Equity Underwriting Agreement

EXECUTION COPY


4,100,000 Shares


SILGAN HOLDINGS INC.


Common Stock


($.01 Par Value)


EQUITY UNDERWRITING AGREEMENT
-----------------------------


November 6, 2001


Deutsche Banc Alex. Brown Inc. Morgan Stanley & Co. Incorporated As Representatives of the
Several Underwriters


c/o Deutsche Banc Alex. Brown Inc.
One South Street
Baltimore, Maryland 21202


and


c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036


Ladies and Gentlemen:


The Morgan Stanley Leveraged Equity Fund II, L.P., a Delaware limited partnership (the "Selling Shareholder") proposes to sell to the several underwriters named in Schedule I hereto (the "Underwriters") for whom you are acting as representatives (the "Representatives") an aggregate of 4,100,000 shares of Common Stock, $0.01 par value (the "Firm Shares"), of Silgan Holdings Inc., a Delaware corporation (the "Company"). The respective amounts of the Firm Shares to be so purchased by the several Underwriters are set forth opposite their names in Schedule I hereto. The Selling Shareholder also proposes to sell at the Underwriters' option an aggregate of up to 492,000 additional shares of the Company's Common Stock (the "Option Shares") as set forth below.


As the Representatives, you have advised the Company and the Selling Shareholder (a) that you are authorized to enter into this Agreement on behalf of the several Underwriters, and (b) that the several Underwriters are willing, acting severally and not jointly, to purchase the numbers of Firm Shares set forth opposite their respective names in Schedule I, plus their pro rata portion of the Option Shares if you elect to exercise the over-allotment option in whole or in part for the accounts of the several Underwriters. The Firm Shares and the Option Shares (to the extent the aforementioned option is exercised) are herein collectively called the "Shares."


In consideration of the mutual agreements contained herein and of the interests of the parties in the transactions contemplated hereby, the parties hereto agree as follows:


1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING
------------------------------------------------------------- SHAREHOLDER. - -----------


(a) The Company represents and warrants to each of the Underwriters as follows:


(i) A registration statement on Form S-3 (File No. 333-65396) with respect to the Shares has been prepared by the Company and has been filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), and the rules and regulations (the "Rules and Regulations") of the Commission thereunder and is effective. The Company and the transactions contemplated by this Agreement meet the requirements and comply with the conditions for the use of Form S-3. Copies of such registration statement, including any amendments thereto, the preliminary prospectuses (meeting the requirements of the Rules and Regulations in all material respects) contained therein and the exhibits, financial statements and schedules, as finally amended and revised, have heretofore been delivered by the Company to you. Such registration statement, together with any registration statement increasing the size of the offering filed by the Company pursuant to Rule 462 (b) of the Act, is herein referred to as the "Registration Statement," which shall be deemed to include all information omitted therefrom in reliance upon Rule 430A and contained in the Prospectus referred to below, has become effective under the Act and no post-effective amendment to the Registration Statement has been filed as of the date of this Agreement. "Prospectus" means the form of prospectus first filed with the Commission pursuant to Rule 424(b). Each preliminary prospectus included in the Registration Statement prior to the time it becomes effective is herein referred to as a "Preliminary Prospectus." Any reference herein to the Registration Statement, any Preliminary Prospectus or to the Prospectus or to any amendment or supplement to any of the foregoing documents shall be deemed to refer to and include any documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act as of the date of such Registration Statement, Preliminary Prospectus or Prospectus, as the case may be, and, in the case of any reference herein to any Prospectus, also shall be deemed to include any documents incorporated by reference therein, and any supplements or amendments thereto, filed with the Commission after the date of filing of the Prospectus under Rules 424(b) or 430A, and prior to the termination of the offering of the Shares by the Underwriters.


(ii) The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware, with corporate power and authority to own or lease its properties and conduct its business as described in the Registration Statement.


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Each of the subsidiaries of the Company as listed in Exhibit A hereto (collectively, the "Subsidiaries") has been duly organized and is validly existing as a corporation or limited liability company in good standing under the laws of the jurisdiction of its organization, with corporate or limited liability company power and authority to own or lease its properties and conduct its business as described in the Registration Statement. The Subsidiaries are the only subsidiaries, direct or indirect, of the Company that are "significant subsidiaries" as defined in Rule 1-02(w) of Regulation S-X. The Company and each of the Subsidiaries are duly qualified to transact business and are in good standing in all jurisdictions in which the conduct of their business or ownership or leasing of property requires such qualification except as could not be reasonably be expected to have a material adverse effect on the Company and its Subsidiaries taken as a whole. The outstanding shares of capital stock of each of the Subsidiaries have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company or another Subsidiary free and clear of all liens, encumbrances and equities and claims, other than the pledges of such capital stock existing on the date hereof made in connection with the (a) the Credit Agreement, dated as of July 29, 1997, as amended, among the Company, Silgan Containers Corporation, Silgan Plastics Corporation, certain other subsidiaries of any of them, various banks, Bankers Trust Company, as Administrative Agent and as a Co-Arranger, Bank of America National Trust & Savings Association, as Syndication Agent and as a Co-Arranger, Goldman Sachs Credit Partners L.P., as Co-Documentation Agent and as a Co-Arranger, and Morgan Stanley Senior Funding, Inc., as Co-Documentation Agent and as Co-Arranger (the "Credit Agreement"); (b) the Credit Agreement dated as of December 19, 1997 by and among Silgan Plastics Canada Inc., as Borrower, the financial institutions listed on the signature pages thereto, as lenders, BT Bank of Canada as Administrative Agent and BT Bank of Canada, Bank of America Canada and Canadian Imperial Bank of Commerce as Co-Arrangers (the "Canadian Credit Agreement"); and (c) the Pledge and Rights Agreement dated as June 1, 1998, by and among Campbell Soup Company, Silgan Containers Corporation, Silgan Corporation and Silgan Can Company (the "Campbell Pledge Agreement"). Other than as described in the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations into shares of capital stock or ownership interests in the Subsidiaries are outstanding.


(iii) The outstanding shares of Common Stock of the Company, including all shares to be sold by the Selling Shareholder, have been duly authorized and validly issued and are fully paid and non-assessable; and no preemptive rights of stockholders exist with respect to any of the Shares or the issue and sale thereof. Neither the filing of the Registration Statement nor the offering or sale of the Shares as contemplated by this Agreement gives rise to any rights, other than those which have been waived or satisfied, for or relating to the registration of any shares of Common Stock.


(iv) The Company has an authorized capitalization as set forth under the caption "Capitalization" in the Prospectus. All of the Shares conform in all material respects to the description thereof contained in the Registration Statement.


(v) The Commission has not issued an order preventing or suspending the use of any Prospectus relating to the proposed offering of the Shares. The Registration Statement contains all documents required to be filed thereto as exhibits by, and the Registration Statement conforms in all material respects to, and the Prospectus and any amendments or supplements thereto will


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conform in all material respects to, the requirements of the Act and the Rules and Regulations. The documents incorporated, or to be incorporated, by reference in the Prospectus, at the time filed with the Commission complied or will comply, in all material respects to the requirements of the Securities Exchange Act of 1934 ("Exchange Act") or the Act, as applicable, and the rules and regulations of the Commission thereunder. The Registration Statement and any amendment thereto as of the applicable effective date do not contain, and will not contain, any untrue statement of a material fact and do not omit, and will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Each Preliminary Prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the Act and the Rules and Regulations as of the applicable effective date. The Prospectus and any amendments and supplements thereto do not contain, and will not contain, any untrue statement of material fact; and do not omit, and will not omit, to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, all of the representations and warranties set forth in this Section 1(a)(v) do not apply to statements or omissions in any Preliminary Prospectus, Prospectus, Registration Statement, or any amendments, or supplements thereto, based upon information relating to any Selling Shareholder or Underwriters furnished to the Company in writing by the Underwriters through you or by the Selling Shareholder expressly for use therein.


(vi) The consolidated financial statements of the Company and the Subsidiaries, together with related notes, as set forth or incorporated by reference in the Registration Statement (other than the condensed consolidated financial statements of the Company and the Subsidiaries incorporated by reference in the Registration Statement from the Current Report on Form 8-K of the Company filed with the Commission on October 24, 2001 (the "October 24, 2001 8-K")) present fairly in all material respects the consolidated financial position and the results of operations and cash flows of the Company and the Subsidiaries, at the indicated dates and for the indicated periods, in conformity with accounting principles generally accepted in the United States. Such financial statements have been prepared in accordance with accounting principles generally accepted in the United States, consistently applied throughout the periods involved, except as disclosed therein, and all adjustments necessary for a fair presentation in all material respects of results for such periods have been made. The condensed consolidated financial statements of the Company and the Subsidiaries incorporated by reference in the Registration Statement from the October 24, 2001 8-K present fairly in all material respects the information presented therein and were compiled on a basis consistent with the book and records of the Company. The summary financial data included or incorporated by reference in the Registration Statement has been compiled on a basis consistent with the financial statements presented therein, except as otherwise indicated, and the books and records of the Company. The statistical data included or incorporated by reference in the Registration Statement has been compiled on a basis consistent with the books and records of the Company.


(vii) Ernst & Young LLP, who have certified certain of the financial statements filed with the Commission as part of, or incorporated by reference in, the Registration Statement, are independent public accountants as required by the Act and the Rules and Regulations.


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(viii) Other than as described in the Prospectus, there is no action, suit, claim or proceeding pending or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries or any of their properties before any court or administrative agency or otherwise which if determined adversely to the Company or any of its Subsidiaries might result in any material adverse change in the earnings, business, properties, assets, operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries taken as a whole or prevent the consummation of the transactions contemplated hereby, except as set forth in the Registration Statement.


(ix) Other than as described in the Prospectus, the Company and the Subsidiaries have good and marketable title to all of the properties and assets reflected in the consolidated financial statements hereinabove described or described in the Registration Statement, subject to no lien, mortgage, pledge, charge or encumbrance of any kind except (1) those reflected in such financial statements or described in the Registration Statement, (2) those given in connection with (a) the Credit Agreement; (b) the Canadian Credit Agreement; or (c) the Campbell Pledge Agreement or (3) those which do not interfere in any material respect with the use made and proposed to be made of such property by the Company and its Subsidiaries. The Company and the Subsidiaries occupy their leased properties under valid and binding leases with such exceptions as are not material.


(x) The Company and the Subsidiaries have filed all material Federal, State, local and foreign tax returns which have been required to be filed and have paid all taxes indicated by such returns.


(xi) Since the respective dates as of which information is given in the Registration Statement, as it may be amended or supplemented, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the earnings, business, properties, assets, operations, condition (financial or otherwise), or prospects of the Company and its Subsidiaries taken as a whole, whether or not occurring in the ordinary course of business. The Company and the Subsidiaries have no material contingent obligations which are not disclosed in the Company's financial statements which are included in the Registration Statement.


(xii) Neither the Company nor any of the Subsidiaries is or with the giving of notice or lapse of time or both, will be, in violation of or in default under (i) its Certificate of Incorporation or By-Laws (ii) any agreement, lease, contract, indenture or other instrument or obligation to which it is a party or by which it, or any of its properties, is bound and, solely with respect to this clause (ii), which violation or default could reasonably be expected to have a material adverse effect on the earnings, business, properties, assets, operations, condition (financial or otherwise) or prospects of the Company and the Subsidiaries taken as a whole. The execution and delivery of this Agreement and the consummation of the transactions herein contemplated and the fulfillment of the terms hereof will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary or any of their respective properties is bound, or of the Certificate of Incorporation or By-Laws of the Company or any law, order, rule or regulation, judgment, order, writ or decree applicable to the Company or any


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Subsidiary of any court or of any government, regulatory body or administrative agency or other governmental body having jurisdiction over the Company or any Subsidiary.


(xiii) The execution and delivery of, and the performance by the Company of its obligations under, this Agreement has been duly and validly authorized by all necessary corporate action on the part of the Company, and this Agreement has been duly executed and delivered by the Company.


(xiv) The execution and delivery by the Company of this Agreement, and the consummation by the Company of the transactions herein contemplated will not require any consent, approval, authorization, or other order of any court, regulatory body, administrative agency or other governmental body (except as may be required under the Act, the securities laws or Blue Sky laws of the various states in connection with the offer and sale of the Shares or by the National Association of Securities Dealers, Inc. (the "NASD") or as have been obtained).


(xv) The Company and each of the Subsidiaries hold all material licenses, certificates and permits from governmental authorities which are necessary to the conduct of their businesses, except where the failure to hold any such license, certificate or permit would not have a material adverse effect on the business of the Company and its Subsidiaries taken as a whole; the Company and the Subsidiaries each own or possess the right to use or has duly licensed from third parties all patents, patent rights, trademarks, trade names, service marks, service names, copyrights, license rights, know-how (including trade secrets and other unpatented and unpatentable proprietary or confidential information, systems or procedures) and other intellectual property rights ("Intellectual Property") necessary to carry on their business in all material respects.


(xvi) Neither the Company, nor to the Company's knowledge, any of its affiliates, has taken or may take, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of Common Stock to facilitate the sale or resale of the Shares (assuming that MSLEF and its affiliates are not considered "affiliates" of the Company for purposes of this Section 1(a)(xvi)). The Company acknowledges that the Underwriters may engage in passive market making transactions in the Shares on the Nasdaq National Market in accordance with Regulation M under the Exchange Act.


(xvii) Neither the Company nor any Subsidiary is or, after giving effect to the offering and sale of the Shares contemplated hereunder, will be an "investment company" within the meaning of such term under the Investment Company Act of 1940, (as amended, the "1940 Act") and the rules and regulations of the Commission thereunder assuming MSLEF is not an "investment company" and is not "controlled" by an "investment company".


(xviii) The Company and each of its Subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles; and (iii) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.


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(xix) The Company and each of its Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as is customary for companies engaged in similar businesses.


(xx) Except as disclosed in the Registration Statement, the Company and its subsidiaries (1) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (2) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (3) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals could not, singly or in the aggregate, be reasonably expected to have a material adverse effect on the Company and its Subsidiaries, taken as a whole.


(xxi) There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which could, singly or in the aggregate, reasonably be expected to have a material adverse effect on the Company and its Subsidiaries taken as a whole.


(b) The Selling Shareholder represents and warrants as follows:


(i) In addition to any other representations and warranties made by operation of law, upon payment for the Securities to be sold by the Selling Shareholder at the Closing Date and the Option Closing Date, as the case may be (as such dates are hereinafter defined), to each of the several Underwriters as provided in this Agreement and the crediting of such Securities on the records of the Depository Trust Company to the securities account or accounts of such Underwriter maintained with The Depository Trust Company or such other securities intermediary, (a) The Depository Trust Company shall be a protected purchaser of the Shares (within the meaning of Section 8-303 of the New York Uniform Commercial Code ("NYUCC")) and (b) assuming that each Underwriter is a purchaser in good faith and acquires its interest in the Securities it has purchased from the Selling Shareholder without notice of any adverse claim (within the meaning of Section 8-105 of the NYUCC), such Underwriter will have acquired a valid security entitlement to such Securities, free and clear of all liens, encumbrances, equities or adverse claims.


(ii) The Selling Shareholder has full right, power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation by the Selling Shareholder of the transactions herein contemplated and the fulfillment by the Selling Shareholder of the terms hereof will not require any consent, approval, authorization, or other order of any court, regulatory body, administrative agency or other governmental body (except as may be required under the Act or the securities laws or Blue Sky laws of the various states in connection with the offer and sale of the Shares or as have been obtained) and will not result in a breach of any of the terms and provisions of, or constitute a default


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under, organizational documents of the Selling Shareholder or any indenture, mortgage, deed of trust or other agreement or instrument to which the Selling Shareholder is a party, or of any judgment, order, rule or regulation applicable to the Selling Shareholder of any court or of any regulatory body or administrative agency or other governmental body having jurisdiction over the Selling Shareholder.


(iii) The Selling Shareholder has not taken and will not take, directly or indirectly (other than any action taken by Morgan Stanley & Co. Incorporated in connection with the performance of its obligations as an Underwriter hereunder), any action designed to, or which has constituted, or which might reasonably be expected to cause or result in the stabilization or manipulation of the price of the Common Stock of the Company and, other than as permitted by the Act, the Selling Shareholder will not distribute any prospectus or other offering material in connection with the offering of the Shares.


(iv) (1) The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (2) the Registration Statement and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (3) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in Sections 1(b)(iv)(1) and 1(b)(iv)(3) only apply to statements or omissions in the Registration Statement or the Prospectus and the representations and warranties set forth in Section 1(b)(iv)(2) only apply to compliance with the Securities Act and the applicable rules and regulations thereunder, in each case based upon information relating to the Selling Shareholder furnished to the Company in writing by the Selling Shareholder expressly for use therein.


2. PURCHASE, SALE AND DELIVERY OF THE SHARES.
-----------------------------------------


(a) On the basis of the representations, warranties and covenants herein contained, and subject to the conditions herein set forth, the Selling Shareholder agrees to sell to the Underwriters and each Underwriter agrees, severally and not jointly, to purchase, at a price of $18.00 per share, the number of Firm Shares set forth opposite the name of each Underwriter in Schedule I hereof, subject to adjustments in accordance with Section 9 hereof. The obligations of the Company and of the Selling Shareholder shall be several and not joint.


(b) The certificates evidencing the Firm Shares and Option Shares shall be delivered to the Transfer Agent no later than two days prior to the Closing Date or Option Closing Date, as the case may be, for the respective accounts of the several Underwriters, with any transfer taxes payable in connection with the transfer of the shares to the Underwriters and d ...