AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 16, 1999
REGISTRATION NO. 333-71681
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
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THE ESTEE LAUDER COMPANIES INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 2844 11-2408943
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION NUMBER) IDENTIFICATION NO.)
INCORPORATION OR
ORGANIZATION)
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(212) 572-4200
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
SAUL H. MAGRAM, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
THE ESTEE LAUDER COMPANIES INC.
767 FIFTH AVENUE
NEW YORK, NEW YORK 10153
(Name and Address, Including Zip Code,
and Telephone Number, Including Area Code, of Agent For Service)
Please send copies of communications to:
JEFFREY J. WEINBERG, ESQ. JEAN E. HANSON, ESQ.
WEIL, GOTSHAL & MANGES LLP FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
767 FIFTH AVENUE ONE NEW YORK PLAZA
NEW YORK, NEW YORK 10153 NEW YORK, NEW YORK 10004
(212) 310-8000 (212) 859-8000
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. |_|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_| _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. |_| _______________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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EXPLANATORY NOTE
This Registration Statement relates to up to _______ shares (or _______shares
if the underwriter's over-allotment option is exercised in full) of Class A
Common Stock, par value $.01 per share, of The Estee Lauder Companies Inc. that
may be delivered by the Estee Lauder Automatic Common Exchange Security Trust II
(the "Trust"), a non-diversified closed-end management investment company, to
holders of Automatic Common Exchange Securities of the Trust upon exchange of
the Automatic Common Exchange Securities. The Automatic Common Exchange
Securities are being offered pursuant to a separate prospectus of the Trust
included in a registration statement on Form N-2 (Registration Nos. 333-57125
and 811-8827).
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses expected to be incurred in
connection with the issuance and distribution of the securities described in
this Registration Statement, other than the underwriting discount. All amounts,
except the SEC registration fees and the National Association of Securities
Dealers, Inc. ("NASD") filing fee, are estimated.
SEC registration fee.................. $ 47,955
NASD filing fee....................... 17,250
Printing, engraving and postage fees.. 200,000
Legal fees and expenses............... 100,000
Accounting fees and expenses.......... 50,000
Miscellaneous......................... 50,000
-----------
Total............................. $ 465,205
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Generally, Section 145 of the General Corporation Law of the State of
Delaware (the "GCL") permits a corporation to indemnify certain persons made a
party to an action, by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or enterprise. To the extent that person has been successful in any
such matter, that person shall be indemnified against expenses actually and
reasonably incurred by him. In the case of an action by or in the right of the
corporation, no indemnification may be made in respect of any matter as to which
that person was adjudged liable unless and only to the extent that the Delaware
Court of Chancery or the court in which the action was brought determines that
despite the adjudication of liability that person is fairly and reasonably
entitled to indemnity for proper expenses.
Our By-laws provide for indemnification of our directors and officers to
the fullest extent permitted by law.
Section 102(b)(7) of the GCL enables a Delaware corporation to include a
provision in its certificate of incorporation limiting a director's liability to
the corporation or its stockholders for monetary damages for breaches of
fiduciary duty as a director. We have adopted a provision in our Certificate of
Incorporation that provides for such limitation to the full extent permitted
under Delaware law.
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Our directors and officers are covered by insurance policies indemnifying
against certain liabilities, including certain liabilities arising under the
Securities Act which might be incurred by them in such capacities and against
which we may not indemnify them.
ITEM 16. EXHIBITS AND FINANCIAL SCHEDULES
(a) Exhibits:
Exhibits identified in parentheses below are on file with the SEC and are
incorporated herein by reference to such previous filings. All other exhibits
are provided as part of this electronic transmission.
Exhibit
Number Description of Exhibit
- ------ ----------------------
1.1 Form of Underwriting Agreement.*
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1 to
Amendment No. 3 to the Company's Registration Statement on Form
S-1 (No. 33-97180) on November 13, 1995 (the "S-1")).
3.2 Form of Amended and Restated By-Laws (filed as Exhibit 3.2 to
the S-1).
5.1 Opinion of Weil, Gotshal & Manges LLP with respect to the
legality of the Class A Common Stock.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Weil, Gotshal & Manges LLP (included in the opinion
filed as Exhibit 5.1).*
24.1 Power of Attorney**
- --------------------------
* Filed herewith
** Previously filed
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement, and to include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such information in
the registration statement.
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(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's Annual
Report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (and where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) That for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the
time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in New York, New York, on this 16th day of February 1999.
THE ESTEE LAUDER COMPANIES INC.
By: /s/ Robert J. Bigler
----------------------------------------
Name: Robert J. Bigler
Title: Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chief Executive Officer February 16, 1999
- ------------------------------ and Director
Leonard A. Lauder (Principal Executive
Officer)
* Director February 16, 1999
- ------------------------------
Ronald S. Lauder
* Director February 16, 1999
- ------------------------------
William P. Lauder
* Director February 16, 1999
- ------------------------------
Fred H. Langhammer
* Director February 16, 1999
- ------------------------------
Marshall Rose
* Director February 16, 1999
- ------------------------------
P. Roy Vagelos, M.D.
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Signature Title Date
--------- ----- ----
* Director February 16, 1999
- ------------------------------
Faye Wattleton
/s/ Robert J. Bigler Senior Vice President February 16, 1999
- ------------------------------ and Chief Financial Officer
Robert J. Bigler (Principal Financial and
Accounting Officer)
*By: /s/ Robert J. Bigler
------------------------
Robert J. Bigler
Attorney-in-Fact
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EXHIBITS
The following is a complete list of Exhibits filed as part of this
Registration Statement, which are incorporated herein.
Exhibit
Number Description of Exhibit
- ------ ----------------------
1.1 Form of Underwriting Agreement.*
3.1 Restated Certificate of Incorporation (filed as Exhibit 3.1 to
Amendment No. 3 to the Company's Registration Statement on Form S-1
(No. 33-97180) on November 13, 1995 (the "S-1")).
3.2 Form of Amended and Restated By-Laws (filed as Exhibit 3.2 to the S-1).
5.1 Opinion of Weil, Gotshal & Manges LLP with respect to the legality of
the Class A Common Stock.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Weil, Gotshal & Manges LLP (included in the opinion filed as
Exhibit 5.1).*
24.1 Power of Attorney**
- ----------------------------
* Filed herewith
** Previously filed
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ESTEE LAUDER AUTOMATIC COMMON EXCHANGE SECURITY TRUST II
(subject to exchange into shares of Class A Common Stock of The
Estee Lauder Companies Inc.)
$[ ] TRUST AUTOMATIC COMMON EXCHANGE SECURITIES
Underwriting Agreement
February __, 1999
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
Estee Lauder Automatic Common Exchange Security Trust II, a trust duly
created under the laws of the State of New York (such trust and the trustees
thereof acting in their capacities as such being referred to herein as the
"Trust"), proposes, subject to the terms and conditions stated herein, to issue
and sell to the Underwriter named in Schedule I hereto (the "Underwriter") an
aggregate of [ ] shares of the $[ ] Automatic Common Exchange Securities of the
Trust specified above (the "Firm Securities") and, at the election of the
Underwriter, up to an aggregate of [ ] additional shares of the $[ ] Automatic
Common Exchange Securities (the "Optional Securities") (the Firm Securities and
the Optional Securities which the Underwriter elects to purchase pursuant to
Section 2 hereof are herein collectively called the "Securities").
The $[ ] Automatic Common Exchange Securities of the Trust to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
called the "Automatic Common Exchange Securities". Each Automatic Common
Exchange Security may be exchanged for one or fewer shares of Class A Common
Stock, par value $.01 per share ("Stock"), of The Estee Lauder Companies Inc., a
Delaware corporation (the "Company"), on _______, 2002 (the "Exchange Date") to
be delivered pursuant to a forward purchase contract (the "Contract"), dated
_______, 1999, between the Trust and a certain existing stockholder of the
Company identified in Schedule II hereto (the "Selling Stockholder"). In lieu of
delivery of shares of Stock, the Contract provides that the Selling Stockholder
may elect (i) to pay cash or deliver other securities on the Exchange Date for
each share of Stock then deliverable and (ii) to extend the Exchange Date to a
date not later than ________, 2002, in each case subject to the terms and
conditions of the Contract. The Trust will enter into a Contract with the
Selling Stockholder obligating that Selling Stockholder to deliver to the Trust
on the Exchange Date a number of shares of Stock equal to the product of the
Exchange Rate (as such term is defined in the Trust Prospectus (as defined in
Section 1(c)(i))) times the initial number of shares of Stock subject to such
Contract. The Selling Stockholder's obligations under such Contract will be
secured by a pledge of shares of Stock and, if applicable, other collateral
pursuant to
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the terms of a collateral agreement, dated _______, 1999, between the Selling
Stockholder, The Chase Manhattan Bank ("Chase Manhattan"), as collateral agent
(in such capacity, the "Collateral Agent"), and the Trust (the "Collateral
Agreement").
1. (a) The Company represents and warrants to, and agrees with, each of
the Underwriter, the Trust and the Selling Stockholder that:
(i) A registration statement on Form S-3 (File No. 333-71681) (the
"Initial Company Registration Statement") in respect of the shares of
Stock deliverable pursuant to the Contract has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Company
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, have been declared effective by, or have been filed
with, as the case may be, the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Company 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 Company Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Company Registration Statement, any post-effective amendment thereto or
the Company Rule 462(b) Registration Statement, if any, has been issued
and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Company
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 "Company Preliminary Prospectus"; the various parts
of the Initial Company Registration Statement and the Company 462(b)
Registration Statement, if any, including all exhibits thereto and
including (A) 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 Company Registration Statement at
the time it was declared effective or such part of the Company Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective and
(B) the documents incorporated by reference in the prospectus contained in
the Initial Company Registration Statement at the time such part of the
Initial Company Registration Statement became effective as amended at the
time such part of the Initial Company Registration Statement became
effective, are hereinafter collectively called the "Company Registration
Statement"; such final prospectus, in the form first filed pursuant to
Rule 424(b) under the Act, is hereinafter called the "Company Prospectus";
the Trust Registration Statement (as defined in Section 1(c)(i) hereof)
and the Company Registration Statement are hereinafter collectively called
the "Registration Statements" and the Trust Prospectus and the Company
Prospectus are hereinafter collectively called the "Prospectuses"; any
reference herein to any Company Preliminary Prospectus or the Company
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 Company Preliminary Prospectus or Company
Prospectus, as the
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case may be; any reference to any amendment or supplement to any Company
Preliminary Prospectus or the Company Prospectus shall be deemed to refer
to and include any documents filed after the date of such Company
Preliminary Prospectus or Company Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Company Preliminary Prospectus or
Company Prospectus, as the case may be; and any reference to any amendment
to the Company 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
Company Registration Statement that is incorporated by reference in the
Company Registration Statement);
(ii) No order preventing or suspending the use of any Company
Preliminary Prospectus has been issued by the Commission, and each Company
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 the Underwriter
expressly for use therein;
(iii) The documents incorporated by reference in the Company
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 Company 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 the Underwriter expressly for use therein;
(iv) The Company Registration Statement conforms, and the
Company Prospectus and any further amendments or supplements to the
Company Registration Statement or the Company Prospectus, when they become
effective or are filed with the Commission, will conform, in all material
respects to the requirements of the Act and the
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rules and regulations of the Commission thereunder and the Company
Registration Statement and any amendment thereto do not and will not, as
of the applicable effective date, 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 and the
Company Prospectus does not, and as amended or supplemented will not, as
of the applicable filing date, 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 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 the Underwriter or by the Selling Stockholder
expressly for use therein;
(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 Company 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 Company Prospectus; and, since
the respective dates as of which information is given in the Company
Registration Statement and the Company Prospectus, there has not been any
change in the capital stock (other than pursuant to employee stock option
plans and employment agreements in each case existing on the date of this
Agreement) 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 taken as a whole, in each case, otherwise
than as set forth or contemplated in the Company 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
Company Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or such as do not and
would not, individually or in the aggregate, have a material adverse
effect on the business, prospects, operations, financial condition or
results of operations of the Company and its subsidiaries taken as a whole
(a "Material Adverse Effect") 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 interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries and do
not, and would not, individually or in the aggregate, have a Material
Adverse Effect;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and
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authority (corporate and other) to own its properties and conduct its
business as described in the Company 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, except where failure to be so qualified would not have a
Material Adverse Effect; 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, except where failure
to be in such good standing would not have a Material Adverse Effect;
(viii) The Company has an authorized capitalization as set
forth in the Company Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued and
are fully paid and non-assessable and conform to the description of the
Stock contained in the Company 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 as disclosed in the Company Prospectus)
are owned directly or indirectly by the Company (except for minority
interests in certain subsidiaries of the Company, as set forth on Schedule
III attached hereto), free and clear of all liens, encumbrances, equities
or claims;
(ix) 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 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 of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties except for foreign and state securities and Blue
Sky laws, and except for breaches, violations or defaults (other than any
relating to the Certificate of Incorporation or By-laws of the Company)
that would not, individually or in the aggregate, have a Material Adverse
Effect or in the aggregate impair the Company's ability to consummate the
transactions herein contemplated; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the shares of Stock and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the shares of Stock by the Trust pursuant to
the Contract;
(x) Neither the Company nor any of Estee Lauder Inc., Aramis
Inc., Clinique Laboratories, Inc., Estee Lauder International, Inc., Estee
Lauder Cosmetics Ltd., Clinique Laboratories K.K., Estee Lauder K.K.,
Estee Lauder N.V. and Estee Lauder A.G.
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Lachen (each, a "Principal Subsidiary" and collectively, the "Principal
Subsidiaries") is in violation of its Certificate of Incorporation or
By-laws and neither the Company nor any of its subsidiaries is 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, which default
would have a Material Adverse Effect;
(xi) 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
"Certain Relationships and Related Transactions" set forth in the
Company's proxy statement dated September 30, 1998 and incorporated by
reference into the Company's Annual Report on Form 10-K for the year ended
June 30, 1998, insofar as they purport to summarize the provisions of the
laws, documents and transactions referred to therein for purposes of
complying with the requirements of Form S-3, are accurate and correct in
all material respects;
(xii) Other than as set forth in the Company 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; and, to the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xiii) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act"
and, together with the Act, the "Acts");
(xiv) The Stock is listed on the New York Stock Exchange;
(xv) Arthur Andersen LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(xvi) Each of the Company and its subsidiaries owns or has
rights to adequate foreign and domestic patents, patent licenses,
trademarks, service marks, trade names, inventions, copyrights and
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures)
(collectively, the "Intellectual Property") necessary to carry on their
respective businesses as of the date hereof, and neither the Company nor
any of its subsidiaries is aware that it would interfere with, infringe
upon or otherwise come into conflict with any Intellectual Property rights
of third parties as a result of the operation of the business of the
Company or any
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subsidiary as of the date hereof that, individually or in the aggregate,
if subject to an unfavorable decision, ruling or finding would have a
Material Adverse Effect; and
(xvii) There are no contracts or documents of a character
required to be described in the Company Registration Statement or the
Company Prospectus or to be filed as exhibits to the Company Registration
Statement that are not so described or filed.
(b) The Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriter, the Company and the Trust that:
(i) It has been duly created, is validly existing as a trust
under the laws of the jurisdiction of its organization and has the power
and authority to own and sell its property and to conduct its business;
(ii) The compliance by the Selling Stockholder with all of the
provisions of this Agreement, and the Contract, the power of attorney in
connection with this transaction (the "Power of Attorney"), the Custody
Agreement in connection with this transaction (the "Custody Agreement")
and the Collateral Agreement, each to which the Selling Stockholder is a
party, 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, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such action result
in any violation of the provisions of the constitutive documents of the
Selling Stockholder, or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Selling Stockholder or any of the property of the Selling Stockholder; and
no consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required for
the execution and delivery of or compliance by the Selling Stockholder
with or the consummation by the Selling Stockholder of the transactions
contemplated by this Agreement, the Contract, the Collateral Agreement,
the Power of Attorney or the Custody Agreement, except the registration
under the Act of the Stock and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Stock by the Trust pursuant to the Contract;
(iii) This Agreement has been duly authorized, executed and
delivered by the Selling Stockholder. The Contract, the Collateral
Agreement, the Power of Attorney and the Custody Agreement have been duly
authorized, executed and delivered by the Selling Stockholder and,
assuming due authorization, execution and delivery by the other parties
thereto, constitute valid and legally binding agreements of the Selling
Stockholder, enforceable in accordance with their respective terms,
subject, as to enforcement, to bankruptcy,
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insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(iv) The Selling Stockholder has, and immediately prior to
each Time of Delivery (as defined in Section 4(a) hereof) the Selling
Stockholder will have, good and valid title to the shares of Stock to be
pledged and assigned by it under the Collateral Agreement, free and clear
of all liens, encumbrances, equities or claims other than those created
pursuant to such Collateral Agreement; all consents, approvals,
authorizations and orders necessary for the Selling Stockholder to pledge
and assign the shares of Stock to be pledged and assigned by the Selling
Stockholder pursuant to such Collateral Agreement have been obtained; the
Selling Stockholder has full right, power and authority to pledge and
assign the shares of Stock to be pledged and assigned by the Selling
Stockholder pursuant to such Collateral Agreement; and upon delivery of
such shares of Stock to the Collateral Agent, as defined in the Collateral
Agreement, for the benefit of the Trust and payment therefor pursuant to
the Contract, good and valid title to such shares of Stock, free and clear
of all liens, encumbrances, equities or claims, will pass to the Trust;
(v) The representations and warranties of the Selling
Stockholder set forth in Section 3 of such Collateral Agreement are true
and correct on and as of the date hereof with the same effect as though
such representations and warranties had been set forth in full in this
Agreement;
(vi) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectuses, the Selling Stockholder will not offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any Stock or
any securities of the Company that are substantially similar to the Stock,
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 dispositions among
Lauder Family Members (as such term is defined in the Company Prospectus)
or pursuant to employee stock option plans and employment agreements in
each case existing on, or upon the conversion or exchange of convertible
or exchangeable securities outstanding as of, the date of this Agreement,
provided that this provision shall continue to apply with respect to the
securities received upon such conversion or exchange) without your prior
written consent;
(vii) The Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might 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 Securities; and
(viii) To the extent that any statements or omissions made in
the Registration Statements, any Preliminary Prospectus, the Prospectuses
or any amendment or supplement thereto are made in reliance upon and in
conformity with written information
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furnished to the Company or the Trust, as the case may be, by the Selling
Stockholder expressly for use therein, (A) such Preliminary Prospectus and
the Registration Statements did, and the Prospectuses and any further
amendments or supplements to the Registration Statements and the
Prospectuses, 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 Acts and the rules and regulations of the Commission
thereunder, (B) the Registration Statements and any amendment or
supplement thereto do not and will not, as of the applicable effective
date, 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 and (C) the Prospectuses do not, and as
amended or supplemented will not, as of the applicable filing date,
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 light of the circumstances under which they were made, not
misleading.
In order to document the Underwriter's compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
with respect to the transactions herein contemplated, the Selling Stockholder
agrees to 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).
The Selling Stockholder represents and warrants that certificates in
negotiable form and containing no restrictive legends representing all of the
shares of Stock to be pledged and assigned by the Selling Stockholder hereunder
have been placed in custody under a Custodial Agreement, in the form heretofore
furnished to you, duly executed and delivered by the Selling Stockholder to
Chase Manhattan, as custodian (the "POA Custodian"), and that the Selling
Stockholder has duly executed and delivered a Power of Attorney, in the form
heretofore furnished to you, appointing the persons indicated in Schedule II
hereto, and each of them, as the Selling Stockholder's attorneys-in-fact (the
"Attorneys-in-Fact") with authority to execute and deliver this Agreement on
behalf of the Selling Stockholder, to execute and deliver the Contract and the
Collateral Agreement, to authorize the delivery of the shares of Stock to be
pledged and assigned by the Selling Stockholder hereunder and otherwise to act
on behalf of the Selling Stockholder in connection with the transactions
contemplated by this Agreement, the Custody Agreement, the Contract and the
Collateral Agreement.
The Selling Stockholder specifically agrees that the shares of Stock
represented by the certificates held in custody for the Selling Stockholder
under the Custody Agreement are subject to the interests of the Collateral Agent
for the benefit of the Trust hereunder, and that the arrangements made by the
Selling Stockholder for such custody, and the appointment by the Selling
Stockholder of the Attorneys-in-Fact by the Power of Attorney, are to that
extent irrevocable. The Selling Stockholder specifically agrees that the
obligations of the Selling Stockholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity of any trustee or the
termination of the trust or by the occurrence of any other event. If the Selling
Stockholder or any such trustee should die or become incapacitated, or if the
trust should be terminated, or if any other such event
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should occur, before the delivery of the shares of Stock hereunder, certificates
representing the shares of Stock shall be delivered by or on behalf of the
Selling Stockholder in accordance with the terms and conditions of this
Agreement, of the Contract, of the Collateral Agreement and of the Custody
Agreement, as appropriate, and actions taken by the Attorneys-in-Fact pursuant
to the Powers of Attorney shall be as valid as if such death, incapacity,
termination or other event had not occurred, regardless of whether or not the
Custodian, the Attorneys-in-Fact, or any of them, shall have received notice of
such death, incapacity, termination, dissolution or other event.
(c) The Trust represents and warrants to, and agrees with, each of
the Underwriter, the Selling Stockholder and the Company that:
(i) A notification on Form N-8A (the "Notification") of
registration of the Trust as an investment company has been filed with the
Commission; a registration statement on Form N-2 (File No. 333-57125 and
File No. 811-8827) (the "Initial Trust Registration Statement") in respect
of the Securities has been filed with the Commission; the Initial Trust
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto,
have been declared effective by the Commission in such form; no other
document with respect to the Initial Trust Registration Statement has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Trust Registration Statement, or any
post-effective amendment thereto has been issued and no proceeding for
that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Trust Registration
Statement or filed with the Commission pursuant to Rule 497(a) of the
rules and regulations of the Commission under the Act, is hereinafter
called a "Trust Preliminary Prospectus"; the various parts of the Initial
Trust Registration Statement including all exhibits thereto and including
the information contained in the form of final prospectus filed with the
Commission pursuant to Rule 497(h) 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 Trust Registration Statement at the time it was
declared effective, as amended at the time such part of the registration
statement became effective, are hereinafter collectively called the "Trust
Registration Statement"; and such final prospectus, in the form first
filed pursuant to Rule 497(h) under the Act, is hereinafter called the
"Trust Prospectus");
(ii) No order preventing or suspending the use of any Trust
Preliminary Prospectus has been issued by the Commission, and each Trust
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Acts, 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 Trust by the Underwriter or
by the Selling Stockholder expressly for use therein;
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<PAGE>
(iii) The Notification and the Trust Registration Statement
conform, and the Trust Prospectus and any further amendments or
supplements to the Notification, the Trust Registration Statement or the
Trust Prospectus will conform, in all material respects to the
requirements of the Acts and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date as
to the Trust Registration Statement and any amendment thereto and as of
the applicable filing date as to the Trust 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 Trust by the Underwriter or by the Selling Stockholder
expressly for use therein;
(iv) Since the respective dates as of which information is
given in the Trust Registration Statement and the Trust Prospectus, there
has not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, results of operations, prospects,
investment objectives, investment policies, or liabilities of the Trust,
otherwise than as set forth or contemplated in the Trust Prospectus, and
there have been no transactions entered into by the Trust which are
material to the Trust other than those in the ordinary course of its
business or as described in the Trust Prospectus;
(v) The Trust has been duly created, is validly existing as a
trust under the laws of the State of New York, with power and authority to
own its properties and conduct its business as described in the Trust
Prospectus and to enter into and perform its obligations under this
Agreement and the Fundamental Agreements (as defined in Section 1(c)(vii)
hereof); the Trust has all necessary consents, approvals, authorizations,
orders, registrations or qualifications, of and from, and has made all
declarations and filings with, all courts and governmental agencies and
bodies, to own and use its assets and to conduct its business in the
manner described in the Trust Prospectus, except to the extent that the
failure to obtain or file the foregoing would not have a material adverse
effect on the Trust and except the registration under the Act of the
Securities and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by the
Underwriter; the Trust has no subsidiaries;
(vi) The Trust is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Trust, threatened by the Commission; no person is serving
or acting as an officer or trustee of the Trust except in accordance with
the provisions of the Investment Company Act;
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<PAGE>
(vii) Each of the Contract, the Collateral Agreement, the
Administration Agreement between Chase Manhattan and the Trust (the
"Administration Agreement"), the Custodian Agreement between Chase
Manhattan and the Trust (the "Custodian Agreement"), the Paying Agent
Agreement between ChaseMellon Shareholder Services, L.L.C. and the Trust
(the "Paying Agent Agreement"), the Fund Expense Agreement among Goldman,
Sachs & Co., Chase Manhattan and the Trust (the "Fund Expense Agreement")
and the Fund Indemnity Agreement between the Selling Stockholder and the
Trust (the "Fund Indemnity Agreement") (the Contract, the Collateral
Agreement, the Administration Agreement, the Custodian Agreement, the
Paying Agent Agreement, the Fund Expense Agreement and the Fund Indemnity
Agreement are herein collectively called the "Fundamental Agreements") has
been duly authorized, executed and delivered by the Trust and, assuming
due authorization, execution and delivery by the other parties thereto,
constitutes a valid and legally binding agreement of the Trust,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(viii) The Amended and Restated Trust Agreement dated as of
________, 1999 (the "Trust Agreement") and the Fundamental Agreements
comply with all applicable provisions of the Acts, and all approvals of
such agreements required under the Investment Company Act by the holders
of the Automatic Common Exchange Securities and the trustees have been
obtained and are in full force and effect;
(ix) All of the outstanding Automatic Common Exchange
Securities have been duly and validly authorized and issued and are fully
paid and non-assessable, and the form of certificates used to evidence the
Automatic Common Exchange Securities is in due and proper form and
complies with all provisions of applicable law; the Trust Agreement and
the Fundamental Agreements conform to the descriptions thereof contained
in the Trust Prospectus;
(x) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be validly issued, fully
paid and nonassessable; the Securities will conform to the description
thereof in the Trust Prospectus; no person has rights to registration of
any securities because of the filing of the Trust Registration Statement;
(xi) The issue and sale of the Securities and the compliance
by the Trust with all of the provisions of the Securities, this Agreement
and each Fundamental 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, the Trust Agreement or any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Trust
is a party or by which the Trust is bound or to which any of the property
or assets of the Trust is subject, nor will such action result in any
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of
its properties; and no consent,
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<PAGE>
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 Securities or the consummation by the Trust of the
transactions contemplated by this Agreement or the Fundamental Agreements,
other than the registration under the Act of the Securities and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriter;
(xii) Assuming due authorization, execution and delivery by
the parties other than the Trust, the Fundamental Agreements are in full
force and effect and the Trust is not in default in the performance or
observance of any obligation, covenant or condition thereunder and, to the
knowledge of the Trust, no event has occurred which with the passage of
time or the giving of notice or both would constitute a default
thereunder; the Trust is not in default in the performance or observance
of any obligation, covenant or condition contained in any other agreement
or instrument to which it is a party or by which it or any of its
properties may be bound;
(xiii) The statements set forth in the Trust Prospectus under
the caption "Description of the Securities", insofar as they purport to
constitute a summary of the terms of the Securities, under the caption
"Certain Federal Income Tax Considerations", and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and agreements referred to therein, are accurate, complete and fair
in all material respects;
(xiv) Other than as set forth in the Trust Prospectus, there
are no legal or governmental proceedings pending to which the Trust is a
party or of which any property of the Trust is the subject which, if
determined adversely to the Trust, would individually or in the aggregate
have a material adverse effect on the current or future financial
position, or results of operations of the Trust; and, to the best of the
Trust's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xv) There are no material restrictions, limitations or
regulations with respect to the ability of the Trust to invest its assets
as described in the Trust Prospectus, other than as described therein;
(xvi) The Automatic Common Exchange Securities outstanding
prior to the issuance of the Securities and the Securities have been
approved for listing on the New York Stock Exchange subject to notice of
issuance; the Trust's Registration Statement on Form 8-A under the
Exchange Act is effective; and
(xvii) PricewaterhouseCoopers LLP, who have certified certain
financial statements included in the Trust Registration Statement, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
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2. Subject to the terms and conditions herein set forth, (a) the Trust
agrees to issue and sell to the Underwriter, and the Underwriter agrees to
purchase from the Trust, at a purchase price of $[ ] per Security, the number of
Firm Securities set forth opposite the name of such Underwriter in Schedule I
hereto and (b) in the event and to the extent that the Underwriter shall
exercise the election to purchase Optional Securities as provided below, the
Trust agrees to issue and sell to the Underwriter, and the Underwriter agrees to
purchase from the Trust, at the same purchase price set forth in clause (a) of
this Section 2, that portion of the aggregate number of Optional Securities as
to which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional securities). The agreements in this Section made by the
Trust are for the benefit of and enforceable by the Underwriter and the Selling
Stockholder. The agreements in this Section made by the Underwriter are for the
benefit of and are enforceable by the Selling Stockholder and the Trust.
The Trust hereby grants to the Underwriter the right to purchase at its
election up to [ ] Optional Securities, at the purchase price set forth in
clause (a) of the first paragraph of this Section 2, for the sole purpose of
covering overallotments in the sale of the Firm Securities. Any such election to
purchase Optional Securities may be exercised only by written notice from you to
the Trust (with copies to Jeffrey J. Weinberg, Weil, Gotshal & Manges LLP, 767
Fifth Avenue, New York, New York 10153), given within a period of 30 calendar
days after the date of this Agreement, setting forth the aggregate principal
amount of Optional Securities to be purchased and the date on which such
Optional Securities are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4(a) hereof) or,
unless you and the Trust otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
As compensation to the Underwriter for its commitments hereunder, and in
view of the fact that the proceeds of the sale of the Securities will be used by
the Trust as specified in the Contract, the Selling Stockholder at each Time of
Delivery will pay to the Underwriter an amount equal to $[ ] per Security for
the Securities to be delivered at such Time of Delivery. Alternatively, as a
matter of convenience, the Underwriter may deduct such amount from the purchase
price of the Securities, and in such event the Selling Stockholder shall be
deemed to have paid the same.
3. Upon the authorization by you of the release of the Firm Securities,
the Underwriter proposes to offer the Firm Securities for sale upon the terms
and conditions set forth in the Trust Prospectus.
4. (a) The Securities to be purchased by the Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as the Underwriter may request upon at least forty-eight hours' prior
notice to the Trust, shall be delivered by or on behalf of the Trust to the
Underwriter against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer or certified or official bank check or checks,
payable to the order of the Trust in Federal (same day) funds. The Trust will
cause the certificates representing the Securities to be made available for
checking and packaging at least twenty-four hours prior to the Time of Delivery
(as defined below) at the office of Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004 (the "Designated Office"). The time and date of such
delivery and payment shall be, with
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respect to the Firm Securities, 9:30 a.m., New York City time, on February _,
1999 or such other time and date as Goldman, Sachs & Co. and the Trust may agree
upon in writing, and, with respect to the Optional Securities, 9:30 a.m., New
York City time, on the date specified by Goldman, Sachs & Co. in the written
notice given by Goldman, Sachs & Co. of the Underwriter's election to purchase
such Optional Securities, or such other time and date as Goldman, Sachs & Co.
and the Trust may agree upon in writing. Such time and date for delivery of the
Firm Securities is herein called the "First Time of Delivery", such time and
date for delivery of the Optional Securities, 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 Securities and any additional documents requested by the
Underwriter pursuant to Section 7(o) hereof, will be delivered at the offices of
Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York 10153 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at such Time of Delivery. A meeting will be held at the Closing
Location at 3:30 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 City are generally
authorized or obligated by law or executive order to close.
5. (a) The Trust agrees with the Underwriter:
(i) To prepare the Trust Prospectus in a form approved by you
and to file such Trust Prospectus pursuant to Rule 497(h) 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 Trust
Registration Statement or Trust 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 Trust Registration Statement has
been filed or becomes effective or any supplement to the Trust 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 Trust with the
Commission pursuant to the Acts and the Exchange Act subsequent to the
date of the Trust Prospectus and for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities; 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 Trust Preliminary Prospectus or
prospectus or any order pursuant to Section 8(e) of the Investment Company
Act, of the suspension of the qualification of the Securities 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
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the Trust Registration Statement or Trust 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 Trust Preliminary Prospectus
or prospectus or suspending any such qualification or order pursuant to
Section 8(e) of the Investment Company Act, promptly to use its best
efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities 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 Securities, provided that in connection therewith
the Trust shall not be required to qualify as a foreign trust or
association or to file a general consent to service of process in any
jurisdiction;
(iii) Prior to 12:00 noon, New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time, at the expense of the Selling Stockholder, to furnish the
Underwriter with copies of the Trust 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 Trust Prospectus in connection with the
offering or sale of the Securities and if at such time any event shall
have occurred as a result of which the Trust 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 Trust Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement the
Trust Prospectus in order to comply with the Act, to notify you and upon
your request to prepare and furnish without charge to the Underwriter and
to any dealer in securities as many copies as you may from time to time
reasonably request of an amended Trust Prospectus or a supplement to the
Trust Prospectus which will correct such statement or omission or effect
such compliance; and in case the Underwriter is required to deliver a
prospectus in connection with sales of any of the Securities at any time
nine months or more after the time of issue of the Trust Prospectus, upon
your request but at the expense of such Underwriter, to prepare and
deliver to such Underwriter as many copies as you may request of an
amended or supplemented Trust Prospectus complying with Section 10(a)(3)
of the Act;
(iv) To make generally available to the Trust's security
holders as soon as practicable, but in any event not later than eighteen
months after the effective date of the Trust Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Trust
(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 Trust, Rule 158);
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(v) To use the net proceeds received by it from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Trust Prospectus under the caption "Use of Proceeds"; and
(vi) To use its best efforts to maintain the listing of the
Automatic Common Exchange Securities and the Securities on the New York
Stock Exchange.
(b) The Company agrees with the Underwriter:
(i) To prepare the Company Prospectus in a form approved by
you and to file such Company 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
Company Registration Statement or Company Prospectus prior to the last
Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof, such disapproval not to be unreasonably
exercised; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Company Registration Statement has been
filed or becomes effective or any supplement to the Company Prospectus or
any amended Company 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 Company Prospectus and for so long as
the delivery of a prospectus is required in connection with the offering
or sale of the Securities; 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 Company Preliminary
Prospectus or prospectus, of the suspension of the qualification of the
shares of Stock to be delivered pursuant to the Contract 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 Company Registration Statement or
Company Prospectus or for additional information; and, in the event of the
issuance of any stop order or any order preventing or suspending the use
of any Company Preliminary Prospectus or prospectus or suspending any such
qualification, to promptly use its best efforts to obtain the withdrawal
of such order;
(ii) If the Company elects to rely upon Rule 462(b), to file a
Company 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 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;
(iii) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and sale
under the securities laws of such
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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
Securities, 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;
(iv) Prior to 12:00 noon, 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 Underwriter with copies of the Company Prospectus 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 Company Prospectus in connection with the
offering or sale of the Securities and if at such time any events shall
have occurred as a result of which the Company 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 Company Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such same period to amend or
supplement the Company Prospectus or to file under the Exchange Act any
document incorporated by reference in the Company 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
the Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Company Prospectus or a
supplement to the Company Prospectus which will correct such statement or
omission or effect such compliance, and in case the Underwriter is
required to deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of issue of the
Company Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies as
you may request of an amended or supplemented Company Prospectus complying
with Section 10(a)(3) of the Act;
(v) To make generally available to its security- holders 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 earning 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);
(vi) During the period beginning from the date hereof and
continuing to and including the date 90 days after the First Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any
Stock or any securities of the Company (other than pursuant to employee
stock option plans and employment agreements, in each case, existing on,
or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement) which are
substantially similar to the Stock, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the
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right to receive, Stock or such substantially similar securities without
your prior written consent;
(vii) To make available 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, to make available to its stockholders
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), consolidated summary
financial information of the Company and its subsidiaries for such quarter
in reasonable detail;
(viii) During a period of five 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 will 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; and
(ix) To use its best efforts to maintain the listing of the
Stock on the New York Stock Exchange.
6. The Trust, the Company, the Selling Stockholder and the Underwriter
covenant and agree with each other that (a) the Underwriter will pay or cause to
be paid the following: (i) the organizational expenses and the ongoing expenses
of the Trust and all fees, disbursements and expenses of the Trust's counsel and
the Trust's accountants in connection with the registration of the Securities
under the Acts; (ii) the fees in connection with filing the Trust Registration
Statement; and (iii) the filing fees incident to, and the fees and disbursements
of counsel for the Trust in connection with, securing any required review by the
NASD of the terms of the sale of the Securities; (b) the Selling Stockholder
will pay or cause to be paid the following: (i) subject to Clause (a) (ii)
above, the fees, disbursements and expenses of the Company's outside accountants
and of the Company's outside counsel in connection with the registration of the
Securities and the Stock under the Act and all other expenses in connection with
the preparation, printing and filing of the Notification, the Trust Registration
Statement, the Company Registration Statement, any Trust Preliminary Prospectus
or Company Preliminary Prospectus, the Trust Prospectus and the Company
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriter and dealers; (ii) the cost of printing or
producing this Agreement and any Blue Sky Memorandum, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities and the Stock; (iii)
the filing fees incident to,
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and the fees and disbursements of counsel for the Underwriter in connection
with, securing any required review by the NASD of the terms of the sale of the
Stock; (iv) all costs and expenses incident to the listing of the Securities on
the New York Stock Exchange or other national or regional exchange; (v) the cost
of preparing certificates representing the Securities; (vi) the cost and charges
of any transfer agent or registrar for the Securities; (vii) all expenses and
taxes incident to the sale and delivery of the shares of Stock to be sold or
pledged by the Selling Stockholder; (viii) all fees, expenses and costs in
connection with the marketing of the Securities; and (ix) all other costs and
expenses incident to the performance of the Selling Stockholder's obligations
hereunder which are not otherwise specifically provided for in this Section,
including (x) any fees and expenses of counsel for the Selling Stockholder, (y)
the fees and expenses of the Attorneys-in-Fact and the POA Custodian, and (z)
all expenses and taxes incident to the sale and delivery of the shares of Stock
to be sold or pledged by the Selling Stockholder and (c) the Company will pay or
cause to be paid (i) the cost of preparing Stock certificates; and (ii) the cost
and charges of any transfer agent or registrar for the Stock. In connection with
Clause (b)(ix)(z) of the preceding sentence, Goldman, Sachs & Co. agrees to pay
New York State stock transfer tax, and the Selling Stockholder agrees to
reimburse Goldman, Sachs & Co. for associated carrying costs if such tax payment
is not rebated on the day of payment and for any portion of such tax payment not
rebated. It is understood, however, that the Company shall bear, and the Selling
Stockholder 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
Securities pursuant to this Agreement, and that, except as provided in this
Section, Section 8 and Section 10 hereof, the Underwriter will pay all of its
own costs and expenses, including the fees of its counsel, transfer taxes on
resale of any of the Securities by it, and any advertising expenses connected
with any offers it may make.
7. The obligations of the Underwriter hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in its discretion, to
the condition that all representations and warranties of the Trust, the Company
and the Selling Stockholder herein are, at and as of such Time of Delivery, true
and correct, the condition that the Trust, the Company and the Selling
Stockholder shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectuses shall have been filed with the Commission
pursuant to Rule 424(b) or Rule 497(h), as applicable, within the applicable
time period prescribed for such filing by the rules and regulations under the
Act and in accordance with Sections 5(a)(i) and 5(b)(i) hereof; if the Company
has elected to rely upon Rule 462(b), the Company 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 Statements or any part thereof, and no order pursuant to Section
8(e) of the Investment Company Act affecting this transaction, 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;
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(b) Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriter, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(a) hereto), dated such Time of Delivery, with
respect to paragraphs (i), (ii), (iii), (v), (vi) and (viii) of subsection (c)
below and paragraphs (i), (ii) and (vi) of subsection (e) below, as well as a
statement to the effect of the text following paragraph (xii) of subsection (e)
below, 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) Sullivan & Cromwell, counsel for the Trust, shall have furnished
to you their written opinion (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) The Trust (x) has been duly formed and is validly existing
as a trust under the laws of the State of New York and (y) is registered
with the Commission under the Investment Company Act as a non-diversified,
closed-end management investment company;
(ii) The Securities have been duly authorized and validly
issued and are fully paid and non-assessable and are entitled to the
benefits provided by the Trust Agreement;
(iii) The Securities will be exchanged for shares of Stock in
accordance with the terms of the Trust Agreement and the Contract (unless
a Reorganization Event occurs or the Seller elects the Cash Settlement
Alternative (each as defined in the Contract)), subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(iv) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Trust under the Federal
laws of the United States and the laws of the State of New York for the
issuance, sale and delivery of the Securities by the Trust to you have
been obtained or made;
(v) This Agreement has been duly authorized, executed and
delivered by the Trust;
(vi) Each Fundamental Agreement has been duly authorized,
executed and delivered by the Trust and, assuming due authorization,
execution and delivery by the other parties thereto, constitutes a valid
and legally binding agreement of the Trust enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
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(vii) The statements in the Trust Prospectus under the caption
"Certain Federal Income Tax Considerations", to the extent that such
statements constitute summaries of the legal matters referred to therein,
fairly represent their opinion as to such matters; and
(viii) On the basis of information which was reviewed in the
course of the performance of the services referred to in their opinion,
considered in the light of their understanding of the applicable law and
the experience they have gained through their practice under the Acts,
such counsel confirm to you that, in their opinion, the Trust Registration
Statement, as of its effective date, and the Trust Prospectus, as of the
date of the Trust Prospectus, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Acts and
the applicable rules and regulations of the Commission thereunder; and
that nothing that came to their attention in the course of such review has
caused them to believe that the Trust Registration Statement, as of its
effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Trust
Prospectus, as of the date of the Trust Prospectus, contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; also, nothing
that has come to such counsel's attention in the course of certain
procedures (as described in such opinion) has caused such counsel to
believe that the Trust Prospectus, as of the date and time of delivery of
such opinion, contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that such opinion may state that the
limitations inherent in the independent verification of factual matters
and the character of determinations involved in the registration process
are such, however, that such counsel do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Trust Registration Statement or the Trust Prospectus except for those made
under the captions "Investment Objective and Policies", "Description of
the Securities" and "Underwriting" in the Trust Prospectus insofar as such
statements relate to provisions of documents referred to therein, and such
counsel need not express any opinion or belief as to the financial
statements or other financial data contained in the Trust Registration
Statement or the Trust Prospectus; and provided further that such counsel
may state that they have not participated in the preparation of the
Company Registration Statement or the Company Prospectus, and need not
express any opinion or belief with respect thereto or with respect to
information relating to the Company contained in the Trust Prospectus
under the captions "Prospectus Summary--The Company" and "Investment
Objectives and Policies--The Company".
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States.
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(d) Sullivan & Cromwell, counsel for the Trust, shall have furnished
to the Selling Stockholder their written opinion (a draft of such opinion is
attached as Annex II(c) hereto), dated such Time of Delivery, with respect to
paragraphs (i)(y), (iv) and (vii) of subsection (c) above and, in addition, to
the effect that the statements in the Trust Prospectus under the captions
"Investment Objective and Policies", "Description of the Securities" and
"Underwriting", insofar as such statements summarize provisions of the documents
referred to therein, are accurate in all material respects and fairly summarize
the matters referred to therein, provided, however, that such counsel may state
that in rendering such opinion, such counsel are not passing upon the Federal
income tax treatment of the Selling Stockholder in connection with the
transactions described in the Trust Prospectus, that such counsel express no
opinion as to such matters, and that the Selling Stockholder should draw no
inference with respect to such matters from the language set out in the Trust
Prospectus.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States.
(e) Weil, Gotshal & Manges, LLP, counsel for the Company, shall have
furnished to you their written opinion (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) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and
conduct its business as described in the Company Prospectus;
(ii) The Company has an authorized capitalization as set forth
in the Company Prospectus, and all of the shares of Stock to be pledged
under the Collateral Agreement have been duly and validly authorized and
issued and are fully paid and non-assessable; and the shares of Stock
conform to the description of the Stock contained in the Company
Prospectus;
(iii) The Company is duly qualified to transact business and
in good standing under the laws of each other jurisdiction where it owns
or leases properties or conducts any business so as to require such
qualification, except where the failure to be in good standing would not
have a Material Adverse Effect (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 of the Principal Subsidiaries which is incorporated
in the United States ("U.S. Principal Subsidiaries") has been duly
incorporated and is validly existing as a
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corporation in good standing under the laws of its jurisdiction of
incorporation; and, to the best of such counsel's knowledge, all of the
issued shares of capital stock of each U.S. Principal Subsidiary have been
duly and validly authorized and issued, are fully paid and non-assessable,
and are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances or claims;
(v) To such counsel's knowledge and other than as set forth in
the Company Prospectus, there are no legal or governmental proceedings
pending or overtly threatened against the Company or any of its
subsidiaries or involving the Company or any of its subsidiaries or any
property of the Company or any of its subsidiaries which would be required
to be disclosed in the Company Prospectus;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) 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, and that is material to the Company and
its subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws
of the Company or any New York, Delaware corporate or Federal law, rule or
regulation (other than foreign and state securities or Blue Sky laws, as
to which such counsel expresses no opinion, and other than Federal
securities laws, as to which such counsel expresses no opinion except as
otherwise set forth herein), or any judgment, writ, injunction, decree,
order or ruling of any court or governmental authority binding on the
Company of which such counsel is aware;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any New York, Delaware corporate
or Federal governmental authority is required for the consummation by the
Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Securities and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws as to which such counsel need
express no opinion (it being understood that the opinion may be limited to
those comments, approvals, authorizations, orders, registrations or
qualifications that, in such counsel's experience, are normally applicable
to the transactions of the type contemplated by this Agreement);
(ix) The statements set forth in the Company Prospectus under
the caption "Description of Capital Stock", insofar as they purport to
constitute a summary of the terms
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of the Stock (including shares of Stock subject to the Contract), are
accurate and correct in all material respects;
(x) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
(xi) The documents incorporated by reference in the Company
Prospectus (other than the financial statements and related notes, the
financial statement schedules and other financial and accounting data
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,
each appeared to comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder; and
(xii) The Company Registration Statement and the Company
Prospectus and any further amendments and supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related notes, the financial statement schedules and other
financial and accounting data included in the Company Registration
Statement or Company Prospectus, as to which such counsel need express no
opinion) comply as to form in all material respects with the requirements
of the Act and the rules and regulations thereunder.
In addition, such counsel shall state that it has participated in
conferences with directors, officers and other representatives of the Company,
the Selling Stockholder, representatives of the independent public accountants
for the Company, representatives of the Underwriter and representatives of
counsel for the Underwriter, at which conferences the contents of the Company
Registration Statement, the Company Prospectus and related matters were
discussed, and, although such counsel has not independently verified and is not
passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Company Registration Statement and
Company Prospectus, except to the extent specified in subsection (ix) of this
Section 7(e), no facts have come to such counsel's attention which leads such
counsel to believe that the Company Registration Statement (including any
documents incorporated by reference therein), on the effective date thereof (or,
in the case of documents incorporated by reference, when such documents became
effective or were filed), 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 contained therein not misleading or that the Company
Prospectus, on the date thereof or on the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such counsel expresses no view with respect
to the financial statements and related notes, the financial statement schedules
and the other financial and accounting data included in the Company Registration
Statement or Company Prospectus) and they do not know of any contracts or other
documents of a character required to be filed as an exhibit to the Company
Registration Statement or required to be incorporated by reference
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into the Company Prospectus or required to be described in the Company
Registration Statement or the Company Prospectus which are not filed or
described as required.
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the corporate laws of the State of Delaware and the federal laws of
the United States;
(f) Debevoise and Plimpton, counsel for The Estee Lauder 1994 Trust,
the Selling Stockholder, shall have furnished to you their written opinion (a
draft of each such opinion is attached as Annex II(e) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Selling Stockholder validly exists as a trust under,
and is governed by, the laws of the State of New York; and the trustee of
the Selling Stockholder has the requisite power and authority, on behalf
of the Selling Stockholder, to enter into this Agreement and the Power of
Attorney, Custody Agreement, Contract and Collateral Agreement, and to
consummate the transactions contemplated hereby and thereby;
(ii) The Power of Attorney and the Custody Agreement have been
duly executed and delivered by the Selling Stockholder and constitute
valid and binding agreements of the Selling Stockholder enforceable in
accordance with their terms, subject to customary bankruptcy and equitable
principles qualifications;
(iii) This Agreement has been duly executed and delivered by
or on behalf of the Selling Stockholder; each of the Contract and the
Collateral Agreement has been duly executed and delivered by or on behalf
of the Selling Stockholder and constitutes a valid and binding agreement
of the Selling Stockholder enforceable in accordance with its terms,
subject to customary bankruptcy and equitable principles qualifications;
(iv) The compliance by the Selling Stockholder with all of the
provisions of this Agreement and the Power of Attorney, the Custody
Agreement, the Contract and the Collateral Agreement and the consummation
of the transactions herein and therein contemplated will not conflict with
or result in a breach or violation of, or constitute a default under, (i)
any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument known by such counsel to which the Selling Stockholder is a
party or by which the Selling Stockholder is bound, or to which any of the
property or assets of the Selling Stockholder is subject, (ii) the
provisions of the constitutive documents of the Selling Stockholder, (iii)
any present law, or present regulation of any government agency or
authority, of the State of New York or the United States of America known
by such counsel to be applicable to the Selling Stockholder or its
properties or (iv) any court decree or order binding upon the Selling
Stockholder or its properties;
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(v) No consent, approval, authorization or order of any United
States or New York court or governmental agency or body is required by or
of the Selling Stockholder for the consummation of the transactions
contemplated by this Agreement, the Contract and the Collateral Agreement,
except for the registration of the Securities and the Stock, under the
Acts and such as may be required under state or foreign securities or Blue
Sky laws, rules or regulations in connection with the purchase and
distribution of the Securities and the Stock (it being understood that
this opinion is limited to those consents, approvals, authorizations,
orders, registrations or qualifications that, in our experience, are
normally applicable to transactions of the type contemplated by this
Agreement);
(vi) Assuming due authorization, execution and delivery
thereof in the State of New York by the Trust and the Collateral Agent,
the Collateral Agreement, together with the delivery of (x) the
certificates in registered form representing the Stock pledged thereunder
by the Selling Stockholder and (y) undated stock powers with respect
thereto endorsed in blank, to the Collateral Agent for the benefit of the
Trust, creates in favor of the Collateral Agent for the benefit of the
Trust a perfected security interest in such Stock under the Uniform
Commercial Code as in effect in the State of New York (the "New York
UCC"); upon such delivery, at the First Time of Delivery, assuming that
(A) the Collateral Agent and the Trust will acquire the security interest
in such shares without notice of any adverse claim (within the meaning of
the New York UCC) and (B) the Selling Stockholder has rights in the shares
of Stock subject to such Collateral Agreement, the Collateral Agent will
acquire such security interest in such shares of Stock for the benefit of
the Trust free of any adverse claim (within the meaning of the New York
UCC); and
(vii) Assuming (A) due authorization, execution and delivery
of the Contract and the Collateral Agreement by the Trust and the
Collateral Agreement by the Collateral Agent, (B) the Selling Stockholder
continues to be the sole registered owner of the shares of Stock to be
sold by it, (C) the holders of Securities acquire such shares of Stock
without notice of any adverse claim (within the meaning of the New York
UCC) and (D) undated stock powers with respect to the certificates
representing such shares of Stock endorsed in blank are delivered to the
holders of Securities, upon payment for and delivery to the holders of
Securities of the shares of Stock in accordance with the Contract and
Collateral Agreement, the holders of Securities will acquire all of the
rights of the Selling Stockholder in such shares of Stock and will also
acquire their interest in such shares of Stock free of any adverse claim
(within the meaning of the New York UCC).
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York and the Federal laws of the United States and in rendering the opinion
in subparagraphs (vi) and (vii) such counsel may rely upon a certificate of the
Selling Stockholder in respect of matters of fact as to ownership of, and liens,
encumbrances, equities or claims on the shares of Stock to be sold by the
Selling Stockholder, provided that such counsel shall state that they believe
that both you and they are justified in relying upon such certificate.
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(g) On the date of the Trust 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 Trust Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you;
(h) On the date of the Company 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 Company Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery, the
accounting firm listed in Section 1(a)(xv) hereof 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;
(i) (i) Since the respective dates as of which information is given
in the Trust Registration Statement and the Trust Prospectus, there shall not
have been any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, results of
operations, prospects, investment objectives, investment policies or liabilities
of the Trust, otherwise than as set forth or contemplated in the Trust
Prospectus, (ii) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Company Prospectus or incorporated by reference therein 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 Company Prospectus, and (iii) since the respective dates as
of which information is given in the Company Prospectus there shall not have
been any change in the capital stock, short-term debt 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, taken as a whole, otherwise than as set forth or contemplated in
the Company Prospectus, the effect of which, in any such case described in
clause (i), (ii) or (iii), is in your judgment so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in the Trust Prospectus;
(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 securities of the Company or the Trust on the New
York Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the outbreak
or material escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iv) in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at such Time of Delivery on the terms and in the
manner contemplated in the Trust Prospectus;
28
<PAGE>
(k) The Securities shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange;
(l) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto and the Selling Stockholder shall have
delivered to the Collateral Agent the number of shares of Stock required by the
Collateral Agreement to be initially pledged thereunder in accordance with the
requirements of such Collateral Agreement;
(m) The Trust and the Company shall have complied with the
provisions of Section 5(a)(iii) and 5(b)(iii) hereof with respect to the
furnishing of prospectuses on the New York Business Day next succeeding the date
of this Agreement;
(n) The Trust, the Company and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery certificates
of officers of the Trust, the Company and the Selling Stockholder, respectively,
satisfactory to you as to the accuracy of the representations and warranties of
the Trust, the Company and the Selling Stockholder, respectively, herein and in
the Contract and Collateral Agreement at and as of such Time of Delivery, as to
the satisfaction and performance by the Trust, the Company and the Selling
Stockholder of all of their respective obligations hereunder and thereunder to
be performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (i) of this Section (except in the case of the Selling
Stockholder) and as to such other matters relating to the transactions
contemplated herein and therein as you may reasonably request; and
(o) The Company shall have obtained and delivered to the Underwriter
executed copies of an agreement from Leonard A. Lauder, and from each trustee of
the Selling Stockholder in his or her capacity as a trustee, to the effect set
forth in Subsection 1(b)(vi) hereof in form and substance satisfactory to you.
8. (a) (i) The Company and the Selling Stockholder will indemnify and hold
harmless the Trust and the Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Trust or the 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
Company Preliminary Prospectus, the Company Registration Statement or the
Company 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 the Trust and the Underwriter for any legal or
other expenses reasonably incurred by the Trust or the 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 Stockholder 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 Company Preliminary
Prospectus, the Company Registration Statement or the Company Prospectus, or any
such amendment or supplement thereto, in reliance
29
<PAGE>
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use therein. (ii) The Selling Stockholder will
indemnify and hold harmless the Trust and the Underwriter against any losses,
claims, damages or liabilities, joint or several, to which the Trust or the
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 Trust Preliminary Prospectus, the Trust
Registration Statement or the Trust 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 the Trust and the
Underwriter for any legal or other expenses reasonably incurred by the Trust or
the Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Selling
Stockholder 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 Trust Preliminary Prospectus, the Trust Registration Statement or the Trust
Prospectus, or any such amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Trust by the Underwriter
expressly for use therein. Notwithstanding the provisions of this Section 8, in
no event shall the Selling Stockholder be liable under this Section 8 for an
amount in excess of the gross proceeds from the transactions contemplated by
this Agreement and the Fundamental Agreements received by the Selling
Stockholder from the sale of the Securities.
(b) The Underwriter will indemnify and hold harmless the Company,
the Trust and the Selling Stockholder against any losses, claims, damages or
liabilities to which the Company, the Trust or the 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 Company Preliminary Prospectus or Trust Preliminary Prospectus,
either of the Registration Statements or either of the Prospectuses, 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 Company
Preliminary Prospectus or Trust Preliminary Prospectus, either of the
Registration Statements or either of the Prospectuses, or any amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Trust or the Company by the Underwriter expressly for use
therein; and will reimburse the Company, the Trust and the Selling Stockholder
for any legal or other expenses reasonably incurred by the Company, the Trust or
the 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
30
<PAGE>
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 satisfactory to such indemnified party (which 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, the Trust and the Selling Stockholder
on the one hand and the Underwriter on the other from the offering of the
Securities. 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, the Trust and the Selling
Stockholder on the one hand and the Underwriter 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, the
Trust and the Selling Stockholder on the one hand and the Underwriter 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, the Trust
and the Selling Stockholder bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Trust 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, the Trust or the
Selling Stockholder on the one hand or the Underwriter on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust, the
Selling Stockholder and the
31
<PAGE>
Underwriter agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation 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), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities 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.
(e) The obligations of the Company and the Selling Stockholder under
this Section 8 shall be in addition to any liability which the Company and the
Selling Stockholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Underwriter within the
meaning of the Act; and the obligations of the Underwriter under this Section 8
shall be in addition to any liability which the Underwriter may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company or the Selling Stockholder, to each trustee of the Trust
and to each person, if any, who controls the Company, the Trust or the Selling
Stockholder within the meaning of the Act.
9. The respective indemnities, agreements, representations, warranties and
other statements of the Company, the Trust, the Selling Stockholder and the
Underwriter, 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 the Underwriter or any controlling person of the
Underwriter, or the Company, the Trust or the Selling Stockholder or any officer
or director or controlling person of the Company, the Trust or the Selling
Stockholder and shall survive delivery of and payment for the Securities.
10. If for any reason any Securities are not delivered by or on behalf of
the Trust as provided herein, the Selling Stockholder will reimburse the
Underwriter for all out-of-pocket expenses approved in writing by you, including
fees and disbursements of counsel, reasonably incurred by the Underwriter in
making preparations for the purchase, sale and delivery of the Securities not so
delivered, but the Company, the Trust and the Selling Stockholder shall then be
under no further liability to the Underwriter in respect of the Securities not
so delivered except as provided in Sections 6 and 8 hereof.
11. In all dealings hereunder, the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement made or given by you;
and in all dealings with the Selling Stockholder hereunder, you, the Trust and
the Company shall be entitled to act and rely upon any
32
<PAGE>
statement, request, notice or agreement on behalf of the Selling Stockholder
made or given by any or all of the Attorneys-in-Fact for the Selling
Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriter shall be delivered or sent by mail, telex or
facsimile transmission to Goldman, Sachs & Co., 85 Broad Street, New York, New
York 10004, Attention: Registration Department; if to the Trust shall be
delivered or sent by mail, telex or facsimile transmission to the Trust at 450
West 33rd Street, New York, New York 10001, 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; and if to the
Selling Stockholder shall be delivered or sent by mail, telex or facsimile
transmission to counsel for the Selling Stockholder at its address set forth in
Schedule II hereto. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriter, the Company, the Trust, the Selling Stockholder and, to the
extent provided in Sections 8 and 9 hereof, the officers and directors of the
Company, the Trust, the Selling Stockholder and each person who controls the
Company, the Selling Stockholder or the 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 Securities from the Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
13. 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.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
15. 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.
33
<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us eight counterparts hereof, and upon the acceptance hereof by you,
this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriter, the Trust, the Company and the Selling Stockholder.
Very truly yours,
THE ESTEE LAUDER COMPANIES INC.
By:
--------------------------------------
Leonard A. Lauder
Chief Executive Officer
ESTEE LAUDER AUTOMATIC COMMON
EXCHANGE SECURITY TRUST II
By:
--------------------------------------
Donald J. Puglisi
By:
--------------------------------------
William R. Latham III
By:
--------------------------------------
James B. O'Neill
each a trustee of the Estee Lauder
Automatic Common Exchange
Security Trust II
34
<PAGE>
LEONARD A. LAUDER, RONALD S. LAUDER
AND IRA T. WENDER AS TRUSTEES OF THE
TRUST, U/A/D JUNE 2, 1994, AS AMENDED,
BETWEEN ESTEE LAUDER, AS SETTLOR,
AND SUCH TRUSTEES
-----------------------------------
Leonard A. Lauder, Trustee
-----------------------------------
Ronald S. Lauder, Trustee
-----------------------------------
Ira T. Wender, Trustee
Accepted as of the date hereof:
Goldman, Sachs & Co.
By:
--------------------------------------
(Goldman, Sachs & Co.)
35
<PAGE>
SCHEDULE I
NUMBER OF OPTIONAL
TOTAL SECURITIES TO BE
NUMBER OF PURCHASED IF
FIRM SECURITIES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
- ----------- --------------- ---------
Goldman, Sachs & Co...................
============= =============
Total...........................
============= =============
<PAGE>
SCHEDULE II
NUMBER OF OPTIONAL
TOTAL SECURITIES TO BE
NUMBER OF PURCHASED IF
FIRM SECURITIES MAXIMUM OPTION
TO BE PURCHASED EXERCISED
--------------- ---------
The Selling Stockholder*:
The Estee Lauder 1994 Trust...........
============= =============
Total...........................
============= =============
* The Selling Stockholder has appointed Robert J. Bigler and Spencer G. Smul,
and each of them, as the Attorneys-in-Fact for the Selling Stockholder.
<PAGE>
SCHEDULE III
MINORITY INTERESTS OF CERTAIN SUBSIDIARIES
NOT HELD DIRECTLY OR INDIRECTLY BY THE COMPANY
Subsidiary INTEREST HELD BY COMPANY
- ---------- ------------------------
Santo Spirito S.r.l. 80% (joint venture with Aveda distributor in
Italy that operates one Aveda store in
Milan)
I.M. Cosmetics S.A. 55% (joint venture with distributor in
Greece; the subsidiary also is responsible
for the Company's business in Romania)
<PAGE>
ANNEX I
Pursuant to Section 7(h) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the Act
and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the consolidated interim financial statements, selected
financial data, pro forma financial information, financial forecasts
and/or condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter, as
indicated in their reports thereon, copies of which have been separately
furnished to the representatives of the Underwriter (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly reports on Form 10-Q
incorporated by reference into the Prospectus; and on the basis of
specified procedures including inquiries of officials of the Company who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year incorporated by
reference in the Prospectus agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such five
A-1
<PAGE>
fiscal years which were included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302 and 402,
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of
the minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus 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 (ii) any material modifications
should be made to the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal
year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis
A-2
<PAGE>
substantially consistent with the basis for the audited financial
statements included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to the date
of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise
of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of
the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders' equity or other items specified
by the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their
report(s) included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an examination
in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated
A-3
<PAGE>
by reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
A-4
WEIL, GOTSHAL & MANGES LLP
A LIMITED LIABILITY PARTNERSHIP
INCLUDING PROFESSIONAL CORPORATIONS
767 FIFTH AVENUE
NEW YORK, NY 10153
212-310-8000
(FAX) 212-310-8007
February 16, 1999
The Estee Lauder Companies Inc.
767 Fifth Avenue
New York, NY 10153
Ladies and Gentlemen:
We have acted as counsel to The Estee Lauder Companies Inc., a
Delaware corporation (the "Company"), in connection with the preparation and
filing of the Registration Statement (File No. 333-71681) of the Company on Form
S-3 (as amended, the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), relating to shares of Class A Common Stock,
par value $.01 per share (the "Class A Common Stock") of the Company
beneficially owned by The Estee Lauder 1994 Trust (the "EL Trust") that may be
delivered to the Estee Lauder Automatic Common Exchange Security Trust (the
"Trust") upon exchange of Automatic Common Exchange Securities of the Trust
(together with any shares of Class A Common Stock which may be registered in any
related registration statement pursuant to Section 462(b) of the Securities Act,
the "Shares").
In so acting, we have reviewed the Registration Statement, including
the prospectus contained therein (the "Prospectus"), the Amended and Restated
Certificate of Incorporation of the Company and the Bylaws of the Company. In
addition, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements, documents
and other instruments, and such certificates or comparable documents of public
officials and of officers and representatives of the Company, and have made such
inquiries of such officers and representatives, as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
NYFS11...:\93\44093\0003\2579\LTR2039S.200
<PAGE>
The Estee Lauder Companies Inc.
February 16, 1999
Page 2
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to this opinion that have not been independently established,
we have relied upon certificates or comparable documents of officers and
representatives of the Company.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that the Shares registered for delivery by the EL
Trust under the Registration Statement and any related registration statement
filed pursuant to Rule 462(b) of the Securities Act, have been duly authorized,
and are validly issued, fully paid and nonassessable.
The opinion expressed herein is limited to the corporate laws of the
State of Delaware, and we express no opinion as to the effect on the matters
covered by this letter of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the heading
"Legal Matters" in the Prospectus, without admitting that we are "experts" under
the Securities Act or the rules and regulations promulgated thereunder with
respect to any part of the Registration Statement.
We also consent to the incorporation by reference of this opinion in
any related registration statement filed by the Company pursuant to Rule 462(b)
of the Securities Act.
Very truly yours,
/s/ WEIL, GOTSHAL & MANGES LLP
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this Registration Statement of our reports dated August 11, 1998
included in the Form 10-K of The Estee Lauder Companies Inc. for the year ended
June 30, 1998 and to all references to our Firm included in this Registration
Statement.
Arthur Andersen LLP
/s/ Arthur Andersen LLP
New York, New York
February 16, 1999
NYFS11...:\93\44093\0003\2449\REG2129S.270
