Purchase Agreement

Exhibit 10.b

 

EXECUTION COPY

 

CROWN HOLDINGS, INC.

 

ISSUANCE BY

 

CROWN AMERICAS, LLC

and

CROWN AMERICAS CAPITAL CORP.

 

OF

 

$500,000,000 7  ⁵ / 8 % Senior Notes due 2013

$600,000,000 7  ³ / 4 % Senior Notes due 2015

 

Purchase Agreement

 

New York, New York

November 8, 2005

 

Citigroup Global Markets Inc.

Lehman Brothers Inc.

Deutsche Bank Securities Inc.

Banc of America Securities LLC

As Representatives of the several Initial

Purchasers named in Schedule I hereto

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

 

Ladies and Gentlemen:

 

Crown Holdings, Inc., a Pennsylvania corporation (“ Holdings ”), and the indirect parent company of Crown Americas, LLC, a Pennsylvania limited liability company (the “ Company ”) and Crown Americas Capital Corp. a Delaware Corporation (“ Crown Americas Capital ”), proposes that the Company and Crown Americas Capital issue and sell to the several purchasers named in Schedule I hereto (the “ Initial Purchasers ”), for whom Citigroup Global Markets Inc. (“ Citigroup ”), Lehman Brothers Inc., Deutsche Bank Securities Inc. and Banc of America Securities LLC (the “ Representatives ”) are acting as representatives, $500,000,000 aggregate principal amount of their 7  ⁵ / 8 % Senior Notes due 2013 (the “ 2013 Notes ”) and $600,000,000 aggregate principal amount of its 7  ³ / 4 % Senior Notes due 2015 (the “ 2015 Notes ” and, together with the 2013 Notes, the “ Notes ”). The 2013 Notes will be issued pursuant to an indenture to be dated as of November 18, 2005 (the “ 2013 Notes Indenture ”) among the Company, Crown Americas Capital, Holdings, as guarantor, the other guarantors named in Schedule II hereto (together with Holdings, the “ Guarantors ” and, together with the Company and Crown Americas Capital, the “ Issuers ”) and Citibank, N.A., as trustee (the “ 2013 Notes Trustee ”). The 2015 Notes will be issued pursuant to an indenture to be dated as of

November 18, 2005 (the “ 2015 Notes Indenture ” and, together with the 2013 Notes Indenture, the “ Indentures ”) among the Issuers and Citibank, N.A., as trustee (the “ 2015 Notes Trustee ” and, together with the 2013 Notes Trustee, the “ Trustees ”). The 2013 Notes will have the benefit of the guarantees (the “ 2013 Note Guarantees ” and, together with the 2013 Notes, the “ 2013 Securities ”) provided for in the 2013 Notes Indenture. The 2015 Notes will have the benefit of the guarantees (the “ 2015 Note Guarantees ” and, together with the 2015 Notes, the “ 2015 Securities ” and, together with the 2013 Securities, the “ Securities ”) provided for in the 2015 Notes Indenture. The use of the neuter in this Agreement shall include the feminine and masculine wherever appropriate. Certain terms used herein are defined in Section 18 hereof.

 

Holders of the 2013 Securities will also have the benefit of a registration rights agreement to be dated as of November 18, 2005 (the “ 2013 Notes Registration Rights Agreement ”) among the Issuers and the Initial Purchasers. Holders of the 2015 Securities will also have the benefit of a registration rights agreement to be dated as of November 18, 2005 (the “ 2015 Notes Registration Rights Agreement ” and, together with the 2013 Notes Registration Rights Agreement, the “ Registration Rights Agreements ”) among the Issuers and the Initial Purchasers. Pursuant to the Registration Rights Agreements, the Issuers will agree to register the Securities under the Act subject to the terms and conditions therein specified.

 

The Securities are being issued in connection with the refinancing plan of Holdings, as described in the Final Memorandum (the “ Refinancing Plan ”). In connection with the Refinancing Plan, (x) Holdings, the Company, Crown European Holdings SA (“ CEH ”) and the guarantors party thereto will enter into a new credit agreement to be dated as of the Closing Date (the “ New Credit Facility ”) which will provide for (a) a $500 million term loan B maturing in 2012 of which $250 million will be borrowed by the Company and the foreign currency equivalent of $250 million will be borrowed by CEH and (b) a $800 million revolving credit facility maturing in 2011 of which $410 million will be available to the Company and the foreign currency equivalent of $390 million will be available to CEH and certain of its subsidiaries, in each case, as more fully described in the Final Memorandum under the heading “Description of Certain Indebtedness—New Credit Facilities” and (y) Holdings will consummate tender offers (the “ Tender Offers ”) for its outstanding (a) 9  ¹ / 2 % Second Priority Senior Secured Notes due 2011 (the “ Dollar Second Priority Notes ), (b) 10  ¹ / 4 % Second Priority Senior Secured Notes due 2011 (the “ Euro Second Priority Notes ” and, together, with the Dollar Second Priority Notes, the “ Second Priority Notes ”) and (c) 10  ⁷ / 8 % Third Priority Senior Secured Notes due 2013 (the “ Third Priority Notes ” and, together with the Second Priority Notes, the “ CEH Notes ”), in each case issued by CEH, and in connection therewith Holdings, CEH and their respective subsidiaries that have issued guarantees of the CEH Notes will enter into supplemental indentures (the “ Supplemental Indentures ”) with the trustees for the CEH Notes pursuant to which substantially all of the restrictive covenants applicable to the CEH Notes will cease to apply to the CEH Notes and the collateral securing the CEH Notes will be released. This Agreement, the Securities, the Indentures, the Registration Rights Agreements, the New Credit Facility, the Supplemental Indentures and other documents relating to the Tender Offers and the agreements and instruments to which Holdings or any of its subsidiaries is a signatory relating to the issuance of the Securities contemplated hereby, collectively are referred to herein as the “ Transaction Documents ”.

 

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The sale of the Securities to the Initial Purchasers will be made without registration of the Securities under the Act in reliance upon exemptions from the registration requirements of the Act.

 

In connection with the sale of the Securities, the Issuers have prepared a preliminary offering memorandum dated November 7, 2005 (as amended or supplemented at the Execution Time, including any and all exhibits thereto and any information incorporated by reference therein, the “ Preliminary Memorandum ”) and a final offering memorandum dated November 8, 2005 (as amended or supplemented at the Execution Time, including any and all exhibits thereto and any information incorporated by reference therein, the “ Final Memorandum ”). Each of the Preliminary Memorandum and the Final Memorandum sets forth certain information concerning the Issuers and the Securities. The Issuers hereby confirm that they have authorized the use of the Preliminary Memorandum and the Final Memorandum, and any amendment or supplement thereto, in connection with the offer and sale of the Securities by the Initial Purchasers. Unless stated to the contrary, any references herein to the terms “amend”, “amendment” or “supplement” with respect to the Final Memorandum shall be deemed to refer to and include any information filed under the Exchange Act which is incorporated by reference therein.

 

1. Representations and Warranties . The Issuers, jointly and severally, represent and warrant to each Initial Purchaser as set forth below in this Section 1.

 

(a) The Preliminary Memorandum, at the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the Execution Time and on the Closing Date (as defined below), the Final Memorandum did not, and will not (and any amendment or supplement thereto, at the date thereof and at the Closing Date, will not), contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided , however , that the Issuers make no representation or warranty as to the information contained in or omitted from the Preliminary Memorandum or the Final Memorandum, or any amendment or supplement thereto, in reliance upon and in conformity with information furnished in writing to the Issuers by or on behalf of the Initial Purchasers specifically for inclusion therein.

 

(b) None of the Issuers or their respective Affiliates, or any person acting on behalf of any of them (other than the Initial Purchasers as to which the Issuers make no representation or warranty), has, directly or indirectly, made offers or sales of any security, or solicited offers to buy any security, under circumstances that would require the registration of the Securities under the Act. Assuming the accuracy of the representations and warranties of the Initial Purchasers in Section 4 of this Agreement, it is not necessary in connection with the offer, sale and delivery of the Securities to the Initial Purchasers or the initial resale of the Securities by the Initial Purchasers, in each case, in the manner contemplated by this Agreement, to register any of the Securities under the Act or to qualify either Indenture under the Trust Indenture Act.

 

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(c) None of the Issuers or their respective Affiliates, or any person acting on behalf of any of them (other than the Initial Purchasers as to which the Issuers make no representation or warranty), has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with any offer or sale of the Securities in the United States.

 

(d) The Securities satisfy the eligibility requirements of Rule 144A(d)(3) under the Act.

 

(e) None of the Issuers or their respective Affiliates, or any person acting on behalf of any of them (other than the Initial Purchasers as to which the Issuers make no representation or warranty), has engaged in any “directed selling efforts” with respect to the Securities, and each of the Issuers and their respective Affiliates has complied with the “offering restrictions” requirement of Regulation S. Terms used in this paragraph have the meanings given to them by Regulation S.

 

(f) No securities of any of the Issuers are of the same class (within the meaning of Rule 144A under the Act) as any of the Securities and listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

 

(g) None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the sale of the Securities), will violate or result in a violation of Section 7 of the Exchange Act, or any regulation promulgated thereunder, including, without limitation, Regulations T, U or X of the Board of Governors of the Federal Reserve System.

 

(h) The Issuers have been advised by the NASD’s PORTAL Market that the Notes have been designated PORTAL-eligible securities in accordance with the rules and regulations of the NASD.

 

(i) None of the Issuers or their respective subsidiaries is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Final Memorandum none of them will be, required to register as an “investment company” or a company “controlled by” an “investment company” within the meaning of the Investment Company Act.

 

(j) Holdings is subject to the reporting requirements of, and has timely filed all material required to be filed by it pursuant to, Section 13 or Section 15(d) of the Exchange Act.

 

(k) None of the Issuers or their respective Affiliates has paid or agreed to pay to any person any compensation for soliciting another to purchase any securities of any of them (except as contemplated by this Agreement).

 

(l) None of the Issuers or their respective Affiliates has taken, directly or indirectly, any action designed to cause or which has constituted or which might reasonably be expected to cause or result, under the Exchange Act or otherwise, in the

 

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stabilization or manipulation of the price of any security of any of them to facilitate the sale or resale of the Securities.

 

(m) The information to be provided by the Issuers pursuant to Section 5(h) hereof will not, at the date thereof, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(n) The statements set forth or referenced under the headings “Crown’s Business—Legal Proceedings”, “Description of Certain Indebtedness”, “Description of the Notes”, “Registered Exchange Offer; Registration Rights” and “Certain Tax Considerations” in the Final Memorandum fairly summarize the matters therein described.

 

(o) The statistical and market-related data included in the Final Memorandum are based on or derived from sources which the Issuers believe to be reliable and accurate in all material respects.

 

(p) There are no contracts, agreements or other documents or pending legal or governmental proceedings to which any of the Issuers or their respective subsidiaries is a party or any property of any of the Issuers or their respective subsidiaries is subject that would be required to be described in a prospectus under the Act that have not been described in the Final Memorandum (exclusive of any amendment or supplement thereto). The contracts, agreements and other documents so described in the Final Memorandum are in full force and effect on the date of this Agreement. None of the Issuers or their respective subsidiaries or, to the knowledge of any Issuer, any other party is in breach of or default under any such contracts, agreements or other documents, other than a breach or default that would not reasonably be expected to have a material adverse effect on (i) the issue and sale of the Securities or the consummation of the other transactions contemplated by the Transaction Documents, the Tender Offers or the Refinancing Plan or (ii) the condition (financial or otherwise), prospects, earnings, business or properties of Holdings and its subsidiaries, taken as a whole, whether or not arising from transactions in the ordinary course of business (“ Material Adverse Effect ”).

 

(q) Holdings and each of its subsidiaries has been duly organized and is validly existing as a corporation or other legal entity in good standing under the laws of the jurisdiction in which it is organized, with full corporate or other statutory power and authority to own or lease, as the case may be, and operate its properties and conduct its business as described in the Final Memorandum. Holdings and each of its subsidiaries is duly qualified to do business as a foreign corporation or other legal entity and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to do so qualify or be in good standing would not reasonably be expected to result in a Material Adverse Effect.

 

(r) All the outstanding shares of capital stock of each subsidiary of Holdings have been duly and validly authorized and issued and are fully paid and except as set forth in the Final Memorandum, all outstanding shares of capital stock of such

 

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subsidiaries are owned by Holdings, either directly or through wholly owned subsidiaries, free and clear of any perfected security interest or any other security interests, claims, liens or encumbrances, except for any such perfected security interests, or other security interests, claims, liens or encumbrances described in the Final Memorandum or that would not reasonably be expected to result in a Material Adverse Effect or an Event of Default (as defined in each Indenture).

 

(s) Holdings’ capitalization is as set forth in the “Actual” column of the table set forth under the heading “Capitalization” in the Final Memorandum. On the Closing Date, Holdings’ capitalization will be consistent in all material respects with the “As Adjusted” column of the table set forth under the heading “Capitalization” in the Final Memorandum.

 

(t) This Agreement shall have been duly authorized, executed and delivered by each such Issuer and, assuming the due authorization, execution and delivery thereof by the Initial Purchasers, will constitute the legal, valid and binding obligation of each such Issuer, enforceable against such Issuer in accordance with its terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity) and except that any rights to indemnity and contribution further may be limited or prohibited by Federal or state securities laws and public policy considerations.

 

(u) The 2013 Notes Indenture has been duly authorized by each of the Issuers and, assuming the due authorization, execution and delivery thereof by the 2013 Notes Trustee, when executed and delivered by each of the Issuers, will constitute the legal, valid and binding instrument of each of the Issuers, enforceable against each of the Issuers in accordance with its terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity). The 2013 Notes Indenture meets the requirements for qualification under the Trust Indenture Act.

 

(v) The 2013 Notes have been duly authorized by the Company and Crown Americas Capital and, when executed and authenticated in accordance with the provisions of the 2013 Notes Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, will have been duly executed and delivered by the Company and Crown Americas Capital and will constitute the legal, valid and binding joint and several obligations of the Company and Crown Americas Capital, entitled to the benefits of the 2013 Notes Indenture and enforceable against the Company and Crown Americas Capital in accordance with their terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting

 

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creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity).

 

(w) The 2013 Note Guarantees have been duly authorized by the Guarantors and, when the 2013 Notes have been executed in accordance with the provisions of the 2015 Notes Indenture, will have been duly executed and delivered by the Guarantors and will constitute legal, valid and binding obligations of the Guarantors, entitled to the benefits of the 2013 Notes Indenture and enforceable against the Guarantors in accordance with their terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity).

 

(x) The 2015 Notes Indenture has been duly authorized by each of the Issuers and, assuming the due authorization, execution and delivery thereof by the 2015 Notes Trustee, when executed and delivered by each of the Issuers, will constitute the legal, valid and binding instrument of each of the Issuers, enforceable against each of the Issuers in accordance with its terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity). The 2015 Notes Indenture meets the requirements for qualification under the Trust Indenture Act.

 

(y) The 2015 Notes have been duly authorized by the Company and Crown Americas Capital, and, when executed and authenticated in accordance with the provisions of the 2015 Notes Indenture and delivered to and paid for by the Initial Purchasers in accordance with the terms hereof, will have been duly executed and delivered by the Company and Crown Americas Capital and will constitute the legal, valid and binding joint and several obligations of the Company and Crown Americas Capital, entitled to the benefits of the 2015 Notes Indenture and enforceable against the Company and Crown Americas Capital in accordance with their terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity).

 

(z) The 2015 Note Guarantees have been duly authorized by the Guarantors and, when the 2015 Notes have been executed in accordance with the provisions of the 2015 Notes Indenture, will have been duly executed and delivered by the Guarantors and will constitute legal, valid and binding obligations of the Guarantors, entitled to the benefits of the 2015 Notes Indenture and enforceable against the Guarantors in

 

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accordance with their terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity).

 

(aa) The 2013 Notes Registration Rights Agreement has been duly authorized by each of the Issuers and, assuming the due authorization, execution and delivery thereof by the Representatives when executed and delivered by each of the Issuers, will constitute the legal, valid and binding obligation of each of the Issuers, enforceable against each of the Issuers in accordance with its terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity and except that any rights to indemnity and contribution further may be limited or prohibited by Federal or state securities laws and public policy considerations).

 

(bb) The 2015 Notes Registration Rights Agreement has been duly authorized by each of the Issuers and, assuming the due authorization, execution and delivery thereof by the Representatives when executed and delivered by each of the Issuers, will constitute the legal, valid and binding obligation of each of the Issuers, enforceable against each of the Issuers in accordance with its terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity and except that any rights to indemnity and contribution further may be limited or prohibited by Federal or state securities laws and public policy considerations).

 

(cc) No holder of securities of any of the Issuers will be entitled to have such securities registered under the registration statements required to be filed by the Issuers pursuant to the Registration Rights Agreements other than as expressly permitted thereby.

 

(dd) Each other Transaction Document has been duly authorized by each Issuer a party thereto and, assuming the due authorization, execution and delivery thereof by the other parties thereto, when executed and delivered by each such Issuer will constitute the legal, valid and binding obligation of each such Issuer, enforceable against each such Issuer in accordance with its terms (except that the enforcement thereof may be subject to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium or other laws of general applicability affecting creditors’ rights generally from time to time in effect and to general principles of equity and the discretion of the court before which any proceeding therefor may be brought regardless of whether such enforcement is considered in a proceeding at law or in equity and except that any rights to indemnity and

 

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contribution further may be limited or prohibited by Federal or state securities laws and public policy considerations).

 

(ee) The documents (or portions thereof) incorporated by reference in the Final Memorandum, when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(ff) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated by any of the Transaction Documents or otherwise in connection with the Tender Offers or the Refinancing Plan, except (i) in the case of compliance with the terms of the Registration Rights Agreements such as will be obtained under the Act and the Trust Indenture Act, (ii) such as may be required under the blue sky laws of any state in connection with the purchase and distribution of the Securities by the Initial Purchasers in the manner contemplated herein and in the Final Memorandum and the Registration Rights Agreements, and except where the failure to obtain the same would not reasonably be expected to have a Material Adverse Effect.

 

(gg) None of the execution and delivery by any of the Issuers party thereto of any of the Transaction Documents, the issue and sale of the Securities, the consummation of the other transactions contemplated by the Transaction Documents, the Tender Offers or of the Refinancing Plan will conflict with, result in a breach or violation or imposition of any lien, charge or encumbrance upon any property or assets of any of the Issuers or their respective subsidiaries pursuant to (i) the organizational documents of Holdings or any of its subsidiaries; (ii) the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which Holdings or any of its subsidiaries is a party or bound or to which any property or assets of Holdings or any of its subsidiaries is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to Holdings or any of its subsidiaries or any property or assets of Holdings or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over Holdings or any of its subsidiaries or property or assets of any of its subsidiaries, except, in the case of clauses (ii) and (iii) above, as would not reasonably be expected to have a Material Adverse Effect or to materially adversely affect the rights of the holders of the Securities or of the Initial Purchasers under the Transaction Documents.

 

(hh) The consolidated historical financial statements and schedules of Holdings and its consolidated subsidiaries included in the Final Memorandum present fairly in all material respects the financial condition, results of operations and cash flows of Holdings and its consolidated subsidiaries as of the dates and for the periods indicated, comply as to form in all material respects with the applicable requirements of the Act and have been prepared in conformity with generally accepted accounting principles applied on a

 

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consistent basis throughout the periods involved (except as otherwise noted therein). The selected historical financial data set forth under the caption “Selected Historical Financial Data” in the Final Memorandum comply as to form in all material respects with the applicable requirements of the Act (except that historical data for the fiscal years ended December 31, 2000 and 2001 is omitted) and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The summary historical financial data set forth under the caption “Summary—Summary Historical and Pro Forma Consolidated Condensed Financial Data” in the Final Memorandum fairly present, on the basis stated in the Final Memorandum, the information included therein. The pro forma financial data included in the Final Memorandum include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical amounts in the pro forma financial data included in the Final Memorandum. The pro forma financial statements included in the Final Memorandum comply as to form in all material respects with the applicable requirements of Regulation S-X under the Act (except for the unaudited pro forma consolidated condensed statement of operations for the nine months ended September 30, 2004, which does not comply as to form in all material respects with the applicable requirements of Regulation S-X under the Act because it is for a period other than a period required by Regulation S-X) and the pro forma adjustments have been properly applied to the historical amounts in the compilation of such data.

 

(ii) Other than as set forth in the Final Memorandum, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving Holdings or any of its subsidiaries or any property or assets of Holdings or any of its subsidiaries is pending or, to the knowledge of Holdings, threatened that would reasonably be expected to have a Material Adverse Effect.

 

(jj) Holdings and each of its subsidiaries owns or leases all such properties as are necessary to the conduct of its operations as presently conducted. Holdings and each of its subsidiaries has good and marketable title to, or valid leasehold interests in, or easements or other limited property interests in, or is licensed to use, all its material properties and assets, except for minor defects that do not interfere with its ability to conduct its business as currently conducted or utilize such properties and assets for their intended purposes, and except where failure to have such title, leasehold interests, easements or other limited property interests or licenses to use, in the aggregate, would not reasonably be expected to have a Material Adverse Effect. All material properties and assets of Holdings and its subsidiaries are free and clear of all liens, charges, encumbrances or restrictions, except for Permitted Liens and as described in the Final Memorandum. Each of the Issuers and their respective subsidiaries has good and marketable title to all personal property it purports to own, except as described in the Final Memorandum.

 

(kk) Neither Holdings nor any of its subsidiaries is in violation or default of (i) any provision of its organizational documents; (ii) the terms of any indenture, contract,

 

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lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property or assets is subject; or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to it or any of its subsidiaries of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over it or any such subsidiaries or any of their respective property or assets, except, in the case of clauses (ii) and (iii) above, for any such violation or default which would not reasonably be expected to have a Material Adverse Effect.

 

(ll) PricewaterhouseCoopers LLP, who have certified certain financial statements of Holdings and its consolidated subsidiaries and delivered their report with respect to the audited consolidated financial statements and schedules included in the Final Memorandum, are independent public accountants with respect to Holdings within the meaning of the Act and the Exchange Act and the related published rules and regulations thereunder.

 

(mm) Holdings and each of its subsidiaries has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file would not reasonably be expected to have a Material Adverse Effect). Holdings and each of its subsidiaries has paid all taxes required to be paid by it as shown in such return and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is being contested in good faith or as would not reasonably be expected to have a Material Adverse Effect.

 

(nn) No labor problem or dispute with the employees of Holdings or any of its subsidiaries exists or is threatened or imminent, and there is no existing or imminent labor disturbance or collective bargaining activities by the employees of Holdings or any of its subsidiaries or, to the knowledge of any of the Issuers, by the employees of any of the principal suppliers, contractors or customers of Holdings or any of its subsidiaries, in each case, that would have a Material Adverse Effect.

 

(oo) Holdings and each of its subsidiaries, except as disclosed in the Final Memorandum, or to the extent it would not reasonably be expected to have a Material Adverse Effect, is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged. All policies of insurance and fidelity or surety bonds insuring Holdings or any of its subsidiaries or the businesses, assets, employees, officers and directors of Holdings or any of its subsidiaries are in full force and effect other than any policies of insurance and fidelity or surety bonds that, if not in full force and effect, would not reasonably be expected to have a Material Adverse Effect. Holdings and each of its subsidiaries is in compliance with the terms of such policies and instruments in all material respects. There are no claims by Holdings or any of its subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause, except for such claims which, if successfully denied, would not reasonably be expected to have a Material Adverse Effect. Neither Holdings nor any of its subsidiaries has been refused any insurance coverage

 

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sought or applied for. Neither Holdings nor any of its subsidiaries has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.

 

(pp) No subsidiary of Holdings is prohibited, directly or indirectly, from paying any dividends on such subsidiary’s capital stock, from making any other distribution on such subsidiary’s capital stock, from repaying to Holdings or any other subsidiary of Holdings any loans or advances to such subsidiary from Holdings or such other subsidiary or from transferring any of such subsidiary’s property or assets to Holdings or any other subsidiary of Holdings, except as described in or contemplated by the Final Memorandum (exclusive of any amendment or supplement thereto).

 

(qq) Holdings and each of its subsidiaries owns or possesses adequate licenses or other rights to use all patents, trademarks, service marks, trade names, copyrights and know-how that are necessary to conduct their respective businesses as described in the Final Memorandum, except where the failure to own or possess such licenses or other rights to use such patents, trademarks, service marks, trade names, copyrights and know-how would not reasonably be expected to have a Material Adverse Effect. Neither Holdings nor any of its subsidiaries has received any notice of infringement of or conflict with (or knows of any such infringement of or conflict with) asserted rights of others with respect to any patents, trademarks, service marks, trade names, copyrights or know-how that, if such assertion of infringement or conflict were sustained, could have a Material Adverse Effect.

 

(rr) Holdings and each of its subsidiaries possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, except where the failure to possess such licenses, certificates, permits or other authorizations would not reasonably be expected to have a Material Adverse Effect, and neither Holdings nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would reasonably be expected to have a Material Adverse Effect.

 

(ss) Holdings and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access t