Spartech Corporation
Common Stock, par value $.75 per share
Underwriting Agreement
May 23, 2002
Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
First Analysis Securities Corporation,
McDonald Investments Inc.,
Commerce Capital Investments, Inc.,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Spartech Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
2,115,000 shares and, at the election of the Underwriters, up to 309,375
additional shares of Common Stock, par value $.75 per share, of the Company
("Stock"), and Vita International Limited, a limited liability company
incorporated under the laws of England ("Vita") (a wholly-owned subsidiary of
British Vita PLC), and RBA Partners, L.P., a limited partnership controlled by
Mr. Ralph B. Andy, a director of the Company ("RBA"), each a stockholder of the
Company and named in Schedule II hereto (each a "Selling Stockholder" and
collectively, the "Selling Stockholders"), propose, subject to the terms and
conditions stated herein, to sell to the Underwriters an aggregate of 6,135,000
shares and, at the election of the Underwriters, up to 928,125 additional shares
of Stock. The aggregate of 8,250,000 shares to be sold by the Company and the
Selling Stockholders is herein called the "Firm Shares" and the aggregate of
1,237,500 additional shares to be sold by the Company and the Selling
Stockholders is herein called the "Optional Shares". The Firm Shares and the
Optional Shares that the Underwriters elect to purchase pursuant to Section 2
hereof are herein collectively called the "Shares".
1. (a) The Company represents and warrants to, and agrees with, each of
the
Underwriters that:
(i) A registration statement on Form S-3 (File No. 333-84202) (the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for each
of the other Underwriters, have been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the size of
the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule
462(b) under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or, to the
Company's knowledge, threatened by the Commission (any preliminary prospectus
included in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the rules and regulations of the Commission under the
Act is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including (i) the information contained
in the form of final prospectus filed with the Commission pursuant to
Rule 424(b) under the Act in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A under the Act to be part of the Initial Registration
Statement at the time it was declared effective and (ii) the documents
incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration
Statement became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statement"; and such final
prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; and any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual report
of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement);
(ii) No order preventing or suspending the use of any Preliminary Prospectus has
been issued by the Commission, and each Preliminary Prospectus, at the time of
filing thereof, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder, and did not
contain an 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, in
the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman, Sachs &
Co. expressly for use therein or by a Selling Stockholder expressly for use in
the preparation of the answers therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
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;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman, Sachs &
Co. expressly for use therein;
(iv) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through Goldman, Sachs & Co. expressly for use therein
or by a Selling Stockholder expressly for use in the preparation of the answers
therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus;
(vi) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens, encumbrances
and defects except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries;
(vii) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation;
(viii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus; and all
of the issued shares of capital stock of each subsidiary of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and (except for directors' qualifying shares and except as set forth in the
Prospectus) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(ix) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable and will conform to the
description of the Stock contained in the Prospectus;
(x) The issue and sale of the Shares to be sold by the Company and the
compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions herein contemplated will not (i) conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such breach or violation that would not,
individually or in the aggregate, have a material adverse effect on the current
or future consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries, taken together as a whole,
provided, that any such breach or violation does not affect the validity of the
Shares; or (ii) result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except the registration under the Act of the
Shares and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, by the National
Association of Securities Dealers, Inc. (the "NASD") or under state securities
or Blue Sky laws in connection with the purchase and distribution of the Shares
by the Underwriters;
(xi) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of
its properties may be bound, except for any such default under any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or instrument
that would not, individually or in the aggregate, have a material adverse effect
on the current or future consolidated financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken together as
a whole;
(xii) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, and under the caption "Underwriting", insofar as they
purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair;
(xiii) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries; and, to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xiv) The Company is not and, after giving effect to the offering and sale
of the Shares, will not be an "investment company", as such term is defined in
the Investment Company Act of 1940, as amended (the "Investment Company Act");
(xv) Except as disclosed in the Prospectus, neither the Company nor any of its
subsidiaries is in violation of or liable under any statute, any rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws and the Company is not aware of any pending
investigation which might lead to such a claim which violation, contamination,
liability or claim would individually or in the aggregate have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken together as a whole; and
(xvi) Ernst & Young LLP and Arthur Andersen LLP, who have certified certain
financial statements of the Company and its subsidiaries, each are independent
public accountants as required by the Act and the rules and regulations of the
Commission thereunder.
(b) Each of the Selling Stockholders severally represents and
warrants to, and
agrees with, each of the Underwriters and the Company that:
(i) All consents, approvals, authorizations and orders necessary for the
execution and delivery by such Selling Stockholder of this Agreement and for the
sale and delivery of the Shares to be sold by such Selling Stockholder
hereunder, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement and to sell, assign, transfer
and deliver the Shares to be sold by such Selling Stockholder hereunder;
(ii) The sale of the Shares to be sold by such Selling Stockholder hereunder and
the compliance by such Selling Stockholder with all of the provisions of this
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any statute (other
than state securities or Blue Sky laws), indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to which
any of the property or assets of such Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the Memorandum of
Association or Articles of Association if such Selling Stockholder is a
corporation incorporated under the laws of England, the Certificate of Limited
Partnership or Limited Partnership Agreement if such Selling Stockholder is a
limited partnership or any statute (other than state securities or Blue Sky
laws) or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder;
(iii) Such Selling Stockholder has, and immediately prior to each Time of
Delivery (as defined in Section 4 hereof) such Selling Stockholder will have,
good and valid title to the Shares to be sold by such Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities or claims; and,
upon delivery of such Shares and payment therefor pursuant hereto, good and
valid title to such Shares, free and clear of all liens, encumbrances, equities
or claims, will pass to the several Underwriters;
(iv) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities, without your prior written consent;
(v) Such Selling Stockholder has not taken and will not take, directly or
indirectly, any action which is designed to or which has constituted or which
would reasonably be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Shares;
(vi) To the extent that any statements or omissions made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto are made in reliance upon and in conformity with written
information furnished to the Company by such Selling Stockholder expressly for
use therein, such Preliminary Prospectus and the Registration Statement did, and
the Prospectus and any further amendments or supplements to the Registration
Statement and the Prospectus, when they become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading;
(vii) In order to document the Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof); and
(viii) The obligations of the Selling Stockholders hereunder shall not be
terminated by operation of law, whether by the death or incapacity of any
individual Selling Stockholder or, in the case of a corporation or partnership,
by the dissolution of such corporation or partnership, or by the occurrence of
any other event; if any such corporation or partnership should be dissolved, or
if any other such event should occur, before the delivery of the Shares
hereunder, certificates representing the Shares shall be delivered by or on
behalf of the Selling Stockholders in accordance with the terms and conditions
of this Agreement.
2. Subject to the terms and conditions herein set forth, (a) the Company
and
each of the Selling Stockholders agree, severally and not jointly, to sell to
each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company and each of the Selling Stockholders, at a
purchase price per share of $20.955, the number of Firm Shares (to be adjusted
by you so as to eliminate fractional shares) determined by multiplying the
aggregate number of Shares to be sold by the Company and each of the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm Shares to be purchased by all of the Underwriters from the
Company and all of the Selling Stockholders hereunder and (b) in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company and Vita agree, severally and not
jointly, to sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company and Vita, at the
purchase price per share set forth in clause (a) of this Section 2, that portion
of the number of Optional Shares as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional shares)
determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such
Underwriter is entitled to purchase as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the maximum
number of Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Company and Vita, as and to the extent indicated in Schedule II hereto,
hereby grant, severally and not jointly, to the Underwriters the right to
purchase at their election up to 1,237,500 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the maximum
number of Optional Shares to be sold by the Company and Vita as set forth in
Schedule II hereto. Any such election to purchase Optional Shares may be
exercised only by written notice from you to the Company and Vita, given within
a period of 30 calendar days after the date of this Agreement and setting forth
the aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by you, but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you, the Company and Vita otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least two business days' prior
notice to the Company and the Selling Stockholders shall be delivered by or on
behalf of the Company and the Selling Stockholders to Goldman, Sachs & Co.,
through the facilities of the Depository Trust Company ("DTC"), for the account
of such Underwriter, against payment by or on behalf of such Underwriter of the
purchase price therefor by wire transfer of Federal (same-day) funds to the
account specified by the Company and each of the Selling Stockholders, as their
interests may appear, to Goldman, Sachs & Co. at least two business days in
advance. The Company will cause the certificates representing the Shares to be
made available for checking and packaging at least two business days prior to
the Time of Delivery (as defined below) with respect thereto at the office of
DTC or its designated custodian (the "Designated Office"). The time and date of
such delivery and payment shall be, with respect to the Firm Shares, 9:30 A.M.,
New York time, on May 30, 2002 or such other time and date as Goldman, Sachs &
Co., the Company and the Selling Stockholders may agree upon in writing, and,
with respect to the Optional Shares, 9:30 A.M., New York time, on the date
specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs
& Co. of the Underwriters' election to purchase such Optional Shares, or such
other time and date as Goldman, Sachs & Co., the Company and the Selling
Stockholders may agree upon in writing. Such time and date for delivery of the
Firm Shares is herein called the "First Time of Delivery", such time and date
for delivery of the Optional Shares, if not the First Time of Delivery, is
herein called the "Second Time of Delivery", and each such time and date for
delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for
the Shares and any additional documents requested by the Underwriters pursuant
to Section 7(n) hereof, will be delivered at the offices of Sullivan & Cromwell,
125 Broad Street, New York, New York 10004 (the "Closing Location"), and the
Shares will be delivered at the Designated Office, all at such Time of Delivery.
A meeting will be held at the Closing Location at 3:00 P.M., New York City time,
on the New York Business Day next preceding such Time of Delivery, at which
meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or sale of
the Shares; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business Day next
succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with written and electronic copies of the Prospectus in New York
City in such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Prospectus in connection with the offering or sale of
the Shares and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act or
the Exchange Act, to notify you and upon your request to file such document and
to prepare and furnish without charge to each Underwriter and to any dealer in
securities as many written and electronic copies as you may from time to time
reasonably request of an amended Prospectus or a supplement to the Prospectus
which will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Shares at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus
complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as practicable,
but in any event not later than eighteen months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the Act), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any securities of the Company that are substantially similar to the Shares,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to employee stock option
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement), without
your prior written consent;
(f) To furnish to its stockholders as soon as practicable after the end of each
fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its stockholders consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of three years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications
(financial or other) furnished to stockholders, and to deliver to you (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities exchange on
which any class of securities of the Company is listed; and (ii) such additional
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(h) To use the net proceeds received by it from the sale of the Shares pursuant
to this Agreement in the manner specified in the Prospectus under the caption
"Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance, the Shares
on the New York Stock Exchange (the "Exchange");
(j) If the Company elects to rely upon Rule 462(b), the Company shall file a
Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act; and
(k) Upon request of any Underwriter, to furnish, or cause to be furnished,
to such Underwriter an electronic version of the Company's corporate logo for
use
on the website, if any, operated by such Underwriter for the purpose of
facilitating the on-line offering of the Shares (the "License"); provided,
however, that the License shall be used solely for the purpose described above,
is granted without any fee and may not be assigned or transferred.
6. The Company and each of the Selling Stockholders covenant and agree with
one another and with the several Underwriters that (a) the Company and such
Selling Stockholder will pay or cause to be paid a pro rata share (based on the
number of Shares to be sold by the Company and such Selling Stockholder
hereunder) the following: (i) the fees, disbursements and expenses of the
Company's counsel and accountants in connection with the registration of the
Shares under the Act and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, any Preliminary Prospectus
and the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or reproducing any Agreement among Underwriters, this Agreement, the
Blue Sky Memorandum, and the cost of printing or producing closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; and (iv) the filing
fees incident to, and the fees and disbursements of counsel for the Underwriters
in connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; and (b) the
Company will pay or cause to be paid: (i) the cost of preparing stock
certificates; (ii) the cost and charges of any transfer agent or registrar and
(iii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section; and (iv) all fees and expenses in connection with listing the Shares on
the New York Stock Exchange; and (c) such Selling Stockholder will pay or cause
to be paid all costs and expenses incident to the performance of such Selling
Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Stockholder and (ii) all expenses of such Selling Stockholder's and
taxes incident to the sale and delivery of the Shares to be sold by such Selling
Stockholder to the Underwriters hereunder. It is understood, however, that the
Company shall bear, and the Selling Stockholders shall not be required to pay or
to reimburse the Company for, the cost of any other matters not directly
relating to the sale and purchase of the Shares pursuant to this Agreement, and
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, stock transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules
and regulations under the Act and in accordance with Section 5(a) hereof; if the
Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on
the date of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have furnished to
you such written opinion or opinions, dated such Time of Delivery, with respect
to the incorporation of the Company, the validity of the Shares, the due
authorization, execution and delivery of this Agreement and with respect to the
Registration Statement, the Prospectus and such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Armstrong Teasdale LLP, counsel for the Company, shall have furnished to
you its written opinion (a draft of such opinion is attached as Annex II(a)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
(including the Shares being delivered at such Time of Delivery) have been duly
and validly authorized and issued and are fully paid and non-assessable; and the
Shares conform to the description of the Stock contained in the Prospectus;
(iii) The Company has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel shall state
that they believe that both you and they are justified in relying upon such
opinions and certificates);
(iv) Each subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction of
incorporation; and all of the issued shares of capital stock of each such
subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares and except as
otherwise set forth in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims (such
counsel being entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such opinions and certificates);
(v) To the best of such counsel's knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future consolidated
financial position, stockholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement has been duly authorized, executed and delivered by the
Company;
(vii) The issue and sale of the Shares being delivered at such Time of
Delivery to be sold by the Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation of the transactions herein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
properties;
(viii) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except the registration
under the Act of the Shares, and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act, by
the NASD or under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters;
(ix) Neither the Company nor any of its subsidiaries is in violation of its
Certificate of Incorporation or By-laws or, to the best of such counsel's
knowledge, in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement, or lease or agreement or other
instrument to which it is a party or by which it or any of its properties may be
bound;
(x) The statements set forth in the Prospectus under the caption "Description
of Capital Stock", insofar as they purport to constitute a summary of the terms
of the Stock, and under the caption "Underwriting", insofar as they purport to
summarize the provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects;
(xi) The Company is not an "investment company", as such term is defined in the
Investment Company Act;
(xii) The documents incorporated by reference in the Prospectus or any
further amendment or supplement thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules therein,
as to which such counsel need express no opinion), 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 the rules and regulations of the Commission thereunder; and they
have no reason to believe that any of such documents, when such documents became
effective or were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue statement
of a material fact, or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such documents were so filed,
not misleading; and
(xiii) The Registration Statement, as of its effective date, and the
Prospectus, as of its date, and any further amendments and supplements thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to which
such counsel need express no opinion) complied as to form in all material
respects with the requirements of the Act and the rules and regulations
thereunder; although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, except for those referred to in the opinion in
subsection (x) of this Section 7(c), they have no reason to believe that, as of
its effective date, the Registration Statement or any further amendment thereto
made by the Company prior to such Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to which
such counsel need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial statements and
related schedules and other financial data therein, as to which such counsel
need express no opinion) 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 or
that, as of such Time of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made by the Company
prior to such Time of Delivery (other than the financial statements and related
schedules and other financial data therein, as to which such counsel need
express no opinion) contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be filed or of
any contracts or other documents of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in the Registration
Statement or the Prospectus which are not filed or incorporated by reference or
described as required;
(d) Milbank, Tweed, Hadley & McCloy LLP, special United States
counsel for Vita, shall have furnished to you its written opinion with respect
to Vita (a draft of such opinion is attached as Annex II(b) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the effect that:
(i) This Agreement has been duly delivered by Vita;
(ii) The sale of the Shares to be sold by Vita hereunder and the compliance by
Vita with all of the provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with any laws of the United
States or New York nor will such action result in any violation of any order,
rule or regulation known to such counsel of any court or United States or New
York governmental agency or body having jurisdiction over Vita or the property
of Vita;
(iii) No consent, approval, authorization or order of any United States or
New York governmental agency or body is required for the consummation by Vita of
the transactions contemplated by this Agreement in connection with the Shares to
be sold by Vita hereunder, except for such consents, approvals, authorizations
or orders which have been duly obtained and are in full force and effect, such
as have been obtained under the Act and such as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
such Shares by the Underwriters; and
(iv) Good and valid title to such Shares, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the several
Underwriters who have purchased such Shares in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse claim within
the meaning of the Uniform Commercial Code;
(e) Ashurst Morris Crisp, United Kingdom counsel for Vita, and in-
house counsel of Vita shall have furnished to you their written opinions with
respect to Vita
(a draft of such opinions are attached as Annex II(c) hereto), dated such
Time
of Delivery, each in form and substance satisfactory to you, to the effect that:
(i) Vita is a limited liability company, duly incorporated and
subsisting under the laws of England and, so far as is discoverable from public
records of the Companies Registry, is not in liquidation;
(ii) Vita has all requisite corporate power to enter into, execute, deliver and
perform its obligations under this Agreement and has taken all necessary
corporate action to authorize the entry into, execution, delivery and
performance of its obligations under this Agreement and has duly executed this
Agreement;
(iii) The sale of the Shares to be sold by Vita hereunder and the compliance
by Vita with all of the provisions of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or result in a breach or
violation of any terms or provisions of, or constitute a default under, any
English statute applicable to English companies generally, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument known
to such counsel to which Vita is a party or by which Vita is bound or to which
any of the property or assets of Vita is subject, nor will such action result in
any violation of the provisions of the Memorandum of Association or Articles of
Association of Vita; and
(iv) No consent, approval, authorization or order of any English court or
governmental agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the Shares to be sold by Vita
hereunder, except for such consents, approvals, authorizations or orders which
have been duly obtained and are in full force and effect in connection with the
purchase and distribution of such Shares by the Underwriters;
(f) Cohen & Grigsby, P.C., counsel for RBA, shall have furnished to
you its written opinion with respect to RBA for whom it is acting as counsel (a
draft of such opinion is attached as Annex II(d) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) This Agreement has been duly executed and delivered by or on
behalf of RBA; and the sale of the Shares to be sold by RBA hereunder and the
compliance by RBA
with all of the provisions of this Agreement, and the consummation of the
transactions herein contemplated (a) to such counsel's knowledge will not
conflict with or result in a breach or violation of any terms or provisions of,
or constitute a default under, any material indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which RBA is a party or by
which RBA is bound or to which any of the property or assets of RBA is subject,
(b) will not result in any violation of the provisions of the Certificate of
Limited Partnership or the Agreement of Limited Partnership of RBA, or (c) to
such counsel's knowledge will not conflict with or result in a breach or
violation of applicable provisions of Federal or Pennsylvania statutory law or
regulation or any court or administrative order, writ, judgment or decree naming
RBA or specifically directed to RBA or its assets or property;
(ii) No consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation of the transactions contemplated
by this Agreement in connection with the Shares to be sold by RBA hereunder,
except for such consents, approvals, authorizations or orders which have been
duly obtained and are in full force and effect, such as have been obtained under
the Act and such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters; and
(iii) Each of the Underwriters who has purchased any of the Shares to be
sold by RBA (assuming that they have purchased such Shares in good faith and
without notice of any adverse claim within the meaning of the applicable Uniform
Commercial Code), upon payment for such Shares, has received good and valid
title to such Shares, free and clear of any security interests, claims, liens,
and encumbrances.
In rendering the opinion in paragraph (iii), such counsel may rely upon a
certificate of RBA in respect of matters of fact as to ownership of, and liens,
encumbrances, equities or claims on, the Shares sold by RBA, provided that such
counsel shall state that they believe that both you and they are justified in
relying upon such certificate;
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 9:30 A.M., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at each Time of Delivery, (i) Ernst & Young LLP
shall have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto), and (ii) Randy C. Martin, in his capacity as
Executive Vice President, Chief Financial Officer and Director, shall have
furnished to you a certificate or certificates, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex III hereto;
(h) (i) Neither the Company nor any of its subsidiaries shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus, and
(ii) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or long-
term debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its subsidiaries, otherwise than as set forth or contemplated in
the Prospectus, the effect of which, in any such case described in clause (i) or
(ii), is in the judgment of Goldman, Sachs & Co. so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Shares being delivered at such Time of Delivery on the terms and
in the manner contemplated in the Prospectus;
(i) On or after the date hereof (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities;
(j) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities or a material disruption in
commercial banking or securities settlement or clearance services in the United
States; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war or
(v) the occurrence of any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in clause (iv) or (v) in the judgment of
Goldman, Sachs & Co. makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
(k) The Shares at such Time of Delivery shall have been duly listed, subject to
notice of issuance, on the New York Stock Exchange;
(l) The Company has obtained and delivered to the Underwriters executed copies
of an agreement from each of the executive officers and directors of the
Company, substantially to the effect set forth in Subsection 1(b)(iv) hereof in
form and substance satisfactory to you;
(m) The Company shall have complied with the provisions of Section 5(c) hereof
with respect to the furnishing of prospectuses on the New York Business Day next
succeeding the date of this Agreement; and
(n) The Company and the Selling Stockholders shall have furnished or caused to
be furnished to you at such Time of Delivery certificates of officers of the
Company and of the Selling Stockholders, respectively, satisfactory to you as to
the accuracy of the representations and warranties of the Company and the
Selling Stockholders, respectively, herein at and as of such Time of Delivery,
as to the performance by the Company and the Selling Stockholders of all of
their respective obligations hereunder to be performed at or prior to such Time
of Delivery, and as to such other matters as you may reasonably request, and the
Company shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (h) of this Section.
8. (a) The Company and each of the Selling Stockholders, jointly and
severally, will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company and the Selling Stockholders shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through Goldman, Sachs & Co. expressly for use therein; provided, further, that
the liability of a Selling Stockholder pursuant to this subsection 8(a) shall
not exceed the product of the number of Shares sold by such Selling Stockholder
including any Optional Shares and the initial public offering price of the
Shares as set forth in the Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through Goldman, Sachs & Co. expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the indemnified party, effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Selling Stockholders on the one hand and the Underwriters
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company and the Selling Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Selling Stockholders on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company and the Selling Stockholders bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Selling Stockholders on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, each of the Selling
Stockholders and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares underwritten
by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange for the
purchase of such Shares, then the Company and the Selling Stockholders shall
be entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to you to purchase such Shares on
such terms. In the
event that, within the respective prescribed periods, you notify the Company and
the Selling Stockholders that you have so arranged for the purchase of such
Shares, or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your opinion
may thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares
of a defaulting Underwriter or Underwriters by you and the Company and the
Selling Stockholders as provided in subsection (a) above, the aggregate number
of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all of the Shares to be purchased at such Time of Delivery, or if the
Company and the Selling Stockholders shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to purchase Shares
of a defaulting Underwriter or Underwriters, then this Agreement (or, with
respect to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Company and the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any non-
defaulting Underwriter or the Company or the Selling Stockholders, except for
the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the
several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company, or any of the Selling
Stockholders, or any officer or director or controlling person of the Company,
or any controlling person of any Selling Stockholder, and shall survive
delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, neither
the Company nor the Selling Stockholders shall then be under any liability to
any Underwriter except as provided in Sections 6 and 8 hereof; but, if for any
other reason any Shares are not delivered by or on behalf of the Company and the
Selling Stockholders as provided herein, the Company and each of the Selling
Stockholders pro rata (based on the number of Shares to be sold by the Company
and such Selling Stockholder hereunder) will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing by you, including fees
and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company and the Selling Stockholders shall then be under no further
liability to any Underwriter in respect of the Shares not so delivered except as
provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to in care of Goldman, Sachs & Co., 32 Old Slip, 21st
Floor, New York, New York 10005, Attention: Registration Department; if to any
Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for such Selling Stockholder at its address set forth in
Schedule II hereto; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire or telex constituting such
Questionnaire, which address will be supplied to the Company or the Selling
Stockholders by you on request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder
or any Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the term
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties hereto in
any number of counterparts, each of which shall be deemed to be an original, but
all such counterparts shall together constitute one and the same instrument.
17. The Company and the Selling Stockholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. Federal income tax benefits expected to
be claimed with respect to such transaction, without the Underwriters imposing
any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign and
return to us one for each of the Company, the Selling Stockholders and the
Underwriters plus one for each counsel, and upon the acceptance hereof by
Goldman, Sachs & Co., on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company and the
Selling Stockholders for examination, upon request, but without warranty on your
part as to the authority of the signers thereof.
Very truly yours,
Spartech Corporation
By: /s/ Bradley B. Buechler
Name: Bradley B. Buechler Title:Chairman, President, CEO
Vita International Limited
By: /s/ D.A. Campbell
Name: D.A. Campbell Title:Chief Executive
RBA Partners, L..P.
By: RBA Investments, Inc., its general partner
By: /s/ Ralph B. Andy
Name: Ralph B. Andy, President
Accepted as of the date hereof
in New York, New York
On behalf of each of the Underwriters
/s/ Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
SCHEDULE I
Number of Optional
shares to be
Total Number of Purchased if
Firm Shares Maximum Option
Underwriter to be Purchased Exercised
Goldman, Sachs & Co. 4,455,000 668,251
Merrill Lynch, Pierce, Fenner & Smith 2,310,000 346,500
Incorporated
First Analysis Securities Corporation 618,750 92,812
McDonald Investments Inc. 618,750 92,812
Commerce Capital Investments, Inc. 247,500 37,125
Total 8,250,000 1,237,500
SCHEDULE II
Number of Optional
Shares to be
Total Number of Sold if
Firm Shares Maximum Option
Underwriter to be Sold Exercised
The Company 2,115,000 309,375
The Selling Stockholders:
Vita International Limited 6,000,000 928,125
RBA Partners, L.P. 135,000
8,250,000 1,237,500
Total
ANNEX I
FORM OF DESCRIPTION OF COMFORT LETTER
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) We have not audited any financial statements of the Company as of any
date or for any period. The consolidated balance sheets of the Company as of
November 3, 2001 and October 28, 2000, and the consolidated statements of
operations, shareholders' equity, and cash flows for each of the three years in
the period ended November 3, 2001, all included in the Registration Statement,
have been audited by other auditors, whose report with respect thereto expressed
an unqualified opinion on those statements and is included in such Registration
Statement.
(ii) We have performed the procedures specified by the American Institute
of Certified Public Accountants for a review of interim financial information as
described in Statement on Auditing Standard No. 71, Interim Financial
Information, on the unaudited condensed consolidated balance sheet of the
Company as of February 2, 2002 and the related unaudited condensed consolidated
statements of operations and cash flows for the three-months then ended all
included in the Company's Quarterly Report on Form 10-Q for the quarter ended
February 2, 2002 and incorporated by reference in the Registration Statement.
(iii) We are independent auditors with respect to the Company within
the meaning of the Act and the applicable rules and regulations thereunder
adopted by the Commission.
(iv) We have not audited any financial statements of the Company as of any
date or any period. Therefore, we are unable to express and do not express an
opinion on the unaudited condensed consolidated balance sheet of the Company at
February 2, 2002 or the unaudited condensed consolidated statements of
operations and cash flows of the Company for the three-month period ended
February 2, 2002, incorporated by reference in the Registration Statement.
(v) For purposes of this letter, we have read the fiscal 2002 minutes of
meetings of the shareholders, Board of Directors, Audit Committee, Nominating
Committee and Compensation Committee of the Company and its subsidiaries as set
forth in the minute books through May 21, 2002, officials of the Company having
advised us that the minutes of all such meetings through that date were set
forth therein, and have carried out other procedures to May 21, 2002 as follows
(our work did not extend to the period from May 21, 2002 to May 23, 2002,
inclusive):
a. With respect to the three-month period ended February 2, 2002, we
have:
(1) performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial information
as described in SAS 71, Interim Financial Information, on the unaudited
condensed consolidated balance sheet at February 2, 2002 and the unaudited
condensed consolidated statements of income, and cash flows for the three-
month period ended February 2, 2002, incorporated by reference in the
Registration Statement; and
(2) inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to whether the unaudited
condensed consolidated financial statements referred to under a.(1) comply
as to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations.
b. With respect to the period from February 2, 2002 to May 4, 2002,
we have:
(1) read the unaudited consolidated financial statements for
February, March and April of both 2001 and 2002 furnished to us by the Company,
officials of the Company having advised us that no such financial
statements as of any date or for any period subsequent to May 4, 2002 were
available; and
(2) inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to whether the unaudited
consolidated financial statements referred to under b.(1) are stated on a
basis substantially consistent with that of the audited consolidated
financial statements included in the Registration Statement.
(vi) The foregoing procedures do not constitute an audit conducted in
accordance with auditing standards generally accepted in the United States.
Also, they would not necessarily reveal matters of significance with respect to
the comments in the following paragraph. Accordingly, we make no representations
as to the sufficiency of the foregoing procedures for your purposes.
(vii) Nothing came to our attention as a result of the foregoing
procedures that caused us to believe that:
a. any material modifications should be made to the unaudited
condensed consolidated financial statements described in (v)a.(1) above,
incorporated by reference in the Registration Statement, for them to be in
conformity with accounting principles generally accepted in the United States;
b. the unaudited condensed consolidated financial statements
described in (v)a.(1) above do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the related published rules and regulations; or
c. (i) at May 4, 2002, there was any change in the capital
stock, increase in long-term debt or decrease in consolidated net current
assets or shareholders' equity of the consolidated companies as compared with
the amounts shown in the February 2, 2002 unaudited condensed consolidated
balance sheet included and incorporated by reference in the Registration
Statement; or (ii) for the period from February 3, 2002 to May 4, 2002, there
was any decrease, as compared with the corresponding period in the preceding
year, in consolidated net sales or in the total or per-share amounts of
consolidated net income, except ______.
(viii) As mentioned under (v)b. above, Company officials have advised us
that no consolidated financial statements as of any date or for any period
subsequent to May 4, 2002 are available; accordingly, the procedures carried out
by us with respect to changes in financial statement items after May 4, 2002
have, of necessity, been even more limited than those with respect to the
periods referred to in (v) above. We have inquired of certain officials of the
Company who have responsibility for financial and accounting matters as to
whether: (i) at May 21, 2002 there was any change in the capital stock, increase
in long-term debt or any decreases in consolidated net current assets or
shareholders' equity of the consolidated companies as compared with the amounts
shown on the February 2, 2002 unaudited condensed consolidated balance sheet
incorporated by reference in the Registration Statement, or (ii) for the period
from February 3, 2002 to May 21, 2002, there were any decreases, as compared
with the corresponding period in the preceding year, in consolidated net sales
or in the total or per-share amounts of consolidated net income. On the basis of
these inquiries and our reading of the minutes as described in (v) above,
nothing came to our attention that caused us to believe that there was any such
change, increase, or decrease, except as described in the following sentence.
Those officials referred to above stated that they had no basis to assess
whether there was any such change, increase or decrease, because no financial
information is available as of May 21, 2002 or for the period from May 4, 2002
to May 21, 2002 or for any date or any period subsequent to May 4, 2002.
(ix) At your request, we have also read the items identified by you on the
attached copy of excerpts from the Registration Statement, and have performed
the following procedures, which were applied as indicated with respect to the
symbols explained below:
A Compared the dollar amounts or percentages either to the
amounts in the audited consolidated financial statements described in the
introductory paragraph of this letter or, for prior years, included in
the Company's annual reports to shareholders for the years 1999, 1998 and 1997,
to the extent such amounts are included in or can be derived from such
statements and found them to be in agreement.
B Compared the dollar amounts or percentages to amounts in the unaudited
condensed consolidated financial statements described in paragraph 2 above or
in the Company's unaudited condensed consolidated financial statements included
in the Company's Quarterly Report on Form 10-Q for the quarter ended
February 3, 2001, to the extent such amounts are included in or can be
derived from such statements and found them to be in agreement.
C Compared the dollar and other amounts not derived directly
from audited or unaudited consolidated financial statements to amounts in the
Company's general ledger to the extent such amounts could be so compared
directly and found them to be in agreement.
D Compared the dollar and other amounts not derived directly
from the Company's general ledger to amounts in schedules prepared by the
Company's management from the Company's underlying accounting records and
found them to be in agreement.
(x) We make no representation as to whether the transaction will take
place or the use of related proceeds, if any.
(xi) We have not audited any financial statements of the Company as of any
date or for any period. For neither the periods referred to herein nor any other
periods did we perform audit tests for the purpose of expressing an opinion on
individual balances of accounts or summaries of selected transactions such as
those enumerated above and, accordingly, we do not express an opinion thereon.
ANNEX III
SPARTECH CORPORATION
Certificate of Chief Financial Officer
Pursuant to Section 7 (g) of the Underwriting Agreement, the Chief
Financial Officer of the Company shall furnish certificate(s) to the
Underwriters to the following effect:
I, Randy C. Martin, in my capacity as Executive Vice President, Chief
Financial Officer and Director of Spartech Corporation, a Delaware Corporation
(the "Company"), hereby certify that I have read the items marked on the
attached copies of the Prospectus, dated May 23, 2002, and have compared the
amount with, or recomputed from, amounts or percentages included on a schedule
or report for the applicable periods prepared by the Company and noted
agreement.
IN WITNESS WHEREOF, I have hereunto signed by name.
Dated: May 30, 2002
SPARTECH CORPORATION
/s/ Randy C. Martin
Name: Randy C. Martin
Title: Executive Vice President, Chief Financial Officer and Director