High River Limited Partnership
000 Xxxxx Xxxxxxx Xxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
November 5, 1995
Brooke Group Ltd.
BGLS Inc.
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. XxXxx
Dear Xxxxxxx:
By executing this letter in the space provided below,
Brooke Group Ltd., a Delaware corporation ("BGL"), BGLS Inc., a
Delaware corporation and a direct wholly-owned subsidiary of BGL
("BGLS") and High River Limited Partnership, a Delaware limited
partnership ("High River"), each hereby agree as follows:
1. All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such terms
in the Agreement by and among BGL, BGLS and High River, dated
October 17, 1995 (the "BGL Agreement").
2. Section 1(a) of the BGL Agreement is deleted in its
entirety and all reference thereto in the BGL Agreement is
likewise deleted.
3. Section 1(c)(ii)(B) of the BGL Agreement is hereby
amended to delete the subsection in its entirety and to
substitute in lieu thereof the following:
"(B) Prior to the consummation of the Spinoff, the BGL Group
will (I) not directly or indirectly exercise any management
control over Nabisco or Nabisco, Inc., a Delaware
corporation ("Nabisco, Inc."), (II) refrain from becoming
involved in the ordinary course of business of Nabisco or
Nabisco, Inc. and (III) use its best efforts to ensure that
a majority of the directors of Nabisco and Nabisco, Inc.
consists of individuals who are presently members of the
board of directors of Nabisco and Nabisco, Inc.,
respectively and"
4. Section 3(c)(ix)(C) of the BGL Agreement is hereby
amended to delete the subsection in its entirety and to
substitute in lieu thereof the following:
"(C) fail to file the Solicitation Statement relating to the
Annual Meeting preliminarily with the SEC prior to the
earlier of (I) February 15, 1996 and (II) sixty (60) days
following the record date for the solicitation of Written
Consents with respect to the Spinoff Proposal and the By-Law
Amendment Proposal,"
5. In the event that prior to February 1, 1996 (i)
the BGL Group provides High River Group with notice of
termination of the BGL Agreement or New Valley Group (as defined
below) provides High River Group with notice of termination of
the Agreement by and among New Valley Corporation, ALKI Corp. and
High River, dated October 17, 1995 (the "New Valley Agreement")
at a time when a Termination Event set forth in Section 3(c)(vii)
or 3(c)(viii) of the BGL Agreement has occurred or (ii) High
River Group provides BGL Group with notice of termination of the
BGL Agreement or provides New Valley Group with notice of
termination of the New Valley Agreement at a time when a
Termination Event set forth in Section 3(c)(ix)(A) of the BGL
Agreement has occurred, BGL Group shall not transfer any Shares
beneficially owned by BGL Group until February 1, 1996 in
consequence of or in reliance upon such notice of termination.
If the notice of termination specified in clause (i) of the
preceding sentence is provided after January 16, 1996, and the
aggregate number of shares of common stock, par value $.01 per
share, of RJR Nabisco Holdings Corp. ("Shares") beneficially
owned by High River Group exceeds the aggregate number of Shares
beneficially owned by (A) New Valley Corporation, ALKI Corp. and
any assignee of the foregoing ("New Valley Group") plus (B) BGL
Group (collectively, the "Aggregate XxXxx Shares"), BGL Group
shall not Transfer any Shares beneficially owned by BGL Group for
fifteen (15) days following receipt by High River Group of BGL
Group's or New Valley Group's notice of termination; provided,
however, that on such date not before February 1, 1996 that the
aggregate number of Shares beneficially owned by High River Group
is equal to or less than the Aggregate XxXxx Shares, and
thereafter, BGL Group may Transfer any Shares beneficially owned
by BGL Group.
6. In the event that High River Group provides BGL
Group with notice of termination of the BGL Agreement or provides
New Valley Group with notice of termination of the New Valley
Agreement at a time when a Termination Event under any of
Sections 3(c)(ix)(B) through (E) of the BGL Agreement has
occurred and the aggregate number of shares beneficially owned by
High River Group exceeds the Aggregate XxXxx Shares, BGL Group
shall not Transfer any Shares beneficially owned by BGL Group in
consequence of or in reliance upon such notice of termination
until the earlier of (i) fifteen (15) days following receipt by
BGL Group or New Valley Group of High River Group's notice of
termination specified in the preceding sentence and (ii) the date
that the aggregate number of Shares beneficially owned by High
River Group is equal to or less than the Aggregate XxXxx Shares.
7. BGLS shall promptly make any payments due under
Section 4(c) of the BGL Agreement. In the event that High River
Group believes that BGLS has breached any of its obligations
under Section 4(c) of the BGL Agreement, the parties shall
promptly follow the procedures set forth in Section 1(c)(v) of
the New Valley Agreement in order to resolve the dispute. If the
Arbitrator (as defined in the New Valley Agreement) determines
that BGLS is required to make a payment pursuant to Section 4(c)
of the BGL Agreement, BGLS shall make or cause to be made to High
River Group such payment within twenty (20) days after receiving
the Arbitrator's notice of decision. In the event that BGLS
fails to make such payment within twenty (20) days after receipt
of the Arbitrator's notice of decision, BGLS shall immediately
pay or cause to be paid to High River Group an additional sum in
the amount of $50 million.
8. Section 9(k) shall be added to the BGL Agreement
to read as follows:
"(k) Anything in this Agreement to the contrary
notwithstanding, High River shall have no obligation with
respect to the selection of the BGL Nominees or the
solicitation of Written Consents or Proxies."
9. Nothing herein contained shall be construed to
otherwise abrogate the rights and obligations of the parties to
this letter agreement with respect to all other provisions of the
BGL Agreement, the New Valley Agreement and the letter agreement
by and among New Valley, ALKI Corp. and High River, dated October
17, 1995 (the "Letter Agreement").
If the foregoing reflects your understanding, please
sign this letter below. Upon your execution hereof, this letter
agreement will become a binding contract between us.
Very truly yours,
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE INVESTORS CORP., INC.
Its: General Partner
By:
Name:
Title:
Agreed to and Accepted:
BROOKE GROUP LIMITED
By:
Name:
Title:
BGLS INC.
By:
Name:
Title:
[Signature page for letter agreement by and among Brooke Group
Limited, BGLS Inc. and High River Limited Partnership, dated
November __, 1995]
