Exhibit 1
DEALER MANAGER AGREEMENT
June 20, 1995
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281-1329
LEHMAN BROTHERS
3 World Financial Center
New York, New York 10285
MORGAN STANLEY & CO. INCORPORATED
1251 Avenue of the Americas
New York, New York 10020
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Gentlemen:
RJR Nabisco Holdings Capital Trust I (the "Trust"), a statutory
business trust organized under the Business Trust Act (the "Delaware Act") of
the State of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C.
Sec.3801 et seq.), proposes to issue its Trust Originated Preferred Securities
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("TOPrS") (the "Preferred Securities") in exchange for up to 49,000,000
depositary shares (the "Target Securities"), each representing one-
thousandth of a share of Series B Cumulative Preferred Stock (par value $.01
per share) of RJR Nabisco Holdings Corp., a Delaware corporation (the
"Company"). The Preferred Securities will be guaranteed (the "Guarantee") by
the Company to the extent described in the Prospectus (as hereinafter
defined). The exchange described above is herein referred to as the "Exchange
Offer" and any exchange of Preferred Securities for Target Securities
pursuant to the Exchange Offer is herein referred to as an "Exchange". In
connection with the Exchange Offer, the Company will deposit in the Trust as
trust assets its Junior Subordinated Debentures due 2044 (the "Debentures") as
set forth in the Prospectus.
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Each of the Company and the Trust hereby confirms its agreement
with Merrill Lynch & Co. of Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), Lehman Brothers ("Lehman"), Morgan Stanley &
Co. Incorporated ("Morgan Stanley"), PaineWebber Incorporated ("PaineWebber")
and Smith Barney Inc. ("Smith Barney" and together with Merrill Lynch,
Lehman, Morgan Stanley and PaineWebber, the "Co-Dealer Managers") as follows:
1. Registration Statement, Prospectus and Offering Materials.
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The Company and the Trust have prepared and filed with the Securities and
Exchange Commission (the "Commission"), under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated
thereunder (collectively, the "Securities Act"), a registration statement on
Form S-4 covering the registration of the Preferred Securities, the Guarantee
and the Debentures, including the related preliminary prospectus (the
"prospectus"), and will prepare and file, on or prior to the effective date
of such registration statement, amendments to such registration statement,
including a final prospectus. Each prospectus used before the time such
registration statement becomes effective is herein called a "preliminary
prospectus". Such registration statement, including the exhibits thereto and
any documents incorporated by reference therein, as amended at the time it
becomes effective or as thereafter amended or supplemented from time to time,
is herein called the "Registration Statement". The final prospectus included
in the Registration Statement (including any documents incorporated in the
prospectus by reference) is herein called the "Prospectus", except that if
the final prospectus furnished to the Co-Dealer Managers for use in
connection with the Exchange Offer differs from the prospectus set forth in
the Registration Statement (whether or not such prospectus is required to be
filed pursuant to Rule 424(b)), the term "Prospectus" shall refer to the
final prospectus furnished to the Co-Dealer Managers for such use. The terms
"supplement" and "amendment" or "amend" as used herein with respect to the
Prospectus shall include all documents deemed to be incorporated by reference
in the Prospectus that are filed subsequent to the date of the Prospectus and
prior to the termination of the Exchange Offer by the Company with the
Commission pursuant to the Exchange Act.
The Registration Statement, Prospectus and the related letters from
the Co-Dealer Managers to securities brokers, dealers, commercial banks,
trust companies and other nominees, letters to beneficial owners of Target
Securities, letters of transmittal (the "Letters of Transmittal"), notices of
guaranteed delivery (the "Notices of Guaranteed Delivery") and any newspaper
announcements, press releases and other offering materials and information
the Company may use or prepare, approve or authorize for use in connection
with the Exchange Offer, as amended or supplemented from time to time are
herein collectively referred to as the "Offering Materials".
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2. Exchange Offer; Agreement to Act as Co-Dealer Managers. (a)
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The Company and the Trust intend to commence the Exchange Offer as soon as
practicable after the Registration Statement becomes effective under the
Securities Act by publicly announcing its commencement and by mailing, or
causing to be mailed on its behalf, copies of the Prospectus, the related
Letters of Transmittal and such of the other Offering Materials as is
required or as the Company elects to each holder of Target Securities (the
date of the commencement of such distribution being herein called the
"Commencement Date").
(b) The Company and the Trust hereby retain the Co-Dealer Managers
to advise them with respect to the terms and timing of the Exchange Offer and
to assist them in the preparation of the Offering Materials and retain and
authorize the Co-Dealer Managers to act as co-dealer managers and to assist
the Company with the solicitation of Exchanges (each a "Solicitation" and
collectively the "Solicitations"). On the basis of the representations and
warranties and agreements of the Company and the Trust herein contained and
subject to and in accordance with the terms and conditions hereof and of the
Offering Materials, the Co-Dealer Managers agree to advise the Company and
the Trust with respect to the terms and timing of the Exchange Offer and to
act as co-dealer managers in connection with the Exchange Offer and to assist
the Company with the Solicitations. The Co-Dealer Managers agree to use
their reasonable best efforts to solicit Exchanges.
(c) The Company shall furnish the Co-Dealer Managers, or cause the
transfer agent or registrar for the Target Securities (respectively, the
"Transfer Agent" and "Registrar") to furnish the Co-Dealer Managers, as soon
as practicable after the date hereof (to the extent not previously
furnished), with cards or lists in reasonable quantities or copies thereof
showing the names of persons who were the holders of record or, to the extent
available to the Company, the beneficial owners of the Target Securities as
of a recent date, together with their addresses, and the number of shares of
Target Securities held by them. Additionally, the Company shall use its best
efforts to update, or to cause the Transfer Agent or Registrar to update,
such information from time to time during the term of this Agreement as may
be reasonably requested by the Co-Dealer Managers. Except as otherwise
provided herein, the Co-Dealer Managers agree to use such information only in
connection with the Solicitations. The Co-Dealer Managers shall act
hereunder as independent contractors and nothing herein contained shall make
the Co-Dealer Managers agents of the Trust, the Company or any of its
subsidiaries in connection with any Solicitation. Nothing contained in this
Agreement shall constitute the Co-Dealer Managers partners of or joint
venturers with the Trust, the Company or any of its subsidiaries.
(d) The Trust and the Company authorize the Co-Dealer Managers to
use the Offering Materials in connection with the
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Solicitations and for such period of time as any Offering Materials are
required by law to be delivered in connection therewith. The Co-Dealer
Managers shall not have any obligation to cause any Offering Materials to be
transmitted generally to the holders of the Target Securities. The Co-Dealer
Managers agree not to give any written information and not to make any
representations to holders of the Target Securities in connection with any
Solicitation other than as contained in the Offering Materials.
(e) The Trust and the Company authorize the Co-Dealer Managers to
communicate with any information agent (the "Information Agent") or exchange
agent (the "Exchange Agent") appointed by the Company to act in such capacity
in connection with the Exchange Offer with respect to matters relating to the
Exchange Offer.
(f) The Trust and the Company agree that any reference to any Co-
Dealer Manager in any Offering Materials or in any newspaper announcement or
press release or other document or communication is subject to such Co-Dealer
Manager's prior consent, which consent shall not be unreasonably withheld.
3. Compensation. (a) The Company hereby agrees to pay to the Co-
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Dealer Managers for services rendered and to be rendered by them in
connection with the Exchange Offer a fee (the "Management Fee") equal to
$0.125 per share of Target Securities validly submitted for exchange and not
withdrawn in connection with the Exchange Offer. The Management Fee shall be
paid only if the Exchange Offer is consummated, and shall be paid within one
week of the consummation of the Exchange Offer. The Management Fee shall be
divided 40% to Merrill Lynch and 60% to the other Co-Dealer Managers, who
shall divide their portion of the Management Fee equally among themselves.
In addition, the Company agrees to reimburse each Co-Dealer Manager directly
for all of its reasonable out-of-pocket expenses, including, without
limitation, the reasonable fees and expenses of the law firm acting as legal
counsel for the Co-Dealer Managers. Fees, if any, related to all other
transactions with respect to the Target Securities not contemplated hereby
will be negotiated in good faith by the parties hereto at the time thereof.
(b) The Company agrees to pay, or cause to be paid to, each
soliciting dealer (including any Co-Dealer Manager acting as a soliciting
dealer) whose name has been inserted in the space provided in the Letter of
Transmittal for that purpose a fee (the "Soliciting Dealer Fee") equal to
$0.50 per share of Target Securities validly submitted for exchange and not
withdrawn in connection with the Exchange Offer; provided, however, that no
such fee shall be paid with respect to Target Securities tendered, directly
or indirectly, by soliciting dealers for their own account and such fee shall
not be remitted, in whole or in part, to the beneficial owner of such Target
Securities. The
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Soliciting Dealer Fee shall be payable to the soliciting dealers within one
week of the consummation of the Exchange Offer.
4. Certain Covenants of the Trust and the Company. Each of the
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Company and the Trust jointly and severally covenants with the Co-Dealer
Managers:
(a) To use its best efforts to cause the Registration Statement,
including any post-effective amendment thereto, to become effective and
will notify the Co-Dealer Managers immediately and, if requested by any
Co-Dealer Manager, will confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall have become
effective, or any supplement to the Prospectus or any amended Prospectus
or any amended or additional Offering Materials shall have been filed,
(ii) of the receipt of any comments from the Commission relating to the
Exchange Offer, (iii) of any request by the Commission to amend the
Registration Statement or amend or supplement the Prospectus or the
other Offering Materials or for additional information relating to the
Exchange Offer and (iv) of (A) the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
(B) the issuance by the Commission of any order preventing or suspending
the use of any of the Offering Materials or (C) the suspension of the
qualification of the Preferred Securities for offering or sale in
connection with the Exchange Offer in any jurisdiction, (D) the
institution or threatening of any proceedings for any of such purposes
or (E) the occurrence of any event which could cause the Company to
withdraw, rescind, terminate or modify the Exchange Offer or would
permit the Company to exercise any right not to accept the Target
Securities tendered pursuant to the Exchange Offer. The Company and the
Trust will make every reasonable effort to prevent the issuance of any
such stop order, the issuance of any order preventing or suspending such
use and the suspension of any such qualification and, if any such order
is issued or qualification suspended, to obtain the lifting of such
order or suspension at the earliest practicable time.
(b) Prior to the termination of the Exchange Offer, before
amending or supplementing the Registration Statement or the Prospectus,
to furnish copies of drafts to, and consult with, the Co-Dealer Managers
and their counsel within a reasonable time in advance of filing with the
Commission of any amendment or supplement to the Registration Statement,
the Prospectus or the other Offering Materials. Neither the Company nor
the Trust shall file any such amendment or supplement to which any Co-
Dealer Manager shall reasonably object; provided, however, that the
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foregoing shall not apply to any of the Company's filings with the
Commission required to be filed pursuant to Section
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13(a), 13(c), 14 or 15(d) of the Exchange Act, copies of which such
filings the Company will cause to be delivered to each Co-Dealer Manager
promptly after being transmitted for filing with the Commission.
(c) To furnish promptly to each Co-Dealer Manager, without charge,
one signed copy of the Registration Statement, all amendments thereto
and any other filing with the Commission in connection with the Exchange
Offer, whether filed before or after the Registration Statement becomes
effective.
(d) To furnish promptly to each Co-Dealer Manager, without charge,
from time to time until the effective date of the Registration
Statement, as many copies of each preliminary prospectus as the Co-
Dealer Managers may reasonably request, and the Company hereby consents
to the use of such copies for purposes permitted by the Securities Act
and the Exchange Act. The Company will furnish promptly to each Co-
Dealer Manager, without charge, as soon as the Registration Statement
shall have become effective and during the period mentioned in the
second sentence of paragraph (e) below such number of copies of the
Prospectus and the other Offering Materials (as supplemented or amended)
as such Co-Dealer Manager may reasonably request and will cause all
amendments and supplements filed with the Commission to be distributed
to holders of Target Securities as may be required by the Securities Act
and the Exchange Act.
(e) To comply in all material respects with the Securities Act,
the Exchange Act and the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), in connection with the Offering Materials, the
Exchange Offer and the transactions contemplated hereby and thereby, as
applicable. If at any time when the Prospectus is required by the
Securities Act or Exchange Act to be delivered in connection with any
Solicitation or Exchange any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of counsel for the
Co-Dealer Managers or counsel for the Company, to amend the Registration
Statement or amend or supplement the Prospectus or any other Offering
Materials in order that the Prospectus or such other Offering Materials
will not include an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements in the
Prospectus or such other Offering Materials, in the light of the
circumstances under which they were made, not misleading or if, in the
opinion of either such counsel, it shall be necessary to amend the
Registration Statement or amend or supplement the Prospectus or any
other Offering Materials to comply with the requirements of the
Securities Act or Exchange Act, the Trust will promptly prepare, file
with the Commission, subject to Section 4(b) of this Agreement, and
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furnish, at its own expense, to each Co-Dealer Manager and to the
dealers (whose names and address will be furnished to the Company by the
Co-Dealer Managers) to which Preferred Securities may have been
exchanged, such amendment or supplement as may be necessary to correct
such untrue statement or omission or to make the Registration Statement
or the Prospectus or such other Offering Materials comply with such
requirements.
(f) To endeavor, in cooperation with the Co-Dealer Managers, to
qualify the Preferred Securities for offering and sale in connection
with the Exchange Offer under the applicable securities or Blue Sky laws
of such jurisdictions as the Company and the Trust may elect and to
maintain such qualifications in effect for such time as may be required
for the consummation of the Exchange Offer; provided, however, that
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neither the Company nor the Trust shall be obligated to file any general
consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so
qualified or to subject itself to taxation in respect of doing business
in any jurisdiction in which it is not otherwise so subject; provided
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further that the Co-Dealer Managers shall not be obligated to solicit
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tenders in jurisdictions where the Preferred Securities are not
qualified for offer and sale. The Company and the Trust will file such
statements and reports as may be required by the laws of each
jurisdiction in which the Preferred Securities have been qualified as
above provided.
(g) To make generally available to its security holders and to the
Co-Dealer Managers as soon as practicable an earnings statement covering
a twelve-month period beginning on the first day of the first full
fiscal quarter after the date of this Agreement, which earning statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
(h) To use its best efforts to effect the listing of the Preferred
Securities on the New York Stock Exchange ("NYSE"), subject to official
notice of issuance, as soon as practicable after the date hereof.
(i) To timely file any report or other document required to be
filed by the Company or the Trust with the Commission pursuant to
Section 13, 14 or 15 of the Exchange Act during the period of time
referred to in the second sentence of Section 4(e) hereof.
(j) To pay all costs and expenses incurred in connection with the
performance of its obligations in connection with this Agreement and the
Solicitations including, without limitation, (i) the preparation,
printing and filing of the Registration Statement (including
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financial statements and exhibits), as originally filed and as amended,
the preliminary prospectuses, the Prospectus and the other Offering
Materials and any amendments or supplements to any of the foregoing, and
the cost of furnishing copies thereof to the Co-Dealer Managers,
(ii) the preparation and distribution of this Agreement, certificates
for the Preferred Securities and any Blue Sky surveys and the printing
of certificates for the Preferred Securities, (iii) the distribution of
the Offering Materials to the holders of the Target Securities, (iv) the
fees and disbursements of counsel to the Company and the Trust, counsel
to the Co-Dealer Managers and the Company's and the Trust's accountants,
(v) the qualification of the Preferred Securities under the applicable
securities laws in accordance with Section 4(f) and any filing for
review of the Exchange Offer with the NASD (including filing fees and
fees and disbursements of counsel for the Co-Dealer Managers in
connection with such filing with the NASD), (vi) the fees and expenses
of the Transfer Agent, the Registrar, the Trustees of the Trust (the
"Trustees"), the Indenture Trustee (as defined herein), the Information
Agent and the Exchange Agent and (vii) all other costs and expenses
incident to the Solicitations incurred by the Trust and the Company and
its subsidiaries. The Company agrees to pay all of the aforementioned
costs and expenses whether or not the Exchange Offer is consummated.
(k) To advise or cause the Exchange Agent to advise the Co-Dealer
Managers at 5:00 P.M., New York City time, or as promptly as practicable
thereafter, daily (or more frequently if requested), by telephone or
facsimile transmission, as of 4:00 P.M. on such day with respect to
Target Securities tendered as follows:
(A)(i) the number of shares of Target Securities validly
tendered represented by certificates physically held by the
Exchange Agent (or for which the Exchange Agent has received
confirmation of receipt of book-entry transfer of such Target
Securities into the Exchange Agent's account at a Book-Entry
Transfer Facility (as defined in the Prospectus) pursuant to the
procedures set forth in the Exchange Offer) on such day; (ii) the
number of shares of Target Securities represented by Notices of
Guaranteed Delivery on such day; (iii) the number of shares of
Target Securities properly withdrawn on such day; and (iv) the
cumulative number of shares of Target Securities in categories
(A)(i) through (A)(iii) above.
On the day following such oral communication, the Company shall furnish
or cause the Exchange Agent to furnish to the Co-Dealer Managers a
written report confirming the above information which has been
communicated orally. The Company shall furnish or cause the Exchange
Agent to furnish to the
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Co-Dealer Managers such reasonable information on the tendering holders
of Targeted Securities as may be requested from time to time.
(l) To give the Co-Dealer Managers notice of any change of the
expiration time of the Exchange Offer (the "Expiration Time").
5. Representations and Warranties of the Company and the Trust.
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Each of the Company and the Trust jointly and severally represents and
warrants to and agrees with each of the Co-Dealer Managers that:
(a) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 of the Securities Act, will comply when so
filed, in all material respects, as to form with the Securities Act and
the Exchange Act; the Registration Statement at the time it becomes
effective and the Prospectus and any other Offering Materials, on the
Commencement Date and on the date on which the Company commences
delivery of the Preferred Securities for exchange of the Target
Securities pursuant to the Exchange Offer (such date, the "Exchange
Date"), will comply, in all material respects, as to form with the
Securities Act and the Exchange Act; each part of the Registration
Statement when such part becomes effective will not contain and each
such part, as amended, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and as of the Commencement Date and the Exchange Date, none
of the Prospectus or the other Offering Materials or any amendments or
supplements to such Offering Materials will contain any untrue statement
of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, except that the representations
and warranties set forth in this Section 5(a) do not apply (A) to
statements or omissions made based upon and in conformity with
information supplied in writing by a Co-Dealer Manager expressly for use
in the Registration Statement, Prospectus, any other Offering Materials
or any amendments or supplements to any of the foregoing or (B) to that
part of the Registration Statement that constitutes the Statements of
Eligibility and Qualification on Form T-1 (the "Forms T-1") under the
Trust Indenture Act of The Bank of New York as trustee (the "Indenture
Trustee") under the Indenture (as defined herein), as institutional
trustee under the Declaration (as defined herein) and as trustee under
the Guarantee.
(b) The Company has the corporate power and authority to execute,
deliver and perform its obligations under this
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Agreement, the Declaration, the Indenture and the Guarantee; and this
Agreement has been duly authorized, executed and delivered by the
Company. The Trust has the business trust power and authority to
execute, deliver and perform its obligations under this Agreement; and
this Agreement has been duly authorized, executed and delivered by the
Trust.
(c) The Preferred Securities to be issued pursuant to the Exchange
Offer will be duly authorized by the Trust's Amended and Restated
Declaration of Trust (the "Declaration") and, when issued in exchange
for Target Securities pursuant to the Exchange Offer, will be validly
issued and (subject to the terms of the Declaration) fully paid and
nonassessable undivided beneficial interests in the assets of the Trust,
not subject to any preemptive or similar rights, and will conform to all
statements relating thereto contained in the Prospectus. Holders of
Preferred Securities will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit.
(d) The Declaration and the Guarantee have been duly authorized by
the Company and, as of the Exchange Date, will have been duly executed
and delivered by the Company. Assuming due authorization, execution and
delivery of the Declaration by the Trustees, the Declaration will, as
of the Exchange Date, be a valid and binding obligation of the Company
and the Trustees, enforceable against the Company and the Trustees in
accordance with its terms, subject to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity). As of the Exchange Date,
the Guarantee will be a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws affecting the rights and remedies of
creditors generally and of general principles of equity.
(e) The Indenture between the Company and the Indenture Trustee
(including the related supplemental indenture governing the Debentures
to be deposited in the Trust, the "Indenture"), will be duly qualified
under the Trust Indenture Act and, assuming due authorization, execution
and delivery of the Indenture by the Indenture Trustee and upon
execution and delivery by the Company, will be enforceable against the
Company in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium and
other similar laws affecting the rights and remedies of creditors
generally and of general principles of equity.
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(f) The Debentures to be deposited in the Trust as trust assets in
connection with the Exchange Offer have been duly and validly
authorized, and assuming due authorization, execution and delivery of
the Indenture by the Indenture Trustee, when executed and authenticated
in accordance with the provisions of the Indenture and delivered to the
Trust pursuant to the terms of the Exchange Offer will be entitled to
the benefits of the Indenture and will be valid and binding obligations
of the Company enforceable against the Company in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting the rights and
remedies of creditors generally and of general principles of equity.
(g) The Company has been duly incorporated, is validly existing as
a corporation and is in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent
that the failure to be so qualified or to be in good standing would not
have a material adverse effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(h) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, is and will be
treated as a "grantor trust" for Federal income tax purposes under
existing law, has the business trust power and authority to conduct its
business as presently conducted and as described in the Prospectus, and
is not required to be authorized to do business in any other
jurisdiction.
(i) Each of RJR Nabisco, Inc. ("RJRN"), R.J. Reynolds Tobacco
Company, R.J. Reynolds Tobacco International, Inc. and Nabisco Holdings
Corp. ("Nabisco") (collectively, the "Principal Operating Subsidiaries")
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, has the
corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or to be in good standing would not have a material adverse
effect on the financial condition or results of operations of the
Company and its subsidiaries, taken as a whole.
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(j) (i) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the Prospectus;
(ii) except as set forth in the Prospectus and except for 51,750,000
shares of Class A Common Stock of Nabisco, all of the outstanding
capital stock of each of the Principal Operating Subsidiaries which is
owned by the Company is owned directly or indirectly by the Company free
and clear of any security interest, claim, lien or other encumbrance or
preemptive rights; and (iii) except for (A) options to acquire common
stock of Nabisco granted to certain directors, officers and employees of
the Company and Nabisco and (B) the option granted to RJRN to acquire
shares of Class B Common Stock of Nabisco pursuant to the Corporate
Agreement between RJRN and Nabisco dated as of January 26, 1995 and the
rights of holders of the Class A Common Stock and Class B Common Stock
of Nabisco to convert their shares into shares of the other class in
accordance with the Certificate of Incorporation of Nabisco under
certain circumstances, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to acquire,
or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in any of the Principal Operating
Subsidiaries or any contract, commitment, agreement, understanding or
arrangement of any kind relating to the issuance of any such capital
stock, any such convertible or exchangeable securities or any such
rights, warrants or options.
(k) The execution and delivery by the Company and the Trust of,
and the performance by the Company and the Trust of their obligations
under, this Agreement, the execution and delivery by the Company of, and
the performance by the Company of its obligations under, the
Declaration, the Indenture and the Guarantee, the issuance and delivery
by the Trust of the Preferred Securities and the consummation of the
Exchange Offer and the fulfillment of the terms herein contemplated will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or the declaration of trust of
the Trust or any agreement or other instrument binding upon the Trust or
the Company or any of its subsidiaries or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Trust or the Company or any of its subsidiaries, except for such
contraventions that would not, individually or in the aggregate, have a
material adverse effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, or the
Trust and no consent, approval or authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company and the Trust of their obligations under this
Agreement, the issuance and delivery of the Preferred Securities and the
consummation of the Exchange Offer,
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except such as will be obtained under the Securities Act, the Exchange
Act or the Trust Indenture Act and as may be required by the securities
or Blue Sky laws of the various states or the securities laws of non-U.S.
jurisdictions in connection with the Exchange Offer.
(l) There are no legal or governmental proceedings pending or, to
the best of the Company's knowledge, threatened to which the Trust or
the Company or any of its subsidiaries is a party or to which any of the
properties of the Trust or the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement
or the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to
the Registration Statement that are not described or filed as required.
(m) Neither the Company nor the Trust is, or after giving effect
to the consummation of the Exchange Offer, will be, and neither the
Company nor the Trust is directly or indirectly controlled by, or acting
on behalf of any person which is, an investment company within the
meaning of the Investment Company Act of 1940, as amended.
(n) Each of the Company and the Trust has complied with all
provisions of Section 517.075 Florida Statutes (Chapter 92-198, Laws of
Florida).
6. Indemnification and Contribution. (a) Each of the Company
--------------------------------
and the Trust jointly and severally agrees: (A) to indemnify and hold each
Co-Dealer Manager harmless against any loss, damage, expense, liability or
claim (i) which (1) with respect to the Registration Statement, is caused by
any untrue statement or alleged untrue statement of a material fact contained
therein or which is caused by the omission or alleged omission to state
therein 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, or (2) with respect to the Offering Materials or
in any amendment or supplement thereto, is caused by any untrue statement or
alleged untrue statement of a material fact contained in such Offering
Materials or which is caused by the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except, in any such case, as to any Co-Dealer Manager insofar as such loss,
damage, expense, liability or claim is caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
relating to such Co-Dealer Manager furnished to the Company or the Trust in
writing by such Co-Dealer Manager expressly for use in such Offering
Materials, or (ii) which arises out of or is based upon a withdrawal,
14
rescission or modification of or a failure to make or consummate the Exchange
Offer; and (B) to indemnify and hold each Co-Dealer Manager harmless against
any other loss, damage, expense, liability or claim which otherwise arises
out of or is related to this Agreement or the Exchange Offer or the services
provided by the Co-Dealer Managers in connection with this Agreement or the
Exchange Offer, except to the extent any such loss, damage, expense,
liability or claim referred to in this clause (B) is found by a final
judgment of a court of competent jurisdiction to have resulted from such Co-
Dealer Manager's gross negligence, bad faith or wilful misconduct. The
Company and the Trust each jointly and severally agrees to indemnify and hold
each Co-Dealer Manager harmless against and reimburse each Co-Dealer Manager
for any and all reasonable expenses (including reasonable legal fees and
expenses) as such expenses are incurred by such Co-Dealer Manager in
connection with investigating, preparing for or defending against any such
loss, damage, expense, liability or claim, whether or not resulting in any
liability, whether or not such Co-Dealer Manager is a named party in
connection therewith and whether or not such loss, damage, expense, liability
or claim results from action initiated or brought by or on behalf of the
Company or any of its subsidiaries (including the Trust), and any amount paid
in settlement of any litigation, commenced or threatened, or of any claim
whatsoever as set forth herein if such settlement is effected with the prior
written consent of the Company and the Trust; provided, however, with respect
--------
to clause (B) above, that neither the Company nor the Trust shall be liable
for any of the foregoing expenses and any amounts previously paid shall be
promptly repaid to the extent that any loss, damage, liability or claim is
found by a final judgment of a court of competent jurisdiction to have
resulted from such Co-Dealer Manager's gross negligence, bad faith or wilful
misconduct. The Company and the Trust also agree that no Co-Dealer Manager
shall have any liability (whether direct or indirect, in tort, contract or
otherwise) to the Company or any of its subsidiaries (including the Trust) or
its or their security holders or creditors related to or arising out of this
Agreement or the Exchange Offer or the services provided by such Co-Dealer
Manager in connection with this Agreement or the Exchange Offer, except to
the extent such liability is found by a final judgment of a court of
competent jurisdiction to have resulted from such Co-Dealer Manager's gross
negligence, bad faith or wilful misconduct and except as expressly provided
in the next succeeding paragraph.
Each Co-Dealer Manager agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Trust to the same extent as
the foregoing indemnity from the Company and the Trust to each Co-Dealer
Manager contained in Section 6(a)(A)(i) above, but only with reference to
information relating to such Co-Dealer Manager furnished to the Company in
writing by such Co-Dealer Manager expressly for use in the Offering
Materials.
15
(b) Promptly after receipt by a person indemnified under this
Section 6 of notice of any suit, action, proceeding or investigation with
respect to which an indemnified party may be entitled to indemnification
hereunder, such indemnified person shall notify the person against whom such
indemnity may be sought in writing of the commencement or the written
assertion thereof; but the omission so to notify such indemnifying person
shall not relieve such indemnifying person from any liability which it may
have to such indemnified person unless the indemnifying person has been
materially prejudiced by such omission. Following such notification, such
indemnifying person may elect in writing to assume the defense of such suit,
action, proceeding or investigation and, upon such election, such
indemnifying person shall not be liable for any legal costs subsequently
incurred by such indemnified person (other than reasonable costs of
investigation and providing evidence) in connection therewith, unless (i)
such indemnifying person has failed to provide counsel reasonably
satisfactory to such indemnified person in a timely manner, (ii) counsel
which has been provided by such indemnifying person reasonably determines
that its representation of such indemnified person would present it with a
conflict of interest or (iii) such indemnified person reasonably determines
that there may be legal defenses available to it which are different from or
in addition to those available to such indemnifying person. In the event of
a determination pursuant to clause (i), (ii) or (iii) above, such indemnified
person shall be entitled to retain separate counsel of their choice and the
fees and expenses of such separate counsel shall be borne by such
indemnifying person. Such indemnifying person shall not in any event be
liable for the fees and expenses of more than one separate firm of attorneys
(in addition to any local counsel) for all Co-Dealer Managers in any one
action or group of related actions, except as provided in the immediately
preceding sentence. Whether or not such indemnifying person shall have
assumed the defense of any suit, action, proceeding or investigation, the
Company, the Trust and the Co-Dealer Managers agree to cooperate in the
defense thereof and shall furnish such records, information, testimony, and
attend such conferences, discovery proceedings, hearings, trials and appeals,
as may be reasonably requested in connection therewith.
(c) If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an indemnified person to the
extent provided under subsection (a) above in respect of any losses, damages,
expenses, liabilities or claims referred to therein, then the indemnifying
person shall contribute to the amount paid or payable by such indemnified
person as a result of such losses, damages, expenses, liabilities or claims
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company and its subsidiaries (including the Trust) on the one
hand and such Co-Dealer Manager on the other from the Exchange Offer or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative
16
fault of the Company and its subsidiaries (including the Trust) on the one
hand and such Co-Dealer Manager on the other in connection with any
statements or omissions or any other matters which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
its subsidiaries (including the Trust) on the one hand and such Co-Dealer
Manager on the other shall be deemed to be in the same proportion as the
maximum aggregate liquidation preference of Preferred Securities issuable
pursuant to the Exchange Offer bears to the maximum amount of fees payable to
such Co-Dealer Manager pursuant to Section 3 hereof. The relative fault of
the Company and its subsidiaries (including the Trust) on the one hand and
such Co-Dealer Manager on the other (i) in the case of any untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact, shall be determined by reference to, among other
things, whether such statement or omission relates to information supplied by
the Company or any of its subsidiaries (including the Trust) or their
affiliates or such Co-Dealer Manager, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission and (ii) in the case of any other action or omission,
shall be determined by reference to, among other things, whether such action
or omission was taken or omitted to be taken by the Company or any of its
subsidiaries (including the Trust) or their affiliates or by such Co-Dealer
Manager, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action or omission. The Company
and each Co-Dealer Manager agree that it would not be just and equitable if
contribution pursuant to this subsection (c) were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in this subsection (c).
Notwithstanding the provisions of this Section 6(c), no Co-Dealer Manager
shall be required to contribute any amount in excess of the fee paid to such
Co-Dealer Manager as provided in Section 3 hereof. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act of 1933, as amended) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
7. Conditions to Co-Dealer Managers' Obligations. The
---------------------------------------------
obligations of the Co-Dealer Managers hereunder are subject as of the
Commencement Date and as of the Exchange Date to the accuracy of the
representations and warranties of the Company and the Trust contained herein
or in certificates of any officer of the Company or the Trust delivered
pursuant to the provisions hereof, to the performance, in all material
respects, by the Company and the Trust of their obligations hereunder to be
performed, and the following additional conditions:
(a) On the Commencement Date and the Exchange Date, the
Registration Statement shall have become effective under the Securities
Act; no stop order suspending the
17
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or, to the
Company's or the Trust's knowledge, threatened by the Commission.
(b) On the Commencement Date and the Exchange Date, there shall
not have been since the respective date as of which information is given
in the Registration Statement, any material adverse change, or any
development involving a prospective material adverse change, in the
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole.
(c) The Co-Dealer Managers shall have received on the Commencement
Date and the Exchange Date a certificate, dated such date and signed by
an executive officer of the Company, to the effect set forth in clause
(b) above and to the effect that the representations and warranties of
the Company contained in this Agreement are true and correct in all
material respects as of such date and that the Company has complied in
all material respects with all of the agreements and satisfied in all
material respects all of the conditions on its part to be performed or
satisfied on or before such date. The officer signing and delivering
such certificate may rely upon the best of such officer's knowledge as
to proceedings threatened.
(d) On the Commencement Date and the Exchange Date, there shall
not have been since the respective date as of which information is given
in the Registration Statement, any material adverse change, or any
development involving a prospective material adverse change, in the
financial condition or results of operations of the Trust.
(e) The Co-Dealer Managers shall have received on the Commencement
Date and the Exchange Date a certificate, dated such date and signed by
an executive officer of the Trust, to the effect set forth in clause (d)
above and to the effect that the representations and warranties of the
Trust contained in this Agreement are true and correct in all material
respects as of such date and that the Trust has complied in all material
respects with all of the agreements and satisfied in all material
respects all of the conditions on its part to be performed or satisfied
on or before such date. The officer signing and delivering such
certificate may rely upon the best of such officer's knowledge as to
proceedings threatened.
(f) On the Commencement Date and the Exchange Date, the Co-Dealer
Managers shall have received a signed opinion of Davis Polk & Wardwell,
counsel for the Company and the Trust, dated as of such date, to the
effect that:
18
(i) The Company is validly existing as a corporation, is in
good standing under the laws of the State of Delaware and has the
corporate power and authority to own its property and to conduct
its business as described in the Prospectus;
(ii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act and, assuming due authorization, execution and
delivery of the Indenture by the Company, the Indenture will be
enforceable against the Company in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting the
rights and remedies of creditors generally and of general
principles of equity;
(iv) assuming due authorization, execution and delivery of the
Debentures by the Company and due authorization, execution and
delivery of the Indenture by the Company and the Indenture Trustee,
the Debentures when executed and authenticated in accordance with
the provisions of the Indenture and delivered pursuant to the terms
of the Exchange Offer will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the Company
enforceable against the Company in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium and other similar laws affecting the
rights and remedies of creditors generally and of general
principles of equity;
(v) assuming due authorization, execution and delivery of the
Guarantee by the Company, the Guarantee will be enforceable against
the Company in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, receivership, moratorium
and other similar laws affecting the rights and remedies of
creditors generally and of general principles of equity;
(vi) the statements made in the Prospectus under the captions
"Description of the Preferred Securities," "Description of the
Junior Subordinated Debentures," and "Description of the
Guarantee", insofar as such statements constitute summaries of the
legal matters or documents referred to therein are accurate in all
material respects;
19
(vii) such counsel confirms its opinion under the caption
"Taxation";
(viii) neither the Company nor the Trust is, or after giving
effect to the consummation the Exchange Offer, will be, and neither
the Company nor the Trust is directly or indirectly controlled by,
or acting on behalf of any person which is, an investment company
within the meaning of the Investment Company Act of 1940, as
amended.
(ix) such counsel (1) has no reason to believe that (except
for financial statements and schedules and financial and
statistical data as to which such counsel need not express any
belief and except for that part of the Registration Statement that
constitutes the Forms T-1) (i) as of its effective date, the
Registration Statement or any further amendment thereto made prior
to the date of such counsel's opinion, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (ii) that, as of the date of such
counsel's opinion, the Prospectus or any further amendment or
supplement to the Prospectus made prior to the date of such
counsel's opinion (except as aforesaid), contains any untrue
statement of a material fact or omits to state a material fact
necessary in order to make the statements therein in the light of
the circumstances under which they were made, not misleading, and
(2) is of the opinion that the Registration Statement and
Prospectus and any further amendments and supplements thereto made
prior to the date of such counsel's opinion (except as aforesaid),
as of their respective effective or issue dates, comply as to form
in all material respects with the Securities Act.
In rendering such opinion, such counsel may rely as to certain
matters of fact on certificates of officers of the Company and of public
officials and may state that such counsel expresses no opinion as to the
laws of any jurisdiction other than the State of New York, the federal
law of the United States and the Delaware General Corporation Law.
With respect to paragraph (ix) above, such counsel may state that
it has not independently verified the accuracy, completeness or fairness
of the statements made or included or incorporated by reference therein
and takes no responsibility therefor and that such opinion is based upon
such counsel's examination of the Registration Statement, the Prospectus
as amended or supplemented and any documents incorporated by reference
thereto, its investigations made in connection with the preparation of
the Registration
20
Statement and Prospectus and its participation in conferences with
certain officers and employees of the Company and its subsidiaries and
with representatives of Deloitte & Touche and any others referred to in
such opinion.
(g) On the Commencement Date and the Exchange Date, the Co-Dealer
Managers shall have received a signed opinion of Morris, Nichols, Arsht
& Tunnell, Delaware counsel for the Company, dated as of such date, to
the effect that:
(i) the Trust has been duly organized and is validly existing
in good standing as a business trust under the Delaware Act and has
the business trust power and authority to conduct its business as
described in the Prospectus;
(ii) assuming due authorization, execution and delivery of the
Declaration by the Company and the Trustees, the Declaration is a
legal, valid and binding agreement of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with
its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance, moratorium and
other similar laws affecting the rights and remedies of creditors
generally as from time to time in effect, general principles of
equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law), and considerations of public
policy or the effect of applicable law relating to fiduciary
duties;
(iii) under the Declaration and the Delaware Act, the execution
and delivery of this Agreement by the Trust, and the performance by
the Trust of its obligations hereunder, have been duly authorized
by all requisite business trust action on the part of the Trust;
(iv) the Preferred Securities have been duly authorized by the
Declaration and are duly and validly issued and, subject to the
terms of the Declaration, fully paid and nonassessable beneficial
interests in the Trust. The holders of Preferred Securities will
be, subject to the terms of the Declaration, entitled to the same
limitation of personal liability extended to stockholders of
private corporations for profit organized under the General
Corporation Law of the State of Delaware; and
(v) under the Declaration and the Delaware Act, the issuance
of the Preferred Securities is not subject to preemptive rights.
21
(h) On the Commencement Date and the Exchange Date, the Co-Dealer
Managers shall have received a signed opinion of Jo-Ann Ford, Senior
Vice-President, Law and Secretary, counsel for the Company, dated as of
such date, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Delaware, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or the
ownership or leasing of its property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local
counsel);
(ii) each Principal Operating Subsidiary has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken
as a whole (such counsel being entitled to rely in respect of the
opinion in this clause upon opinions of local counsel);
(iii) (a) The authorized capital stock of the Company
conforms as to legal matters to the description thereof contained
in the Prospectus; (b) except for 51,750,000 shares of Class A
Common Stock of Nabisco, all of the outstanding capital stock of
each of the Principal Operating Subsidiaries is owned directly or
indirectly by the Company free and clear of any security interest,
claim, lien or other encumbrance or preemptive rights; and (c)
except for (i) options to acquire common stock of Nabisco granted
to certain directors, officers and employees of the Company and
Nabisco and their subsidiaries and (ii) the option granted to RJRN
to acquire shares of Class B Common Stock of Nabisco pursuant to
the Corporate Agreement between RJRN and Nabisco dated as of
January 26, 1995 and the rights of holders of the Class A Common
Stock
22
and Class B Common Stock of Nabisco to convert their shares into
shares of the other class in accordance with the Certificate of
Incorporation of Nabisco under certain circumstances, there are no
outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other
equity interest in any of the Principal Operating Subsidiaries or
any contract, commitment, agreement, understanding or arrangement
of any kind relating to the issuance of any such capital stock, any
such convertible or exchangeable securities or any such rights,
warrants or options.
(iv) this Agreement, the Declaration, the Indenture, the
Debentures and the Guarantee have been duly authorized, executed
and delivered by the Company;
(v) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Declaration, the Indenture, the Debentures and the
Guarantee, and the consummation of the Exchange Offer and the
fulfillment of the terms herein contemplated (including the
issuance of the Preferred Securities by the Trust) will not
contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or any of its subsidiaries
(including the Trust) or, to the best of such counsel's knowledge,
any agreement or other instrument binding upon the Company or any
of its subsidiaries (including the Trust) or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any subsidiary (including the Trust), except for such
contraventions that would not, individually or in the aggregate,
have a material adverse effect on the financial condition or
results of operations of the Company and its subsidiaries, taken as
a whole, and no consent, approval or authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by either the Trust or the Company of its
obligations under this Agreement, the Declaration, the Indenture,
the Debentures and the Guarantee, and the consummation of the
Exchange Offer, except such as have been obtained under the
Securities Act or the Exchange Act and as may be required by the
securities or Blue Sky laws of the various states or the securities
laws of non-U.S. jurisdictions in connection with the Exchange
Offer;
(vi) after due inquiry, to the best of such counsel's
knowledge, such counsel does not know of any legal or governmental
proceeding pending or threatened
23
to which the Company or any of its subsidiaries (including the
Trust) is a party or to which any of the properties of the Company
or any of its subsidiaries (including the Trust) is subject that is
required to be described in the Registration Statement or the
Prospectus and is not so described or of any statutes, regulations,
contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or
filed as required;
(vii) such counsel (1) is of the opinion that each document, if
any, filed pursuant to the Exchange Act and incorporated by
reference in the Registration Statement or Prospectus (except for
financial statements and schedules and other financial and
statistical data included therein as to which such counsel need not
express any opinion and except for that part of the Registration
Statement that constitutes the Forms T-1) complied when so filed as
to form in all material respects with the Exchange Act, (2) has no
reason to believe that (except for financial statements and
schedules and financial and statistical data as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Forms T-1) (i) as of
its effective date, the Registration Statement, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Prospectus or any
further amendment or supplement to the Prospectus made prior to the
date of such counsel's opinion (except as aforesaid), on the date
of such counsel's opinion, contains any untrue statement of a
material fact or omits to state a material fact necessary in order
to make the statements therein in the light of the circumstances
under which they were made, not misleading and (3) is of the
opinion that the Registration Statement and Prospectus and any
further amendments and supplement thereto prior to the date of such
counsel's opinion (except as aforesaid), on their respective
effectiveness or issue dates, comply as to form in all material
respects with the Securities Act.
In rendering such opinion, such counsel may rely as to certain
matters of fact on certificates of officers of the Company and of public
officials and may state that such counsel expresses no opinion as to the
laws of any jurisdiction other than the State of New York, the federal
law of the United States and the Delaware General Corporation Law.
24
With respect to paragraph (vii) above, counsel for the Company may
state that such counsel's opinion and belief are based upon such
counsel's participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified.
(i) The Co-Dealer Managers shall have received the favorable
opinion of Simpson Thacher & Bartlett, counsel for the Co-Dealer
Managers, dated as of the Commencement Date and the Exchange Date,
covering the incorporation and legal existence of the Company, the
issuance and delivery of the Preferred Securities, this Agreement, the
Registration Statement, the Prospectus and such other related matters as
the Co-Dealer Managers may require. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York, and the Federal law of the United
States and the corporate law of the State of Delaware, upon the opinions
of counsel satisfactory to the Co-Dealer Managers. Such counsel may
also state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of
officers of the Company and certificates of public officials.
(j) On the Commencement Date, the Co-Dealer Managers shall have
received from the Company's independent public accountants, in form and
substance satisfactory to the Co-Dealer Managers and dated as of such
date, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect
to the financial statements and certain financial information contained
in or incorporated by reference into the Prospectus.
(k) At the Exchange Date, the Co-Dealer Managers shall have
received from the Company's independent public accountants, in form and
substance satisfactory to the Co-Dealer Managers and dated as of such
dates, to the effect that such accountants reaffirm the statements made
in the letter furnished pursuant to Section 7(j).
(l) By the Exchange Date, RJRN shall have entered into appropriate
agreements with the Information Agent and the Exchange Agent for
purposes of the Exchange Offer.
8. Termination. (a) This Agreement shall terminate upon the
-----------
earliest to occur of (i) the Exchange Date, (ii) the date on which the Co-
Dealer Managers give notice to the Company and the Trust that any of the
conditions specified in Section 7 have not been fulfilled as of any date such
conditions are required to be fulfilled pursuant to Section 7 or (iii) the
date
25
on which the Company terminates or withdraws the Exchange Offer for any
reason (the earliest to occur of clauses (i), (ii) or (iii) being referred to
as the "Termination Date").
(b) Notwithstanding termination of this Agreement pursuant to
subsection (a) of this Section 8, the obligations of the Company to
compensate the Co-Dealer Managers pursuant to Section 3, the representations
and warranties contained in Section 5 and the provisions of Section 6 shall
survive any termination of this Agreement.
9. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if delivered,
mailed or transmitted by any standard form of telecommunication. Notices to
the Co-Dealer Managers shall be directed to Merrill Lynch & Co., World
Financial Center, North Tower, New York, New York 10281-1307, attention
Samuel R. Chapin, with a copy to David Sorkin, Esq., Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017, and notices to the
Company and the Trust shall be directed to either of them c/o RJR Nabisco
Holdings Corp., 1301 Avenue of the Americas, New York, New York 10019,
attention of Jo-Ann Ford, Esq., with a copy to David W. Ferguson, Esq.,
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017. Any
notice under Section 6 hereof may be made by telex or telephone, but if so
made, shall be subsequently confirmed promptly in writing.
10. Tombstone. The Company and the Trust acknowledge that the Co-
---------
Dealer Managers may, with the prior review and approval of the Company, which
approval shall not be unreasonably withheld, place an announcement in such
newspapers and periodicals as the Co-Dealer Managers may choose, stating that
the Co-Dealer Managers are or were acting as co-dealer managers and financial
advisors to the Company and the Trust in connection with the Exchange Offer.
The costs relating to any such tombstone shall be borne by the Co-Dealer
Managers.
11. Survival of Certain Provisions. The representations,
------------------------------
warranties, indemnities and agreements of the Company and the Trust will
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Co-Dealer Manager or any affiliate or controlling
person thereof and, subject to Section 8(b), will survive the consummation of
the Exchange Offer.
12. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of New York, without
giving effect to principles of conflicts of laws.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be
an original and all
26
of which counterparts, taken together, shall constitute one and the same
Agreement.
14. Successors. This Agreement is made solely for the benefit of
----------
the Co-Dealer Managers, the Company and the Trust and, to the extent
expressed, the parties indemnified pursuant to Section 6, and no other
persons shall acquire or have any right under or by virtue of this Agreement.
Nothing in this Agreement, expressed or implied, is intended to confer on any
person other than the parties hereto or their respective successors and
assigns, and, to the extent expressly set forth herein, the parties
indemnified pursuant to Section 6 hereof, any rights or remedies under or by
reason of this Agreement. Without limiting the generality of the foregoing,
the parties acknowledge that nothing in this Agreement, expressed or implied,
is intended to confer on holders of the securities of the Trust, the Company
or any of its subsidiaries or creditors of the Company or any of its
subsidiaries or the respective successors and assigns of such creditors, any
rights or remedies under or by reason of this Agreement.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company, the Trust and
the Co-Dealer Managers in accordance with its terms.
Very truly yours,
RJR NABISCO HOLDINGS CORP.
By:________________________________
RJR NABISCO HOLDINGS CAPITAL
TRUST I
By RJR NABISCO HOLDINGS CORP.
By:________________________________
Confirmed and accepted as of
the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
LEHMAN BROTHERS
MORGAN STANLEY & CO. INCORPORATED
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
By: Merrill Lynch, Pierce, Fenner
& Smith Incorporated
By: ______________________