indebtedness, Guaranty or obligation of the Company,
including any Senior Subordinated Indebtedness and any Subordinated Obligations,
(v) any obligations with respect to any Capital Stock or (vi) any Indebtedness
Incurred in violation of the Indenture.

"Senior Indebtedness of Subsidiary Guarantors" means (i) with respect to
the Guarantor, the Bank Indebtedness and (ii) all other Indebtedness of the
Subsidiary Guarantors including interest thereon, whether outstanding on the
date of the Indenture or thereafter issued, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is provided
that such obligations are not superior in right of payment to the Subsidiary
Guaranties, provided, however, that Senior Indebtedness of Subsidiary Guarantors
shall not include (a) any obligation of the Subsidiary Guarantors to any
Subsidiary, (b) any liability for federal, state, local or other taxes owed or
owing by the Subsidiary Guarantors, (c) any accounts payable or other liability
to trade creditors arising in the ordinary course of business (including
Guaranties thereof or instruments evidencing such liabilities), (d) any
Indebtedness, Guaranty or obligation of the Subsidiary Guarantors which is
subordinate or junior in any respect to any other Indebtedness, Guaranty or
obligation of the Subsidiary Guarantors, including Senior Subordinated
Indebtedness of Subsidiary Guarantors and any Subordinated Obligations, (e) any
obligations with respect to any Capital Stock or (f) any Indebtedness Incurred
in violation of the Indenture.

"Senior Subordinated Indebtedness" means the Notes, the Exchange Notes and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes and the Exchange Notes and is
not subordinated by its terms to any Indebtedness or other obligation of the
Company which is not Senior Indebtedness.

"Senior Subordinated Indebtedness of Subsidiary Guarantors" means (i) with
respect to the Guarantor, the 13 1/2% Notes, (ii) the Subsidiary Guaranties and
(iii) any other Indebtedness of the Subsidiary Guarantors that specifically
provides that such Indebtedness is to rank pari passu with the Subsidiary
Guaranties and is not subordinated by its terms to any Indebtedness or other
obligation of the Subsidiary Guarantors which is not Senior Indebtedness of
Subsidiary Guarantors.

"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such

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security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).

"Subordinated Obligation" means (i) any Indebtedness of the Company
(whether outstanding on the date of the Indenture or thereafter Incurred) which
is subordinate or junior in right of payment to the Notes and the Exchange Notes
or (ii) any Indebtedness of the Subsidiary Guarantors (whether outstanding on
the date of the Indenture or thereafter Incurred) which is subordinate or junior
in right of payment to the Subsidiary Guaranties.

"Subsidiary" of any specified Person means any corporation, partnership,
joint venture, association or other business entity, whether now existing or
hereafter organized or acquired, (i) in the case of a corporation, of which at
least 50% of the total voting power of the Voting Stock is held by such first-
named Person or any of its Subsidiaries and such first-named Person or any of
its Subsidiaries has the power to direct the management, policies and affairs
thereof; or (ii) in the case of a partnership, joint venture, association, or
other business entity, with respect to which such first-named Person or any of
its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise if in accordance
with GAAP such entity is consolidated with the first-named Person for financial
statement purposes.

"Subsidiary Guarantors" means (i) the Guarantor and (ii) each Domestic
Restricted Subsidiary that in the future executes a supplemental indenture in
which such Subsidiary agrees to be bound by the terms of the Indenture as a
Subsidiary Guarantor, provided that any Person constituting a Subsidiary
Guarantor as described above shall cease to constitute a Subsidiary Guarantor
when its respective Subsidiary Guaranty is released in accordance with the terms
of the Indenture.

"Temporary Cash Investments" means any of the following: (i) investments in
U.S. Government Obligations maturing within 90 days of the date of acquisition
thereof, (ii) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 90 days of the date of acquisition
thereof, issued by a bank or trust company which is organized under the laws of
the United States of America or any state thereof having capital, surplus and
undivided profits aggregating in excess of $500,000,000 and whose long-term debt
is rated "A-3" or A- or higher according to Moody's Investors Service, Inc. or
Standard and Poor's Corporation (or such similar equivalent rating by at least
one "nationally recognized statistical rating organization" (as defined in Rule
436 under the Securities Act)), (iii) repurchase obligations with a term of not
more than 7 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, and (iv) investments in commercial paper, maturing not more than 90
days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Moody's Investors Service,
Inc. or "A-1" (or higher) according to Standard and Poor's Corporation.

"Trade Payables" means, with respect to any Person, any accounts payable or
any indebtedness or monetary obligation to trade creditors created, assumed or
guaranteed by such Person arising in the ordinary course of business of such
Person in connection with the acquisition of goods or services.

"Trustee" means the party named as such in the Indenture until a successor
replaces it in accordance with the provisions of the Indenture and, thereafter,
means such successor.

"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.

"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary (i) owns any
Capital Stock or Indebtedness of, or owns or holds any Lien on any property of,
the Company or any other Subsidiary of

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the Company that is not a Subsidiary of the Subsidiary to be so designated or
(ii) is obligated under any Indebtedness or other obligation that, if in
default, would result (with the passage of time or the giving of notice or
otherwise) in a default on any Indebtedness of the Company or any Restricted
Subsidiary; provided, however, that either (a) the Subsidiary to be so
designated has total assets of $1,000 or less or (b) if such Subsidiary has
assets greater than $1,000, then such designation would be permitted under "--
Certain Covenants -- Limitation on Restricted Payments" as a "Restricted
Payment". Unless so designated as an Unrestricted Subsidiary, any Person that
becomes a Subsidiary of the Company or of any Restricted Subsidiary will be
classified as a Restricted Subsidiary. Notwithstanding the foregoing sentence,
the Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided, however, that immediately after giving pro
forma effect to such designation (1) the Company could incur $1.00 of additional
Indebtedness pursuant to clause (i) of the definition of "Permitted
Indebtedness" and (2) no Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Certified Resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complies with the foregoing provisions.

"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.

"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.

"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company all
the Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or another Wholly Owned Subsidiary.

DESCRIPTION OF NOTES

The Notes evidence the same indebtedness as that which will be evidenced by
the Exchange Notes and are entitled to the benefits of the Indenture. The form
and terms of the Notes are the same as the form and terms of the Exchange Notes
(which replace the Notes) except that none of the Notes (or the related
guarantees) was registered under the Securities Act. Therefore, the Notes may
not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
Accordingly, the Notes bear legends restricting the transfer thereof. In
addition, with certain exceptions, the Notes may not be sold or transferred to,
or acquired on behalf of, any pension or welfare plan (as described in Section 3
of the Employee Retirement Income Security Act of 1974). For a description of
the terms of the Exchange Notes, see "Description of Exchange Notes."

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EXCHANGE OFFER; REGISTRATION RIGHTS

The Company, the Guarantor and the Initial Purchasers entered into the
Registration Rights Agreement on October 17, 1996 pursuant to which the Company
and the Guarantor agreed, for the benefit of the Holders, that the Company
would, at its cost, (i) no later than 60 days (December 16, 1996) after the
Issue Date file a registration statement (the "Exchange Offer Registration
Statement") with the Commission with respect to a registered offer to exchange
the Notes for new notes of the Company, the Exchange Notes, having terms
substantially identical in all material respects to the Notes (except that the
Exchange Notes will not contain terms with respect to transfer restrictions) and
(ii) use its best efforts to cause the Exchange Offer Registration Statement to
be declared effective under the Securities Act not later than 120 days (February
14, 1997) after the Issue Date (which obligations have been satisfied by the
filing of the Registration Statement on Form S-4 of which this Prospectus is a
part on December 11, 1996 and the Commission declaring such statement effective
on February 11, 1997). The Company will keep the Exchange Offer open for not
less than 30 days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders. For each Note surrendered
to the Company pursuant to the Exchange Offer, the Holder of such Note will
receive an Exchange Note having a principal amount equal to that of the
surrendered Note. Interest on each Exchange Note will accrue from the last
interest payment date on which interest was paid on the Note surrendered in
exchange therefor or, if no interest has been paid on such Note, from the date
of its original issue. Under existing Commission interpretations, the Exchange
Notes will be freely transferable by Holders other than affiliates of the
Company after the Exchange Offer without further registration under the
Securities Act if the holder of the Exchange Notes represents that it is
acquiring the Exchange Notes in the ordinary course of its business, that it has
no arrangement or understanding with any person to participate in the
distribution of the Exchange Notes and that it is not an affiliate of the
Company, as such terms are interpreted by the Commission; provided that
broker-dealers ("Participating Broker-Dealers") receiving Exchange Notes in the
Exchange Offer will have a prospectus delivery requirement with respect to
resales of such Exchange Notes. While the Commission has not taken a position
with respect to this particular transaction, under existing Commission
interpretations relating to transactions structured substantially like the
Exchange Offer, participating Broker-Dealers may fulfill their prospectus
delivery requirements with respect to Exchange Notes (other than a resale of an
unsold allotment from the original sale of the Notes) with the prospectus
contained in the Exchange Offer Registration Statement. Under the Registration
Agreement, the Company is required to allow Participating Broker-Dealers and
other persons, if any, with similar prospectus delivery requirements to use the
prospectus contained in the Exchange Offer Registration Statement in connection
with the resale of such Exchange Notes.

A Holder of Notes (other than certain specified holders) who wishes to
exchange such Notes for Exchange Notes in the Exchange Offer will be required to
represent that any Exchange Notes to be received by it will be acquired in the
ordinary course of its business and that at the time of the commencement of the
Exchange Offer it has no arrangement or understanding with any person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Notes and that it is not an "affiliate" of the Company, as defined
in Rule 405 of the Securities Act, or if it is an affiliate, that it will comply
with the registration and prospectus delivery requirements of the Securities Act
to the extent applicable. If a Holder is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Notes that were acquired as a
result of market-making or other trading activities, it will be required to
acknowledge that it will deliver a Prospectus in connection with any resale of
such Exchange Notes.

In the event that (i) applicable interpretations of the staff of the
Commission do not permit the Company to effect such a Exchange Offer, or (ii) if
for any other reason the Exchange Offer is not consummated within 150 days
(March 16, 1997) after the Issue Date, or (iii) if the Initial Purchasers so
request with respect to Notes not eligible to be exchanged for Exchange Notes in
the Registered Exchange Offer, or (iv) if any Holder of Notes is not eligible to
participate in the Exchange Offer or (v) if an Initial Purchaser does not
receive freely tradeable Exchange Notes in exchange for Notes constituting any
portion of an unsold allotment (unless current interpretations by the
Commission's staff permit the

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filing in lieu of such shelf registration statement of a post-effective
amendment to the Registration Statement covering the sale of such Exchange
Notes), the Company will, at its cost, (a) as promptly as practicable, file a
Shelf Registration Statement covering resales of the Notes or the Exchange
Notes, as the case may be, (b) use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act and (c)
keep the Shelf Registration Statement effective until three years after its
effective date (or until one year after such effective date if such Shelf
Registration Statement is filed at the request of an Initial Purchaser). An
Initial Purchaser or Holder of a Note would be ineligible to participate in the
Exchange Offer if such Initial Purchaser or Holder could not execute a Letter of
Transmittal as required under the Purchase Agreement because they were unable to
make the required representations therein. See, "The Exchange Offer" at page 31.
The Company will, in the event a Shelf Registration Statement is filed, among
other things, provide to each holder for whom such Shelf Registration Statement
was filed copies of the prospectus which is a part of the Shelf Registration
Statement, notify each such holder when the Shelf Registration Statement has
become effective and take certain other actions as are required to permit
unrestricted resales of the Notes or the Exchange Notes, as the case may be. A
holder selling such Notes or Exchange Notes pursuant to the Shelf Registration
Statement generally would be required to be named as a selling security holder
in the related prospectus and to deliver a prospectus to purchasers, will be
subject to certain of the civil liability provisions under the Securities Act in
connection with such sales and will be bound by the provisions of the
Registration Agreement which are applicable to such holder (including certain
indemnification obligations).

If (i) within 150 days after the Issue Date, neither the Exchange Offer has
been consummated nor the Shelf Registration Statement has been declared
effective or (ii) after either the Exchange Offer Registration Statement or the
Shelf Registration Statement has been declared effective, such Registration
Statement thereafter ceases to be effective or usable (subject to certain
exceptions) in connection with resales of Notes or Exchange Notes in accordance
with and during the periods specified in the Registration Agreement (each such
event a "Registration Default"), additional interest ("Liquidated Damages") will
accrue on the Notes and the Exchange Notes (in addition to the stated interest
on the Notes and the Exchange Notes) from and including the date on which any
such Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured. Liquidated Damages will accrue at a rate
of 0.50% per annum during the 90-day period immediately following the occurrence
of any Registration Default and shall increase by 0.25% per annum at the end of
each subsequent 90-day period, but in no event shall such rate exceed 2.00% per
annum in the aggregate regardless of the number of Registration Defaults.

The summary herein of certain provisions of the Registration Agreement does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, all the provisions of the Registration Agreement, a copy of
which is available upon request to the Company.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion of the material United States federal income tax
consequences of the Exchange Offer does not purport to deal with all the tax
considerations a potential investor may want to examine in connection with a
decision to purchase an Exchange Note. The discussion is not meant to be an
exhaustive examination of tax implications for all potential investors and all
potential investors are encouraged to consult their own tax and financial
advisors in connection with making any investment decision. Such discussion is
based on the Internal Revenue Code of 1986, as amended to the date of this
Prospectus (the "Code"), existing and proposed Treasury regulations, and
judicial and administrative determinations, all of which are subject to change
at any time, possibly on a retroactive basis. The following relates only to
Notes, and Exchange Notes received therefor, that are held as "capital assets"
within the meaning of Section 1221 of the Code by persons who are citizens or
residents of the United States. It does not discuss state, local, or foreign tax
consequences, nor does it discuss tax consequences to categories of holders that
are subject to special rules, such as foreign persons, tax-exempt organizations,
insurance companies, banks, and dealers in stocks and securities. Tax
consequences may

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vary depending on the particular status of an investor. No rulings will be
sought from the IRS with respect to the federal income tax consequences of the
Exchange Offer.

THIS SECTION DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF FEDERAL INCOME
TAXATION THAT MAY BE RELEVANT TO AN INVESTOR'S DECISION TO PARTICIPATE IN THE
EXCHANGE. EACH INVESTOR SHOULD CONSULT WITH ITS OWN TAX ADVISOR CONCERNING THE
APPLICATION OF THE FEDERAL INCOME TAX LAWS AND OTHER TAX LAWS TO ITS PARTICULAR
SITUATION BEFORE DETERMINING WHETHER TO INVEST IN THE EXCHANGE NOTES.

PAYMENTS OF INTEREST

In general, interest (including Liquidated Damages) on a Note or Exchange
Note will be taxable to a beneficial owner who or which is (i) a citizen or
resident of the United States, (ii) a corporation created or organized under the
laws of the United States or any State thereof (including the District of
Columbia) or (iii) a person otherwise subject to United States federal income
taxation on its worldwide income (a "U.S. Holder") as ordinary income at the
time it is received or accrued, depending on the Holder's method of accounting
for tax purposes.

The Company is obligated to pay additional interest to the Holders of Notes
under certain circumstances described under "Exchange Offer; Registration
Rights." It is believed that any such payments should be taxable to Holders as
such interest payments are made (regardless of the Holder's usual method of tax
accounting).

PURCHASE, SALE, EXCHANGE, RETIREMENT AND REDEMPTION OF THE EXCHANGE NOTES

In general, a U.S. Holder's tax basis in an Exchange Note will equal the
price paid for the Note for which such Exchange Note was exchanged pursuant to
the Exchange Offer. A U.S. Holder generally will recognize gain or loss on the
sale, exchange, retirement, redemption or other disposition of a Note or an
Exchange Note (or portion thereof) equal to the difference between the amount
realized on such disposition and the U.S. Holder's tax basis in the Note or the
Exchange Note (or portion thereof). Except to the extent attributable to accrued
but unpaid interest, gain or loss recognized on such disposition of a Note or
Exchange Note will be capital gain or loss and will be long-term capital gain or
loss if such Note or Exchange Note was held for more than one year.

MARKET DISCOUNT

A U.S. Holder of an Exchange Note or a Note, other than an initial Holder
who acquired the Exchange Note or Note for at least its issue price (generally,
the first price at which a substantial number of Notes included in the issue of
which the Note is a part is sold other than to bond houses, brokers, or similar
persons or organizations acting in the capacity of underwriters, placement
agents or wholesalers), will be treated as holding the Exchange Note or Note at
a market discount (a "Market Discount Note") if the amount for which such U.S.
Holder purchased the Exchange Note or Note is less than the Exchange Note's or
Note's principal amount, subject to a de minimis rule.

In general, any partial payment of principal on, or gain recognized on the
maturity or disposition of, a Market Discount Note will be treated as ordinary
income to the extent that such gain does not exceed the accrued market discount
on such Exchange Note or Note. Alternatively, a U.S. Holder of a Market Discount
Note may elect to include market discount in income currently over the life of
the Market Discount Note. Such an election applies to all debt instruments with
market discount acquired by the electing U.S. Holder on or after the first day
of the first taxable year to which the election applies and may not be revoked
without the consent of the IRS.

Market discount accrues on a straight-line basis, unless the U.S. Holder
elects to accrue such discount on a constant yield to maturity basis. Such an
election is applicable only to the Exchange Note or the Note with respect to
which it is made and is irrevocable. A U.S. Holder of a Market Discount Note
that does not elect to include market discount in income currently generally
will be required to defer

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deductions for interest on borrowings allocable to such Exchange Note or Note,
in an amount not exceeding the accrued market discount on such Exchange Note or
Note, until the maturity or disposition of such Exchange Note or Note.

NON-U.S. HOLDERS

Under present United States federal income and estate tax law and subject
to the discussion of backup withholding below:

(a) payments of interest on the Notes or Exchange Notes by the Company
or any agent of the Company to any Holder of a Note or Exchange Note that
is not a U.S. Holder (a "Non-U.S. Holder") will not be subject to United
States federal withholding tax, provided that (i) the Non-U.S. Holder does
not actually or constructively own 10 percent or more of the total combined
voting power of all classes of stock of the Company entitled to vote, (ii)
the Non-U.S. Holder is not a controlled foreign corporation that is related
to the Company through stock ownership, and (iii) either (A) the beneficial
owner of the Notes or Exchange Notes certifies to the Company or its agent,
under penalties of perjury, that it is not a "United States person" (as
defined in the Code) and provides its name and address or (B) a securities
clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and holds the Notes on behalf of the beneficial
owner certifies to the Company or its agent, under penalties of perjury,
that such statement has been received from the beneficial owner by it or by
a financial institution between it and the beneficial owner and furnishes
the payor with a copy thereof;

(b) a Non-U.S. Holder will not be subject to United States federal
withholding tax on gain realized on the sale, exchange or redemption of a
Note or Exchange Note; and

(c) a Note or Exchange Note held by an individual who at the time of
death is not a citizen or resident of the United States will not be subject
to United States federal estate tax as a result of such individual's death
if, at the time of such death, the individual did not actually or
constructively own 10 percent or more of the total combined voting power of
all classes of stock of the Company entitled to vote and the income on the
Notes or Exchange Notes would not have been effectively connected with the
conduct of a trade or business by the individual in the United States.

Recently proposed regulations that would be effective January 1, 1998
provide for several alternative methods for Non-U.S. Holders or "qualified
intermediaries" who hold Notes or Exchange Notes on behalf of Non-U.S. Holders
to obtain an exemption from withholding on interest payments.

If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest on the Note or Exchange Note is effectively connected with the
conduct of such trade or business, the Non U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraph (provided that such holder
furnishes a properly executed IRS Form 4224 on or before any payment date to
claim such exemption), may be subject to U.S. federal income tax on such
interest in the same manner as if it were a U.S. Holder.

BACKUP WITHHOLDING

Under the Code, a holder of an Exchange Note or Note may be subject, under
certain circumstances, to "backup withholding" at a 31% rate with respect to
payments in respect of interest thereon or the gross proceeds from the
disposition thereof. This withholding generally applies only if the holder (i)
fails to furnish his or her social security or other taxpayer identification
number ("TIN") within a reasonable time after request therefor; (ii) furnishes
an incorrect TIN, (iii) is notified by the IRS that he or she has failed to
report properly payments of interest and dividends and the IRS has notified the
Company that he or she is subject to backup withholding or (iv) fails, under
certain circumstances, to provide a certified statement, signed under penalty of
perjury, that the TIN provided is his or her correct number and that he or she
is not subject to backup withholding. Any amount withheld from a payment to a
holder under the backup withholding rules is allowable as a credit against such
holder's federal income tax liability,

122
<PAGE> 123

provided that the required information is furnished to the IRS. Corporations,
Non-U.S. Holders and certain other entities described in the Code and Treasury
regulations are generally exempt from such withholding if their exempt status is
properly established.

PLAN OF DISTRIBUTION

Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. The Prospectus,
as it may be amended or supplemented from time to time, may be used by any
person subject to the prospectus delivery requirements of the Securities Act,
including a broker-dealer in connection with resales of Exchange Notes received
in exchange for Notes where such Notes were acquired as a result of
market-making activities or other trading activities. The Company and the
Guarantor have agreed that, for a period of 180 days after the Expiration Date,
they will make this Prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until May
12, 1997 (90 days after commencement of the Exchange Offer), all dealers
effecting transactions in the Exchange Notes may be required to deliver a
Prospectus.

Neither the Company nor the Guarantor will receive any proceeds from any
sales of the Exchange Notes by broker-dealers. Exchange Notes received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange Notes or
a combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to the purchaser or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer and/or the purchasers of any such
Exchange Notes. Any broker-dealer that resells the Exchange Notes that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Notes may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that, by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.

For a period of 180 days after the Expiration Date, the Company or the
Guarantor will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Company and the Guarantor have
agreed to pay certain expenses incident to the Exchange Offer, other than
commission or concessions of any brokers or dealers, and will indemnify the
holders of the Exchange Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.

By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Notes for its own account pursuant to the Exchange Offer agrees that,
upon receipt of notice from the Company or the Guarantor of the happening of any
event which makes any statement in the Prospectus untrue in any material respect
or which requires the making of any changes in the Prospectus in order to make
the statements therein not misleading (which notice the Company and the
Guarantor agree to deliver promptly to such broker-dealer), such broker-dealer
will suspend use of the Prospectus until the Company or the Guarantor have
amended or supplemented the Prospectus to correct such misstatement or omission
and have furnished copies of the amended or supplemental Prospectus to such
broker-dealer.

LEGAL MATTERS

Certain legal matters relating to the validity of the Exchange Notes
offered by the Company hereby were passed upon for the Company by Ross &
Hardies, Chicago, Illinois.

123
<PAGE> 124

EXPERTS

The consolidated balance sheets of the Company as of December 31, 1994 and
1995, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1995, included in this Prospectus have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.

The combined balance sheets of CPI Group as of December 31, 1994 and 1995,
the related combined statements of income, stockholders' equity and cash flows
for each year in the three-year period ended December 31, 1995, included in this
Prospectus, have been audited by Plante & Moran LLP, independent auditors, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.

The combined statements of financial position of USC Europe (Aerosols
Divestiture Package) as of December 31, 1994 and 1995, and the related combined
statements of operations for each of the three years in the period ended
December 31, 1995, included in this Prospectus, have been so included in
reliance on the report of Befec-Price Waterhouse, independent accountants, given
on the authority of said firm as experts in auditing and accounting.

124
<PAGE> 125

INDEX TO FINANCIAL STATEMENTS

REGISTRANT FINANCIAL STATEMENTS

<TABLE>
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS:
Report of Independent Public Accountants.................. F-2
Consolidated Balance Sheets as of December 31, 1994 and
1995................................................... F-3
Consolidated Statements of Operations for the Years Ended
December 31, 1993, 1994 and 1995....................... F-4
Consolidated Statements of Stockholders' Equity for the
Years Ended December 31, 1993, 1994 and 1995........... F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1994
and 1995............................................... F-6
Notes to Consolidated Financial Statements................ F-7
UNAUDITED QUARTERLY FINANCIAL DATA.......................... F-26
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS:
Condensed Consolidated Balance Sheets as of December 31,
1995 and September 29, 1996............................ F-27
Condensed Consolidated Statements of Operations for the
Nine Months Ended
October 1, 1995 and September 29, 1996................. F-28
Condensed Consolidated Statements of Cash Flows for the
Nine Months Ended
October 1, 1995 and September 29, 1996................. F-29
Notes to Condensed Consolidated Financial Statements...... F-30
ACQUIRED BUSINESSES FINANCIAL STATEMENTS
CPI GROUP:
Combined Financial Statements:
Independent Auditor's Report........................... F-37
Combined Balance Sheets as of December 31, 1994 and
1995.................................................. F-38
Combined Statements of Income for the Years Ended
December 31, 1993, 1994 and 1995...................... F-39
Combined Statement of Stockholders' Equity for the
Years Ended December 31, 1993, 1994 and 1995.......... F-40
Combined Statements of Cash Flows for the Years Ended
December 31, 1993, 1994 and 1995...................... F-41
Notes to the Combined Financial Statements............. F-42
Unaudited Combined Interim Financial Statements:
Combined Interim Balance Sheets as of June 30, 1995 and
June 30, 1996......................................... F-48
Combined Interim Statements of Income for the Six
Months Ended June 30, 1995 and 1996................... F-49
Combined Interim Statements of Stockholders' Equity for
the Six Months Ended June 30, 1995 and 1996........... F-50
Combined Interim Statements of Cash Flows for the Six
Months Ended June 30, 1995 and 1996................... F-51
Notes to Combined Interim Financial Statements......... F-52
USC EUROPE (AEROSOLS DIVESTITURE PACKAGE):
Combined Financial Statements:
Report of Independent Accountants...................... F-57
Combined Statements of Financial Position as of
December 31, 1994 and 1995............................ F-58
Combined Statements of Operations for the Years Ended
December 31, 1993, 1994 and 1995...................... F-59
Notes to the Combined Financial Statements............. F-60
Unaudited Combined Interim Financial Statements:
Combined Interim Statement of Financial Position as of
June 30, 1996......................................... F-68
Combined Interim Statements of Operations for the Six
Months Ended June 30, 1995 and 1996................... F-69
Notes to the Combined Interim Financial Information.... F-70
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Year Ended December 31, 1995........... F-77
Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the Nine Months Ended September 29, 1996... F-78
Notes to Unaudited Pro Forma Condensed Consolidated
Statements of Operations.................................. F-79
</TABLE>

F-1
<PAGE> 126

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To U.S. Can Corporation:

We have audited the accompanying consolidated balance sheets of U.S. CAN
CORPORATION (a Delaware corporation) AND SUBSIDIARY as of December 31, 1994 and
1995, and the related consolidated statements of operations, stockholders'
equity and cash flows for the years ended December 31, 1993, 1994 and 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of U.S. Can
Corporation and Subsidiary as of December 31, 1994 and 1995, and their results
of operations and cash flows for the years ended December 31, 1993, 1994 and
1995, in conformity with generally accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

ARTHUR ANDERSEN LLP

Chicago, Illinois
February 14, 1996 (except with
respect to the matter discussed
in Note 16, as to which the
date is October 17, 1996)

F-2
<PAGE> 127

U.S. CAN CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1994 1995
-------- ---------
(000'S OMITTED,
EXCEPT SHARE DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................................ $ 123 $ 136
Accounts receivable, less allowances of $4,116 and $5,451 in 1994 and
1995, respectively..................................................... 44,849 51,279
Inventories.............................................................. 77,656 78,252
Prepaid expenses and other current assets................................ 8,077 10,786
Prepaid income taxes..................................................... 3,574 6,732
-------- --------
Total current assets................................................... 134,279 147,185
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land..................................................................... 2,901 2,576
Buildings................................................................ 39,539 44,954
Machinery, equipment and construction in process......................... 266,694 306,319
-------- --------
309,134 353,849
Less -- Accumulated depreciation and amortization........................ (99,086) (123,748)
-------- --------
Total property, plant and equipment.................................... 210,048 230,101
-------- --------
MACHINERY REPAIR PARTS..................................................... 5,458 5,395
INTANGIBLES................................................................ 43,508 62,301
OTHER ASSETS............................................................... 7,431 10,454
-------- --------
Total assets........................................................... $400,724 $ 455,436
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt..................................... $ 14,437 $ 17,216
Cash overdrafts.......................................................... 2,007 5,395
Accounts payable......................................................... 43,504 32,560
Accrued payrolls and benefits............................................ 16,377 19,282
Accrued insurance........................................................ 5,798 5,830
Other current liabilities................................................ 13,352 17,954
-------- --------
Total current liabilities.............................................. 95,475 98,237
-------- --------
SENIOR DEBT................................................................ 86,209 127,360
SUBORDINATED DEBT.......................................................... 100,000 100,000
-------- --------
Total long-term debt................................................... 186,209 227,360
-------- --------
OTHER LONG-TERM LIABILITIES:
Postretirement benefits.................................................. 24,155 25,080
Plant consolidation reserves............................................. 2,029 --
Deferred income taxes.................................................... 17,934 19,962
Other long-term liabilities.............................................. 12 2,970
-------- --------
Total other long-term liabilities...................................... 44,130.. 48,012
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 10,000,000 shares authorized, none
issued or outstanding.................................................. -- --
Common stock, $.01 par value; 50,000,000 shares authorized; 12,553,886
and 12,902,111 shares issued in 1994 and 1995, respectively............ 126 129
Paid-in capital.......................................................... 98,799 103,913
Unearned restricted stock................................................ -- (2,052)
Treasury common stock, at cost; 81,138 and 37,908 shares in 1994 and
1995, respectively..................................................... (468) (319)
Retained deficit......................................................... (23,547) (19,844)
-------- --------
Total stockholders' equity............................................. 74,910 81,827
-------- --------
Total liabilities and stockholders' equity............................. $400,724 $ 455,436
======== ========
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these balance sheets.

F-3
<PAGE> 128

U.S. CAN CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1993 1994 1995
-------- -------- --------
(000'S OMITTED, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
NET SALES.................................................. $455,127 $563,153 $626,485
COST OF SALES.............................................. 392,652 481,676 555,478
-------- -------- --------
Gross income............................................. 62,475 81,477 71,007
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES............... 20,270 24,798 27,369
OVERHEAD REDUCTION PROVISION............................... -- -- 8,000
-------- -------- --------
Operating income......................................... 42,205 56,679 35,638
INTEREST EXPENSE ON BORROWINGS............................. 19,576 21,829 24,513
AMORTIZATION OF DEFERRED FINANCING COSTS................... 1,052 1,307 1,543
CONSOLIDATION EXPENSE...................................... 622 463 327
OTHER EXPENSE.............................................. 648 1,117 1,708
-------- -------- --------
Income before income taxes, minority interest and
extraordinary item.................................... 20,307 31,963 7,547
PROVISION FOR INCOME TAXES................................. 8,775 13,393 3,608
-------- -------- --------
Income before minority interest and extraordinary item... 11,532 18,570 3,939
MINORITY INTEREST.......................................... (608) -- --
-------- -------- --------
Income before extraordinary item......................... 10,924 18,570 3,939
EXTRAORDINARY ITEM -- LOSS FROM EARLY EXTINGUISHMENT OF
DEBT, net of income taxes................................ (3,402) -- --
-------- -------- --------
NET INCOME................................................. $ 7,522 $ 18,570 $ 3,939
======== ======== ========
PER SHARE DATA:
Primary:
Income after minority interest and before extraordinary
item and net of the effect of warrant accretion....... $ 1.16 $ 1.73 $ 0.31
Extraordinary item....................................... (0.37) -- --
-------- -------- --------
Net income............................................... $ 0.79 $ 1.73 $ 0.31
======== ======== ========
Weighted averages shares and equivalent shares
outstanding (000's)................................... 9,212 10,714 12,839
======== ======== ========
Fully Diluted:
Income after minority interest and before extraordinary
item net of the effect of warrant accretion........... $ 1.13 $ 1.73 $ 0.31
Extraordinary item....................................... (0.36) -- --
-------- -------- --------
Net income............................................... $ 0.77 $ 1.73 $ 0.31
======== ======== ========
Weighted averages shares and equivalent shares
outstanding (000's)................................... 9,509 10,731 12,845
======== ======== ========
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

F-4
<PAGE> 129

U.S. CAN CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON
UNEARNED TREASURY STOCK RETAINED
COMMON PAID-IN RESTRICTED COMMON SUBSCRIPTIONS EARNINGS
STOCK CAPITAL STOCK STOCK RECEIVABLE (DEFICIT)
------ -------- ---------- ------ ------------- --------
(000'S OMITTED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1992............. $ 1 $ 6,340 $ -- $(934 ) $(300) $(49,107)
Net income............................. -- -- -- -- -- 7,522
Issuance of common stock............... 44 53,249 -- -- -- --
Payments of common stock issuance
costs................................ -- (5,091) -- -- -- --
Exercise of stock options.............. -- 100 -- -- -- --
Purchase of treasury stock............. -- -- -- (125 ) -- --
Issuance of treasury stock............. -- 388 -- 462 -- --
Accretion of redeemable warrants....... -- -- -- -- -- (224)
Proceeds from common stock
subscriptions........................ -- -- -- -- 297 --
Change in par value.................... 46 (46) -- -- -- --
Conversion of redeemable preferred
stock and unpaid dividends earned
thereon.............................. 1 381 -- -- -- (160)
Redemption of redeemable warrants...... 8 3,885 -- -- -- --
Conversion of note payable to
stockholder and unpaid interest
earned thereon....................... 1 2,092 -- -- -- --
Equity adjustment to recognize minimum
pension liability.................... -- -- -- -- -- (321)
---- -------- ------- ----- ----- --------
BALANCE AT DECEMBER 31, 1993............. 101 61,298 -- (597 ) (3) (42,290)
Net income............................. -- -- -- -- -- 18,570
Issuance of common stock............... 23 34,753 -- -- -- --
Payments of common stock issuance
costs................................ -- (579) -- -- -- --
Issuance of common stock under employee
stock purchase plan.................. 1 1,368 -- -- -- --
Issuance of common stock in connection
with acquisition of Rollason......... 1 1,061 -- -- -- --
Purchase of treasury stock............. -- -- -- (154 ) -- --
Issuance of treasury stock............. -- 568 -- 283 -- --
Exercise of stock options.............. -- 39 -- -- -- --
Income tax benefit related to exercise
of nonqualified stock options........ -- 291 -- -- -- --
Proceeds from common stock
subscriptions........................ -- -- -- -- 3 --
Equity adjustment to reflect minimum
pension liability.................... -- -- -- -- -- 173
---- -------- ------- ----- ----- --------
BALANCE AT DECEMBER 31, 1994............. 126 98,799 -- (468 ) -- (23,547)
Net income............................. -- -- -- -- -- 3,939
Payments of common stock issuance
costs................................ -- (22) -- -- -- --
Issuance of common stock under employee
stock purchase plan.................. 1 1,488 -- -- -- --
Purchase of treasury stock............. -- -- -- (209 ) -- --
Issuance of treasury stock............. -- 704 -- 358 -- --
Exercise of stock options.............. 1 123 -- -- -- --
Income tax benefit related to exercise
of nonqualified stock options........ -- 661 -- -- -- --
Issuance of restricted stock........... 1 2,160 (2,161) -- -- --
Amortization of unearned restricted
stock................................ -- -- 109 -- -- --
Equity adjustment to reflect minimum
pension liability.................... -- -- -- -- -- (236)
---- -------- ------- ----- ----- --------
BALANCE AT DECEMBER 31, 1995............. $129 $103,913 $ (2,052) $(319 ) $ -- $(19,844)
==== ======== ======= ===== ===== ========
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

F-5
<PAGE> 130

U.S. CAN CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------
1993 1994 1995
-------- -------- --------
(000'S OMITTED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 7,522 $ 18,570 $ 3,939
Adjustments to reconcile net income to net cash provided
by operating activities --
Depreciation and amortization.......................... 17,987 22,670 28,238
Minority interest...................................... 608 -- --
Extraordinary loss from early extinguishment of debt,
net.................................................. 3,402 -- --
Overhead reduction provision........................... -- -- 8,000
Plant consolidation costs paid......................... (2,205) (2,793) (2,084)
Consolidation expense.................................. 622 463 327
Deferred income taxes.................................. 2,594 3,592 (567)
Change in operating assets and liabilities, net of
acquired businesses --
Accounts receivable.................................. (1,026) (3,850) (1,373)
Inventories.......................................... (5,490) (12,475) 4,716
Accounts payable..................................... 3,107 15,020 (15,832)
Accrued payrolls and benefits, insurance and other... 2,743 2,078 (1,957)
Postretirement benefits.............................. 1,198 1,222 545
Other, net........................................... (1,202) (197) 840
-------- -------- --------
Net cash provided by operating activities......... 29,860 44,300 24,792
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures...................................... (22,010) (32,516) (31,379)
Asset purchases........................................... -- (6,600) --
Acquisition of businesses, net of cash acquired........... (6,678) (51,647) (29,941)
Change in restricted cash................................. -- -- (3,500)
Proceeds from sale of property............................ -- 1,838 600
Machinery repair parts usage, net......................... 131 437 63
-------- -------- --------
Net cash used in investing activities............. (28,557) (88,488) (64,157)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (payments) under the revolving line of
credit and changes in cash overdrafts.................. (2,666) (22,375) 46,884
Borrowings under term loan................................ -- 35,000 --
Repayment of senior notes................................. (30,000) -- --
Borrowings of other long-term debt, including capital
lease obligations...................................... 18,927 10,080 10,911
Payments of other long-term debt, including capital lease
obligations............................................ (9,419) (11,200) (17,973)
Payments of debt refinancing costs........................ (3,044) (1,307) (337)
Payments of common stock issuance costs................... (5,091) (579) (22)
Redemption of minority interest in subsidiary............. (23,618) -- --
Purchase of treasury stock, net........................... (125) (154) (209)
Issuance of common stock and exercise of stock options.... 53,393 34,815 124
Proceeds from common stock subscriptions.................. 297 3 --
-------- -------- --------
Net cash provided by (used in) financing activities....... (1,346) 44,283 39,378
-------- -------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS............ (43) 95 13
CASH AND CASH EQUIVALENTS, beginning of year................ 71 28 123
-------- -------- --------
CASH AND CASH EQUIVALENTS, end of year...................... $ 28 $ 123 $ 136
======== ======== ========
</TABLE>

The accompanying Notes to Consolidated Financial Statements
are an integral part of these statements.

F-6
<PAGE> 131

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995

(1) BASIS OF PRESENTATION AND OPERATIONS

The consolidated financial statements include the accounts of U.S. Can
Corporation (the "Corporation") and its wholly owned subsidiary, United States
Can Company ("U.S. Can"). All significant intercompany transactions have been
eliminated in consolidation. The consolidated group is hereinafter referred to
as the Company.

The Company manufactures and sells steel containers for personal care,
household, automotive, paint and industrial products manufactured in the United
States. The Company conducts its principal business operations in the general
packaging (non-food and non-beverage) segment of the metal container industry.
The Company also manufactures metal closures, lithographed metal housewares,
metal caps and closure machines, and is engaged in the contract overhaul and
manufacture of packaging equipment and replacement parts. The Company produces
aerosol, round and general line, and specialty and other containers which are
sold to many well-known companies. Personal care and household products
represent the primary end use of containers. As of December 31, 1995, the
Company owned or leased 29 plants, located in 11 states, strategically
positioned near principal customers and suppliers.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Cash and Cash Equivalents -- The Company considers all highly liquid
interest-bearing instruments purchased with an original maturity of three months
or less to be cash equivalents.

(b) Cash Overdrafts -- Cash overdrafts represent the aggregate amount of
checks which have been issued and have not yet cleared the Company's
zero-balance disbursement accounts, net of any cash in specific Company
depository accounts which will be automatically drawn against as such checks
clear the disbursement accounts. Cash on-hand and cash in Company accounts at
banks not subject to the automatic draw are reported as cash and cash
equivalents.

(c) Accounts Receivable Allowances -- Activity in the accounts receivable
allowances accounts was as follows (000's omitted):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Balance at beginning of year.................... $ 4,720 $ 4,209 $ 4,116
Provision for doubtful accounts............... 365 477 220
Reserve for doubtful accounts recorded
in business acquisitions................... -- 582 160
Provision for discounts, allowances and
rebates.................................... 6,247 8,226 7,911
Write-offs of doubtful accounts, net of
recoveries................................. (558) (832) (242)
Discounts, allowances and rebates taken....... (6,565) (8,546) (6,714)
------- ------- -------
Balance at end of year.......................... $ 4,209 $ 4,116 $ 5,451
======== ======== ========
</TABLE>

(d) Inventories -- All inventories, except machine parts, are stated at
cost determined by the last-in, first-out ("LIFO") cost method, not in excess of
market. Inventory costs include elements of material, labor and factory
overhead. Current (first-in, first-out) cost of inventories was lower than
inventories valued at LIFO by approximately $2,297,000 at December 31, 1994
primarily due to a decline in the Company's cost of tin-plated steel. However,
tin-plated steel costs rose in 1995 resulting in current cost of inventories
being higher than inventories valued at LIFO by approximately $150,000 at
December 31, 1995. Tin plate accounted for approximately 85% of U.S. Can's total
raw material purchases in 1995. Periodically, U.S. Can's major suppliers have
announced increased prices for tin plate. Historically,

F-7
<PAGE> 132

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

U.S. Can has been able to negotiate lower price increases and/or later effective
dates than those announced by its major suppliers. However, there can be no
assurance that U.S. Can will be successful in negotiating lower price increases
or later effective dates with respect to future price increases.

Inventories reported in the accompanying balance sheets were classified as
follows (000's omitted):

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1995
------- -------
<S> <C> <C>
Raw materials........................................... $26,390 $21,066
Work in process......................................... 31,230 34,138
Finished goods.......................................... 17,618 19,549
Machine parts........................................... 2,418 3,499
------- -------
$77,656 $78,252
======= =======
</TABLE>

At year end 1994, a significant purchase of tin-plated steel was undertaken in
advance of 1995 price increases announced by U.S. Can's tin plate suppliers.
There were no significant purchases at year end 1995.

(e) Property, Plant and Equipment -- Property, plant and equipment is
recorded at cost. Major renewals and betterments which extend the useful life of
an asset are capitalized; routine maintenance and repairs are expensed as
incurred. Total maintenance and repairs expense charged against earnings was
approximately $18,701,000, $23,090,000 and $24,639,000 in 1993, 1994 and 1995,
respectively. Upon sale or retirement of these assets, the asset cost and
related accumulated depreciation are removed from the accounts and any related
gain or loss is reflected in income.

Depreciation for financial reporting purposes is principally provided using
the straight-line method over the estimated useful lives of the assets as
follows: buildings -- 25 to 40 years; machinery and equipment -- 5 to 20 years.
Property, plant and equipment under capital leases are amortized over the
shorter of the estimated useful life of the asset or the term of the lease.
Accelerated methods are used for income tax purposes, where permitted.

(f) Machinery Repair Parts -- Machinery repair parts are capitalized when
purchased and are expensed, at cost, as they are used in the course of
operations. These parts are recorded at the lower of cost or net realizable
value in the accompanying balance sheets.

(g) Intangibles -- Intangible assets consist principally of the excess
purchase price over the fair value of the net assets of businesses acquired
("goodwill"), which is amortized over a 40 year life. The related amortization
expense was $648,000, $1,117,000 and $1,733,000 for the years ended December 31,
1993, 1994 and 1995, respectively. Total accumulated amortization was $5,312,000
and $7,045,000 at December 31, 1994 and 1995, respectively. After an
acquisition, the Company continually reviews whether subsequent events and
circumstances have occurred that indicate the remaining estimated useful life of
goodwill may warrant revision or that the remaining balance of goodwill may not
be recoverable. If events and circumstances indicate that goodwill related to a
particular business should be reviewed for possible impairment, the Company uses
projections to assess whether future operating income of the business on a
non-discounted basis is likely to exceed the goodwill amortization over the
remaining life of the goodwill, to determine whether a write-down of goodwill to
recoverable value (as determined by the same projections) is appropriate.

(h) Environmental Liabilities -- The Company's operations and products are
subject to Federal, state and local regulatory requirements relating to
environmental protection. It is the Company's policy to comply fully with all
such applicable requirements. The Company may also be subject to potential

F-8
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

liabilities for the costs of environmental remediation at currently or
previously owned or operated sites or sites to which it, or predecessor owners,
transported materials.

It is the Company's policy to provide and accrue for the estimated cost of
environmental matters, on a non-discounted basis, when it is probable that a
liability has been incurred and the amount of the liability can be reasonably
estimated. Such provisions and accruals exclude claims for recoveries from
insurance carriers or other third parties. Such claims, if realization is
probable, are recorded independent from the liability.

(i) Revenue is recognized on the date goods are shipped to the customer.
Estimated sales returns and allowances are recognized as a charge against
revenue in the period in which the related revenue is recognized.

(j) Use of estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

(3) U.S. CAN CORPORATION STOCK OFFERINGS

On March 15, 1993, the Corporation completed an initial public offering
("IPO") of 5,550,000 shares of $.01 par value common stock ("Common Stock"). Of
the total shares offered, 4,441,006 shares were sold by the Corporation and
1,108,994 shares were sold by certain stockholders of the Corporation. The
Corporation did not receive any proceeds from the sale of Common Stock by the
selling stockholders.

At an initial public offering price of $12.00 per share of common stock,
the net proceeds to the Corporation from the sale of the 4,441,006 shares
offered by the Corporation were approximately $48.6 million. The Corporation
contributed the net proceeds of $48.6 million to the capital of U.S. Can. The
net proceeds, along with some additional borrowings under its revolving credit
line, were used by U.S. Can to redeem all outstanding shares of U.S. Can's
preferred stock, including earned but unpaid dividends thereon, and to pay down
certain indebtedness, including a related prepayment penalty and unpaid facility
fees. U.S. Can recorded an extraordinary loss from this prepayment of $3,402,000
($.37 per share), net of income taxes of $2,165,000.

In conjunction with the IPO, (a) certain warrants were exercised to
purchase shares of Common Stock; (b) all remaining outstanding shares of the
Corporation's redeemable preferred stock (including earned but unpaid dividends
thereon) were converted or exchanged into shares of Common Stock; (c) a note
payable to a stockholder of the Corporation (including earned but unpaid
interest thereon) was converted into shares of Common Stock; and (d) stock
options were exercised to purchase shares of Common Stock.

Also in connection with the IPO, the Corporation restructured its
authorized capital stock into two classes: (1) 50,000,000 shares of Common
Stock, $.01 par value per share, and (2) 10,000,000 shares of preferred stock,
$.01 par value per share, without stated dividend, conversion or redemption
provisions. There are currently no shares of preferred stock outstanding. All
other classes of capital stock were eliminated.

F-9
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

Had the IPO and related transactions occurred on January 1, 1993, earnings
per share and weighted average shares for the year ended December 31, 1993 would
have been as follows:

<TABLE>
<CAPTION>
PRIMARY FULLY DILUTED
------- -------------
<S> <C> <C>
Income before extraordinary item...................... $ 1.07 $ 1.06
Extraordinary item.................................... (0.33) (0.33)
------ ------
Net income............................................ $ 0.74 $ 0.73
====== ======
Weighted average shares and equivalent shares
outstanding (000's)................................. 10,221 10,260
====== ======
</TABLE>

On November 7, 1994, the Corporation completed a second public offering
("SPO") of 2,300,000 shares of Common Stock. At a public offering price of
$16.00 per share of Common Stock, the net proceeds to the Corporation were
approximately $34.2 million. The Corporation contributed the net proceeds to the
capital of U.S. Can. The net proceeds were used by U.S. Can to prepay a portion
of the outstanding balance on its revolving line of credit. Had the SPO occurred
on January 1, 1994, primary and fully diluted earnings per share would have been
$1.54. Primary and fully diluted weighted average shares and equivalent shares
outstanding would have been 12,718,000 and 12,735,000, respectively.

(4) ACQUISITIONS AND ASSET PURCHASES

On May 14, 1993, the Company acquired Olsher Metals Processing Corporation
("Olsher") for approximately $6.7 million in cash and the assumption of
approximately $2.1 million of debt.

On January 20, 1994, the Company acquired all the outstanding capital stock
of Steeltin Can Corporation ("Steeltin Can") and substantially all the assets of
two affiliated companies, Eastern Container Company, Inc. ("ECC") and Eastern
Metal Decorating, Inc. ("EMD") (Steeltin Can, ECC and EMD are collectively
referred to as "Steeltin"). The total cost of the three transactions was
approximately $19.1 million in cash and assumption of approximately $1.6 million
of debt and was financed by U.S. Can's then existing revolving credit line and a
supplemental credit facility provided to U.S. Can by one of its senior lenders.
Of the $20.7 million total purchase price, $11.9 million related to Steeltin
Can, $3.6 million to ECC, and $5.2 million to EMD.

On March 30, 1994, the Company acquired all of the outstanding capital
stock of Ellisco Inc. ("Ellisco") from CSS Industries, Inc. and certain minority
shareholders for $32.2 million. The cost of the transaction was financed by the
remaining availability under the supplemental credit facility granted for the
Steeltin acquisition and a portion of a second supplemental credit facility
provided to U.S. Can by one of its senior lenders.

On May 16, 1994, the Company acquired Rollason Engineering & Manufacturing,
Inc. ("Rollason"), a contract overhauler of equipment for the packaging
industry, for approximately $1 million in Common Stock, which the Corporation
had contributed to U.S. Can, plus the payment of approximately $350,000 in debt.
On July 1, 1994, the Company completed the asset purchase of a metal decorating
and lithography plant (and related equipment) in Alsip, Illinois from Ball
Corporation for approximately $4.6 million. On November 16, 1994, the Company
completed an acquisition of the metal packaging operations of Grafco Industries
("Grafco") for $1.1 million.

In early 1995, the Company completed the acquisition of Metal Litho
International, Inc. and the portion of a related partnership not previously
owned by MLI (collectively, "MLI") for approximately $10.1 million in cash plus
the assumption of approximately $4.2 million of debt. The former MLI plant,
located in Trenton, New Jersey, operates a full service metal decorating
facility which provides coil shearing in addition to coating and printing tin
plate for its customers. On March 1, 1995, the Company

F-10
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

completed an acquisition of the common stock of Plastite Corporation
("Plastite") for approximately $7.3 million plus future contingent payments of
approximately $2.5 million. Plastite, located in Morrow, Georgia, is the
nation's largest manufacturer of plastic paint cans and also manufactures
plastic five-gallon pails and lids.

On April 11, 1995, the Company completed an acquisition of certain assets
of Prospect Industries Corporation ("Prospect") for approximately $8.8 million.
The acquired assets, located in North Brunswick, New Jersey, are used to
manufacture metal pails for the chemical and coatings industries. Prospect's
operation includes coil cutting, coating and lithography as well as the
manufacture of can tops and bottoms. On May 4, 1995, the Company completed an
acquisition of the common stock of Hunter Container Corporation ("Hunter") for
approximately $4.0 million plus the assumption of $2.5 million of debt. The
former Hunter plant, located in Vernalis, California, manufactures a broad line
of proprietary and specialty metal containers.

On May 24, 1995, the Company announced that negotiations to purchase 54% of
Massilly, S.A. ("Massilly") of Cluny, France had been terminated. Massilly, a
privately held packaging manufacturer, owned primarily by Patrick Bindschedler
and his family, withdrew from discussions when Mr. Bindschedler reconsidered
ceding control as a result of the proposed transaction.

Each business acquisition was accounted for as a purchase for financial
reporting purposes. Accordingly, certain recorded assets and liabilities of the
acquired companies were revalued to estimated fair values as of the acquisition
date. Such revaluation adjustments, all made pursuant to the purchase method of
accounting, resulted in increased amortization and depreciation in periods
following the acquisition. Management has used its best judgment and available
information in estimating the fair value of those assets and liabilities. Any
changes to these estimates are not expected to be material.

The operating results of each acquired business are included in the
consolidated statement of operations from the date of acquisition. Amortization
of any excess purchase price over the estimated fair value of the net assets
acquired is made over a period of forty years. All acquired companies have since
been merged with U.S. Can.

The following data represents the Company's unaudited pro forma results of
operations as if the significant acquisitions of Steeltin, Ellisco and Olsher
had occurred on January 1, of the applicable year (000's omitted, except per
share data):

<TABLE>
<CAPTION>
1993 1994
-------- --------
<S> <C> <C>
Net sales............................................. $537,641 $573,053
Income before extraordinary item...................... 12,247 17,691
Net income............................................ 8,845 17,691
Per Share Data:
Primary:
Income before extraordinary item................. $ 1.33 $ 1.65
Net income....................................... 0.96 1.65
Fully Diluted:
Income before extraordinary item................. $ 1.29 $ 1.65
Net income....................................... 0.93 1.65
</TABLE>

The pro forma operating results include each seller's pre-acquisition
results of operations for the indicated years with adjustments to reflect
amortization of goodwill, additional depreciation on the increases to the fair
market value of fixed assets, interest expense on the acquisition borrowings and
the effect of income taxes thereon. The pro forma information given above does
not purport to be indicative of

F-11
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

the results that actually would have been obtained if the operations were
combined during the periods presented and is not intended to be a projection of
future results or trends.

On November 16, 1995, the Company announced its intention to establish an
aerosol can production facility in Western Europe. The decision was made
following receipt of a letter of intent from The Gillette Company ("Gillette")
to enter into a multi-year container purchase relationship with the Company.
This letter of intent includes a European supply arrangement with Gillette's
North Atlantic Group.

The fully-integrated plant, with a site yet to be determined, will contain
coil processing, lithography, coating, end press and assembly equipment for the
manufacture of three-piece steel aerosol containers, including barrier-pack cans
used for shaving gel. Initial plans are to install two production lines and
support equipment with capacity for up to four additional lines in the plant.

(5) DEBT OBLIGATIONS

The primary debt obligations of the Company at December 31, 1994 and 1995,
consisted of the following (000's omitted):

<TABLE>
<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Senior debt --
Revolving line of credit.............................. $ 10,100 $ 57,700
Term loan............................................. 35,000 31,500
Secured equipment notes............................... 21,412 16,819
Capital lease obligations............................. 25,563 29,100
Industrial revenue bonds.............................. 4,000 7,500
Mortgages and other................................... 4,571 1,957
-------- --------
100,646 144,576
Less -- Current maturities............................ (14,437) (17,216)
-------- --------
Total senior debt.................................. 86,209 127,360
-------- --------
Senior subordinated notes............................... 100,000 100,000
-------- --------
Total long-term debt............................... $186,209 $227,360
======== ========
</TABLE>

On December 26, 1991, U.S. Can issued $100,000,000 principal amount of the
13 1/2% Senior Subordinated Notes due 2002 (the "13 1/2% Notes"). The 13 1/2%
Notes will mature on January 15, 2002. Interest on the 13 1/2 Notes is payable
semiannually on January 15 and July 15. The 13 1/2% Notes are redeemable at the
option of U.S. Can, in whole or in part, on or after January 15, 1997, at
defined redemption prices, plus accrued interest. The Notes are unsecured and
are subordinated to all senior debt of U.S. Can.

On May 24, 1993, U.S. Can entered into a three-year credit agreement with a
group of banks, providing a revolving credit line of up to $65 million. In
January 1994, a $20 million supplemental credit facility was provided to U.S.
Can by one of its senior lenders in order to facilitate the Steeltin
acquisition. In March 1994, a second $20 million supplemental credit facility
was provided to U.S. Can by one of its senior lenders in order to facilitate the
Ellisco acquisition.

On April 29, 1994, U.S. Can entered into the Credit Agreement with a group
of banks (the "Senior Credit Agreement") providing a $130 million line of credit
consisting of a $95 million revolving credit line (the "Revolving Credit
Facility") and the $35 million term loan (the "Term Loan"). The Senior Credit
Agreement replaced the former $65 million revolving credit facility as well as
the two supplemental credit facilities, and initial borrowings under the Senior
Credit Agreement were used to repay those facilities. In

F-12
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

May 1995, U.S. Can and the senior lenders increased the Revolving Credit
Facility to $115 million. On October 26, 1995, as requested by U.S. Can, the
Revolving Credit Facility was reduced to its original amount. Funds available
under the Senior Credit Agreement are used for working capital and other general
corporate purposes, including acquisitions. The Senior Credit Agreement is
secured by U.S. Can's inventories and accounts receivable, and the Term Loan is
secured by a mortgage on, and certain equipment located at, U.S. Can's Elgin,
Illinois plant.

As of December 31, 1995, U.S. Can's borrowings under the Senior Credit
Agreement totaled $89.2 million, and an additional $11.7 million in letters of
credit had been issued pursuant thereto. Unused credit of $25.6 million remained
available thereunder. The Term Loan matures at increasing annual amounts through
April 29, 1998. The Revolving Credit Facility terminates in 1998.

The loans outstanding under the Senior Credit Agreement bear interest at a
floating rate equal to, at the election of U.S. Can, one of the following: (i)
the Base Rate per annum (currently 8.25%), or (ii) based on the current pricing
ratio, a reserve-adjusted Eurodollar rate plus 1.125% per annum, for specified
interest periods (selected by U.S. Can) of one, two, three or six months. The
"Base Rate" is the higher of: (i) the Federal Funds rate plus 0.5% per annum or
(ii) the rate of interest publicly announced from time to time by Bank of
America Illinois, Chicago, Illinois as its "reference rate." As of December 31,
1995, the weighted average interest rate of all outstanding loans under the
Senior Credit Agreement was 6.9%. For letters of credit issued under the Senior
Credit Agreement, U.S. Can pays fees equal to: (a) the applicable Eurodollar
Margin, currently 1.125% per annum, multiplied by the aggregate face amount
outstanding on each such letter of credit and (b) an amount payable to the
issuing bank equal to 0.2% payable quarterly in arrears. Currently, U.S. Can is
required to pay a commitment fee of 0.375% per annum of the average daily unused
portion of each lender's commitment under the Senior Credit Agreement.

Secured equipment notes, issued at various times since 1990, mature in
varying amounts from 1997 to 2000 and bear interest at various rates between
8.08% and 10.37%. Proceeds from these notes were used to purchase certain
manufacturing equipment, and the notes are secured by that equipment.

Capital lease obligations mature in varying amounts from 1996 to 2003 and
bear interest at various rates between 3.7% and 9.8%. Other debt, consisting of
various governmental loans and real estate mortgages at interest rates between
7.0% and 9.25%, mature at various times through 2025, and were used to finance
the expansion of several manufacturing facilities. Included in other assets are
proceeds of $3.5 million from certain industrial revenue bonds which are
restricted for the relocation and expansion of the Company's Wheeling, West
Virginia plant.

U.S. Can had two interest rate swap agreements with a commercial bank,
having a total notional principal amount of $50 million. The agreements became
effective May 7, 1992, and matured and were settled every six months in May and
November and terminated on November 7, 1994. These agreements effectively
increased U.S. Can's exposure to floating interest rates as they exchanged the
payment of fixed interest rates of 5.82% and 6.40%, respectively, on the two $25
million notional amounts, for floating interest rates equal to the Eurodollar
rate as defined in the agreements. U.S. Can recorded interest income or expense
under these arrangements in the period in which such interest was incurred. Net
interest income from these arrangements was approximately $1,352,000 and
$384,000 in 1993 and 1994, respectively. The Company no longer holds any
derivative financial instruments.

Based upon borrowing rates currently available to U.S. Can for borrowings
with similar terms and maturities, the fair value of U.S. Can's debt was
approximately $202 million and $264 million as of December 31, 1994 and 1995,
respectively. No quoted market value is available. These amounts,

F-13
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

because they do not include certain costs such as prepayment penalties, do not
represent the amount U.S. Can would have to pay to reacquire and retire all of
its outstanding debt in a current transaction.

Financing costs related to the issuance of new debt are deferred and
amortized over the terms of the related debt agreements. Net deferred financing
costs are recorded as other assets on the accompanying balance sheets.

The Company paid interest on borrowings of $20,865,000, $22,116,000 and
$24,693,000 in 1993, 1994 and 1995, respectively. As of December 31, 1994 and
1995, accrued interest on borrowings totaled $6,841,000 and $6,771,000,
respectively.

U.S. Can's debt agreements, including the Senior Credit Agreement, contain
various financial and other restrictive covenants. Certain of such agreements
also contain cross-default provisions. U.S. Can was in compliance with all
covenants as of December 31, 1995. During 1995, certain of such covenants were
amended.

The more restrictive of U.S. Can's covenants, as amended and defined in the
credit agreements, required an earnings to interest expense on borrowings ratio
of 1.50, a cash flow from operations to interest expense on borrowings ratio of
1.20 and a funded debt to adjusted earnings ratio of 4.50 for the year ended
December 31, 1995. Additionally, the debt agreements required a minimum current
ratio, excluding current maturities of long-term debt, of 1.50 as of December
31, 1995 and limit the distribution of dividends, the incurrence of additional
debt, capital expenditures, asset sales and lease commitments. Compliance with
these covenants is determined using methods as defined in the related
agreements. Certain covenants become more restrictive on a graduated bases, as
set forth in the related agreements.

Under the Senior Credit Agreement and as defined therein, U.S. Can may pay
cash dividends on account of any shares of any class of capital stock of U.S.
Can (or only any warrants, options or rights with respect thereto) in an amount
not to exceed 25% of Net Income in any given fiscal year but in any event not
more than 25% of consolidated cumulative Net Income attributable to the period
commencing April 29, 1994, and ending on the date of such proposed cash
dividends at any time that either (i) the Term Loan has been indefeasibly paid
in full in cash or (ii) the Leverage Ratio as of the last day of the last fiscal
quarter of any fiscal year does not exceed 3.50 to 1.00, but in no event may
U.S. Can pay such cash dividends prior to the later to occur of (a) April 29,
1995 and (b) the delivery of the annual audited consolidated financial
statements for the fiscal year ended in which either of the conditions contained
in clause (i) or (ii) next above have been satisfied; and provided that no
Default or Event of Default exists immediately prior to any Restricted Payment
otherwise permitted.

F-14
<PAGE> 139

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

Under existing agreements, maturities of long-term debt as of December 31,
1995 (including capital lease obligations), are as follows (000's omitted):

<TABLE>
<S> <C>
1996.................................. $ 17,216
1997.................................. 19,492
1998.................................. 82,585
1999.................................. 7,103
2000.................................. 2,357
Thereafter............................ 115,823
--------
$244,576
========
</TABLE>

(6) INCOME TAXES

The provision for income taxes in the statements of operations consisted of
the following (000's omitted):

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Current..................................................... $7,059 $ 9,088 $4,182
Deferred.................................................... 2,053 4,305 (574)
------ ------- ------
Total.................................................. $9,112 $13,393 $3,608
====== ======= ======
</TABLE>

Taxes of $5,183,000, $10,955,000 and $5,810,000 were paid in 1993, 1994 and
1995, respectively.

The principal items comprising the difference between taxes on income
before income taxes, minority interest and extraordinary item computed at the
Federal statutory rate and the actual provision for income taxes for the years
presented were as follows (000's omitted):

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Tax provision computed at the statutory rate................ $7,396 $11,187 $2,566
Nondeductible amortization of intangible assets............. 227 347 320
State taxes, net of Federal benefit......................... 721 1,562 436
Change in deferred income taxes due to change in Federal
statutory rate............................................ 330 -- --
Other, net.................................................. 438 297 286
------ ------- ------
Provision for income taxes............................. $9,112 $13,393 $3,608
====== ======= ======
</TABLE>

Deferred income taxes are determined based on the estimated future tax
effects of differences between the financial statement and tax bases of assets
and liabilities given the provisions of the enacted

F-15
<PAGE> 140

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

tax laws. The tax effect of significant temporary differences representing
deferred income tax benefits and obligations consisted of the following (000's
omitted):

<TABLE>
<CAPTION>
DECEMBER 31, 1994 DECEMBER 31, 1995
-------------------------- --------------------------
BENEFITS OBLIGATIONS BENEFITS OBLIGATIONS
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Vacation accrual.................................. $ 2,684 $ -- $ 2,900 $ --
Plant consolidation reserve....................... 1,652 -- -- --
Overhead reduction reserves....................... -- -- 3,043 --
Postretirement benefits........................... 10,114 -- 10,233 --
Workers' compensation accrual..................... 1,434 -- 1,017 --
Pension accrual................................... 1,710 -- 2,078 --
Inventory valuation reserves...................... -- (8,413) -- (8,802)
Depreciation...................................... -- (30,771) -- (31,673)
Net operating loss carryforwards.................. 1,080 -- -- --
Alternative minimum tax credit carryforwards...... 1,348 -- 2,758 --
Other............................................. 4,960 (1,368) 6,155 (2,314)
------- -------- ------- --------
Total deferred income tax benefits
(obligations)................................... $24,982 $(40,552) $28,184 $(42,789)
======= ======== ======= ========
</TABLE>

The Company did not record any valuation allowances against deferred income
tax benefits at December 31, 1994 or 1995, as all such benefits are expected to
be realized as tax deductions in future tax returns.

(7) OVERHEAD REDUCTION PROVISION

The Company recorded a pretax charge of approximately $8 million in the
fourth quarter of 1995 related to actions taken to reduce overhead expenses and
to eliminate redundant manufacturing capacity. The primary components of the
charge include costs associated with severance packages for a number of
identified salaried employees throughout the Company (41 employees for $2.0
million) and with the Company's Saddle Brook, New Jersey manufacturing facility
(43 employees for $1.2 million) which has been closed as part of the
consolidation of the Company's metal pail business into the recently acquired
North Brunswick, New Jersey manufacturing facility. This closing will not have a
material ongoing adverse effect on the Company's operating results as a majority
of the business carried on at the Saddle Brook facility will now be conducted at
the North Brunswick facility. The principal plant closure costs include
severance to affected employees, the write down to net realizable value of
assets to be disposed of ($2.4 million) and estimated costs associated with the
facility's operating lease. The majority of such severance and other costs are
expected to be paid within one year, with $0.8 million of severance and $0.1
million of other plant closure costs having been spent as of December 31, 1995.
Also as of such date, all scheduled employee terminations had been completed.
Management anticipates that the Company's annual operating income will be
enhanced as a result of these actions; however, the full benefits of these
actions will not be realized until late 1996.

The Company continuously evaluates the composition of its various
manufacturing facilities in light of current and expected market conditions and
demand. While no plans currently exist to further consolidate plant operations,
such actions may be deemed appropriate in the future.

(8) PER SHARE DATA

Primary income per common share amounts are computed by dividing net income
applicable to Common Stock (computed as net income less, if applicable,
dividends earned during the period on the Corporation's preferred stock and
accretion on the redeemable warrants) by the weighted average

F-16
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

common shares and common equivalent shares, if dilutive, outstanding during the
periods. Such outstanding shares amounted to 9.2 million, 10.7 million and 12.8
million, in 1993, 1994 and 1995, respectively. Common equivalent shares result
primarily from the assumed exercise of certain outstanding stock options.

(9) RELATED-PARTY TRANSACTIONS

Salomon Brothers Inc ("Salomon Brothers"), a common stockholder of the
Corporation and its affiliate, Salomon Brothers International Limited, received
an underwriters discount in 1993 in connection with the IPO in the aggregate
amount of approximately $2.3 million. Salomon Brothers Inc received an
underwriting discount in 1994 in connection with the SPO (see Note 2) in the
aggregate amount of approximately $833,000. No amounts were paid to Salomon
Brothers in 1995.

In March 1993, 1994 and 1995, the Corporation contributed shares of Common
Stock, valued at $850,000, $850,000 and $1,063,000, respectively, into U.S.
Can's Salaried Employees Savings and Retirement Accumulation Plan.

(10) EMPLOYEE BENEFIT PLANS

U.S. Can maintains separate noncontributory pension and defined
contribution plans covering most hourly employees and all salaried personnel,
respectively. It is the Company's policy to fund accrued pension and defined
contribution plan costs in compliance with ERISA requirements. The total cost of
these plans charged against earnings was approximately $3,234,000, $4,782,000
and $5,851,000 for 1993, 1994 and 1995, respectively.

The following table sets forth the funded status of U.S. Can's defined
benefit pension plans, including, in 1994, two frozen plans under which certain
current and previous employees of Steeltin and Ellisco are covered, at December
31, 1994 and 1995 (000's omitted):

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Actuarial present value of benefit obligation --
Vested benefits........................................... $18,174 $19,376
Nonvested benefits........................................ 1,334 1,673
------- -------
Accumulated benefit obligation.............................. 19,508 21,049
Effect of projected future compensation levels.............. -- --
------- -------
Projected benefit obligation................................ 19,508 21,049
Plan assets at fair value................................... 14,892 18,386
------- -------
Projected benefit obligation in excess of plan assets....... 4,616 2,663
Unrecognized net gain (loss)................................ (245) (482)
Unrecognized prior-service cost............................. (781) (631)
Unrecognized transition liability to be amortized over 15
years..................................................... (465) (398)
Adjustment required to recognize additional minimum
liability................................................. 1,491 1,511
------- -------
Unfunded accrued pension cost recognized in the December 31,
1994 and 1995 balance sheets.............................. $ 4,616 $ 2,663
======= =======
</TABLE>

During 1995, the Company reclassified certain reserves related to plant
consolidation and restructuring programs started prior to 1991 into accrued
pension costs as such reserves related solely to pension benefits due to
employees affected by the programs. Additionally, consolidation expenses,

F-17
<PAGE> 142

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

which represented the interest charges on these discounted reserves, will now be
reported as part of the Company's net periodic pension cost.

In accordance with the provisions of SFAS No. 87 -- "Employers' Accounting
for Pensions," U.S. Can recorded an additional minimum liability at the end of
1994 and 1995 representing the excess of the accumulated benefit obligation over
the plan assets at fair value and the unfunded accrued pension cost. The
additional minimum liability was offset to the extent possible by an intangible
asset. Because the asset recognized may not exceed the amount of unrecognized
prior-service cost and unrecognized transition liability, the balance of the
offset of the additional minimum liability was reported as a reduction of
retained earnings net of related income tax benefits.

The projected benefit obligation as of December 31, 1993, 1994 and 1995 was
determined using an assumed discount rate of 7.5%, 8.0% and 7.5%, respectively.
The expected long-term rate of return on plan assets used in determining net
periodic pension cost was 7.5% in 1993 and 1994 and 8.0% in 1995. The plan has a
flat benefit formula; accordingly, the effect of projected future compensation
levels is zero. The plan's assets consist primarily of shares of Common Stock,
equity and bond funds, corporate bonds and investment contracts with insurance
companies.

Net periodic pension costs for U.S. Can's defined benefit pension plan for
the years ended December 31, 1993, 1994 and 1995 included the following
components (000's omitted):

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Service cost on benefits earned during the
year........................................ $ 526 $ 667 $ 625
Interest cost on projected benefit
obligation.................................. 1,068 1,034 1,085
Actual return on plan assets.................. (847) 242 (1,562)
Net amortization and deferral................. 498 (672) 1,041
------ ------ -------
Net periodic pension cost..................... $1,245 $1,271 $ 1,189
====== ====== =======
</TABLE>

In addition, hourly employees at eight plants are covered by
union-sponsored, collectively bargained, multi-employer pension plans. U.S. Can
contributed to these plans and charged to expense approximately $672,000,
$885,000 and $1,203,000 in 1993, 1994 and 1995, respectively. The contributions
are generally determined in accordance with the provisions of the negotiated
labor contracts and are generally based on a per employee per week amount.

While the Company does provide limited severance and certain supplemental
unemployment benefits for certain employees in connection with certain
collective bargaining agreements, benefits paid under these arrangements have
been and are expected to continue to be minimal. Postemployment benefits
associated with overhead reduction and plant consolidation programs are
appropriately provided.

(11) POSTRETIREMENT BENEFIT PLANS

U.S. Can provides limited health and life insurance benefits for certain
retired employees in connection with certain collective bargaining agreements.

F-18
<PAGE> 143

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

Net periodic postretirement benefit costs for U.S. Can's postretirement
benefit plans for the years ended December 31, 1993, 1994 and 1995, included the
following components (000's omitted):

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Service cost on benefits earned during the
year......................................... $ 200 $ 292 $ 333
Amortization of net loss....................... -- 60 --
Interest cost on accumulated postretirement
benefit obligation........................... 1,762 1,758 1,836
------ ------ ------
Net periodic postretirement benefit cost....... $1,962 $2,110 $2,169
====== ====== ======
</TABLE>

U.S. Can's postretirement benefit plans currently are not funded. The
status of the plans at December 31, 1994 and 1995, is as follows (000's
omitted):

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Actuarial present value of accumulated postretirement
benefit obligation --
Retirees, beneficiaries and dependents of retirees.... $15,300 $16,441
Active employees and dependents....................... 9,577 10,314
------- -------
Total accumulated postretirement benefit obligation..... 24,877 26,755
Unrecognized prior service cost......................... 3 --
Unrecognized net loss................................... 2,129 3,038
------- -------
Unfunded accrued postretirement benefit cost recognized
in the December 31, 1994 and 1995 balance sheets...... $22,745 $23,717
======= =======
</TABLE>

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 13% in 1993, 12% in 1994, and 11% in 1995
gradually declining to 7% by the year 1999 and remaining at that level
thereafter. A one-percentage-point increase in the assumed health care cost
trend rate for each year would increase the accumulated postretirement benefit
obligation as of December 31, 1995, by approximately $2,826,000 and the total of
the service and interest cost components of net postretirement benefit cost for
the year then ended by approximately $259,000. The assumed discount rate used in
determining the accumulated postretirement benefit obligation was 7.5%, 8.0% and
7.5%, in 1993, 1994 and 1995 respectively.

An executive, director and stockholder of the Corporation is eligible to
receive postretirement benefits under a non-qualified supplemental benefit plan.
During 1993, 1994, and 1995, $323,000, $298,000 and $364,000, respectively, was
charged to expense for benefits earned under this plan. As of December 31, 1994
and 1995, the Company had recorded a liability of $2,216,000 and $2,580,000,
respectively, for benefits for which the executive was fully eligible to receive
at that date. The principal source of funding for this obligation is an
insurance policy on the executive's life on which the Company is currently
paying the premium. The cash surrender value, net of appropriate reserves, is
reflected as a component of other assets.

(12) COMMITMENTS AND CONTINGENCIES

Aerosol containers, the Company's principal product, have historically been
subject to criticism on environmental grounds. While the Company believes that
aerosol can technology is environmentally sound, unfavorable legislation or
regulation relating to aerosols could reduce the number of aerosol containers
used by the Company's customers, which could have a material adverse effect on
the Company.

F-19
<PAGE> 144

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

A portion of the Company's facility at Burns Harbor, Indiana is regulated
as a treatment, storage or disposal facility ("TSDF") under the Federal Resource
Conservation and Recovery Act. The Company completed the closure of the TSDF in
accordance with a closure plan approved by the Indiana Department of
Environmental Management. Management estimates that total future monitoring
activities which are required by the plan will cost approximately $125,000 over
a five-year period.

The Company understands that groundwater in San Leandro, California is
contaminated at shallow and intermediate depths and that the area of concern
partially extends to the groundwater below the facility formerly owned by the
Company. Management believes that neither the Company nor its predecessors
contributed to this contamination. The California environmental authorities have
already directed some property owners in the area to conduct clean-ups in
connection with their properties. There can be no assurance that the Company
will not receive a similar order. In July 1995, the California Department of
Toxic Substances Control issued a letter of inquiry regarding the past use and
environmental history of the facility. The Company's response indicated that
there was no groundwater contamination attributable to its operation of the
facility. There have been no further inquiries from the State. The San Leandro
facility was closed in 1989 and was sold, except for a related parcel of land,
at approximately book value in 1994. The remaining parcel was sold in 1995. In
connection with the sale, the Company agreed to indemnify the purchaser against
any environmental claims related to the Company's ownership of the property.

In connection with a 1993 asset purchase, the Company entered into an
Administrative Consent Order ("ACO") with the New Jersey Department of
Environmental Protection. The ACO requires the Company to investigate and
remediate certain environmental concerns at the Saddle Brook, New Jersey
facility. As provided in the ACO, the Company is entitled to reimbursement for
the cost of such activities on a quarterly basis from an escrow account into
which $3 million was deposited by the Company as part of its purchase price for
the assets. The ACO limits the Company's liability under New Jersey
environmental laws in this respect to the $3 million deposited in the escrow
account. This limitation does not, however, limit the Company's liability for
clean-up costs in the event of a sale, or other transfer of control, of the
Company or the facility. Management does not believe that the costs of
remediation and monitoring will exceed the amount deposited in the escrow
account. Costs incurred by the Company to date in this effort have been
reimbursed from the escrow account.

As a PRP at the Spectron Superfund site in Elkton, Maryland, the Company is
legally responsible, jointly and severally with the other members of the PRP
group, for the cost of remediation of this site. The Company and other PRPs have
entered into certain liability-sharing agreements, the terms of which have been
approved by the EPA. Certain groundwater treatment is being undertaken in Phase
II of the clean-up. This work will be funded by the Galaxy generators (the
Company is only a Spectron generator) until they reach the per gallon amounts
paid by Spectron generators in Phase I of the clean-up. Any excess costs would
be shared by all Galaxy and Spectron generators proportionately based on their
respective volume contribution levels. The Company represents approximately 0.1%
of the total known volume at the site. Pursuant to these agreements and the
Company's liability allocation, the Company expects that its share of the
remaining remediation costs will be de minimis. U.S. Can and more than 600 other
PRPs received a special Notice for Negotiations for Remedial
Investigation/Feasibly Study ("RI/FS"), dated September 29, 1995, from the EPA,
relating to the Spectron Superfund site. This notice sets a period for PRPs to
negotiate a consent agreement with the EPA to conduct the RI/FS for determining
the final remedy at the Spectron site.

In conjunction with its acquisitions, the Company routinely obtains
indemnification for environmental matters from the sellers. Such indemnification
is typically subject to varying "baskets" or deductibles and maximum
limitations.

F-20
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U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

As of December 31, 1995, the Company's reserves for future ascertainable
costs of environmental remediation were approximately $430,000. Management does
not believe that such costs, if any, in excess of the reserve will have a
material adverse affect on the Company's results of operations or financial
condition. In making its assessment, the Company considered all information
available to it at this time including its and other companies' reported prior
experience in dealing with such matters, data released by the EPA, and reports
by independent environmental consultants regarding certain matters. In
estimating the ascertainable costs of environmental remediation, management has
not taken into account (i) any potential insurance recovery or (ii)
indemnification rights to which it may be entitled.

In addition to the costs described above, the Company has made and expects
to continue to make significant capital expenditures to upgrade its facilities
in accordance with current and pending environmental regulations. Most notably,
the Company has undertaken an approximately $5.7 million program (of which $2.0
million had been spent as of December 31, 1995) to upgrade its lithography
centers to comply with scheduled Clean Air Act requirements.

On February 28, 1995, CHI, an affiliate of Kiewit, filed a Complaint
against U.S. Can and others in the United States District Court of the State of
New Jersey, asserting claims based upon alleged indemnity obligations of U.S.
Can to Kiewit, as successor in interest to CCC, arising from the 1987
acquisition by U.S. Can of the general packaging business of CCC. These alleged
indemnity obligations relate to environmental liabilities, reimbursable
insurance deductibles and reinsurance amounts, and certain personal injury and
employment discrimination claims. The Complaint includes counts for breach of
contract, declaratory judgment, indemnification and contribution, CERCLA
remedies, state environmental law remedies and unjust enrichment. CHI seeks
unspecified compensatory damages, consequential and incidental damages,
interest, attorneys' fees and costs of litigation, equitable relief,
environmental response costs, and restitution. No aggregate dollar amount of
damages is specified in the Complaint. However, in an initial discovery
disclosure served on U.S. Can, CHI alleged that its damages to the date of such
disclosure were approximately $4.4 million. U.S. Can has filed an Answer to the
Complaint, asserted affirmative defenses and made counterclaims against CHI
seeking reimbursement for expenses and accruals relating to postretirement
medical and life insurance benefits for former employees of CCC, and expenses
incurred as a result of CCC's breach of its contractual indemnification
obligations to U.S. Can. The case has been transferred to the United States
District Court for the Northern District of Illinois. U.S. Can believes it has
meritorious defenses to all of CHI's claims.

The NLRB has issued a decision finding the Company in violation of certain
sections of the National Labor Relations Act as a result of the Company's
closure of a facility in 1991 and failure to offer inter-plant job opportunities
to affected employees. Management does not believe that the resolution of this
matter will have a material adverse effect on the Company's financial condition
or results of operations.

The Company has entered into agreements to lease certain property under
terms which qualify as capital leases. Capital leases consist primarily of data
processing equipment and various production machinery and equipment. Most
capital leases contain renewal options and some contain purchase options. The
December 31, 1994 and 1995 capital lease asset balances were $32,214,000 and
$39,634,000, net of accumulated amortization of $8,185,000 and $13,150,000,
respectively. Capital lease obligations extend through 2003. Capital lease
additions included as capital expenditures in the accompanying statements of
cash flows were $1,250,000, $8,157,000 and $5,802,000, in 1993, 1994 and 1995,
respectively.

F-21
<PAGE> 146

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

The Company also maintains operating leases on various plant and office
facilities and office equipment. Rent expense under operating leases for the
years ended December 31, 1993, 1994 and 1995, was $4,118,000, $5,955,000, and
$8,090,000, respectively.

At December 31, 1995, minimum payments due under these leases are as
follows (000's omitted):

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
1996............................................ $ 6,467 $ 6,369
1997............................................ 6,457 5,018
1998............................................ 6,455 3,679
1999............................................ 5,260 2,883
2000............................................ 3,217 1,866
Thereafter...................................... 9,319 5,879
------- -------
Total minimum lease payments.............................. 37,175 $25,694
=======
Amount representing interest.............................. (8,075)
-------
Present value of net minimum capital lease payments
(including $4,399 classified as current)................ $29,100
=======
</TABLE>

The Company was contingently liable for outstanding letters of credit
totaling $11.7 million as of December 31, 1995. Such letters of credits were
issued primarily to guarantee workers' compensation claims, which have been
accrued but not funded, and certain debt.

(13) STOCK OPTION PLANS

Incentive Stock Option Plan

The Corporation maintains an Incentive Stock Option Plan (the "ISO Plan")
for certain key employees of the Company. Directors who are not regular
employees of the Company are not eligible to participate in the ISO Plan. In
addition, no employee of the Company is eligible to participate in the ISO Plan
if such employee owns stock constituting 10% or more of the total voting power
of the Corporation. The Corporation has reserved 240,000 shares for issuance
under the ISO Plan. The exercise price for options granted under the ISO Plan
may not be less than 100% of the fair market value of the underlying stock on
the date the option is granted. Options under the plan may have a maximum term
of 10 years and are exercisable at the time specified by the Board of Directors.
Payment upon exercise of an option is to be in full, in either cash or shares of
Common Stock with a value equal to the option price, or a combination of the
two.

Nonqualified Stock Option Agreement

The Corporation was a party to a Nonqualified Stock Option Agreement under
which options to purchase a total of 300,000 shares were granted to an executive
officer and a former executive officer of the Company. During 1995, the
remaining 115,000 outstanding options were exercised.

1993 Option Plan

The Company maintains a non-qualified option plan (the "1993 Option Plan")
pursuant to which employees of the Company may be granted options to purchase up
to a total of 500,000 shares of Common Stock at a per share exercise price equal
to the per share market price of the Common Stock as of the date the option is
granted. Pursuant to the 1993 Option Plan, the Company has issued options to
purchase 496,375 shares of Common Stock at prices ranging from $12.00 to $21.50
per share. These options have a maximum term of 10 years and will vest over a
four-year period, 25% becoming fully vested on the first anniversary date of
their issuance, with the rest of the options vesting monthly in equal amounts
over the remaining three years.

F-22
<PAGE> 147

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

1994 Option Plan

The Company maintains a non-qualified option plan (the "1994 Option Plan")
with provisions identical to the 1993 Option Plan. Pursuant to the 1994 Option
Plan, the Company has reserved 50,000 shares of Common Stock and has issued
options to purchase 47,000 shares of Common Stock at prices ranging from $15.75
to $19.00 per share.

Stock Purchase Plan

The Company maintains an annual non-qualified employee stock purchase plan
(the "Stock Purchase Plan") available to all salaried employees and certain
designated groups of hourly employees. The purpose of the plan is to promote
increased employee stock ownership in the Company and to provide a benefit to
employees. Participating employees are able to purchase shares of Common Stock
through payroll deductions. Each annual Stock Purchase Plan is in effect for a
one-year period. Eligible employees are able to elect to purchase shares of
Common Stock at a price equal to the current market price, less a 15% discount,
in an amount up to 7.5% of each participating employee's salary. Fifteen days
prior to the exercise date, each participant has the option to complete the
purchase of shares under the Stock Purchase Plan or to withdraw the amounts
withheld from the employee's salary pursuant to the plan. During 1994 and 1995,
the Corporation issued Common Stock valued at $1,660,000 and $1,569,000 related
to the Stock Purchase Plan. The Stock Purchase Plan established for the 1995 -
1996 plan year has an exercise price of $17.2125 per share.

Incentive Plan

In 1995, the Company adopted an equity incentive plan (the "Incentive
Plan") pursuant to which employees of the Company may be granted stock options
("Options"), stock appreciation rights ("SARs") and shares of restricted stock
("Restricted Shares"). The number of shares of Common Stock that may be issued
or transferred under this plan upon the exercise of Options or as Restricted
Shares may not exceed 650,000 shares.

The exercise price of the Options may not be less than 100% of the fair
market value of the underlying stock on the date of the grant. Options have a
maximum term of ten years and are exercisable at the time specified by the Board
of Directors.

Options granted under the Incentive Plan may be either incentive stock
options ("ISOs") or non-qualified stock options ("NSOs"). Pursuant to the
Incentive Plan, the Company has issued ISOs to purchase 189,500 shares of Common
Stock at prices ranging from $16.50 to $20.875 per share and NSOs to purchase
5,000 shares of Common Stock at a price of $18.75 per share.

SARs may be granted in connection with any Option granted under the
Incentive Plan, either at the time of the Option grant or any time thereafter
during the term of the Option. SARs entitle the holder of the related Option to
surrender to the Company the unexercised, related option, or any portion
thereof, in exchange for an amount equal to the excess of the market value of a
share of Common Stock on the date the SAR is exercised over the Option's
exercise price times the number of shares covered by the surrendered Option, or
portion thereof. The Company did not grant any SARs in 1995.

Shares issued as Restricted Shares under the Incentive Plan provide all the
rights of ownership with respect to such shares, including the right to vote the
shares and receive all dividends or other distributions made or paid with
respect to such shares. The shares are restricted in that ownership is dependent
on continued employment with the Company and transferability is limited. These
restrictions lapse upon the completion of a period of time as specified by the
Board of Directors at the time of issuance. Restricted Shares issued under the
plan are recorded at their fair value on the date of issuance with a
corresponding charge to stockholders' equity representing the compensation to be
recognized during the restriction period. The unearned compensation is amortized
as expense on a straight-line basis

F-23
<PAGE> 148

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

over the restriction period. In 1995, 131,000 restricted shares were issued at
an aggregate value of approximately $2,161,000. Amortization of unearned
compensation amounted to $109,000 during 1995.

Details pertaining to stock options for the years ending December 31, 1994
and 1995 are as follows:

<TABLE>
<CAPTION>
ISO PLANS NONQUALIFIED PLANS
---------------------------- -----------------------------
OUTSTANDING OPTION PRICE OUTSTANDING OPTION PRICE
OPTIONS PER SHARE OPTIONS PER SHARE
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1993......... 125,000 $ 1.00-8.00 632,750 $ 1.00-12.00
Granted.............................. -- -- 308,918 15.75-18.00
Exercised............................ (18,000) 1.00-8.00 (118,146) 10.20
Purchased by the Company............. (5,000) -- -- --
Canceled............................. (4,500) -- (49,839) --
------- ------------- -------- --------------
Balance at December 31, 1994......... 97,500 $ 1.50-8.00 773,683 $ 1.00-18.00
Granted.............................. 189,500 $16.50-20.875 146,417 $17.2125-21.50
Exercised............................ -- -- (217,162) $ 1.00-15.09
Purchased by the Company............. -- -- -- --
Canceled............................. -- -- (33,146) --
------- ------------- -------- --------------
Balance at December 31, 1995......... 287,000 $ 1.50-20.875 669,792 $ 12.00-21.50
======= ========
Exercisable at:
December 31, 1993.................. 78,000 $ 1.00-8.00 115,000 $ 1.00-12.00
December 31, 1994.................. 70,500 $ 1.50-8.00 286,230 $ 1.00-15.50
December 31, 1995.................. 84,000 $ 1.50-8.00 319,469 $ 12.00-18.00
</TABLE>

(14) SIGNIFICANT CUSTOMER

Sales to the Sherwin-Williams Company and its affiliates amounted to
approximately 12% of the Company's net sales during 1993. No customer accounted
for more than 10% of the Company's net sales in 1994 or 1995. The Company's 10
largest customers accounted for 35.1% and 33.3% of 1994 and 1995 gross sales,
respectively.

(15) SHAREHOLDER RIGHTS PLAN

On October 19, 1995, the Corporation's Board of Directors adopted a
Shareholder Rights Plan. The Board declared a distribution of one right (a
"Right") for each share of Common Stock, which was outstanding on October 19,
1995 (the "Record Date"). Each share of Common Stock issued after the Record
Date will be issued with an attached Right. The Rights will not immediately be
exercisable or detachable from the Common Stock. The Rights will become
exercisable and detachable only following the acquisition by a person or a group
of 15 percent or more of the outstanding Common Stock of U.S. Can Corporation or
following the announcement of a tender or exchange offer for 15 percent or more
of the outstanding Common Stock.

The Rights will, if they become exercisable, permit the holders of the
Rights to purchase a certain amount of preferred stock of the Corporation at a
50 percent discount, or to exchange the Rights for Common Stock, if the Board
permits. Where an acquiring company effects a merger or other control
transaction with the Corporation, the Rights may also entitle the holder to
acquire stock of the acquiring company at a 50 percent discount. If a person or
group acquires 15 percent or more of the Common Stock (or announces a tender or
exchange offer for 15 percent or more of the Common Stock), the acquiring
person's or group's Rights become void. In certain circumstances, the Rights may
be redeemed by the Company at an initial redemption price of $.01 per Right. If
not redeemed, the Rights will expire ten years after the Record Date.

In addition, the Company has adopted certain change of control protections
that under certain circumstances would increase compensation and benefits of
certain executive officers.

F-24
<PAGE> 149

U.S. CAN CORPORATION AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

(16) SUBSEQUENT EVENTS

On October 17, 1996, the Corporation issued $275 million principal amount
of 10 1/8% Senior Subordinated Notes due 2006 (the "10 1/8% Notes") in a private
placement. The Noteholders have registration rights with respect to the 10 1/8%
Notes. The 10 1/8% Notes are guaranteed on a full, unconditional, joint and
several basis by each of the Corporation's Subsidiary Guarantors. As of December
31, 1995, U.S. Can, wholly-owned by the Corporation, was the only Subsidiary
Guarantor. The Corporation had no assets or operations separate from its
investment in U.S. Can and there were no Non-guarantor Subsidiaries. Separate
financial statements of U.S. Can are not presented because management of the
Company has determined that they would not be material to investors.

On September 11, 1996, USC Europe (defined below) became a wholly owned
subsidiary of U.S. Can. USC Europe and its subsidiaries are not Subsidiary
Guarantors of the 10 1/8% Notes.

(17) SUBSEQUENT EVENTS (UNAUDITED)

On August 1, 1996, the Company announced that it signed a definitive
agreement to purchase certain aerosol can businesses of Crown Cork & Seal
Company, Inc. ("Crown") located in the United Kingdom and Italy as well as the
aerosol can businesses of a Crown subsidiary, CarnaudMetalbox S.A. ("CMB")
located in France, Spain and Germany (collectively, "USC Europe"). The purchase
price includes $52.8 million in cash and the assumption of net indebtedness
totaling $5.8 million, subject to a post-closing adjustment for changes in
working capital from April 30, 1996 through closing. Closing, which is subject
to approval of various European regulatory authorities, is currently expected to
occur in the third quarter. The operations to be acquired produce approximately
24% of all European tinplate aerosol cans and, in 1995, the businesses to be
acquired generated sales of $119 million and earnings, before interest, taxes,
depreciation and amortization, of more than $14 million.

On August 2, 1996, the Company completed the acquisition of all of the
outstanding stock of three related companies, CPI Plastics, Inc., CP Ohio, Inc.
and CP Illinois, Inc. (collectively, "CPI Group"), engaged in manufacturing
molded plastic drums and pails and poultry products at locations in Newnan,
Georgia, Alliance, Ohio and Jerseyville, Illinois. To acquire the stock, the
Company paid approximately $15.1 million subject to potential contingent
payments (in an amount not to exceed $1 million) based upon CPI Group's
financial performance for the years 1996 and 1997. This acquisition was financed
with borrowings under the Acquisition Facility.

Net proceeds from the issuance of the 10 1/8% Notes were $268.1 million and
were used to pay down amounts under the Senior Credit Agreement ($158.4 million)
with $109.7 million being placed in an escrow account to be used to redeem the
$100 million principal amount of 13 1/2% Senior Subordinated Notes due 2002 (the
"13 1/2% Notes") and pay all remaining interest on the 13 1/2% Notes. The
Acquisition Facility and aggregate $30 million supplemental increases to the
Revolving Credit Facility were terminated on the closing date of the 10 1/8%
Note offering.

The amounts placed in the escrow account are invested in U.S. Government
obligations and must, pursuant to the amended and restated escrow agreement, be
used by the escrow agent to redeem the 13 1/2% Notes on or immediately after the
earliest redemption date (January 15, 1997) of such notes. Such redemption will
include a $4 million premium and unpaid interest earned on such notes through
the redemption date. Considering the interest income accruing on the funds in
the escrow account, the Company is not expected to make any additional payments
for this redemption. Accordingly, the Company recorded the early extinguishment
of this debt as of October 17, 1996, which resulted in an after-tax
extraordinary charge in the fourth quarter of 1996 of $5.5 million representing
the difference between the $109.7 million placed in escrow and the October 17,
1996, carrying value of the 13 1/2% Notes, related accrued interest and related
unamortized deferred financing costs.

F-25
<PAGE> 150

U.S. CAN CORPORATION AND SUBSIDIARY

QUARTERLY FINANCIAL DATA (UNAUDITED)

The following is a summary of the unaudited interim results of operations
for each of the quarters in 1994 and 1995 and the first three quarters in 1996.
<TABLE>
<CAPTION>
FIRST QUARTER SECOND QUARTER
------------------------------ ------------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
NET SALES.......................... $127,145 $154,061 $163,611 $151,617 $165,981 $180,596
COST OF SALES...................... 109,713 132,212 142,129 129,363 144,757 157,466
-------- -------- -------- -------- -------- --------
Gross income...................... 17,432 21,849 21,482 22,254 21,224 23,130
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.......................... 5,337 6,591 6,850 6,141 7,101 7,080
OVERHEAD REDUCTION PROVISION(a).... -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Operating income.................. 12,095 15,258 14,632 16,113 14,123 16,050
INTEREST EXPENSE ON BORROWINGS..... 4,901 5,802 6,186 5,627 6,345 6,334
AMORTIZATION OF DEFERRED FINANCING
COSTS............................. 290 357 426 325 382 376
CONSOLIDATION EXPENSE.............. 116 82 -- 116 82 --
OTHER EXPENSE...................... 211 271 492 353 446 511
-------- -------- -------- -------- -------- --------
Income (loss) before income
taxes........................... 6,577 8,746 7,528 9,692 6,868 8,829
PROVISION (BENEFIT) FOR INCOME
TAXES............................. 2,790 3,624 3,198 4,068 2,908 3,752
-------- -------- -------- -------- -------- --------
NET INCOME (LOSS).................. $ 3,787 $ 5,122 $ 4,330 $ 5,624 $ 3,960 $ 5,077
======== ======== ======== ======== ======== ========
PRIMARY PER SHARE DATA:
Net income (loss)................. $ 0.37 $ 0.40 $ 0.33 $ 0.54 $ 0.31 $ 0.39
======== ======== ======== ======== ======== ========
Weighted average shares and
equivalent shares outstanding
(000's)......................... 10,308 12,864 13,005 10,424 12,856 13,074
======== ======== ======== ======== ======== ========
Stock Market Price Range(b)
High.............................. $ 18.750 $ 23.250 $ 17.375 $ 18.750 $ 21.500 $ 18.000
Low............................... 15.000 18.750 13.250 17.000 14.000 16.125

<CAPTION>
THIRD QUARTER FOURTH QUARTER
------------------------------ -------------------
1994 1995 1996 1994 1995
---- ---- ---- ---- ----
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
NET SALES.......................... $148,802 $154,345 $194,109 $135,589 $152,098
COST OF SALES...................... 127,114 142,103 171,150 115,486 136,406
-------- -------- -------- -------- --------
Gross income...................... 21,688 12,242 22,959 20,103 15,692
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.......................... 6,373 6,898 7,173 6,947 6,779
OVERHEAD REDUCTION PROVISION(a).... -- -- -- -- 8,000
-------- -------- -------- -------- --------
Operating income.................. 15,315 5,344 15,786 13,156 913
INTEREST EXPENSE ON BORROWINGS..... 5,638 6,241 6,993 5,663 6,125
AMORTIZATION OF DEFERRED FINANCING
COSTS............................. 344 396 330 348 408
CONSOLIDATION EXPENSE.............. 115 81 -- 116 82
OTHER EXPENSE...................... 226 499 480 327 492
-------- -------- -------- -------- --------
Income (loss) before income
taxes........................... 8,992 (1,873) 7,983 6,702 (6,194)
PROVISION (BENEFIT) FOR INCOME
TAXES............................. 3,725 (593) 3,402 2,810 (2,331)
-------- -------- -------- -------- --------
NET INCOME (LOSS).................. $ 5,267 $ (1,280) $ 4,581 $ 3,892 $ (3,863)
======== ======== ======== ======== ========
PRIMARY PER SHARE DATA:
Net income (loss)................. $ 0.50 $ (0.10) $ 0.35 $ 0.33 $ (0.30)
======== ======== ======== ======== ========
Weighted average shares and
equivalent shares outstanding
(000's)......................... 10,506 12,756 13,120 11,704 12,866
======== ======== ======== ======== ========
Stock Market Price Range(b)
High.............................. $ 18.500 $ 16.000 $ 16.375 $ 19.500 $ 14.250
Low............................... 15.688 12.000 14.500 15.750 11.000
</TABLE>

- -------------------------
(a) See Note 7 of the "Notes to Consolidated Financial Statements."

(b) The Common Stock of U.S. Can Corporation began trading on the New York Stock
Exchange on April 7, 1995. Prior to that date the principal market for U.S.
Can Corporation stock was the Nasdaq National Market System. U.S. Can
Corporation stock began trading in March 1993.

F-26
<PAGE> 151

U.S. CAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 29,
1995 1996
------------ -------------
(000'S OMITTED, EXCEPT SHARE
DATA)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................................... $ 136 $ 3,940
Accounts receivable, less allowances of $5,451 and $9,305 in 1995
and 1996, respectively.......................................... 51,279 103,083
Inventories....................................................... 78,252 113,735
Prepaid expenses and other current assets......................... 10,786 10,794
Prepaid income taxes.............................................. 6,732 4,274
--------- ---------
Total current assets............................................ $ 147,185 $ 235,826
--------- ---------
PROPERTY, PLANT AND EQUIPMENT:
Land.............................................................. 2,576 4,428
Buildings......................................................... 44,954 51,183
Machinery, equipment and construction in process.................. 306,319 394,475
--------- ---------
$ 353,849 $ 450,086
Less -- Accumulated depreciation and amortization................. (123,748) (145,081)
--------- ---------
Total property, plant and equipment............................. $ 230,101 $ 305,005
--------- ---------
MACHINERY REPAIR PARTS.............................................. $ 5,395 $ 5,888
INTANGIBLES......................................................... 62,301 65,994
OTHER ASSETS........................................................ 10,454 11,443
--------- ---------
Total assets.................................................... $ 455,436 $ 624,156
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt.............................. $ 17,216 $ 17,946
Cash overdrafts................................................... 5,395 10,142
Accounts payable.................................................. 32,560 56,433
Accrued payrolls and benefits..................................... 19,282 27,100
Accrued insurance................................................. 5,830 5,892
Other current liabilities......................................... 17,954 27,321
--------- ---------
Total current liabilities....................................... $ 98,237 $ 144,834
--------- ---------
SENIOR DEBT......................................................... $ 127,360 $ 232,206
SUBORDINATED DEBT................................................... 100,000 100,000
--------- ---------
Total long-term debt............................................ $ 227,360 $ 332,206
--------- ---------
OTHER LONG-TERM LIABILITIES:
Postretirement benefits........................................... $ 25,080 $ 25,350
Deferred income taxes............................................. 19,962 21,358
Other long-term liabilities....................................... 2,970 3,536
--------- ---------
Total other long-term liabilities............................... $ 48,012 $ 50,244
--------- ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 10,000,000 shares authorized,
none issued or outstanding...................................... $ -- $ --
Common stock, $.01 par value; 50,000,000 shares authorized
12,902,111 and 12,933,636 shares issued in 1995 and 1996,
respectively.................................................... 129 129
Paid-in capital................................................... 103,913 104,557
Unearned restricted stock......................................... (2,052) (1,735)
Treasury common stock, at cost; 37,908 and 18,591 shares in 1995
and 1996, respectively.......................................... (319) (223)
Retained deficit.................................................. (19,844) (5,856)
--------- ---------
Total stockholders' equity...................................... $ 81,827 $ 96,872
--------- ---------
Total liabilities and stockholders' equity.................... $ 455,436 $ 624,156
========= =========
</TABLE>

The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these balance sheets.

F-27
<PAGE> 152

U.S. CAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
OCTOBER 1, SEPTEMBER 29,
1995 1996
---------- -------------
(000'S OMITTED, EXCEPT PER
SHARE DATA)
<S> <C> <C>
NET SALES................................................... $474,387 $538,316
COST OF SALES............................................... 419,072 470,745
-------- --------
Gross income.............................................. $ 55,315 $ 67,571
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES................ 20,590 21,103
-------- --------
Operating income.......................................... $ 34,725 $ 46,468
INTEREST EXPENSE ON BORROWINGS.............................. 18,388 19,513
AMORTIZATION OF DEFERRED FINANCING COSTS.................... 1,135 1,132
CONSOLIDATION EXPENSE....................................... 245 --
OTHER EXPENSE............................................... 1,216 1,483
-------- --------
Income (loss) before income taxes......................... $ 13,741 $ 24,340
PROVISION (BENEFIT) FOR INCOME TAXES........................ 5,939 10,352
-------- --------
NET INCOME (LOSS)........................................... $ 7,802 $ 13,988
======== ========
PER SHARE DATA:
Net income (loss)......................................... $ 0.61 $ 1.07
======== ========
Weighted average shares and equivalent shares outstanding
(000's)................................................ 12,833 13,070
======== ========
</TABLE>

The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these statements.

F-28
<PAGE> 153

U.S. CAN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
OCTOBER 1, SEPTEMBER 29,
1995 1996
---------- -------------
(000'S OMITTED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income......................................................... $ 7,802 $ 13,988
Adjustments to reconcile net income to net cash provided by
operating activities --
Depreciation and amortization................................... 21,285 24,844
Plant consolidation costs paid.................................. (1,966) --
Consolidation expense........................................... 245 --
Deferred income taxes........................................... 1,425 2,484
Change in operating assets and liabilities, net of acquired
businesses --
Accounts receivable............................................. (9,295) (23,598)
Inventories..................................................... 9,257 (16,667)
Accounts payable................................................ (16,771) 6,155
Accrued payrolls and benefits, insurance and other.............. (1,925) (3,463)
Postretirement benefits......................................... 213 139
Other, net...................................................... 577 (1,085)
--------- --------
Net cash provided by operating activities.................. $ 10,847 $ 2,797
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................................... $ (24,382) $ (23,400)
Acquisition of businesses, net of cash acquired.................... (29,167) (78,346)
Proceeds from sale of property..................................... 600 --
Machinery repair parts usage, net.................................. 62 118
--------- --------
Net cash used in investing activities...................... $ (52,887) $(101,628)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock........................................... $ 100 $ 56
Net borrowings under the revolving line of credit and changes in
cash overdrafts................................................. 51,970 106,954
Borrowings of other long-term debt, including capital lease
obligations..................................................... 4,990 3,985
Payments of other long-term debt, including capital lease
obligations..................................................... (13,993) (7,325)
Payments of debt refinancing costs................................. (818) (835)
Payments of common stock issuance costs............................ (22) --
Purchase of treasury stock, net.................................... (153) (200)
--------- --------
Net cash provided by financing activities.................. $ 42,074 $ 102,635
--------- --------
INCREASE IN CASH AND CASH EQUIVALENTS................................ $ 34 $ 3,804
CASH AND CASH EQUIVALENTS, beginning of period....................... 123 136
--------- --------
CASH AND CASH EQUIVALENTS, end of period............................. $ 157 $ 3,940
========= ========
</TABLE>

The accompanying Notes to Condensed Consolidated Financial Statements
are an integral part of these statements.

F-29
<PAGE> 154

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 29, 1996
(UNAUDITED)

(1) PRINCIPLES OF REPORTING

The condensed consolidated financial statements of U.S. Can Corporation
(the "Corporation") include the accounts of the Corporation and its wholly owned
subsidiary, United States Can Company ("U.S. Can"). The consolidated group
including the Corporation is hereinafter referred to as the Company. These
financial statements have been prepared in accordance with generally accepted
accounting principles for interim reporting. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. These financial statements, which,
in the opinion of management, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation, have not been audited
by independent public accountants. Operating results for any interim period are
not necessarily indicative of results that may be expected for the full year.

Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission; however, management believes that the
disclosures contained herein are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the previously filed financial statements and footnotes
included herein for the year ended December 31, 1995.

Quarterly accounting periods are based upon two four-week periods and one
five-week period. Management believes that this technique provides a more
consistent view of accounting data resulting in greater comparability than the
calendar month basis would provide.

(2) ACQUISITIONS

In early 1995, the Company completed its acquisition of the stock of Metal
Litho International, Inc. and the portion of a related partnership not
previously owned by MLI (collectively, "MLI") for approximately $10.1 million in
cash, plus the assumption of approximately $4.2 million of debt. The former MLI
plant, located in Trenton, New Jersey, is a full service metal decorating
facility, providing coil shearing and tin plate coating and printing. In March
1995, the Company completed its acquisition of the stock of Plastite Corporation
("Plastite") for approximately $7.3 million, plus future contingent payments of
approximately $2.5 million. The former Plastite plant, located in Morrow,
Georgia, manufactures plastic paint cans and pails in two sizes.

In April 1995, the Company completed an acquisition of certain assets of
Prospect Industries Corporation ("Prospect") for approximately $8.8 million. The
acquired assets, located in North Brunswick, New Jersey, are used to manufacture
metal pails for the chemical and coatings industries. U.S. Can's North Brunswick
operation includes coil cutting, coating and lithography, as well as
manufacturing of tops and bottoms. In May 1995, the Company completed an
acquisition of the stock of Hunter Container Corporation ("Hunter") for
approximately $4.0 million, plus the assumption of $2.5 million of debt. The
former Hunter facility, located in Vernalis, California, manufactures a broad
line of proprietary and specialty metal containers.

In April 1996, the Company acquired from Alltrista Corporation
("Alltrista") substantially all of the machinery, equipment and coatings and
inks inventory of, as well as certain proprietary technology used in, Alltrista
Metal Services ("AMS"), a division of Alltrista (collectively referred to
hereinafter as the "Assets"), and assumed a liability of approximately $0.5
million. The Assets were purchased for approximately $9.6 million. The Company
also agreed to purchase the Chicago, Illinois, Baltimore, Maryland and
Trussville, Alabama real property and buildings formerly used in AMS's business
for

F-30
<PAGE> 155

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 29, 1996
(UNAUDITED)

approximately $4.8 million. In a related transaction, in June 1996, the Company
completed the purchase of AMS's remaining inventory for approximately $8
million. AMS was engaged in the business of metal cutting and decorating, as
well as the manufacture, sale and licensure of certain proprietary products. In
July 1996, the Company discontinued operations at the former AMS operations in
Baltimore, Maryland and Trussville, Alabama.

On August 2, 1996, the Company completed the acquisition of all of the
outstanding stock of three related companies, CPI Plastics, Inc., CP Ohio, Inc.
and CP Illinois, Inc. (collectively, the "CPI Group"), engaged in manufacturing
molded plastic drums and pails and poultry products at locations in Newnan,
Georgia, Alliance, Ohio and Jerseyville, Illinois. To acquire the stock, the
Company paid approximately $15.1 million in cash to the stockholders of the CPI
Group, subject to adjustment for potential contingent payments (in an amount not
to exceed $1 million) based upon the CPI Group's financial performance for the
years 1996 and 1997. This acquisition was financed with borrowings under the
Acquisition Facility. For additional information regarding the Acquisition
Facility, see Note (4) of the Notes to Condensed Consolidated Financial
Statements.

On September 11, 1996, the Company completed the acquisition of a portion
of Crown Cork & Seal Company, Inc.'s ("Crown's") European aerosol can businesses
("USC Europe") for $52.8 million and the assumption of net indebtedness of $5.8
million, subject to a post-closing adjustment for the change in working capital
from April 30, 1996 to the closing date. This acquisition included manufacturing
operations in the United Kingdom, France, Spain and Germany and the aerosol can
manufacturing equipment and assets from a Crown facility in Italy. USC Europe
produced approximately 24% of all European steel aerosol cans sold in 1995 and,
as a group, constituted the second largest manufacturer of steel aerosol cans in
Europe.

Each of the foregoing business acquisitions was accounted for as a purchase
for financial reporting purposes. Accordingly, certain recorded assets and
liabilities of the acquired companies were revalued at estimated fair values as
of the acquisition date. Such revaluation adjustments, all made pursuant to the
purchase method of accounting, resulted in increased amortization and
depreciation in periods following the acquisition. Management has used its best
judgment and available information in estimating the fair value of those assets
and liabilities. However, such estimates are subject to change pending
finalization of property appraisals, plant consolidation requirements and other
studies. Any changes to these estimates are not expected to be material.
Amortization of any excess purchase price over the estimated fair value of the
net assets acquired is made over a period of forty years.

The following is a summary of the preliminary allocation of the aggregate
purchase price of the CPI Group and USC Europe acquisitions (000's omitted):

<TABLE>
<S> <C>
Current assets.................................................... $ 51,827
Net property, plant and equipment................................. 55,199
Other assets...................................................... 1,087
Current liabilities............................................... (36,530)
Other liabilities................................................. (8,189)
--------
Net assets...................................................... 63,394
Resulting goodwill................................................ 4,413
--------
Purchase price paid............................................. $ 67,807
========
</TABLE>

F-31
<PAGE> 156

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 29, 1996
(UNAUDITED)

The following data represents the unaudited pro forma results of operations
as if the CPI Group and USC Europe acquisitions had occurred on January 1 of the
applicable period (000's omitted, except per share data):

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE NINE MONTHS ENDED
DECEMBER 31, 1995 SEPTEMBER 29, 1996
-------------------------- --------------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- --------- ----------- ---------
<S> <C> <C> <C> <C>
Net Sales.............................. $ 626,485 $ 774,942 $ 538,316 $ 644,678
Net income............................. 3,939 5,411 13,988 14,866
Earnings per share..................... $ 0.31 $ 0.42 $ 1.07 $ 1.14
</TABLE>

The pro forma operating results include each company's results of
operations for the indicated periods with adjustments to reflect, among other
things, amortization of goodwill, interest expense on the acquisition borrowings
and the effect of income taxes thereon.

The pro forma information given above does not purport to be indicative of
the results that actually would have been obtained if the operations were
combined during the periods presented and is not intended to be a projection of
future results or trends. Other than the CPI Group and USC Europe, the
acquisitions described above were not significant to the Company or U.S. Can.

On August 16, 1996, the Company completed its acquisition of a site in the
Dallas, Texas area for the establishment of a paint and general line
manufacturing plant. The decision to expand manufacturing capabilities in the
Southwest followed the Company's agreement with one of its major coating
customers on the material terms of a long-term supply arrangement. In October
1996, the Company and this customer signed a definitive long-term supply
agreement. This Texas facility will initially produce gallon round paint cans
for the coatings industry. In the future, if circumstances warrant, the Company
may expand this facility to include production of certain of its other products.

The Company has selected Merthyr Tydfil, U.K. as the site of a new aerosol
container manufacturing facility. This plant, expected to be operational in
mid-1997, represents an initial investment of $20 million (spread over two to
three years), and will supply The Gillette Company's North Atlantic operations.

(3) INVENTORIES

Inventories are stated at cost determined by the last-in, first-out
("LIFO") cost method (for all but foreign inventories), not in excess of market.
Inventory costs include elements of material, labor and factory overhead.
Current (first-in, first-out) cost of such inventories approximated their LIFO
value at December 31, 1995 and September 29, 1996. Inventories of foreign
locations of approximately $17.3 million are valued at the lower of first-in,
first-out cost or market. Inventories reported in the accompanying balance
sheets were classified as follows (000's omitted):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 29,
1995 1996
------------ -------------
<S> <C> <C>
Raw materials.................................................... $ 21,066 $ 35,898
Work in process.................................................. 34,138 49,556
Finished goods................................................... 19,549 24,079
Machine shop inventory........................................... 3,499 4,202
-------- -------
$ 78,252 $ 113,735
======== =======
</TABLE>

F-32
<PAGE> 157

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 29, 1996
(UNAUDITED)

(4) CREDIT AGREEMENT

On April 29, 1994, U. S. Can entered into a four-year credit agreement (the
"Senior Credit Agreement") with a group of banks providing a $130 million line
of credit consisting of a $95 million revolving credit line (the "Revolving
Credit Facility") and a $35 million term loan (the "Term Loan"). As of September
29, 1996, $9,000,000 of the Term Loan had been repaid under the terms of the
Senior Credit Agreement. Funds available under the Senior Credit Agreement are
used for working capital and other general corporate purposes. The loans
outstanding under the Senior Credit Agreement bear interest at a floating rate
equal to, at the election of U.S. Can, one of the following: (i) the Base Rate
per annum (currently 8.25%), or (ii) based on the current pricing ratio, a
reserve-adjusted Eurodollar rate plus 1.0% per annum, for specified interest
periods (selected by U.S. Can) of one, two, three or six months. The "Base Rate"
is the higher of: (i) the Federal Funds rate plus 1/2 of 1% per annum or (ii)
the rate of interest publicly announced from time to time by Bank of America
Illinois, Chicago, Illinois as its "reference rate." For letters of credit
issued under the Senior Credit Agreement, U.S. Can pays fees equal to: (a) the
applicable Eurodollar Margin, currently 1.0% per annum, multiplied by the
aggregate face amount outstanding on each such letter of credit and (b) an
amount payable to the issuing bank equal to 0.2% per annum of the aggregate face
amount outstanding on each such letter of credit, both of which are payable
quarterly in arrears. Currently, U.S. Can is required to pay a commitment fee of
.325% per annum of the average daily unused portion of each lender's commitment
under the Senior Credit Agreement.

The Senior Credit Agreement is secured by the accounts receivable and
inventories of U.S. Can. The Term Loan is also secured by a mortgage on U.S.
Can's Elgin, Illinois facility and certain equipment located at the Elgin
facility. In early April 1996, the lenders under the Senior Credit Agreement
provided U.S. Can a temporary $10 million increase in the Revolving Credit
Facility due to seasonal inventory requirements. In late April 1996, these
lenders provided U.S. Can an additional temporary $20 million increase in the
Revolving Credit Facility due to the acquisition of certain assets from
Alltrista. As of September 29, 1996, borrowings under the Senior Credit
Agreement totaled $191.4 million, an additional $11.7 million in letters of
credit had been issued pursuant thereto, and $15.2 million of unused credit
(excluding unused credit under the Acquisition Facility) remained available
thereunder.

In July 1996, the lenders under the Senior Credit Agreement provided to
U.S. Can a supplemental $97 million credit facility (the "Acquisition Facility")
to fund certain permitted acquisitions and, at U.S. Can's option, prepay the
Revolving Credit Facility by an amount not to exceed $20 million on December 31,
1996. While the Acquisition Facility is in place, U.S. Can may not use the
Revolving Credit Facility to fund acquisitions. The Acquisition Facility matures
on April 30, 1997, but U.S. Can may, at its option and subject to certain
restrictions, elect to convert the outstanding borrowings thereunder to term
loans with a five-year amortization period. Base rate and Eurodollar loans
outstanding under the Acquisition Facility bear interest at a higher margin than
other borrowings under the Credit Agreement. Under the amended Senior Credit
Agreement, U.S. Can's interest rate margins vary depending upon U.S. Can's ratio
of total funded debt to earnings, before interest, taxes, depreciation and
amortization. In addition, U.S. Can is required to pay an acquisition loan
activation fee in an amount equal to 0.25% of the amount by which the loans
outstanding at any time under the Acquisition Facility exceed $50 million. In
connection with the Acquisition Facility, U.S. Can pledged substantially all of
its unencumbered personal property (including machinery and equipment) and owned
real estate to secure its obligations under the Acquisition Facility. U.S. Can
is also required to pledge the stock and/or assets, and provide the guaranty, of
any company or operations acquired using a borrowing under the Acquisition
Facility.

In connection with the USC Europe Acquisition, U.S. Can pledged 65% of the
stock of its European holding company to secure its obligations under the
Acquisition Facility and agreed that, so long as any

F-33
<PAGE> 158

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 29, 1996
(UNAUDITED)

obligations under the Acquisition Facility remain outstanding, the European
holding company shall not (i) own any assets other than the capital stock of
foreign subsidiaries, (ii) make any expenditures other than expenditures
necessary to maintain its separate corporate existence, (iii) incur any debt,
(iv) have employees or engage in any trade or business, (v) merge with any other
person, (vi) dispose of any assets or (vii) permit any lien on its assets. None
of the companies included in USC Europe have provided guaranties of U.S. Can's
obligations under the Senior Credit Agreement.

Under and pursuant to the Senior Credit Agreement, U.S. Can may pay cash
dividends on account of any shares of any class of capital stock of U.S. Can (or
on any warrants, options or rights with respect thereto) in an amount not to
exceed 25% of Net Income (as defined in the Senior Credit Agreement) in any
given fiscal year, but in any event not more than 25% of consolidated cumulative
Net Income attributable to the period commencing subsequent to April 29, 1994,
and ending on the date of such proposed cash dividends; provided that either:
(i) the Term Loan has been indefeasibly paid in full in cash or (ii) the
Leverage Ratio (as defined in the Senior Credit Agreement) as of the last day of
the last fiscal quarter of such fiscal year does not exceed 3.50 to 1.00; and,
provided further, that no Default or Event of Default (as defined in the Senior
Credit Agreement) exists immediately prior to any such cash dividend or would
result therefrom. Notwithstanding the foregoing, in no event may U.S. Can pay
such cash dividends prior to the delivery of the annual audited consolidated
financial statements to the banks for the fiscal year ended in which either of
the conditions contained in clauses (i) or (ii) above has been satisfied.
Because amounts remain outstanding under the Term Loan, the Senior Credit
Agreement currently prohibits U.S. Can from paying cash dividends.

U.S. Can was in compliance with all terms and restrictive covenants of the
Senior Credit Agreement and its other long-term debt agreements as of September
29, 1996.

(5) SUPPLEMENTAL CASH FLOW INFORMATION

U.S. Can paid interest on borrowings of $21,883,000 and $22,609,000 for the
nine-month periods ended October 1, 1995 and September 29, 1996, respectively.

The Corporation and U.S. Can paid approximately $5,046,000 and $3,847,000
of income taxes for the nine-month periods ended October 1, 1995 and September
29, 1996, respectively.

During the nine-month periods ended October 1, 1995 and September 29, 1996,
the Corporation issued stock valued at approximately $3,067,000 and $943,000,
respectively, into certain of its employee benefit plans. During the first
nine-months of 1996 the Company received no tax benefits on the exercise of
non-qualified stock options. The Company did receive approximately $87,000 of
such benefits during the first nine months of 1995.

F-34
<PAGE> 159

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 29, 1996
(UNAUDITED)

(6) LEGAL PROCEEDINGS

On February 28, 1995, Continental Holdings Inc. ("CHI"), an affiliate of
Peter Kiewit Sons', Inc. ("Kiewit"), filed a Complaint against U.S. Can and
others in the United States District Court of the State of New Jersey, asserting
claims based upon alleged indemnity and reimbursement obligations of U.S. Can to
Kiewit, as successor in interest to Continental Can Company, USA, Inc. ("CCC"),
arising from the 1987 acquisition by U.S. Can of the general packaging business
of CCC. These alleged obligations relate to environmental liabilities,
reimbursable insurance deductibles and reinsurance amounts, and certain personal
injury claims and employment discrimination claims. The Complaint includes
counts for breach of contract, declaratory judgment, indemnification and
contribution, CERCLA remedies, state environmental law remedies and unjust
enrichment. CHI seeks unspecified compensatory damages, consequential and
incidental damages, interest, attorneys' fees and costs of litigation, equitable
relief, environmental response costs, and restitution. No aggregate dollar
amount of damages is specified in the Complaint. However, in an initial
discovery disclosure served on U.S. Can, CHI alleged that its damages to the
date of such disclosure were approximately $4.4 million. U.S. Can has filed an
Answer to the Complaint, asserted affirmative defenses and made counterclaims
against CHI seeking reimbursement for expenses and accruals relating to
postretirement medical and life insurance benefits for former employees of CCC,
and expenses incurred as a result of CCC's breach of its contractual
indemnification obligations to U.S. Can. The case has been transferred to the
United States District Court for the Northern District of Illinois. U.S. Can
believes it has meritorious defenses to all of CHI's claims.

The National Labor Relations Board has issued a decision finding the
Company in violation of certain sections of the National Labor Relations Act as
a result of the Company's closure of certain facilities in 1991 and failure to
offer inter-plant job opportunities to affected employees. Management does not
believe that the resolution of this matter will have a material adverse effect
on the Company's financial condition or results of operations.

The Company understands that the groundwater in San Leandro, California is
contaminated at shallow and intermediate depths, and that the area of concern
partially extends to the groundwater below a facility formerly owned by the
Company. In late April 1996, the California Department of Toxic Substances
Control ("CDTSC") issued to certain of the past and present owners of this
facility, including U.S. Can, an order directing such owners to conduct
remediation activities at this site. Although there can be no assurance that the
Company will not incur material costs and expenses in connection with the CDTSC
order, extensive environmental testing has been performed at this facility and
management does not believe that substantial remediation activities at this
facility are justified. Representatives of the Company have met with the CDTSC
and agreed to undertake additional site assessment work. The San Leandro
facility was closed in 1989 and was sold, except for a related parcel of land,
in 1994. The remaining parcel was sold in 1995, and the Company agreed to
indemnify the purchaser against any environmental claims related to the
Company's ownership of the property.

On August 30, 1996, the Company received a general Notice of Potential
Liability from the Environmental Protection Agency (the "EPA") regarding the
Master Metals, Inc. site in Cleveland, Ohio. The letter alleges that the Company
is a Potentially Responsible Party ("PRP") in that it generated hazardous
materials disposed at this site. The Company is one of a number of PRPs and, as
of the date of this report, it is evaluating information regarding the site to
determine the extent, if any, of its liability.

F-35
<PAGE> 160

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
SEPTEMBER 29, 1996
(UNAUDITED)

(7) SUBSEQUENT EVENTS

On October 17, 1996, the Corporation issued $275 million principal amount
of 10 1/8% Senior Subordinated Notes due 2006 (the "10 1/8% Notes") in a private
placement. The Noteholders have registration rights with respect to the 10 1/8%
Notes. Net proceeds from the issuance of the 10 1/8% Notes were $268.1 million
and were used to pay down amounts under the Senior Credit Agreement ($158.4
million) with $109.7 million being placed in an escrow account to be used to
redeem the $100 million principal amount of 13 1/2% Senior Subordinated Notes
due 2002 (the "13 1/2% Notes") and pay all remaining interest on the 13 1/2%
Notes. The Acquisition Facility and aggregate $30 million supplemental increases
to the Revolving Credit Facility were terminated on the closing date of the
10 1/8% Note offering.

The 10 1/8% Notes are guaranteed on a full, unconditional, joint and
several basis by each of the Corporation's Subsidiary Guarantors. As of
September 29, 1996, U.S. Can, wholly-owned by the Corporation, was the only
Subsidiary Guarantor. The Corporation had no assets or operations separate from
its investment in U.S. Can and there were no Non-guarantor Subsidiaries until
the acquisition by U.S. Can of USC Europe on September 11, 1996. Separate
financial statements of U.S. Can are not presented because management of the
Company has determined that they are not material to investors.

The following condensed consolidating financial data illustrates the
composition of the Corporation (the "Parent"), U.S. Can (the "Subsidiary
Guarantor") and USC Europe (the "Non-guarantor Subsidiaries") as of and for the
nine months ended September 29, 1996.

Investments in subsidiaries are accounted for by the Parent and the
Subsidiary Guarantor under the equity method for purposes of the supplemental
consolidating presentations. Earnings of subsidiaries are, therefore, reflected
in their parent's investment accounts and earnings. Operating results of USC
Europe for the eighteen day period from the date of its acquisition to September
29, 1996, will be included in the Company's 1996 fourth quarter results. Such
eighteen day period results were not material.

F-36
<PAGE> 161

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 29, 1996

<TABLE>
<CAPTION>
UNITED STATES
U.S. CAN CAN COMPANY USC EUROPE U.S. CAN
CORPORATION (SUBSIDIARY (NON-GUARANTOR CORPORATION
(PARENT) GUARANTOR) SUBSIDIARIES) ELIMINATIONS CONSOLIDATED
----------- ------------- -------------- ------------ ------------
(000'S OMITTED)
<S> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents..... $ -- $ 550 $ 3,390 $ -- $ 3,940
Accounts receivable........... -- 78,140 24,943 -- 103,083
Inventories................... -- 96,481 17,254 -- 113,735
Prepaid expenses and other
assets...................... -- 9,400 1,394 -- 10,794
Prepaid income taxes.......... 1,297 2,977 -- -- 4,274
------- -------- ------- --------- --------
Total current assets........ 1,297 187,548 46,981 -- 235,826
------- -------- ------- --------- --------
NET PROPERTY, PLANT AND
EQUIPMENT..................... -- 260,312 44,693 -- 305,005
INTANGIBLE ASSETS............... -- 65,994 -- -- 65,994
OTHER ASSETS.................... -- 16,244 1,087 -- 17,331
INVESTMENT IN SUBSIDIARIES...... 94,193 52,800 -- (146,993) --
------- -------- ------- --------- --------
Total assets................ $95,490 $582,898 $92,761 $(146,993) $624,156
======= ======== ======= ========= ========
CURRENT LIABILITIES:
Current maturities of long
term debt................... $ -- $ 17,606 $ 340 $ -- $ 17,946
Accounts payable.............. -- 41,356 15,077 -- 56,433
Other current liabilities..... -- 54,177 16,278 -- 70,455
------- -------- ------- --------- --------
Total current liabilities... -- 113,139 31,695 -- 144,834
------- -------- ------- --------- --------
SENIOR DEBT..................... -- 225,714 6,492 -- 232,206
SUBORDINATED DEBT............... -- 100,000 -- -- 100,000
OTHER LONG-TERM LIABILITIES..... (739) 49,209 1,774 -- 50,244
INTERCOMPANY ADVANCES........... (643) 643 -- -- --
------- -------- ------- --------- --------
STOCKHOLDERS' EQUITY............ 96,872 94,193 52,800 (146,993) 96,872
------- -------- ------- --------- --------
Total liabilities and
stockholders' equity...... $95,490 $582,898 $92,761 $(146,993) $624,156
======= ======== ======= ========= ========
</TABLE>

F-37
<PAGE> 162

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 29, 1996

F-38
<PAGE> 163

CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 29, 1996

<TABLE>
<CAPTION>
UNITED STATES
U.S. CAN CAN COMPANY USC EUROPE U.S. CAN
CORPORATION (GUARANTOR (NON-GUARANTOR CORPORATION
(PARENT) SUBSIDIARY) SUBSIDIARY) ELIMINATIONS CONSOLIDATED
----------- ------------- -------------- ------------ ------------
(000'S OMITTED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES......................... $ -- $ 2,797 $ -- $ -- $ 2,797
---- --------- ---- ---- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............... -- (23,400) -- -- (23,400)
Acquisition of businesses, net of
cash acquired.................... -- (78,346) -- -- (78,346)
Machinery repair parts usage,
net.............................. -- 118 -- -- 118
---- --------- ---- ---- ---------
Net cash used in investing
activities..................... -- (101,628) -- -- (101,628)
---- --------- ---- ---- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of common stock........... -- 56 -- -- 56
Net borrowings under the revolving
line of credit and changes in
cash overdrafts.................. -- 106,954 -- -- 106,954
Borrowings of other long-term debt,
including capital lease
obligations...................... -- 3,985 -- -- 3,985
Payments of other long-term debt,
including capital lease
obligations...................... -- (7,325) -- -- (7,325)
Payments of debt financing costs... -- (835) -- -- (835)
Purchase of treasury stock, net.... -- (200) -- (200)
---- --------- ---- ---- ---------
Net cash provided by financing
activities..................... -- 102,635 -- -- 102,635
---- --------- ---- ---- ---------
INCREASE IN CASH AND CASH
EQUIVALENTS........................ -- 3,804 - -- 3,804
CASH AND CASH EQUIVALENTS, beginning
of period.......................... -- 136 -- -- 136
---- --------- ---- ---- ---------
CASH AND CASH EQUIVALENTS, end of
period............................. $ -- $ 3,940 $ -- $ -- $ 3,940
==== ========= ==== ==== =========
</TABLE>

The Corporation must rely on dividends and other payments from the
Subsidiary Guarantor to generate the funds necessary to meet its obligations,
including the payment of principal and interest on the 10 1/8% Notes. The
indenture under which the 10 1/8% Notes were issued contains covenants that
restrict the ability of the Company's subsidiaries to enter into any agreement
limiting certain distributions and transfers, including dividends to the
Corporation. However, the ability of the Subsidiary Guarantor to pay dividends
to the Corporation and make other payments may be subject to certain statutory,
contractual and other restrictions including, specifically, negative covenants
in the Subsidiary Guarantor's Senior Credit Agreement which limit its ability to
pay dividends depending on the Subsidiary Guarantor's financial condition as
well as restrictions which would arise as a result of legal limitations and
economic and business constraints on the amount of cash flow generated by the
Subsidiary Guarantor which would then be available to distribute to the
Corporation in the form of dividends.

F-39
<PAGE> 164

INDEPENDENT AUDITOR'S REPORT

To the Directors and Stockholders
CPI Plastics, Inc., CP Illinois, Inc.
and CP Ohio, Inc.

We have audited the accompanying combined balance sheet of CPI Plastics,
Inc., CP Illinois, Inc. and CP Ohio, Inc. as of December 31, 1994 and 1995 and
the related combined statements of income, stockholders' equity and cash flows
for each year in the three-year period ended December 31, 1995. These combined
financial statements are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of CPI
Plastics, Inc., CP Illinois, Inc. and CP Ohio, Inc. at December 31, 1994 and
1995 and the combined results of their operations and their cash flows for each
year in the three-year period ended December 31, 1995, in conformity with
generally accepted accounting principles.

PLANTE & MORAN, LLP

Southfield, Michigan
February 2, 1996

F-40
<PAGE> 165

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1994 1995
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash...................................................... $ 53,751 $ 9,749
Accounts receivable:
Trade -- Less allowance for doubtful accounts of
$35,000 in 1994 and $70,000 in 1995................... 2,647,937 2,795,737
Officer................................................ -- 68,554
Notes receivable -- Stockholders (Note 2)................. 995,000 995,000
Inventories (Note 3)...................................... 2,041,758 2,377,137
Prepaid expenses and other................................ 121,898 236,281
----------- -----------
Total current assets................................... 5,860,344 6,482,458
PROPERTY AND EQUIPMENT (Note 4)............................. 8,637,134 8,439,678
OTHER ASSETS (Note 5)....................................... 69,044 47,106
----------- -----------
Total assets........................................... $14,566,522 $14,969,242
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable (Note 6):
Bank................................................... $ 2,427,763 $ 1,781,373
Stockholders........................................... 1,560,000 1,560,000
Current portion of long-term debt (Note 7)................ 1,439,664 1,475,014
Accounts payable -- Trade................................. 2,819,235 2,622,470
Accrued payroll and related liabilities................... 321,503 362,652
Other accrued liabilities (Note 4)........................ 419,345 492,575
----------- -----------
Total current liabilities.............................. 8,987,510 8,294,084
LONG-TERM LIABILITIES
Debt (Note 7)............................................. 1,491,008 895,994
Other (Note 4)............................................ 647,646 416,470
STOCKHOLDERS' EQUITY (Note 8)
Common stock.............................................. 300,000 300,000
Paid-in capital........................................... 400,000 400,000
Retained earnings......................................... 2,740,358 4,662,694
----------- -----------
Total stockholders' equity............................. 3,440,358 5,362,694
----------- -----------
Total liabilities and stockholders' equity............. $14,566,522 $14,969,242
=========== ===========
</TABLE>

See Notes to Combined Financial Statements.

F-41
<PAGE> 166

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED STATEMENT OF INCOME

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
NET SALES.......................................... $22,263,167 $25,946,351 $29,350,842
COST OF SALES...................................... 19,262,875 22,361,752 24,906,390
----------- ----------- -----------
GROSS PROFIT....................................... 3,000,292 3,584,599 4,444,452
SELLING AND ADMINISTRATIVE EXPENSES................ 1,813,659 2,005,680 1,861,804
----------- ----------- -----------
OPERATING INCOME................................... 1,186,633 1,578,919 2,582,648
INTEREST EXPENSE................................... 649,327 637,943 660,312
----------- ----------- -----------
NET INCOME......................................... $ 537,306 $ 940,976 $ 1,922,336
=========== =========== ===========
</TABLE>

See Notes to Combined Financial Statements.

F-42
<PAGE> 167

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
------ ---------- -------- -------------
<S> <C> <C> <C> <C>
BALANCE -- January 1, 1993................... $300,000 $400,000 $1,306,076 $2,006,076
Net income................................... -- -- 537,306 537,306
Cash dividends............................... -- -- (44,000) (44,000)
-------- -------- ---------- ----------
BALANCE -- January 1, 1994................... 300,000 400,000 1,799,382 2,499,382
Net income................................... -- -- 940,976 940,976
-------- -------- ---------- ----------
BALANCE -- January 1, 1995................... 300,000 400,000 2,740,358 3,440,358
Net income................................... -- -- 1,922,336 1,922,336
-------- -------- ---------- ----------
BALANCE -- December 31, 1995................. $300,000 $400,000 $4,662,694 $5,362,694
======== ======== ========== ==========
</TABLE>

See Notes to Combined Financial Statements.

F-43
<PAGE> 168

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income....................................... $ 537,306 $ 940,976 $ 1,922,336
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization................. 1,171,063 1,240,301 1,268,332
Bad debt expense.............................. 29,605 722 35,000
Loss on disposal.............................. -- -- 2,745
Changes in assets and liabilities:
Increase in accounts receivable............. (462,253) (423,471) (251,354)
(Increase) decrease in inventories.......... (203,839) 129,124 (335,379)
(Increase) decrease in prepaid expenses..... 164,324 (99,471) (114,382)
(Increase) decrease in other assets......... (49) 14,636 --
Increase (decrease) in accounts payable..... (178,801) 814,223 (196,765)
Increase in accrued payroll and other
accrued liabilities...................... 101,631 24,063 185,822
----------- ----------- -----------
Net cash provided by operating
activities............................. 1,158,987 2,641,103 2,516,355
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment..... 9,070 -- 5,500
Purchase of property and equipment............... (361,618) (1,000,115) (1,359,803)
Issuance of note receivable...................... (80,000) -- --
Collections on note receivable................... 32,751 -- --
----------- ----------- -----------
Net cash used in investing activities.... (399,797) (1,000,115) (1,354,303)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (repayments) on short-term debt --
Net........................................... 480,266 (66,503) (646,390)
Principal payments on long-term debt............. (1,813,840) (1,499,636) (1,439,664)
Proceeds (repayments) from issuance of long-term
debt.......................................... -- (37,658) 880,000
Proceeds from issuance of notes to
stockholders.................................. 580,000 -- --
Dividends paid................................... (6,342) -- --
----------- ----------- -----------
Net cash used in financing activities.... (759,916) (1,603,797) (1,206,054)
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH.................... (726) 37,191 (44,002)
CASH -- Beginning of year.......................... 17,286 16,560 53,751
----------- ----------- -----------
CASH -- End of year................................ $ 16,560 $ 53,751 $ 9,749
=========== =========== ===========
</TABLE>

See Notes to Combined Financial Statements.

F-44
<PAGE> 169

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995

NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

The Companies operate plants in Georgia, Illinois and Ohio and are engaged
in manufacturing plastic shipping containers. The Companies' customers are
located throughout the United States and are engaged in the chemical, petroleum,
paint and food industries.

Principles of Combination -- The combined financial statements include the
following companies that are related by common ownership:

CPI Plastics, Inc.
CP Illinois, Inc.
CP Ohio, Inc.

All material intercompany accounts and transactions have been eliminated in
the accompanying combined financial statements.

Inventories -- Inventories are stated at the lower of cost, determined by
the last-in, first-out (LIFO) method, or market.

Property and Equipment -- Property and equipment are recorded at cost.
Depreciation is computed principally on the straight-line basis over the
estimated useful lives of the assets. Costs of maintenance and repairs are
charged to expense when incurred.

Intangible Assets -- Patents are being amortized on the straight-line basis
over their remaining lives. Goodwill is being amortized on the straight-line
basis over ten years. Organization costs are recorded at cost and are being
amortized on the straight-line basis over five to ten years.

Major Customers -- One major customer accounted for approximately 31, 32
and 36 percent of sales for the years ended December 31, 1993, 1994 and 1995,
respectively. Accounts receivable from this customer was $724,013, $869,390 and
$801,423 as of December 31, 1993, 1994 and 1995, respectively.

Income Taxes -- The Companies have elected to be treated as S Corporations
for income tax purposes. Under this election, the stockholders report the
taxable income (or loss) and pay any income tax (or receive any tax benefit)
personally.

Pension Plans -- CPI Plastics, Inc. maintains a defined contribution plan
for its union employees. Contributions in 1993 and 1994 were based on a
percentage of employee compensation. Contributions for 1995 are based upon $.30
for each hour worked. Contributions were paid not less than annually based on
the provisions set forth by each plan.

Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

NOTE 2 NOTES RECEIVABLE -- STOCKHOLDERS

Notes receivable -- stockholders represent unsecured demand loans to
stockholders. The loans bear interest at 8 percent to 10 percent per annum.
Interest income earned relating to these notes amounted to $73,200, $81,400 and
$81,400 for the years ended December 31, 1993, 1994 and 1995, respectively.

F-45
<PAGE> 170

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

NOTE 3 INVENTORIES

Inventories at December 31 are comprised of the following:

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Current cost:
Raw materials:
Resin.......................................... $1,061,857 $ 869,723
Other.......................................... 435,117 655,448
Finished goods.................................... 1,152,154 1,325,979
---------- ----------
Total current cost........................... 2,649,128 2,851,150
Excess of current cost over LIFO.................... 607,370 474,013
---------- ----------
LIFO cost.................................... $2,041,758 $2,377,137
========== ==========
</TABLE>

NOTE 4 PROPERTY AND EQUIPMENT

Cost of property and equipment is summarized as follows:

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Land.............................................. $ 90,000 $ 90,000
Land improvements................................. 1,479,085 1,475,442
Building and improvements......................... 1,264,019 1,330,591
Machinery and equipment........................... 7,886,027 8,299,224
Molds............................................. 3,631,129 4,175,350
Furniture and fixtures............................ 156,030 180,800
----------- -----------
Total cost................................... 14,506,290 15,551,407
Less accumulated depreciation..................... 5,869,156 7,111,729
----------- -----------
Net carrying amount.......................... $ 8,637,134 $ 8,439,678
=========== ===========
</TABLE>

Depreciation expense totaled $1,090,093, $1,173,919 and $1,246,394 during
the years ended December 31, 1993, 1994 and 1995, respectively.

During 1994, the Companies identified an environmental problem on one of
their real properties. In connection with remediation of the problem, the
Companies have capitalized the estimated total corrective cost of approximately
$1,415,000 as land improvements. Approximately $563,000 and $303,000 was paid in
1994 and 1995, respectively, and the remainder has been classified in the
accompanying balance sheet based on the expected payment period.

F-46
<PAGE> 171

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

NOTE 5 OTHER ASSETS

Intangible assets included in other assets consist of the following:

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Patents........................................... $400,000 $400,000
Goodwill.......................................... 80,000 80,000
Organization costs................................ 149,791 149,791
-------- --------
Total cost................................... 629,791 629,791
Less accumulated amortization..................... 582,665 604,603
-------- --------
Net carrying amount.......................... $ 47,126 $ 25,188
======== ========
</TABLE>

Total amortization expense charged to operations during the years ended
December 31, 1993, 1994 and 1995 was $80,970, $66,382 and $21,938, respectively.

Other assets also includes a deposit with an insurance carrier in the
amount of $21,918 at December 31, 1994 and 1995.

NOTE 6 NOTES PAYABLE

Notes payable consist of the following:

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Line of credit with a bank with a ceiling of
$4,000,000, requiring monthly payment of interest
at one-half of 1% above the prime rate, (8.5
percent at December 31, 1994 and 1995)
collateralized by property and equipment, accounts
receivable and inventories of the Companies (also
see Note 7)....................................... $2,427,763 $1,781,373
========== ==========
Unsecured demand notes payable to stockholders,
bearing interest at rates ranging from 8% to 10%
per annum......................................... $1,560,000 $1,560,000
========== ==========
</TABLE>

F-47
<PAGE> 172

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

NOTE 7 LONG-TERM DEBT

<TABLE>
<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Term loan payable to bank in monthly installments of
$119,972 plus interest at 1% over the prime rate,
(8.5 percent at December 31, 1994 and 1995)
maturing January 1997, collateralized by
substantially all assets of the Company. During
1995, the note was amended and increased by
$700,000.......................................... $2,930,672 $2,191,008
Equipment note payable, bearing interest at 8.25%,
payable in monthly installments of $4,415
beginning February 1996, including interest,
collateralized by specific items of equipment..... -- 180,000
---------- ----------
Total........................................ 2,930,672 2,371,008
Less current portion......................... 1,439,664 1,475,014
---------- ----------
Long-term portion............................ $1,491,008 $ 895,994
========== ==========
</TABLE>

In connection with the line of credit and term loan, the Companies have
agreed to, among other things, covenants that require maintenance of certain
working capital and fixed charge ratios, prohibit payments for dividends or
stock redemptions and place restrictions on repayment of subordinated
stockholder notes.

Minimum principal payments on long-term debt to maturity as of December 31,
1995 are as follows:

<TABLE>
<S> <C>
1996................................ $1,475,014
1997................................ 793,985
1998................................ 46,295
1999................................ 50,262
2000................................ 5,452
----------
Total............................. $2,371,008
==========
</TABLE>

Total interest expense incurred during the years ended December 31, 1993,
1994 and 1995 was $649,327, $637,943 and $660,312, respectively, including
approximately $139,000, $124,000 and $152,400 to notes payable to stockholders
in 1993, 1994 and 1995, respectively.

F-48
<PAGE> 173

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

NOTE 8 STOCKHOLDERS' EQUITY

Stockholders' equity consists of the following as of December 31, 1994 and
1995:

<TABLE>
<CAPTION>
CPI PLASTICS, CP ILLINOIS, CP OHIO,
INC. INC. INC. TOTAL
------------- ------------ -------- -----
<S> <C> <C> <C> <C>
1994
Common stock -- $100 par value, 1,000 shares
authorized and issued for each Company.... $ 100,000 $100,000 $ 100,000 $ 300,000
Additional paid-in capital.................. 400,000 -- -- 400,000
Retained earnings
(accumulated deficit)..................... 3,579,440 130,296 (969,378) 2,740,358
---------- -------- --------- ----------
Total stockholders' equity (deficit)...... $4,079,440 $230,296 $(869,378) $3,440,358
========== ======== ========= ==========
1995
Common stock -- $100 par value, 1,000 shares
authorized and issued for each Company.... $ 100,000 $100,000 $ 100,000 $ 300,000
Additional paid-in capital.................. 400,000 -- -- 400,000
Retained earnings
(accumulated deficit)..................... 5,185,340 395,414 (918,060) 4,662,694
---------- -------- --------- ----------
Total stockholders' equity (deficit)...... $5,685,340 $495,414 $(818,060) $5,362,694
========== ======== ========= ==========
</TABLE>

NOTE 9 LEASE COMMITMENTS

CP Ohio, Inc. leases its facility from an affiliate. The lease is
renegotiated quarterly and currently provides for quarterly payments of $16,200.

Additionally, the Companies lease transportation equipment and machinery
under agreements expiring from 1995 to 2000. The following is a schedule of
future minimum rental payments under the lease agreements:

<TABLE>
<S> <C>
1996.................................. $121,304
1997.................................. 20,709
1998.................................. 13,323
1999.................................. 8,489
2000.................................. 4,953
--------
Total............................... $168,778
========
</TABLE>

Rent expense for 1993, 1994 and 1995 amounted to $227,983, $251,010 and
$241,278, respectively, including $64,800 to affiliates in each year.

NOTE 10 MANAGEMENT SERVICE FEES

The Companies purchased certain sales, marketing and administrative
services from an affiliate through February 1994. Expenses of the Companies
approximated $656,000 in 1993 and $86,000 in 1994 related to such services.

NOTE 11 EMPLOYEE BENEFIT PLANS

The total expense for the Companies' defined contribution pension plans
amounted to $125,605, $35,847 and $38,540 for the years ended December 31, 1993,
1994 and 1995, respectively.

The Companies have a partially self-insured medical and dental plan for the
benefit of substantially all employees. Under the plan, the Companies are liable
for claims up to a maximum annual amount of $100,000 per employee and
approximately $750,000 in the aggregate. Expenses incurred under the

F-49
<PAGE> 174

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993, 1994 AND 1995

plan, including administrative charges, approximated $606,000, $631,000 and
$592,000 in 1993, 1994 and 1995, respectively.

During 1995, CPI Plastics, Inc. and CP Illinois, Inc. were partially
uninsured for workers' compensation claims. The Companies have insurance
coverage that limits the workers' compensation loss. Under the plan, the maximum
loss is limited to $500,000 with a $2,500 deductible per occurrence.

CP Ohio, Inc. maintains workers' compensation insurance with the State of
Ohio.

Total workers' compensation expense for 1993, 1994 and 1995 under the above
plans amounted to approximately $500,000, $490,000 and $349,000, respectively.

NOTE 12 SUPPLEMENTAL INCOME INFORMATION

As disclosed in the combined financial statements, the Companies use the
last-in, first-out (LIFO) method of costing inventories. Following is summarized
financial data showing what the results would have been if the first-in,
first-out (FIFO) method had been used:

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Inventories at lower of cost, (first
in, first-out) or market.......... $ 2,426,043 $ 2,649,128 $ 2,851,150
=========== =========== ===========
Net sales........................... $22,263,167 $25,946,351 $29,350,842
Cost of sales....................... 19,238,569 22,009,543 25,039,747
----------- ----------- -----------
Gross profit........................ $ 3,024,598 $ 3,936,808 $ 4,311,095
=========== =========== ===========
Net income.......................... $ 561,612 $ 1,293,185 $ 1,788,979
=========== =========== ===========
</TABLE>

NOTE 13 CASH FLOWS

During 1993, a significant noncash financing activity consisted of the
declaration of a cash dividend of $44,000, of which $37,658 was not paid.

Cash paid for interest during the years ended December 31, 1993, 1994 and
1995 was $679,592, $628,360 and $661,312, respectively.

NOTE 14 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash, Trade Accounts Receivable and Payable, Accrued Receivables and
Accrued Liabilities -- The fair value approximates the carrying amount because
of the short maturity of these instruments.

Long-term Debt -- The carrying amount of the Companies' long-term debt,
$2,371,008 at December 31, 1995, approximates the fair value and is estimated
based on rates currently available to the Company; however, it may not be
possible to settle the liability at the reported value.

Notes Receivable from Stockholders -- The estimated fair value of these
instruments, which approximates the carrying amount, has been determined by
discounting the future cash flows using the interest rate at which the Companies
would currently make similar loans to stockholders.

Notes Payable to Bank and Stockholders -- The carrying amount of notes
payable to bank and stockholders of $1,781,373 and $1,560,000, respectively, at
December 31, 1995 approximates the fair value because of the short maturity of
those instruments.

F-50
<PAGE> 175

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED INTERIM BALANCE SHEET

<TABLE>
<CAPTION>
JUNE 30
-------------------------
1995 1996
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 726,642 $ 16,117
Accounts receivable:
Trade -- Less allowance for doubtful accounts of
$50,000 in 1995 and $35,000 in 1996................... 3,295,943 3,595,724
Notes receivable -- Stockholders (Note 2)................. 995,000 995,000
Inventories (Note 3)...................................... 1,816,072 1,986,793
Prepaid expenses and other................................ 124,718 216,800
----------- -----------
Total current assets................................... 6,958,375 6,810,434
PROPERTY AND EQUIPMENT (Note 4)............................. 8,483,322 8,273,141
OTHER ASSETS (Note 5)....................................... 57,280 72,363
----------- -----------
Total assets........................................... $15,498,977 $15,155,938
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable (Note 6):
Bank................................................... $ 3,513,000 $ 2,971,373
Stockholders........................................... 1,560,000 995,000
Current portion of long-term debt (Note 7)................ 1,439,664 1,512,097
Accounts payable -- Trade................................. 2,085,311 2,657,637
Accrued payroll and related liabilities................... 236,263 214,404
Other accrued liabilities (Note 4)........................ 273,977 487,292
----------- -----------
Total current liabilities.............................. 9,108,215 8,837,803
LONG-TERM LIABILITIES
Debt (Note 7)............................................. 1,471,176 123,769
Other (Note 4)............................................ 638,409 412,422
STOCKHOLDERS' EQUITY
Common stock, $100 par value, 1,000 shares authorized and
issued for each Company................................ 300,000 300,000
Paid-in capital........................................... 400,000 400,000
Retained earnings......................................... 3,581,177 5,081,944
----------- -----------
Total stockholders' equity............................. 4,281,177 5,781,944
----------- -----------
Total liabilities and stockholders' equity............. $15,498,977 $15,155,938
=========== ===========
</TABLE>

See Notes to Combined Interim Financial Statements.

F-51
<PAGE> 176

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED INTERIM STATEMENT OF INCOME

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
--------------------------
1995 1996
---- ----
<S> <C> <C>
NET SALES................................................... $15,853,099 $15,739,682
COST OF SALES............................................... 13,727,307 12,378,353
----------- -----------
GROSS PROFIT................................................ 2,125,792 3,361,329
SELLING AND ADMINISTRATIVE EXPENSES......................... 942,971 1,173,154
----------- -----------
OPERATING INCOME............................................ 1,182,821 2,188,175
INTEREST EXPENSE............................................ 342,002 266,259
----------- -----------
NET INCOME.................................................. $ 840,819 $ 1,921,916
=========== ===========
</TABLE>

See Notes to Combined Interim Financial Statements.

F-52
<PAGE> 177

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED INTERIM STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------ PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE -- January 1, 1995......... 3,000 $300,000 $400,000 $ 2,740,358 $ 3,440,358
Net income -- Six months ended June
30, 1995......................... -- -- -- 840,819 840,819
----- -------- -------- ----------- -----------
BALANCE -- June 30, 1995........... 3,000 $300,000 $400,000 $ 3,581,177 $ 4,281,177
===== ======== ======== =========== ===========
BALANCE -- January 1, 1996......... 3,000 $300,000 $400,000 $ 4,662,694 $ 5,362,694
Net income -- Six months ended June
30, 1996......................... -- -- -- 1,921,916 1,921,916
Cash distributions................. -- -- -- (1,502,666) (1,502,666)
----- -------- -------- ----------- -----------
BALANCE -- June 30, 1996........... 3,000 $300,000 $400,000 $ 5,081,944 $ 5,781,944
===== ======== ======== =========== ===========
</TABLE>

See Notes to Combined Interim Financial Statements.

F-53
<PAGE> 178

CPI PLASTICS, INC. ET AL. (NOTE 1)

COMBINED INTERIM STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD ENDED JUNE 30
-------------------------
1995 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income................................................ $ 840,819 $ 1,921,916
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation and amortization.......................... 628,106 680,551
Bad debt expense....................................... 8,080 16,000
Changes in assets and liabilities:
Increase in accounts receivable...................... (656,086) (747,433)
Decrease in inventories.............................. 225,686 390,344
Decrease (increase) in prepaid expenses.............. (2,820) 19,481
Increase in other assets............................. -- (33,000)
Increase (decrease) in accounts payable.............. (733,924) 35,167
Decrease in accrued payroll and other accrued
liabilities......................................... (239,845) (157,579)
---------- -----------
Net cash provided by operating activities......... 70,016 2,125,447
CASH FLOWS FROM INVESTING ACTIVITIES -- Purchase of property
and equipment............................................. (462,530) (506,271)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on short-term debt, net........................ 1,085,237 1,190,000
Repayment on stockholders' debt........................... -- (565,000)
Principal payments on long-term debt...................... (719,832) (915,142)
Proceeds from issuance of long-term debt.................. 700,000 180,000
Dividends paid............................................ -- (1,502,666)
---------- -----------
Net cash (used in) provided by financing
activities..................................... 1,065,405 (1,612,808)
---------- -----------
NET INCREASE IN CASH........................................ 672,891 6,368
CASH AND CASH EQUIVALENTS -- Beginning of period............ 53,751 9,749
---------- -----------
CASH AND CASH EQUIVALENTS -- End of period.................. $ 726,642 $ 16,117
========== ===========
</TABLE>

See Notes to Combined Interim Financial Statements.

F-54
<PAGE> 179

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS
JUNE 30, 1995 AND 1996

NOTE 1 NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination -- The combined financial statements include the
following companies that are related by common ownership:

CPI Plastics, Inc.
CP Illinois, Inc.
CP Ohio, Inc.

All material intercompany accounts and transactions have been eliminated in
the accompanying combined interim financial statements.

Cash Equivalents -- The Companies consider all highly liquid investments
purchased with a maturity of three months or less to be cash equivalents.

Inventories -- Inventories are stated at the lower of cost, determined by
the last-in, first-out (LIFO) method, or market.

Property and Equipment -- Property and equipment are recorded at cost.
Depreciation is computed principally on the straight-line basis over the
estimated useful lives of the assets. Cost of maintenance and repairs are
charged to expense when incurred.

Major Customers -- Three customers accounted for approximately 45 percent
of sales for each of the six months ended June 30, 1995 and 1996. Accounts
receivable from these customers approximated $1,200,000 as of June 30, 1995 and
1996.

Pension Plans -- CPI Plastics, Inc. maintains a defined contribution plan
for its union employees. Contributions are based upon $.30 for each hour worked.

NOTE 2 NOTES RECEIVABLE -- STOCKHOLDERS

Notes receivable -- stockholders represent unsecured demand loans to
stockholders. The loans bear interest at 10 percent per annum.

F-55
<PAGE> 180

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1995 AND 1996

NOTE 3 INVENTORIES

Inventories are comprised of the following:

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Current cost:
Raw materials:
Resin.......................................... $ 826,531 $ 655,934
Other.......................................... 545,822 657,767
Finished goods.................................... 1,152,099 1,175,195
---------- ----------
Total current cost........................... 2,524,452 2,488,896
Excess of current cost over LIFO.................... 708,380 502,103
---------- ----------
LIFO cost.................................... $1,816,072 $1,986,793
========== ==========
</TABLE>

NOTE 4 PROPERTY AND EQUIPMENT

Cost of property and equipment is summarized as follows:

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Land.............................................. $ 90,000 $ 90,000
Land improvements................................. 1,465,599 1,507,522
Building and improvements......................... 1,322,755 1,330,591
Machinery and equipment........................... 8,011,380 8,402,205
Molds............................................. 3,917,570 4,546,560
Furniture and fixtures............................ 161,516 180,800
----------- -----------
Total cost................................... 14,968,820 16,057,678
Less accumulated depreciation..................... (6,485,498) (7,784,537)
----------- -----------
Net carrying amount.......................... $ 8,483,322 $ 8,273,141
=========== ===========
</TABLE>

Depreciation expense totaled $616,342 for the six-month period ended June
30, 1995 and $672,808 for the six-month period ended June 30, 1996.

During 1994, the Companies identified an environmental problem on one of
their real properties. In connection with remediation of the problem, the
Companies have capitalized the estimated total corrective cost of approximately
$1,448,000 as land improvements. Approximately $158,000 and $82,000 was paid
during the six-month periods ended June 30, 1995 and 1996, respectively, and the
remainder has been classified in the accompanying balance sheet based on the
expected payment period.

F-56
<PAGE> 181

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1995 AND 1996

NOTE 5 OTHER ASSETS

Intangible assets included in other assets consist of the following:

<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Patents........................................... $ 400,000 $ 400,000
Goodwill.......................................... 80,000 80,000
Organization costs................................ 149,791 149,791
--------- ---------
Total cost................................... 629,791 629,791
Less accumulated amortization..................... (594,429) (612,346)
--------- ---------
Net carrying amount.......................... $ 35,362 $ 17,445
========= =========
</TABLE>

Total amortization expense charged to operations during the six-month
periods ended June 30, 1995 and 1996 was $11,764 and $7,743, respectively.

Other assets also include deposits with insurance carriers in the amount of
$21,918 and $54,918 at June 30, 1995 and 1996, respectively.

NOTE 6 NOTES PAYABLE

Notes payable consist of the following:

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Line of credit with a bank with a ceiling of
$4,000,000, requiring monthly payment of interest
at .50% above the prime rate, (9% and 7% at June
30, 1995 and 1996, respectively) collateralized by
property and equipment, accounts receivable and
inventories of the Companies (also see Note 7).... $3,513,000 $2,971,373
========== ==========
Unsecured demand notes payable to stockholders,
bearing interest at rates ranging from 8% to 10%
per annum......................................... $1,560,000 $ 995,000
========== ==========
</TABLE>

F-57
<PAGE> 182

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1995 AND 1996

NOTE 7 LONG-TERM DEBT

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Term loan payable to bank in monthly installments of
$119,972 plus interest at 1% over the prime rate,
(9% and 7% at June 30, 1995 and 1996,
respectively) maturing January 1997,
collateralized by substantially all assets of the
Company. During the six-month period ended June
30, 1995, the note was amended and increased by
$700,000.......................................... $2,910,840 $1,471,176
Equipment note payable, bearing interest at 8.25%,
payable in monthly installments of $4,415
beginning February 1996, including interest,
collateralized by specific items of equipment..... -- 164,690
---------- ----------
Total........................................ 2,910,840 1,635,866
Less current portion......................... 1,439,664 1,512,097
---------- ----------
Long-term portion............................ $1,471,176 $ 123,769
========== ==========
</TABLE>

In connection with the line of credit and term loan, the Companies have
agreed to, among other things, covenants requiring maintenance of certain
working capital and fixed charge ratios, prohibit payments for dividends or
stock redemptions and place restrictions on repayment of subordinated
stockholder notes.

Minimum principal payments on the long-term debt to maturity as of June 30,
1996 are as follows:

<TABLE>
<CAPTION>
YEAR ENDING
JUNE 30 AMOUNT
----------- ------
<S> <C>
1997.............................. $1,512,097
1998.............................. 44,432
1999.............................. 48,056
2000.............................. 31,281
----------
Total......................... $1,635,866
==========
</TABLE>

Total interest expense incurred during the six-month periods ended June 30,
1995 and 1996 was $342,002 and $266,259, respectively, including approximately
$36,000 to related parties for both six-month periods ended June 30, 1995 and
1996.

F-58
<PAGE> 183

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1995 AND 1996

NOTE 8 LEASE COMMITMENTS

CP Ohio, Inc. leases its facility from an affiliate. The lease is
renegotiated quarterly and currently provides for quarterly payments of $16,200.

Additionally, the Companies lease transportation and phone equipment and
machinery under agreements expiring from 1996 to 2005. The following is a
schedule of future minimum rental payments under the lease agreements:

<TABLE>
<S> <C>
1997.............................. $ 56,445
1998.............................. 23,001
1999.............................. 11,836
2000.............................. 8,688
2001 and after.................... 45,609
--------
Total......................... $145,579
========
</TABLE>

Rent expense for the six-month periods ended June 30, 1995 and 1996
amounted to $128,602 and $84,687, respectively, including $32,400 to affiliates
in both 1995 and 1996.

NOTE 9 EMPLOYEE BENEFIT PLANS

The total expense for the Companies' defined contribution pension plans
amounted to $20,130 for the six-month period ended June 30, 1995 and $19,476 for
the six-month period ended June 30, 1996.

NOTE 10 WORKERS' COMPENSATION

Through April 1996, CPI Plastics, Inc. and CP Illinois, Inc. were partially
uninsured for workers' compensation claims. The Companies have insurance
coverage that limits the workers' compensation loss. Under the plan, the maximum
loss is limited to $500,000 with a $2,500 deductible per occurrence.

CP Ohio, Inc. maintains workers' compensation insurance with the State of
Ohio.

Total workers' compensation expense for the six-month periods ended June
30, 1995 and 1996 under the above plans amounted to approximately $178,000 and
$116,000, respectively.

F-59
<PAGE> 184

CPI PLASTICS, INC. ET AL. (NOTE 1)

NOTES TO COMBINED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
JUNE 30, 1995 AND 1996

NOTE 11 SUPPLEMENTAL INCOME INFORMATION

As disclosed in the combined interim financial statements, the Companies
use the last-in, first-out (LIFO) method of costing inventories. Following is
summarized financial data showing what the results would have been if the
first-in, first-out (FIFO) method had been used:

<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Inventories at lower of cost (first-in, first-out)
or market....................................... $ 2,524,452 $ 2,488,896
=========== ===========
Net sales......................................... $15,853,099 $15,739,682
Cost of sales..................................... 13,626,297 12,350,263
----------- -----------
Gross profit...................................... $ 2,226,802 $ 3,389,419
=========== ===========
Net income........................................ $ 941,829 $ 1,950,006
=========== ===========
Total stockholders' equity........................ $ 4,989,557 $ 6,284,047
=========== ===========
</TABLE>

NOTE 12 CASH FLOWS

Cash paid for interest during the six-month periods ended June 30, 1995 and
1996 was $342,241 and $271,593, respectively.

NOTE 13 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash, Trade Accounts Receivable and Payable, Accrued Receivables and
Accrued Liabilities -- The carrying amount approximates fair value because of
the short maturity of those instruments.

Long-term Debt -- The fair value of the Companies' long-term debt,
$1,635,866 at June 30, 1996, approximates its carrying amount and is estimated
based on rates currently available to the Companies.

Notes Receivable From Stockholders -- The estimated fair value of these
instruments has been determined by discounting the future cash flows using the
interest rate at which the Companies would currently make similar loans to
stockholders.

Notes Payable to Bank and Stockholders -- The carrying amount of notes
payable to bank and stockholders of $2,971,373 and $995,000, respectively, at
June 30, 1996 approximates fair value because of the short maturity of those
instruments.

NOTE 14 SUBSEQUENT EVENT

On July 29, 1996, the Companies' common stock was acquired by United States
Can Company. A portion of the proceeds was used by the stockholders as a capital
contribution to pay, in full, the line of credit and term loans payable to bank
as described in Notes 6 and 7. Additionally, during July 1996, in conjunction
with the transaction, all real property and improvements were sold to a related
entity and the notes receivable distributed resulting in a net decrease to
retained earnings of approximately $2,070,000.

F-60
<PAGE> 185

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of
CROWN CORK & SEAL COMPANY, INC.

We have audited the accompanying combined statements of financial position
of the Aerosols Divestiture Package (the "DP"), (a combination of several
operations of Crown Cork & Seal Company, Inc. and CarnaudMetalbox, collectively
the "Company"), at December 31, 1995 and 1994, and the combined statements of
operations of the DP for the years ended December 31, 1995, 1994 and 1993. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

The accompanying combined financial statements were prepared in accordance
with International Accounting Standards and on the basis of accounting described
in Note A and are not intended to be a complete presentation of the DP's
financial position or cash flows.

In our opinion, based on our audits, the combined financial statements
present fairly, in all material respects, the financial position of the DP at
December 31, 1995 and 1994 and the results of its operations for the three years
ended December 31, 1995, 1994 and 1993 in conformity with International
Accounting Standards.

Paris, March 1, 1996

Befec-Price Waterhouse

Jean-Pierre Caroff

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COMBINED STATEMENTS OF FINANCIAL POSITION (SEE NOTE A)
(US DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31
------------------
1994 1995
------- -------
<S> <C> <C>
ASSETS
Current assets
Accounts receivable -- trade.............................. $21,668 $25,904
Accounts receivable -- related parties.................... 1,216 1,395
Inventories............................................... 19,294 22,255
Prepaid expenses and other current assets................. 2,407 1,900
------- -------
Total current assets.............................. 44,585 51,454
------- -------
Property, plant and equipment, net........................ 40,957 45,804
Other non-current assets.................................. 269 259
------- -------
Total............................................. $85,811 $97,517
======= =======
LIABILITIES & OWNER'S NET INVESTMENT
Current liabilities
Short-term debt........................................... $ 4,424 $ 2,948
Accounts payable -- trade................................. 16,071 15,048
Accounts payable -- related parties....................... 2,697 4,728
Accrued liabilities....................................... 6,377 4,288
------- -------
Total current liabilities......................... 29,569 27,012
------- -------
Long-term debt............................................ 8,159 7,897
Other non-current liabilities............................. 2,976 3,509
Owner's net investment.................................... 45,107 59,099
------- -------
Total............................................. $85,811 $97,517
======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

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COMBINED STATEMENTS OF OPERATIONS (SEE NOTE A)
(US DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------
1993 1994 1995
--------------- --------------- ---------------
<S> <C> <C> <C>
Sales
Trade.............................................. $ 88,884 $ 95,501 $ 109,471
Group.............................................. 4,807 7,666 9,635
--------------- --------------- ---------------
$ 93,691 $ 103,167 $ 119,106
=============== =============== ===============
Costs and expenses
Cost of products sold (excluding depreciation and
amortization)................................... 81,380 86,150 99,156
Depreciation and amortization...................... 4,730 5,074 6,137
Selling and administrative expenses................ 5,208 4,610 5,700
Other (income)/expense -- net...................... (50) (274) 29
Management fees -- Group........................... 1,295 1,734 1,900
Provision for restructuring........................ 1,000 1,877 20
Interest expense................................... 2,035 1,541 1,445
--------------- --------------- ---------------
95,598 100,712 114,387
--------------- --------------- ---------------
Income/(loss) before taxes........................... (1,907) 2,455 4,719
Provision for income taxes........................... 614 1,312 1,915
--------------- --------------- ---------------
Net income/(loss).................................... $ (2,521) $ 1,143 $ 2,804
=============== =============== ===============
</TABLE>

The accompanying notes are an integral part of these financial statements.

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

A. BASIS OF PRESENTATION

In January 1996 Crown Cork & Seal Company, Inc. ("Crown") offered to
purchase all outstanding shares of CarnaudMetalbox SA for either cash or
Crown shares. The transaction was initiated by an announcement on May 22,
1995 that Crown and Compagnie Generale d'Industrie et de Participations
("CGIP"), the principal shareholder of CarnaudMetalbox, had signed an
agreement under which CGIP irrevocably committed (subject to certain
conditions which were subsequently met) to sell its shares to Crown. The
proposed transaction was reviewed by the European Commission and approved
by the Commission on November 15, 1995. The offer closed on February 1,
1996 resulting in 98.7% of outstanding shares being tendered. The European
Commission's approval was conditional on the divestiture of five aerosol
businesses within the aerosols' operations, hereafter referred to as the
Divestiture Package ("DP"). The group of companies constituting Crown and
CarnaudMetalbox, excluding operations comprising the DP, is hereafter
referred to as the "Group".

The DP includes the following aerosol can making operations:

<TABLE>
<CAPTION>
COUNTRY LOCATION
------- --------
<S> <C>
France.................................... Laon
Germany................................... Schwedt
Italy..................................... Voghera
Spain..................................... Reus
United Kingdom ("UK")..................... Southall/Tredegar
</TABLE>

The accompanying Combined (combined is used instead of consolidated due to
the two different parent companies) Financial Statements have been prepared
in connection with the sale of the DP and are in accordance with
international accounting principles issued by the International Accounting
Standards Committee. These principles, as applied to the Combined Financial
Statements, do not differ materially from accounting principles generally
accepted in the United States of America with the exception of certain
disclosure requirements. Further these financial statements are not
intended to be a complete presentation of the DP's financial position or
cash flows.

Throughout the period covered by the Combined Financial Statements, the
DP's UK and Italian operations were conducted and accounted for as product
lines of subsidiaries of Crown and as such were not legal entities. The
DP's French, German and Spanish operations were operating subsidiaries of
CarnaudMetalbox.

Accordingly, financial statements were not previously prepared for the DP.
These Combined Financial Statements have been derived from the historical
accounting records of Crown and CarnaudMetalbox subsidiaries, and present
the financial position and results of operations as if the DP was a
separate operating entity. The Combined Financial Statements have been
prepared as if the operations of the DP in each country had been conducted
exclusively within a wholly-owned subsidiary in that country. In that
context, there is no direct ownership among the various units comprising
the DP. Accordingly, Crown's net investment in the DP (Owner's Net
Investment) is shown in lieu of Stockholders' Equity in the Combined
Financial Statements.

Under Crown and CarnaudMetalbox's cash management systems, cash
requirements and cash generated were generally centralized under cash
pooling agreements. In addition, Crown operations'

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

systems were not designed to track liabilities and payments or receivables
and receipts on a business specific basis. Given these constraints,
statements of cash flows are not presented. Intercompany loans and debt in
connection with the Group, net of cash, are included in Owner's Net
Investment.

Two Group manufacturing operations share sites with operations of the DP.
Assets and liabilities which relate to non-DP operations, specifically at
Southall and Voghera, are not included in the Combined Statement of
Financial Position while assets not owned by two of the DP operations,
specifically Reus and Laon, but included in the assets to be sold, have
been reflected in the combined financial statements.

The building in Laon (France) is leased by a CarnaudMetalbox group company
under a finance-type lease. This finance lease has been recognized in the
Combined Financial Statements as an asset and a liability in accordance
with International Accounting Standards.

The building in Reus (Spain) is currently owned by a CarnaudMetalbox group
company and is intended to be sold to the DP. This building has been
accounted for in the Combined Financial Statements at historical cost.

The depreciation and interest expenses in respect of the buildings in Laon
and Reus are included in these Combined Financial Statements.

The Combined Statements of Operations include revenues and costs directly
attributable to the DP including a) facility costs, b) interest on third
party debt and c) management charges. Excluded from the Statements of
Operations are intercompany interest charges (all intercompany debt has
been reflected as Owners's Net Investment).

All the allocations and estimates in the Combined Financial Statements are
based on assumptions that Group management believes are reasonable under
the circumstances. These allocations and estimates are not, however,
necessarily indicative of the costs that would have resulted if the DP had
been operated as a separate entity.

Transactions between the DP and Group entities have been identified in the
Combined Financial Statements among related parties.

B. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

BASIS OF COMBINATION

The Combined Financial Statements include the accounts of the various
businesses comprising the DP. All material transactions and accounts
between DP operations have been eliminated in combination.

USE OF ESTIMATES AND ASSUMPTIONS

The Combined Financial Statements have been prepared on the basis of
presentation disclosed in Note A. They reflect management estimates and
assumptions. Actual results could differ from these estimates, impacting
reported results of operations and financial position.

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

CASH

The DP participates in Group cash pooling systems and, as such, its cash
funding requirements are met by and cash generated is transferred to the
Group. All cash balances are offset against Owner's Net Investment in the
Combined Statements of Financial Position.

INVENTORIES

Inventories are stated principally at the lower of cost or estimated net
realizable value. Cost is determined on a first in, first out basis. The
cost of work in progress and finished goods comprises material, labor and
attributable manufacturing overheads.

PROPERTY, PLANT AND EQUIPMENT (PP&E)

PP&E is shown at historical cost. Depreciation is provided, except on
freehold land, on a straight-line basis over the estimated useful lives of
the assets, as follows (in years):

<TABLE>
<S> <C>
Buildings and improvements.................... 10 to 40 years
Plant and machinery........................... 5 to 12 years
Other assets.................................. 5 to 10 years
</TABLE>

PENSIONS AND RETIREMENT BENEFITS

French legislation requires the company to provide for employees' lump sum
termination benefits depending upon the length of employee service in its
consolidated financial statements. The employer is required to meet the
full cost of retirement benefits, and provision is made in the DP Combined
Statements of Financial Position under other non-current liabilities in
respect of those liabilities. Regular actuarial valuations are carried out
in order to determine the Group's obligation in respect of those retirement
benefits. Retirement benefit obligations are valued using the accumulated
benefit valuation method. The accumulated benefit obligation at December
31, 1994 and 1995, is the present value of benefits (whether vested or non
vested) based on employee service and compensation prior to December 31,
1994 and 1995 respectively.

The employees of the DP's UK operations participate in a Crown sponsored
pension plan. The plan is currently funded. The benefits under the plan are
based primarily on years of service and the employees remuneration. Pension
expense allocated to the Combined Financial Statements, of $188, $364 and
$325 for the years ended December 31, 1993, 1994 and 1995, respectively was
determined under statutory accounting principles which are not considered
materially different from International Accounting Principles.

In other countries amounts are set aside in accordance with local
legislation to provide fully for termination and retirement benefit
obligations relating to employees.

FOREIGN CURRENCY TRANSLATION

The US dollar has been used as the reporting currency of the DP's combined
financial statements. Foreign currency asset and liability amounts are
translated into U.S. dollars at end-of-period exchange rates. Income and
expenses are translated at average rates in effect during each year.

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

Translation adjustments for the entities comprising the DP are accumulated
in a separate component of Owners' Net Investment which amounted to $3,078
and $4,869 at December 31, 1994 and December 31, 1995, respectively.
Transaction gains and losses included in determining the results for the
periods presented are not material.

The following rates (1 $ =) have been used:
-- to translate assets and liabilities at

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1994 1995
------- -------
<S> <C> <C>
French Franc................................................ 5.35 4.90
UK Pound.................................................... 0.641 0.645
German DM................................................... 1.551 1.433
Spanish Pesetas............................................. 131.77 121.28
Italian Lira (100).......................................... 16.2622 15.8583
</TABLE>

-- to translate income and expenses for the year ended

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
French Franc................................................ 5.66 5.55 4.99
UK Pound.................................................... 0.666 0.653 0.633
German DM................................................... 1.655 1.623 1.434
Spanish Pesetas............................................. 126.62 134.05 124.75
Italian Lira (100).......................................... 15.7227 16.3238 16.0965
</TABLE>

REVENUE RECOGNITION

Sales and related cost of goods sold are included in income when goods are
shipped to the customer.

RESEARCH AND DEVELOPMENT EXPENSES

Expenditures for research and development at the operations level are
charged to operations as incurred and are included in selling and
administrative expenses. Research and development costs incurred at
CarnaudMetalbox group level are charged to subsidiaries through management
fees (0.2% of revenues).

INCOME TAXES

The taxable income of the various operations comprising the DP is included
in the consolidated tax returns of the Group company of which it is a part.
As such, separate income tax returns are not prepared or filed by the DP.
Income tax expense has been measured as if each member of the DP were a
separate taxpayer using the local statutory rate for each period presented.
Income taxes currently payable are deemed remitted by the DP to the Group
in the period in which the liability arose. No tax benefit has been
recorded for any member of the DP whose operations resulted in a loss
during any year in the period covered. No deferred taxes have been recorded
in the Combined Financial Statements.

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

C. RELATED PARTY TRANSACTIONS

The Combined Financial Statements include transactions with other Group
organizations involving sales of goods, purchase of materials and
components and functions and services (such as cash management, tax
administration, legal, research and development and data processing) that
were provided to the DP.

MANAGEMENT FEES

The costs of some group functions and services have been charged and/or
allocated to the DP. Such intercompany charges and allocations are not
necessarily indicative of the costs that would be incurred directly if the
DP had been operated as a separate entity.

SALES AND PURCHASES

Sales by the DP to other operations of the Group were approximately $4,807,
$7,666 and $9,635 for the years ended December 31, 1993, December 31, 1994
and December 31, 1995 respectively.

Purchases by the DP from other operations of the Group, were approximately
$18,640, $20,180, and $28,286 for the years ended December 31, 1993,
December 31, 1994 and December 31, 1995 respectively and approximate fair
market value. Such purchases relate mainly to the purchase of metal by the
UK DP operations from the Group which amounted to approximately $13,285,
$13,560 and $17,579 in 1993, 1994 and 1995 respectively. Although sourced
locally, these transactions reflect the centralised purchasing and billing
arrangements within Crown.

BORROWINGS

As stated in Note A, intercompany borrowings are included in Owner's Net
Investment. No interest expense related to intercompany borrowings is
reflected in the Combined Financial Statements.

D. RECEIVABLES

Accounts receivable are presented in the Combined Statements of Financial
Position net of allowances of $1,086 and $1,080 at December 31, 1994 and
December 31, 1995, respectively.

E. INVENTORIES

<TABLE>
<CAPTION>
DECEMBER 31
------------------------------
1994 1995
------------- -------------
<S> <C> <C>
Raw materials and consumables............................... $ 6,173 $ 7,259
Work in progress............................................ 6,523 8,599
Finished goods.............................................. 4,638 4,486
Spare parts and supplies.................................... 1,960 1,911
------------- -------------
$ 19,294 $ 22,255
============= =============
</TABLE>

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

F. PROPERTY, PLANT AND EQUIPMENT

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------
1994 1995
------------- -------------
<S> <C> <C>
Land & Buildings............................................ $ 11,727 $ 12,885
Plant & Machinery........................................... 54,829 64,075
Other tangible assets....................................... 1,829 2,151
Construction in progress.................................... 4,524 5,765
------------- -------------
72,909 84,876
Less: Accumulated depreciation and amortization............. (31,952) (39,072)
------------- -------------
$ 40,957 $ 45,804
============= =============
</TABLE>

As stated in Note A, the historical cost of two buildings (including land)
to be comprised in the divestiture, specifically in France and in Spain, is
included above. Depreciation expense has been adjusted to reflect the
capitalization of these two buildings. Gross book value for the buildings
in France and Spain amount to $7,298 and $1,015, respectively for the year
ended December 31, 1994 and $7,968 and $1,202, respectively, for the year
ended December 31, 1995. Accumulated depreciation for the buildings in
France and Spain amount to $730 and $85, respectively, for the year ended
December 31, 1994 and $1,062 and $122, respectively, for the year ended
December 31, 1995.

Coating and printing lines used by the Italian aerosol operations are
shared with other product lines and are owned by a Crown subsidiary not
part of the DP. However, Crown has committed to provide, subject to the
requirements of a prospective buyer, coating and printing facilities
similar to the existing lines. Therefore, the annual depreciation charge of
the coating and printing lines has been maintained in the Combined
Statements of Operations for the years ended December 31, 1993, 1994 and
1995 for $64, $70 and $84 respectively.

G. CAPITAL LEASE

The building in Laon, dedicated to operating activities, was financed in
1993 under a 15 year lease contract (see Note A and F),

Minimum commitments are $1,097 per annum and can be detailed as follows:

<TABLE>
<CAPTION>
INTEREST CAPITAL
-------- -------
<S> <C> <C>
1996........................................................ $ 757 $ 340
1997........................................................ 717 380
1998........................................................ 673 424
1999........................................................ 624 473
2000........................................................ 569 528
Over five years............................................. 1,840 4,914
</TABLE>

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

H. ACCRUED LIABILITIES

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1994 1995
------ ------
<S> <C> <C>
Accrued employee related charges............................ $3,938 $3,517
Other....................................................... 2,439 771
------ ------
$6,377 $4,288
====== ======
</TABLE>

I. SHORT TERM AND LONG TERM DEBT

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1994 1995
------ ------
<S> <C> <C>
Short term debt
Overdraft................................................. $1,245 $ 153
Bank loans (fixed rate 6.25% -- 11.75%)................... 577 627
Discounted Notes.......................................... 2,309 1,809
Capital lease and other................................... 293 359
------ ------
Total short term debt....................................... $4,424 $2,948
====== ======
Long term debt
Bank loans -- due 1996.................................... $ 335 $ --
6.25% bank loan -- due 2001............................... 1,353 1,178
Capital lease (see notes A and F)......................... 6,471 6,719
------ ------
Total long term debt........................................ $8,159 $7,897
====== ======
</TABLE>

J. OTHER NON-CURRENT LIABILITIES

<TABLE>
<CAPTION>
DECEMBER 31,
1994 1995
------ ------
<S> <C> <C>
Pensions.................................................... $1,208 $1,474
Grants...................................................... 966 1,195
Other....................................................... 802 840
------ ------
$2,976 $3,509
====== ======
</TABLE>

K. PROVISION FOR RESTRUCTURING

As part of the Group's continuing program of reorganisation and
rationalization, certain members of the DP incurred costs principally in
connection with labor force reductions. In 1993 the French and Spanish
operations were restructured. In 1994 the French operation again incurred
significant restructuring costs and additionally a charge was incurred by
the UK.

L. OTHER INCOME/EXPENSE

Other income/expense mainly represents the gain/loss on disposal of assets
and other miscellaneous income/expense.

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NOTES TO THE COMBINED FINANCIAL STATEMENTS
DECEMBER 31, 1995
(US DOLLARS IN THOUSANDS)
- --------------------------------------------------------------------------------

M. COMMITMENTS AND CONTINGENCIES

Aerosol products have historically been subject to certain criticism on
environmental grounds. The future development of unfavorable legislation or
regulations may have a negative effect on the aerosols markets, and
accordingly could potentially adversely affect the DP operations.

To comply with local environmental regulations the UK operations will be
required to upgrade its production equipment, in particular involving the
installation of incinerators in the lithographic department, by 1997.

The German operations received local government grants from 1990 to 1995
corresponding to around 23% of capital expenditures in return for employing
a specified number of workers. The operation has not fully met its
obligations in this respect, specifically, it has employed fifty five
instead of sixty workers as stipulated by the local government at the end
of 1995. The operation may therefore be required to reimburse part of these
grants, estimated by management not to exceed the pro-rata terms of
non-compliance with the conditions of these grants.

The German operations are committed to pay termination indemnities to a
sale agent of approximately $400 in the event of termination of its
contract.

The French DP operations are subject to the two following claims. This
entity was sued in the United States by an individual consumer, who alleges
she suffered burns while using aerosol hairspray. The complaint includes
counts for breach of warranty of merchantability, unsuitability for use and
lack of appropriate warnings. This entity is also subject to a claim by
Matrix Essentials Inc. for defective aerosol cans caused by flaking side
strips on cans supplied to it.

The DP's basic raw material is tinplate which is purchased from multiple
sources. The DP is subject to material fluctuations in the cost of raw
materials and adjusts its selling prices to reflect these movements. There
can be no assurance, however, that the DP will be able to recover fully any
increase in raw material costs from its customers.

The DP is subject to various other claims and litigations and
administrative proceedings. While the impact on future financial results,
of these other claims and proceedings as well as those described above, is
not subject to reasonable estimation because considerable uncertainty
exists, management is of the opinion that their outcome will not have a
material effect on the DP's financial position or results of operations.

N. SUBSEQUENT EVENTS -- UNAUDITED

On September 11, 1996, the operations comprising the DP were sold to U.S.
Can Corporation by means of the sale and purchase of the entire issued
share capital of the former CarnaudMetalbox French. German and Spanish DP
entities and of the Crown UK and Italian DP businesses and related
undertakings. The consideration for the transaction amounts to $58.6
million subject to adjustments based on working capital and net financial
indebtedness as defined in the sale agreement.

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COMBINED INTERIM STATEMENT OF FINANCIAL POSITION (SEE NOTE A)
(US DOLLARS IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
JUNE 30,
1996
-------------
<S> <C>
ASSETS
Current assets
Accounts receivable -- trade.............................. $ 29,635
Accounts receivable -- related parties.................... 1,947
Inventories............................................... 19,660
Prepaid expenses and other current assets................. 945
-------------
Total current assets................................... 52,187
-------------
Property, plant and equipment, net........................ 43,462
Other non-current assets.................................. 224
-------------
Total.................................................. $ 95,873
=============
LIABILITIES & OWNER'S NET INVESTMENT
Current liabilities
Short-term debt........................................... $ 2,663
Accounts payable -- trade................................. 14,985
Accounts payable -- related parties....................... 4,434
Accrued liabilities....................................... 4,983
-------------
Total current liabilities.............................. 27,065
-------------
Long-term debt............................................ 6,214
Other non-current liabilities............................. 3,404
Owner's net investment.................................... 59,190
-------------
Total.................................................. $ 95,873
=============
</TABLE>

The accompanying notes are an integral part of this financial information.

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COMBINED INTERIM STATEMENTS OF OPERATIONS (SEE NOTE A)
(US DOLLARS IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------------
1995 1996
------------- -------------
<S> <C> <C>
Sales
Trade..................................................... $ 57,529 $ 59,868
Group..................................................... 4,410 3,145
------------- -------------
61,939 63,013
Costs and expenses
Cost of products sold (excluding depreciation and
amortization).......................................... 51,456 51,868
Depreciation and amortization............................. 3,037 2,891
Selling and administrative expenses....................... 2,736 2,903
Other (income)/expense -- net............................. 50 (8)
Management fees -- Group.................................. 997 952
Provision for restructuring............................... 21 62
Interest expense.......................................... 777 561
------------- -------------
59,074 59,229
Income before taxes......................................... 2,865 3,784
Provision for income taxes.................................. 1,124 1,511
------------- -------------
Net income.................................................. $ 1,741 $ 2,273
============= =============
</TABLE>

The accompanying notes are an integral part of this financial information.

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NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

A. BASIS OF PRESENTATION

In January 1996 Crown Cork & Seal Company, Inc. ("Crown") offered to
purchase all outstanding shares of CarnaudMetalbox, for either cash or
Crown shares. The transaction was initiated by an announcement on May 22,
1995 that Crown and Compagnie Generale d'Industrie et de Participations
("CGIP"), the principal shareholder of CarnaudMetalbox, had signed an
agreement under which CGIP irrevocably committed (subject to certain
conditions which were subsequently met) to sell its shares to Crown. The
proposed transaction was reviewed by the European Commission and approved
by the Commission on November 15, 1995. The offer closed on February 1,
1996 resulting in 98.7% of outstanding shares being tendered. The European
Commission's approval was conditional on the divestiture of five aerosol
businesses within the aerosols' operations, hereafter referred to as the
Divestiture Package ("DP"). The group of companies constituting Crown and
CarnaudMetalbox, excluding operations comprising the DP, is hereafter
referred to as the "Group".

The DP includes the following aerosol can making operations:

<TABLE>
<CAPTION>
Country Location
------- --------
<S> <C>
France..................................... Laon
Germany.................................... Schwedt
Italy...................................... Voghera
Spain...................................... Reus
United Kingdom ("UK")...................... Southall/Tredegar
</TABLE>

The accompanying unaudited Combined Interim Financial Information has been
prepared in connection with the sale of the DP. In the opinion of
management it contains all material adjustments necessary to present the
interim financial position of the DP as of June 30, 1996 and the interim
results of its operations for the periods ended June 30, 1995 and June 30,
1996, respectively. These results have been determined on the basis of
international accounting principles and practices applied consistently and
are not necessarily indicative of the results that may be expected for the
year ended December 31, 1996. These principles, as applied to the unaudited
Combined Interim Financial Information do not differ materially from
accounting principles generally accepted in the United States of America.
This unaudited Combined Interim Financial Information is not intended to be
a complete presentation of the DP's financial position or cash flows.

Throughout the period covered by the Combined Interim Financial
Information, the DP's UK and Italian operations were conducted and
accounted for as product lines of subsidiaries of Crown and as such were
not legal entities. The DP's French, German and Spanish operations were
operating subsidiaries of CarnaudMetalbox.

Accordingly, financial statements were not previously prepared for the DP.
This Combined Interim Financial Information has been derived from the
historical accounting records of Crown and CarnaudMetalbox subsidiaries,
and presents the interim financial position and results of operations as if
the DP was a separate operating entity. The Combined Interim Financial
Information has been prepared as if the operations of the DP in each
country had been conducted exclusively within a wholly-owned subsidiary in
that country. In that context, there is no direct ownership among the

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NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

various units comprising the DP. Accordingly, Crown's net investment in the
DP (Owner's Net Investment) is shown in lieu of Stockholders' Equity in the
Combined Interim Financial Information.

Under Crown and CarnaudMetalbox's cash management systems, cash
requirements and cash generated were generally centralized under cash
pooling agreements. In addition, Crown operations' systems were not
designed to track liabilities and payments or receivables and receipts on a
business specific basis. Given these constraints, statements of cash flows
are not presented. Intercompany loans and debt in connection with the
Group, net of cash, are included in Owner's Net Investment.

Two Group manufacturing operations share sites with operations of the DP.
Assets and liabilities which relate to non-DP operations, specifically at
Southall and Voghera, are not included in the Combined Interim Statement of
Financial Position while assets not owned by the Laon DP operations, but
included in the assets to be sold, have been reflected in the Combined
Interim Financial Information.

The building in Laon (France) is leased by a CarnaudMetalbox group company
under a finance-type lease. This lease has been transferred to the DP in
July 1996. This finance lease has been recognized in the Combined Interim
Financial Information as an asset and a liability in accordance with
International Accounting Standards.

The building in Reus, Spain was owned by a Group company throughout the
period covered by the Combined Interim Financial Information, until May
1996 when it was sold to the DP. This building has been accounted for at
historical cost in the Combined Interim Financial Information (See Note F).

The depreciation and interest expenses in respect of the buildings in Laon
and Reus are included in this Combined Interim Financial Information.

The Combined Interim Statements of Operations include revenues and costs
directly attributable to the DP including a) facility costs, b) interest on
third party debt and c) management charges. Excluded from the Interim
Statements of Operations are intercompany interest charges (all
intercompany debt has been reflected as Owner's Net Investment).

All the allocations and estimates in the Combined Interim Financial
Information are based on assumptions that Group management believes are
reasonable under the circumstances. These allocations and estimates are
not, however, necessarily indicative of the costs that would have resulted
if the DP had been operated as a separate entity.

Transactions between the DP and Group entities have been identified in the
Combined Interim Financial information among related parties.

Certain information and footnote disclosures, normally included in
financial statements in accordance with generally accepted accounting
principles, have been condensed or omitted. The accompanying Combined
Interim Financial Information should be read in conjunction with the
Combined Financial Statements for the year ended December 31, 1995.

F-75
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AEROSOLS DIVESTITURE PACKAGE

NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

B. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

BASIS OF COMBINATION

The Combined Interim Financial Information includes the accounts of the
various businesses comprising the DP. All material transactions and
accounts between DP operations have been eliminated in combination.

USE OF ESTIMATES AND ASSUMPTIONS

The Combined Interim Financial Information has been prepared on the basis
of presentation disclosed in Note A. It reflects management estimates and
assumptions. Actual results could differ from these estimates, impacting
results of operations and financial position.

CASH

INVENTORIES

PROPERTY, PLANT AND EQUIPMENT (PP&E)

PP&E is shown at historical cost. Depreciation is provided, except on
freehold land, on a straight-line basis over the estimated useful lives of
the assets, as follows (in years):

PENSIONS AND RETIREMENT BENEFITS

French legislation requires the company to provide for employees' lump sum
termination benefits depending upon the length of employee service in its
consolidated financial statements. The employer is required to meet the
full cost of retirement benefits, and provision is made in the DP Combined
Interim Statement of Financial Position under other non-current liabilities
in respect of those liabilities. Regular actuarial valuations are carried
out in order to determine the Group's obligation in respect of those
retirement benefits. Retirement benefit obligations are valued using the
accumulated benefit valuation method. The accumulated benefit obligation at
June 30, 1996, is the present value of benefits (whether vested or
non-vested) based on employees services and compensation prior to June 30,
1996.

The employees of the DP's UK operations participate in a Crown-sponsored
pension plan. This plan is currently funded. The benefits under the plan
are based primarily on years of service and the employees remuneration.
Pension expense allocated to the Combined Interim Financial Information

F-76
<PAGE> 201

AEROSOLS DIVESTITURE PACKAGE

NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

of $216 for the six-month period ended June 30, 1996 was determined under
statutory accounting principles which are not considered materially
different from International Accounting Principles.

In other countries amounts are set aside in accordance with local
legislation to provide fully for termination and retirement benefit
obligations relating to employees.

FOREIGN CURRENCY TRANSLATION

The US dollar has been used as the reporting currency of the DP's Combined
Interim Financial Information. Foreign currency asset and liability amounts
are translated into U.S. dollars at end-of-period exchange rates. Income
and expenses are translated at average exchange rates in effect during each
period. Translation adjustments for the entities comprising the DP are
accumulated in a separate component of Owners' Net Investment which
amounted to $3,534 at June 30, 1996. Transaction gains and losses included
in determining the results for the periods presented are not material.

The following rates (1 $ =) have been used:

-- to translate assets and liabilities at June 30, 1996

<TABLE>
<S> <C>
French Franc................................................ 5.15
UK Pound.................................................... 0.646
German DM................................................... 1.523
Spanish Pesetas............................................. 128.25
Italian Lira (100).......................................... 15.3424
</TABLE>

-- to translate income and expenses for the six-month period ended.

<TABLE>
<CAPTION>
JUNE 30,
-----------------
1995 1996
------- -------
<S> <C> <C>
French Franc.......................................... 4.98 5.12
UK Pound.............................................. 0.625 0.655
German DM............................................. 1.418 1.504
Spanish Pesetas....................................... 125.28 126.31
Italian Lira (100).................................... 16.5059 15.6127
</TABLE>

REVENUE RECOGNITION

Sales and related cost of goods sold are included in income when goods are
shipped to the customer.

RESEARCH AND DEVELOPMENT EXPENSES

F-77
<PAGE> 202

AEROSOLS DIVESTITURE PACKAGE

NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

INCOME TAXES

The taxable income of the various operations comprising the DP is included
in the consolidated tax returns of the Group company of which it is a part.
As such, separate income tax returns are not prepared or filed by the DP.
Income tax expense has been measured as if each member of the DP were a
separate taxpayer using the local statutory rate for each period presented.
Income taxes currently payable are deemed remitted by the DP to the Group
in the period in which the liability arose. No tax benefit has been
recorded for any member of the DP whose operations resulted in a loss
during any of the periods covered. No deferred taxes have been recorded in
the Combined Interim Financial Information.

C. RELATED PARTY TRANSACTIONS

The Combined Interim Financial Information includes transactions with other
Group organizations involving sales of goods, purchase of materials and
components and functions and services (such as cash management, tax
administration, legal, research and development and data processing) that
were provided to the DP.

MANAGEMENT FEES

SALES AND PURCHASES

Sales by the DP to other operations of the Group were approximately $4,410
and $3,145 for the periods ended June 30, 1995 and June 30, 1996
respectively.

Purchases by the DP from other operations of the Group were $9,756 and
$10,700 for the periods ended June 30, 1995 and June 30, 1996 respectively
and approximate fair market value. Such purchases relate mainly to the
purchase of metal by the UK DP operations from the Group which amounted to
approximately $6,970 and $6,088 for the six-month periods ended June 30,
1995 and June 30, 1996, respectively. Although sourced locally, these
transactions reflect the centralized purchasing and billing arrangements
within Crown.

BORROWINGS

As stated in Note A, intercompany borrowings are included in Owner's Net
Investment. No interest expense related to intercompany borrowings is
reflected in the Combined Interim Financial Information.

D. RECEIVABLES

Accounts receivable are presented in the Combined Interim Statement of
Financial Position net of allowances of $1,037 at June 30, 1996.

F-78
<PAGE> 203

AEROSOLS DIVESTITURE PACKAGE

NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

E. INVENTORIES

<TABLE>
<CAPTION>
JUNE 30,
1996
--------
<S> <C>
Raw materials and consumables............................. $ 6,347
Work in progress.......................................... 7,831
Finished goods............................................ 3,564
Spare parts and supplies.................................. 1,918
-------
$19,660
=======
</TABLE>

F. PROPERTY, PLANT AND EQUIPMENT

The building in Laon (France) is leased by a CarnaudMetalbox group company
under a finance-type lease. This lease has been transferred to the DP in
July 1996. This finance lease has been recognized in the Combined Interim
Financial Information at June 30, 1996 as an asset and a liability in
accordance with International Accounting Standards. The net book value for
this building amounts to $6,441 at June 30, 1996.

The building in Reus (Spain) was bought from a Crown Cork & Seal group
company during the first half of 1996 for $2,401. As of June 1996, this
building has been accounted for in the Combined Interim Financial
Information at historical cost. The net book value for this building
amounts to $1,006 at June 30, 1996.

G. COMMITMENTS AND CONTINGENCIES

The German operations are committed to pay termination indemnities to a
sale agent of approximately $400 in the event of termination of its
contract.

The French DP operations are subject to the two following claims. This
entity was sued in the United States by an individual consumer, who alleges
she suffered burns while using aerosol hairspray. The complaint includes
counts for breach of warranty of merchantibility, unsuitability for use and
lack of appropriate warnings. This entity is also subject to a claim by
Matrix Essentials, Inc.

F-79
<PAGE> 204

AEROSOLS DIVESTITURE PACKAGE

NOTES TO THE COMBINED INTERIM FINANCIAL INFORMATION
JUNE 30, 1996
(U.S. DOLLARS IN THOUSANDS)
(UNAUDITED)

management is of the opinion that their outcome will not have a material
effect on the DP's financial position or results of operations.

H. SUBSEQUENT EVENTS

On September 11, 1996, the operations comprising the DP were sold to U.S.
Can Corporation by means of the sale and purchase of the entire issued
share capital of the former CarnaudMetalbox French, German and Spanish DP
entities and of the Crown UK and Italian DP businesses and related
undertakings. The consideration for the transaction amounts to $58.6
million subject to adjustments based on working capital and net financial
indebtedness as defined in the sale agreement.

F-80
<PAGE> 205

U.S. CAN CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA ADJUSTMENTS
ADJUSTMENTS FOR OFFERING
FOR ACQUIRED AND EXCHANGE
U.S. CAN CPI USC BUSINESSES PRO FORMA OFFER PRO FORMA
CORPORATION GROUP EUROPE (NOTE 2) SUBTOTAL (NOTE 3) COMBINED
----------- ----- ------ ------------ --------- ------------ ---------
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
NET SALES................ $626,485 $29,351 $119,106 $ -- $774,942 $ -- $774,942
COST OF SALES............ 555,478 24,906 105,293 (149) 685,528 -- 685,528
-------- ------- -------- ------- -------- ------- --------
Gross income........... 71,007 4,445 13,813 149 89,414 -- 89,414
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES............... 27,369 1,862 7,620 -- 36,851 -- 36,851
OVERHEAD REDUCTION
PROVISION.............. 8,000 -- -- -- 8,000 -- 8,000
-------- ------- -------- ------- -------- ------- --------
Operating income....... 35,638 2,583 6,193 149 44,563 -- 44,563
INTEREST EXPENSE ON
BORROWINGS............. 24,513 660 1,445 4,186 30,804 3,014 33,818
AMORTIZATION OF DEFERRED
FINANCING COSTS........ 1,543 -- -- -- 1,543 218 1,761
OTHER EXPENSE............ 2,035 -- 29 64 2,128 -- 2,128
-------- ------- -------- ------- -------- ------- --------
Income before income
taxes and
extraordinary item... 7,547 1,923 4,719 (4,101) 10,088 (3,232) 6,856
PROVISION FOR INCOME
TAXES.................. 3,608 -- 1,915 (846) 4,677 (1,293) 3,384
-------- ------- -------- ------- -------- ------- --------
Income before
extraordinary item... $ 3,939 $ 1,923 $ 2,804 $(3,255) $ 5,411 $(1,939) $ 3,472
======== ======= ======== ======= ======== ======= ========
PER SHARE DATA:
Income before
extraordinary item... $ 0.31 $ 0.42 $ 0.27
======== ======== ========
Weighted average shares
and equivalent shares
outstanding.......... 12,839 12,839 12,839
======== ======== ========
</TABLE>

The accompanying Notes to Unaudited Pro Forma Condensed Consolidated Statements
of Operations are an integral part of this statement.

F-81
<PAGE> 206

U.S. CAN CORPORATION AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 29, 1996

<TABLE>
<CAPTION>
USC EUROPE PRO FORMA PRO FORMA
CPI GROUP FOR THE ADJUSTMENTS ADJUSTMENTS
FOR THE PERIOD ENDED FOR ACQUIRED FOR OFFERING AND
U.S. CAN PERIOD ENDED SEPTEMBER 10, BUSINESSES PRO FORMA EXCHANGE OFFER PRO FORMA
CORPORATION JULY 28, 1996 1996 (NOTE 2) SUBTOTAL (NOTE 3) COMBINED
----------- ------------- ------------- ------------ --------- ---------------- ---------
(000'S OMITTED, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
NET SALES............... $538,316 $18,166 $88,196 $ -- $644,678 $ -- $644,678
COST OF SALES........... 470,745 15,815 79,326 (1,572) 564,314 -- 564,314
-------- ------- ------- ------- -------- ------- --------
Gross income.......... 67,571 2,351 8,870 1,572 80,364 -- 80,364
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES.............. 21,103 1,701 5,119 (566) 27,357 -- 27,357
-------- ------- ------- ------- -------- ------- --------
Operating income...... 46,468 650 3,751 2,138 53,007 -- 53,007
INTEREST EXPENSE ON
BORROWINGS............ 19,513 306 948 3,001 23,768 2,595 26,363
AMORTIZATION OF DEFERRED
FINANCING COSTS....... 1,132 -- -- -- 1,132 162 1,294
OTHER (INCOME)
EXPENSE............... 1,483 -- 670 36 2,189 -- 2,189
-------- ------- ------- ------- -------- ------- --------
Income before income
taxes and
extraordinary
item................ 24,340 344 2,133 (899) 25,918 (2,757) 23,161
PROVISION FOR INCOME
TAXES................. 10,352 -- 908 (208) 11,052 (1,103) 9,949
-------- ------- ------- ------- -------- ------- --------
Income before
extraordinary
item................ $ 13,988 $ 344 $ 1,225 $ (691) $ 14,866 $(1,654) $ 13,212
======== ======= ======= ======= ======== ======= ========
PER SHARE DATA:
Income before
extraordinary
item................ $ 1.07 $ 1.14 $ 1.01
======== ======== ========
Weighted average
shares and
equivalent shares
outstanding......... 13,070 13,070 13,070
======== ======== ========
</TABLE>

The accompanying Notes to Unaudited Pro Forma Condensed Combined Statements of
Operations are an integral part of this statement.

F-82
<PAGE> 207

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S OMITTED)

NOTE 1 -- DESCRIPTION OF PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS

The unaudited pro forma condensed consolidated statements of operations of
the Company give effect to the Acquisitions, the Offering and the application of
the net proceeds thereof (including the redemption of the 13 1/2% Notes) and the
Exchange Offer (assuming all Notes are exchanged for Exchange Notes) as if such
transactions had occurred on January 1, 1995.

The Company acquired the CPI Group on August 2, 1996, at a purchase price
of $15.1 million, subject to adjustment for potential contingent payments (in an
amount not to exceed $1 million) based upon CPI Group's financial performance
for the years 1996 and 1997. This acquisition was financed with borrowings under
the Acquisition Facility. The USC Europe Acquisition was completed on September
11, 1996 at a purchase price of $52.8 million, subject to a post-closing
adjustment for changes in working capital from April 30, 1996 through the
closing date. This acquisition was also funded with borrowings under the
Acquisition Facility. The pro forma adjustments included herein do not consider
the effect of the USC Europe post-closing adjustment or contingent payments
related to the purchase prices as such effect is not expected to be material.

For purposes of the accompanying pro forma consolidated financial statements,
acquisition-related adjustments, all made pursuant to the purchase method of
accounting, and other adjustments, have been reflected on an estimated basis
using the most recent information available. Pending finalization of property
appraisals, plant consolidation requirements and other studies, no assurances
can be given that the final determination of the fair value of assets acquired
and liabilities assumed by the Company in the Acquisitions will not differ from
the adjustments presented herein. Such determinations will be made within one
year of the related acquisitions and are not expected to be materially different
from the estimates used herein.

The unaudited pro forma combined financial statements should be read in
conjunction with the separate historical financial statements and related notes
thereto of the Company, the CPI Group and USC Europe included elsewhere in this
Prospectus. The pro forma condensed combined financial statements do not purport
to be indicative of the results that actually would have been obtained had all
the transactions been completed as of the assumed dates and for the periods
presented and are not intended to be a projection of future results or trends.
Operating results for any interim period are not necessarily indicative of
results that may be expected for the full year.

F-83
<PAGE> 208

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S OMITTED)

NOTE 2 -- PRO FORMA ADJUSTMENTS FOR ACQUIRED BUSINESSES TO THE STATEMENTS OF
OPERATIONS

<TABLE>
<CAPTION>
FOR THE NINE MONTHS
FOR THE YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 29,
1995 1996
------------------ -------------------
<S> <C> <C>
Cost of sales --
Record additional depreciation expense on revalued
property, plant and equipment -- CPI Group......... 149 87
Eliminate non recurring charges to write off
unpurchased assets -- CPI Group.................... -- (1,448)
Reduce depreciation expense on revalued property,
plant and equipment -- USC Europe.................. $ (298) $ (211)
-------- -------
$ (149) $(1,572)
======== =======
Selling, general and administrative expenses --
Eliminate non recurring charges related to the
acquisition -- CPI Group........................... $ -- $ (566)
======== =======
Interest expense on borrowings --
Eliminate debt not assumed by the Company --
CPI Group.......................................... $ (649) $ (290)
Record interest expense on borrowings used to fund the
Acquisitions (7.13% annually)...................... 4,835 3,291
-------- -------
$4,186 $ 3,001
======== =======
Other expense --
Amortize goodwill related to the CPI Group
acquisition........................................ $ 64 $ 36
======== =======
Provision for income taxes --
Income tax effect of CPI Group's historical pretax
income and of the pro forma adjustments at the
Company's effective tax rate (40%)(a).............. $ (846) $ (208)
======== =======
</TABLE>

- ---------------
(a) The CPI Group had been treated as an S Corporation. As such, no income taxes
were reflected in its historical statements of income.

F-84
<PAGE> 209

U.S. CAN CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S OMITTED)

NOTE 3 -- PRO FORMA ADJUSTMENTS FOR OFFERING AND EXCHANGE OFFER TO THE
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE NINE MONTHS
FOR THE YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 29,
1995 1996
------------------ -------------------
<S> <C> <C>
Interest expense on borrowings --
Eliminate interest expense on debt retired with the
Offering proceeds -- $100 million of 13 1/2% Notes at
an interest rate of 13 1/2% per annum................. $(13,500) $(10,125)
Eliminate interest expense on debt retired with the
Offering proceeds -- $158.4 million under the Senior
Credit Agreement at an average interest rate of 7.13%
as of................................................. (11,330) (8,163)
Record interest expense on $275 million of Notes at
10 1/8%............................................... 27,844 20,883
-------- --------
$ 3,014 $ 2,595
======== ========
Amortization of deferred financing costs --
Amortize deferred financing costs related to the
Offering.............................................. $ 763 $ 572
Eliminate deferred financing costs related to retired
debt.................................................. (545) (410)
-------- --------
$ 218 $ 162
======== ========
Provision for income taxes --
Income tax effect of the pro forma adjustments at the
Company's effective tax rate (40%).................... $ (1,293) $ (1,103)
======== ========
</TABLE>

F-85
<PAGE> 210

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER MADE BY
THIS PROSPECTUS, AS AMENDED OR SUPPLEMENTED AT THE TIME OF DELIVERY OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, NO SUCH INFORMATION OR
REPRESENTATIONS SHOULD BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE AS
OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE EXCHANGE
NOTES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION OR WHO HAS NOT RECEIVED A COPY OF EACH CURRENT AMENDMENT OR
SUPPLEMENT HERETO.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................... 4
Information Incorporated by Reference..... 5
Inclusion of Forward-Looking
Information............................. 7
Summary................................... 8
Risk Factors.............................. 21
The Exchange Offer........................ 31
Certain Federal Income Tax Consequences of
the Exchange Offer...................... 38
Capitalization............................ 39
Selected Consolidated Historical Data..... 40
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 42
Business.................................. 54
Management................................ 70
Principal Stockholders.................... 77
Certain Transactions...................... 79
Description of Capital Stock.............. 79
Description of Certain Indebtedness....... 84
Description of Exchange Notes............. 87
Description of Notes...................... 118
Exchange Offer; Registration Rights....... 119
Certain Federal Income Tax
Considerations.......................... 120
Plan of Distribution...................... 123
Legal Matters............................. 123
Experts................................... 124
Index to Financial Statements............. F-1
</TABLE>

U.S. CAN
CORPORATION

OFFER TO EXCHANGE
$275,000,000
10 1/8% SENIOR SUBORDINATED
NOTES DUE 2006

FOR

SERIES B
10 1/8% SENIOR SUBORDINATED
NOTES DUE 2006

[US CAN LOGO]

PROSPECTUS

DATED AS OF FEBRUARY 11, 1997.