Exhibit 2.h
▇▇▇▇▇ ▇▇▇▇▇▇ AUTOMATIC COMMON EXCHANGE SECURITY TRUST
(subject to exchange into shares of Class A Common Stock of
The ▇▇▇▇▇ ▇▇▇▇▇▇ Companies Inc.)
$__________________TRUST AUTOMATIC COMMON EXCHANGE SECURITIES
Underwriting Agreement
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June __, 1998
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇ ▇▇▇▇▇▇ Automatic Common Exchange Security Trust, 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 Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 4,576,548 shares of the $_____ Automatic
Common Exchange Securities of the Trust specified above (the "Firm
Securities") and, at the election of the Underwriters, up to an aggregate of
686,482 additional shares of the $_____ Automatic Common Exchange Securities
(the "Optional Securities") (the Firm Securities and the Optional Securities
which the Underwriters elect 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 ▇▇▇▇▇ ▇▇▇▇▇▇
Companies Inc., a Delaware corporation (the "Company"), on June __, 2001 (the
"Exchange Date") to be delivered pursuant to forward purchase contracts (the
"Contracts"), dated June __, 1998, between the Trust and certain existing
stockholders of the Company (collectively, the "Selling Stockholders"). In
lieu of delivery of shares of Stock, one of the Contracts 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 September __, 2001, in each case
subject to the terms and conditions of the Contract. The Trust will enter into
a Contract with each 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. Each Selling Stockholder's obligations
under such Contract will be secured by a pledge of shares of Stock and,
if applicable, other collateral pursuant to the terms of collateral
agreements, dated June __, 1998, between such Selling Stockholders, The Chase
Manhattan Bank ("Chase Manhattan"), as collateral agent (in such capacity, the
"Collateral Agent"), and the Trust (the "Collateral Agreements").
1. (a) The Company represents and warrants to, and agrees with, each
of the Underwriters, the Trust and the Selling Stockholders that:
(i) A registration statement on Form S-3 (File No.
333-52609) (the "Initial Company Registration Statement") in respect
of the shares of Stock deliverable pursuant to the Contracts 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, to you for delivery
to each of the other Underwriters, 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 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
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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 an Underwriter through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 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 an Underwriter through
▇▇▇▇▇▇▇, Sachs & Co. 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 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 an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or by a
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
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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 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 or such as
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 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, 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
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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 Contracts;
(x) Neither the Company nor any of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
Aramis Inc., Clinique Laboratories, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ International,
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ Cosmetics Ltd., Clinique Laboratories K.K., ▇▇▇▇▇
▇▇▇▇▇▇ K.K., ▇▇▇▇▇ ▇▇▇▇▇▇ N.V. and ▇▇▇▇▇ ▇▇▇▇▇▇ A.G. 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, 1997 and
incorporated by reference into the Company's Annual Report on Form
10-K for the year ended June 30, 1997, 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;
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(xv) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 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) Each Selling Stockholder represents and warrants to, and agrees
with, each of the Underwriters, 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 such 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
such 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 such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property or
assets of such Selling Stockholder is subject, nor will such action
result in any violation of the provisions of the constitutive
documents of such Selling Stockholder, or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or any of the property of
such 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 such Selling Stockholder with or the
consummation by such Selling Stockholder of the transactions
contemplated by this Agreement, the Contract to which such Selling
Stockholder is a party, the Collateral Agreement to which such
Selling Stockholder is a party, the Power of Attorney to which such
Selling Stockholder is a party or the Custody Agreement to which such
Selling Stockholder is a party, 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 Contracts;
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(iii) This Agreement has been duly authorized,
executed and delivered by such Selling Stockholder. The Contract, the
Collateral Agreement, the Power of Attorney and the Custody
Agreement, each to which such Selling Stockholder is a party, have
been duly authorized, executed and delivered by such Selling
Stockholder and, assuming due authorization, execution and delivery
by the other parties thereto, constitute valid and legally binding
agreements of such Selling Stockholder, enforceable in accordance
with their respective 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;
(iv) Such Selling Stockholder has, and immediately
prior to each Time of Delivery (as defined in Section 4(a) hereof)
such Selling Stockholder will have, good and valid title to the
shares of Stock to be pledged and assigned by it under the Collateral
Agreement to which such Selling Stockholder is a party, 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 such Selling
Stockholder to pledge and assign the shares of Stock to be pledged
and assigned by such Selling Stockholder pursuant to such Collateral
Agreement have been obtained; such Selling Stockholder has full
right, power and authority to pledge and assign the shares of Stock
to be pledged and assigned by such Selling Stockholder pursuant to
such Collateral Agreement to which such Selling Stockholder is a
party; 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 Contracts to which such
Selling Stockholder is a party, 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 such
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, such 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) Such Selling Stockholder has not taken and will
not take, directly or indirectly, any action which is designed to or
which has constituted or which 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 furnished to
the
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Company or the Trust, as the case may be, by such 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 Underwriters' compliance with the reporting
and withholding provisions of the Tax Equity and Fiscal Responsibility Act of
1982 with respect to the transactions herein contemplated, each of the Selling
Stockholders 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).
Each of the Selling Stockholders 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 such
Selling Stockholder hereunder have been placed in custody under a Custodial
Agreement, in the form heretofore furnished to you, duly executed and
delivered by such Selling Stockholder to Chase Manhattan, as custodian (the
"POA Custodian"), and that such 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
such Selling Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with
authority to execute and deliver this Agreement on behalf of such Selling
Stockholder, to execute and deliver the Contract to which such Selling
Stockholder is a party and the Collateral Agreement to which such Selling
Stockholder is a party, to authorize the delivery of the shares of Stock to be
pledged and assigned by such Selling Stockholder hereunder and otherwise to
act on behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement, the Custody Agreement, the Contract and the
Collateral Agreement.
Each of the Selling Stockholders specifically agrees that the shares
of Stock represented by the certificates held in custody for such 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 such Selling Stockholder for such custody, and the
appointment by such Selling Stockholder of the Attorneys-in-Fact by the Power
of Attorney, are to that extent irrevocable. Each of the Selling Stockholders
specifically agrees that the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or
incapacity of such Selling Stockholder if an individual or, in the case of an
estate or trust, by the death or incapacity of any executor or trustee or the
termination of such estate or trust, or in the case of a partnership or
corporation, by the dissolution of such partnership or corporation, or by the
occurrence of any other event. If any Selling Stockholder or any such executor
or trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should be
dissolved, or if any other such event 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 Stockholders in accordance with
the terms and conditions of this Agreement, of the Contracts, of the
Collateral Agreements and of the Custody
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Agreements, 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, dissolution 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 Underwriters, the Selling Stockholders 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.
333-50597 and File No. 811-08761) (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, to you for
delivery to each of the other Underwriters, 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 an Underwriter through ▇▇▇▇▇▇▇,
Sachs & Co. or by a Selling Stockholder expressly for use therein;
(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
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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 an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or by a 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 Underwriters; 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;
(vii) Each of the Contracts, the Collateral
Agreements, 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 between ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and Chase Manhattan (the "Fund
Expense Agreement") and the Fund Indemnity Agreement between ▇▇▇▇▇▇▇,
Sachs & Co. and the Trust (the "Fund Indemnity Agreement") (the
Contracts, the Collateral Agreements, 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;
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(viii) The Amended and Restated Trust Agreement dated
as of June __, 1998 (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, 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 Underwriters;
(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;
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(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) Coopers & ▇▇▇▇▇▇▇ L.L.P., 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.
2. Subject to the terms and conditions herein set forth, (a) the
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, 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 Underwriters shall exercise the election
to purchase Optional Securities as provided below, the Trust agrees to issue
and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, 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)
determined by multiplying such number of Optional Securities by a fraction,
the numerator of which is the maximum aggregate number of Optional Securities
which such Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the
maximum aggregate number of Optional Securities that all of the Underwriters
are entitled to purchase hereunder. The agreements in this Section made by the
Trust are for the benefit of and enforceable by the Underwriters and the
Selling Stockholders. The agreements in this Section made by the Underwriters
are for the benefit of and are enforceable by the Selling Stockholders and the
Trust.
The Trust hereby grants to the Underwriters the right to purchase at
their election up to 686,482 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 ▇▇▇▇▇▇▇ ▇. Weinberg, Weil,
Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇), 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.
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As compensation to the Underwriters for their 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 Contracts, the Selling Stockholders
at each Time of Delivery will pay to ▇▇▇▇▇▇▇, Sachs & Co., for the accounts of
the several Underwriters, an amount equal to $_____ per Security for the
Securities to be delivered at such Time of Delivery; provided that the
aggregate amount payable to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. by the Selling Stockholders
shall be paid by the Selling Stockholders on a pro rata basis according to the
number of shares of Stock pledged by each Selling Stockholder pursuant to the
Collateral Agreement to which such Selling Stockholder is a party.
Alternatively, as a matter of convenience, ▇▇▇▇▇▇▇, Sachs & Co. may deduct
such amount from the purchase price of the Securities, and in such event the
Selling Stockholders shall be deemed to have paid the same.
3. Upon the authorization by you of the release of the Firm
Securities, the several Underwriters propose 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 each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in
such names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may request upon at least forty-eight
hours' prior notice to the Trust, shall be delivered by or on behalf of the
Trust to ▇▇▇▇▇▇▇, Sachs & Co., for the account of such 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (the "Designated Office"). The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York
City time, on June __, 1998 or such other time and date as ▇▇▇▇▇▇▇, 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 ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. in the written notice given by ▇▇▇▇▇▇▇, Sachs & Co. of the
Underwriters' election to purchase such Optional Securities, or such other
time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & 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
Underwriters pursuant to Section 7(o) hereof, will be delivered at the offices
of Weil, Gotshal & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (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 each of the Underwriters:
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(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 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 Stockholders, to
furnish the Underwriters 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 each 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 any 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
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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);
(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 each of the Underwriters:
(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 Contracts 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;
-15-
(iii) Promptly from time to time to take such action
as you may reasonably request to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as you may
request and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(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 Underwriters 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 each 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 any 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 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
-16-
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 and the Selling Stockholders covenant and
agree with the several Underwriters that (a) the Selling Stockholders will pay
or cause to be paid a pro rata share (based on the number of shares of Stock
to be sold by each such Selling Stockholder pursuant to the Contracts) of the
following: (i) the organizational expenses and the ongoing expenses of the
Trust and all reasonable 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, 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 Underwriters and dealers; (iii) the cost of printing or
producing any Agreement among Underwriters, this Agreement and 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; (iv) all expenses in connection with the
qualification of the Securities and the Stock for offering and sale under
state securities laws as provided in Section 5(b)(ii) hereof, including the
fees and disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky survey; (v) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the NASD of the terms of the
sale of the Stock and the Securities; (vi) all fees and expenses in connection
with the preparation and filing of a registration statement under the Exchange
Act relating to the Securities and all costs and expenses incident to the
listing of the Securities on the New York Stock Exchange or other national or
regional exchange; (vii) the cost of preparing certificates representing the
Securities; (viii) the cost and charges of any transfer agent or registrar for
the Securities; (ix) all expenses and taxes incident to the sale and delivery
of the shares of Stock to be sold or pledged by the Selling Stockholders; (x)
all fees, expenses and costs in connection with the marketing of the
Securities; and (xi) all other costs and expenses incident to the performance
of all obligations hereunder which are not otherwise specifically provided for
in this Section; (b) 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; and (c) each Selling Stockholder will pay or
cause to be paid all costs and expenses incident to the performance of such
Selling Stockholder's obligations hereunder which are not otherwise
specifically
-17-
provided for in this Section, including (i) any fees and expenses of counsel
for such Selling Stockholder, (ii) such Selling Stockholder's pro rata share
of the fees and expenses of the Attorneys-in-Fact and the POA Custodian, and
(iii) all expenses and taxes incident to the sale and delivery of the shares
of Stock to be sold or pledged by such Selling Stockholder. In connection with
Clause (c)(iii) of the preceding sentence, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. agrees to pay
New York State stock transfer tax, and the Selling Stockholders agree to
reimburse ▇▇▇▇▇▇▇, 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 Stockholders shall not be required to pay or to reimburse the
Company for, the cost of any other matters not directly relating to the sale
and purchase of the Shares pursuant to this Agreement, and that, except as
provided in this Section, Section 8 and Section 11 hereof, the Underwriters
will pay all of their own costs and expenses, including the fees of their
counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Securities to be delivered at each Time of Delivery, shall be subject, in
their discretion, to the condition that all representations and warranties of
the Trust, the Company and the Selling Stockholders herein are, at and as of
such Time of Delivery, true and correct, the condition that the Trust, the
Company and the Selling Stockholders shall have performed all of its and their
obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The 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;
(b) Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Underwriters, 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 (d)
below, as well as a statement to the effect of the text following paragraph
(xii) of subsection (d) 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) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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;
-18-
(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
Contracts (unless a Reorganization Event occurs or a Seller elects
the Cash Settlement Alternative (each as defined in one or more of
the Contracts)), 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;
(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
-19-
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.
(d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Trust, shall have
furnished to the Selling Stockholders 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 Stockholders in
connection with the transactions described in the Trust Prospectus, that such
counsel express no opinion as to such matters, and that the Selling
Stockholders 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 & ▇▇▇▇▇▇, 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 Agreements 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
-20-
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 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 Shares 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;
(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 of the Stock
(including shares of Stock subject to the Contracts), present fairly
the information disclosed therein in all material respects;
-21-
(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 Stockholders, representatives of the independent public
accountants for the Company, representatives of the Underwriters and
representatives of counsel for the Underwriters, 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 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 outside the United States;
(f) Debevoise and ▇▇▇▇▇▇▇▇, counsel for (i) The ▇▇▇▇▇ ▇▇▇▇▇▇
1994 Trust and (ii) The RSL 4201 Trust, each as a 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:
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(i) Such Selling Stockholder validly exists as a
trust under, and is governed by, the laws of the State of New York;
and the trustee of such Selling Stockholder has the requisite power
and authority, on behalf of such 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) A Power of Attorney and a Custody Agreement have
been duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such 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 such Selling Stockholder; each of the
Contract and the Collateral Agreement to which such Selling
Stockholder is a party has been duly executed and delivered by or on
behalf of such Selling Stockholder and constitutes a valid and
binding agreement of such Selling Stockholder enforceable in
accordance with its terms, subject to customary bankruptcy and
equitable principles qualifications;
(iv) The compliance by such Selling Stockholder with
all of the provisions of this Agreement and the Power of Attorney,
the Custody Agreement, the Contract and the Collateral Agreement to
which such 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, or constitute a default under,
(i) any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder is bound, or to which any of the
property or assets of such Selling Stockholder is subject, (ii) the
provisions of the constitutive documents of such 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 us to be applicable to such Selling Stockholder or
its properties or (iv) any court decree or order binding upon such
Selling Stockholder or its properties;
(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 such Selling Stockholder for the consummation of
the transactions contemplated by this Agreement, the Contract to
which such Selling Stockholder is a party and the Collateral
Agreement to which such Selling Stockholder is a party, 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 such 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
-23-
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) such 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 each Collateral Agreement by the Collateral Agent, (B) such
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 to
which such Selling Stockholder is a party, the holders of Securities
will acquire all of the rights of such 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 such 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 such Selling Stockholder, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificate.
(g) Weil, Gotshal & ▇▇▇▇▇▇, LLP, counsel for The LAL 4002
Trust as a Selling Stockholder, shall have furnished to you their written
opinion (a draft of such opinion is attached as Annex II(f) hereto), dated
such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Such Selling Stockholder validly exists as a
trust under, and is governed by, the laws of the State of New York;
and the trustee of such Selling Stockholder has the requisite power
and authority, on behalf of such 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) A Power of Attorney and a Custody Agreement have
been duly executed and delivered by such Selling Stockholder and
constitute valid and binding agreements of such 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 such Selling Stockholder; each of the
Contract and the Collateral Agreement to which such Selling
Stockholder is a party has been duly executed and delivered by or on
behalf of such Selling Stockholder and constitutes a valid and
binding agreement of such Selling Stockholder enforceable in
accordance with its terms, subject to customary bankruptcy and
equitable principles qualifications;
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(iv) The compliance by such Selling Stockholder with
all of the provisions of this Agreement and the Power of Attorney,
the Custody Agreement, the Contract and the Collateral Agreement to
which such 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, or constitute a default under,
(i) any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party
or by which such Selling Stockholder is bound, or to which any of the
property or assets of such Selling Stockholder is subject, (ii) the
provisions of the constitutive documents of such 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 us to be applicable to such Selling Stockholder or
its properties or (iv) any court decree or order binding upon such
Selling Stockholder or its properties;
(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 such Selling Stockholder for the consummation of
the transactions contemplated by this Agreement, the Contract to
which such Selling Stockholder is a party and the Collateral
Agreement to which such Selling Stockholder is a party, 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 such 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) such 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 each Collateral Agreement by the Collateral Agent, (B) such
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 to
which such Selling Stockholder is a party, the holders of Securities
will acquire all of the rights of such 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).
-25-
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 such 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 such Selling Stockholder, provided that such counsel shall
state that they believe that both you and they are justified in relying upon
such certificate.
(h) 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, Coopers & ▇▇▇▇▇▇▇ L.L.P. shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and substance
satisfactory to you;
(i) 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;
(j) (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;
(k) 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;
-26-
(l) The Securities shall have been duly listed, subject to
notice of issuance, on the New York Stock Exchange;
(m) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto and each Selling Stockholder shall have
delivered to the Collateral Agent the number of shares of Stock required by
the Collateral Agreement to which such Selling Stockholder is a party to be
initially pledged thereunder in accordance with the requirements of such
Collateral Agreement;
(n) 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;
(o) The Trust, the Company and the Selling Stockholders shall
have furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Trust, the Company and the Selling
Stockholders, respectively, satisfactory to you as to the accuracy of the
representations and warranties of the Trust, the Company and the Selling
Stockholders, respectively, herein and in the Contracts and Collateral
Agreements at and as of such Time of Delivery, as to the satisfaction and
performance by the Trust, the Company and the Selling Stockholders 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 (j) of this Section (except in the case of the Selling Stockholders) and
as to such other matters relating to the transactions contemplated herein and
therein as you may reasonably request; and
(p) The Company shall have obtained and delivered to the
Underwriters executed copies of an agreement from all Lauder Family Members
which own shares of Common Stock (other than The Lauder Foundation), from each
trustee, in his or her capacity as a trustee, of a trust that is a Lauder
Family Member and from ▇▇▇▇▇▇ Guaranty Trust Company of New York, to the
effect set forth in Subsection 1(b)(vi) hereof in form and substance
satisfactory to you.
8. (a) (i) The Company and each of the Selling Stockholders, jointly
and severally, will indemnify and hold harmless the Trust and each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
the Trust or such Underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any 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 each Underwriter for any legal or other expenses
reasonably incurred by the Trust or such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company and the Selling Stockholders
shall not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any Company
Preliminary Prospectus, the Company Registration Statement or the Company
Prospectus, or any such amendment or supplement thereto, in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein. (ii) The
Selling Stockholders, jointly and severally, will indemnify and hold harmless
the Trust and each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Trust or such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of
-27-
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 each
Underwriter for any legal or other expenses reasonably incurred by the Trust
or such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Selling Stockholders shall not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any 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 Company by
any Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein.
Notwithstanding the provisions of this Section 8, in no event shall any
Selling Stockholder be liable under this Section 8 for an amount in excess of
the pro rata share (based on the number of shares of Stock to be sold by each
Selling Stockholder pursuant to the Contracts) of the gross proceeds from the
transactions contemplated by this Agreement and the Fundamental Agreements
received by such Selling Stockholder from the sale of the Shares.
(b) Each Underwriter will indemnify and hold harmless the
Company, the Trust and each Selling Stockholder against any losses, claims,
damages or liabilities to which the Company, the Trust or such Selling
Stockholder may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any 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 such Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. expressly for use therein; and will reimburse the Company, the Trust and
each Selling Stockholder for any legal or other expenses reasonably incurred by
the Company, the Trust or such Selling Stockholder in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel 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
-28-
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 Stockholders on the one hand and the Underwriters 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 Stockholders on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company, the Trust and the Selling Stockholders on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, the Trust and the Selling Stockholders bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
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
Stockholders on the one hand or the Underwriters on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Trust, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the 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. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
-29-
(e) The obligations of the Company and the Selling
Stockholders under this Section 8 shall be in addition to any liability which
the Company and the Selling Stockholders may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the Company or the
Selling Stockholders, to each trustee of the Trust and to each person, if any,
who controls the Company, the Trust or any Selling Stockholder within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein at a Time of Delivery. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities, then the Company, the Trust and the Selling
Stockholders shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to
purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company, the Trust and the
Selling Stockholders that you have so arranged for the purchase of such
Securities, or the Company, the Trust and the Selling Stockholders notify you
that they have so arranged for the purchase of such Securities, you or the
Company, the Trust and the Selling Stockholders shall have the right to
postpone such Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statements or the Prospectuses, or in any other documents or
arrangements, and the Company, the Trust and the Selling Stockholders agree to
file promptly any amendments to the Registration Statements or the
Prospectuses which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and the Company, the Trust and the Selling Stockholders as provided in
subsection (a) above, the aggregate principal amount of such Securities which
remains unpurchased does not exceed one-eleventh of the aggregate principal
amount of all the Securities to be purchased at such Time of Delivery, then
the Company, the Trust and the Selling Stockholders shall have the right to
require each non-defaulting Underwriter to purchase the principal amount of
Securities which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Securities which
such Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and the Company, the Trust and the Selling Stockholders as provided in
subsection (a) above, the aggregate principal amount of such Securities which
remains unpurchased exceeds one-eleventh of the aggregate principal amount of
all the Securities to be purchased at such Time of Delivery, or if the
Company, the Trust and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Securities of a defaulting Underwriter or Underwriters, then this
Agreement (or, with respect to the Second Time of Delivery, the obligations of
the Underwriters to purchase and of the Trust to sell the Optional Securities)
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, the Trust and the Selling Stockholders, except for
the expenses to be borne by the Company,
-30-
the Trust, the Selling Stockholders and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Trust, the Selling
Stockholders and the several Underwriters, as set forth in this Agreement or
made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter
or any controlling person of any Underwriter, or the Company, the Trust or the
Selling Stockholders or any officer or director or controlling person of the
Company, the Trust or the Selling Stockholders and shall survive delivery of
and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company, the Trust nor the Selling Stockholders shall then
be under any liability to any Underwriter except as provided in Sections 6 and
8 hereof; but, if for any other reason, any Securities are not delivered by or
on behalf of the Trust as provided herein, the Selling Stockholders, pro rata
(based on the number of shares of Stock to be sold by each such Selling
Stockholder pursuant to the Contracts), will reimburse the Underwriters
through you for all out-of-pocket expenses approved in writing by you,
including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Company, the Trust and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Securities not so delivered except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by you jointly or by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder,
you, the Trust and the Company shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of such Selling Stockholder
made or given by any or all of the Attorneys-in-Fact for such Selling
Stockholder..
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives in care of
▇▇▇▇▇▇▇, Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Registration Department; if to the Trust shall be delivered or sent by mail,
telex or facsimile transmission in care of _____________________; 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 any Selling Stockholder shall be delivered or sent by
mail, telex or facsimile transmission to counsel for such Selling Stockholder
at its address set forth in Schedule II hereto; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting
such Questionnaire, which address will be supplied to the Company or the
Selling Stockholders by you upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Trust, the Selling Stockholders
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company, the Trust, the Selling Stockholders and each person
who controls the Company, any Selling Stockholder or any Underwriter, and
their respective heirs, executors,
-31-
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 any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein,
the term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
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, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters, the Trust, the Company and the Selling Stockholders. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company and
the Selling Stockholders for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
THE ▇▇▇▇▇ ▇▇▇▇▇▇ COMPANIES INC.
By: _______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
▇▇▇▇▇ ▇▇▇▇▇▇ AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By: _______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: _______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
By: _______________________________________
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
each a trustee of the ▇▇▇▇▇ ▇▇▇▇▇▇
Automatic Common Exchange
Security Trust
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AND ▇▇▇ ▇. ▇▇▇▇▇▇ AS TRUSTEES OF THE
TRUST, U/A/D JUNE 2, 1994, AS AMENDED,
BETWEEN ▇▇▇▇▇ ▇▇▇▇▇▇, AS SETTLOR,
AND SUCH TRUSTEES
--------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
--------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ AS TRUSTEE OF
THE LAL 4002 TRUST, U/A/D MAY 13, 1998,
BETWEEN ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, AS
SETTLOR, AND ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
AS TRUSTEE
--------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Trustee
▇▇▇ ▇. ▇▇▇▇▇▇ AS TRUSTEE OF
THE RSL 4201 TRUST, U/A/D MAY 13, 1998,
BETWEEN ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, AS
SETTLOR, AND ▇▇▇ ▇. ▇▇▇▇▇▇,
AS TRUSTEE
--------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
-34-
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
By: _______________________________________
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Underwriters
-35-
SCHEDULE I
Number of Optional
Total Securities to be
Number of Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ----------
▇▇▇▇▇▇▇, Sachs & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇ Securities Inc.
=============== ===============
Total 4,567,548 686,482
=============== ===============
SCHEDULE II
Number of
Optional
Shares to be
Total Delivered if
Number of Maximum
Firm Shares Option
to be Delivered Exercised
--------------- ---------
The Selling Stockholders*:
The ▇▇▇▇▇ ▇▇▇▇▇▇ 1994 Trust.........
The LAL 4002 Trust
The RSL 4201 Trust
=============== ==============
Total...................... 4,567,548 686,482
=============== ==============
* Each Selling Stockholder has appointed ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇, and each of them, as the Attorneys-in-Fact for such Selling
Stockholder.
ANNEX I
Pursuant to Section 7(j) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters 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 Underwriters (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 report on Form 10-Q incorporated by reference
into the Prospectus as indicated in their reports thereon; 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 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, 402 and 503(d), 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
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
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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 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.
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