August 31, 1998
The RJR Nabisco Trusts
(as defined below)
c/o RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Re: The RJR Nabisco Trusts (as defined below)
Ladies and Gentlemen:
We have acted as special Delaware counsel to RJR Nabisco
Holdings Capital Trust II, RJR Nabisco Holdings Capital Trust III, RJR Nabisco
Holdings Capital Trust IV, RJR Nabisco Holdings Capital Trust V and RJR Nabisco
Holdings Capital Trust VI, each a Delaware statutory business trust
(collectively referred to herein as the "RJR Nabisco Trusts" and each
individually as an "RJR Nabisco Trust"), in connection with certain matters
relating to the creation of the RJR Nabisco Trusts and the proposed issuance of
Preferred Securities therein to beneficial owners pursuant to and as described
in Registration Statement Nos. 333-60811, 333-60811-01, 333-60811-02,
333-60811-03, 333-60811-04, 333-60811-05, and 333-60811-06 (and the Prospectus
forming a part thereof) on Form S-3 filed with the Securities and Exchange
Commission (the "Commission") on August 6, 1998, as amended by Pre-Effective
Amendment No. 1 thereto (as so amended, the "Registration Statement").
Capitalized terms used herein and not otherwise herein defined are used as
defined in the form of Amended and Restated Declaration of Trust attached as an
exhibit to the Registration Statement.
In rendering this opinion, we have examined copies of the
following documents in the forms provided to us: the Certificate of Trust of
each RJR Nabisco Trust, each as filed in the Office of the Secretary of State
of Delaware (the "State Office") on August 6, 1998 (each a "Certificate"); the
Declaration of Trust of each RJR Nabisco Trust, each dated as of August 5, 1998
(each an "Original Governing Instrument"); the Indenture dated as of September
21, 1995 between RJR Nabisco Holdings Corp. and The Bank of New York, as
Trustee, as supplemented by a First Supplemental Indenture thereto dated as of
September 21, 1995, and the form of Supplemental Indenture to be entered into
in connection therewith; the form of Guarantee Agreement to be made by RJR
Nabisco Holdings Corp. with respect to each RJR Nabisco Trust; and the
Registration Statement. In such examinations, we have assumed the genuineness
of all signatures, the conformity to original documents of all documents
submitted to us as drafts or copies or forms of documents to be executed and
the legal capacity of natural persons to complete the execution of documents.
We have further assumed for purposes of this opinion: (i) the due formation,
organization or creation, valid existence and good standing of the RJR Nabisco
Trusts and each entity that is a party to any of the documents reviewed by us
under the laws of the jurisdiction of its respective formation, organization or
creation; (ii) the due authorization, execution and delivery by, or on behalf
of, each of the parties thereto of the above-referenced documents with respect
to each RJR Nabisco Trust; (iii) that RJR Nabisco Holdings Corp., The Bank of
New York, The Bank of New York (Delaware) and the appropriate Regular Trustees
will duly authorize, execute and deliver an amended and restated declaration of
trust for each RJR Nabisco Trust in the form of the Amended and Restated
Declaration of Trust attached as an exhibit to the Registration Statement (each
a "Governing Instrument") and all other documents contemplated thereby or by
the Registration Statement to be executed in connection with the creation of
each RJR Nabisco Trust and the issuance by each such RJR Nabisco Trust of
Preferred Securities, in each case, prior to the first issuance of
Preferred Securities; (iv) that the Preferred Securities of each RJR
Nabisco Trust will be offered and sold pursuant to the Registration
Statement and a prospectus supplement that will be consistent with, and
accurately describe, the terms of the applicable Governing Instrument and
Guarantee Agreement relating to each such RJR Nabisco Trust and all other
relevant documents; (v) that no event has or will occur subsequent to the
filing of any Certificate that would cause a dissolution or liquidation of
any RJR Nabisco Trust under the applicable Original Governing Instrument or
the applicable Governing Instrument; (vi) that the activities of each RJR
Nabisco Trust have been and will be conducted in accordance with its
Original Governing Instrument or Governing Instrument, as applicable, and
the Delaware Business Trust Act, 12 Del. C. Section Section 3801 et seq.
(the "Delaware Act"); (vii) that each Holder of Preferred Securities of
each RJR Nabisco Trust will make payment of the required consideration
therefor in consideration thereof in accordance with the terms and
conditions of the Registration Statement and the Prospectus forming a part
thereof, the applicable Governing Instrument and the applicable prospectus
supplement, and that the Preferred Securities of each RJR Nabisco Trust are
otherwise issued and sold to the Preferred Securities Holders of such RJR
Nabisco Trust in accordance with the terms, conditions, requirements and
procedures set forth in the Registration Statement and the Prospectus
forming a part thereof, the applicable Governing Instrument and the
applicable prospectus supplement; and (viii) that the documents examined by
us, or contemplated hereby, express the entire understanding of the parties
thereto with respect to the subject matter thereof and have not been, and,
prior to the issuance of Preferred Securities by each RJR Nabisco Trust,
will not be amended, supplemented or otherwise modified, except as herein
referenced. No opinion is expressed with respect to the requirements of,
or compliance with, federal or state securities or blue sky laws. Further,
we express no opinion with respect to the Registration Statement or any
other offering materials relating to the Preferred Securities offered by
any RJR Nabisco Trust and we assume no responsibility for their contents.
As to any fact material to our opinion, other than those assumed, we have
relied without independent investigation on the above-referenced documents
and on the accuracy, as of the date hereof, of the matters therein
contained.
Based on and subject to the foregoing, and limited in all
respects to matters of Delaware law, it is our opinion that, upon issuance, the
Preferred Securities of each RJR Nabisco Trust will constitute validly issued
and, subject to the terms of the applicable Governing Instrument, fully paid
and non-assessable beneficial interests in the assets of such RJR Nabisco
Trust. We note that pursuant to the Governing Instrument, each RJR Nabisco
Trust may withhold amounts otherwise distributable to a Holder of Securities in
such RJR Nabisco Trust and pay over such amounts to the applicable
jurisdictions in accordance with federal, state and local law and any amounts
withheld will be deemed to have been distributed to such Holder and that,
pursuant to the Governing Instrument, the Preferred Security Holders of each
RJR Nabisco Trust may be obligated to make payments or provide indemnity or
security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus forming a part thereof. In giving this consent, we
do not thereby admit that we come within the category of persons whose consent
is required under Section 7, of the Securities Act of 1933, as amended or the
rules and regulations of the Commission thereunder. This opinion speaks only
as of the date hereof and is based on our understandings and assumptions as to
present facts, and our review of the above referenced documents and the
application of Delaware law as the same exist on the date hereof, and we
undertake no obligation to update or supplement this opinion after the date
hereof for the benefit of any person or entity with respect to any facts or
circumstances that may hereafter come to our attention or any changes in facts
or law that may hereafter occur or take effect. This opinion is intended
solely for the benefit of the addresses hereof in connection with the matters
contemplated hereby and may not be relied upon by any other person or entity or
for any other purpose without our prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL