AGREEMENT
This AGREEMENT among 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"), dated October 17, 0000
X X X X X X X X T H:
WHEREAS, High River, directly or indirectly, and BGL
and BGLS, indirectly through their ownership of stock of New
Valley Corporation, a New York corporation ("New Valley"), are
stockholders of RJR Nabisco Holdings Corp., a Delaware
corporation ("RJRN");
WHEREAS, the parties hereto believe that the value of
RJRN stockholders' investment can be substantially increased
through a spinoff (the "Spinoff") of all or substantially all of
RJRN's remaining investment in Nabisco Holding Corp., a Delaware
corporation ("Nabisco");
WHEREAS, BGL and BGLS desire to obtain the assistance
and advice of High River with respect to measures designed to
effectuate the Spinoff at the earliest possible date;
WHEREAS, High River is willing to give such assistance
and advice to BGL and BGLS in consideration of the agreements by
BGL and BGLS set forth herein;
NOW, THEREFORE, in consideration of the foregoing and
of the mutual promises set forth herein, the parties hereto,
intending to be legally bound, agree as follows:
Section 1. Solicitation of Other Investors and RJRN
Stockholders. (a) Each of the parties hereto intends to use its
best efforts to encourage other investors to acquire shares of
common stock, par value $.01 per share ("Shares"), of RJRN and to
persuade such investors and other major stockholders of RJRN to
cooperate with the parties hereto in order to cause RJRN to
effectuate the Spinoff. The parties hereto anticipate that, as
an inducement to such investors and stockholders, the parties
hereto may enter into binding contractual arrangements with such
investors and stockholders on terms which may but need not be
similar to the terms of this Agreement, and that this Agreement
may be amended or supplemented from time to time to reflect such
arrangements. The parties hereto agree that, in the event any
party hereto proposes to enter into any such contractual
arrangement or so to amend or supplement this Agreement, the
parties hereto shall attempt in good faith to reach mutually
acceptable terms with respect to any such proposed arrangement,
amendment or supplement.
(b) BGL and BGLS intend to seek RJRN stockholder
approval, either at RJRN's 1996 annual meeting of stockholders
(the "1996 Annual Meeting") or at a special meeting of RJRN
stockholders (a "Special Meeting") or through action by written
consent of the RJRN stockholders without a meeting, of any or all
of the following proposals (the "Proposals"): (i) a proposal to
recommend that the Board of Directors of RJRN (the "RJRN Board")
cause RJRN to effectuate the Spinoff (the "Spinoff Proposal"),
(ii) a proposal to remove the entire RJRN Board and to elect as
directors of RJRN a slate of nominees who shall be selected by
BGL (the "BGL Nominees") and who shall pledge to carry out the
Spinoff as promptly as practicable following their election (the
"Election Proposal"), (iii) a proposal for the combination,
incident to the Spinoff, of the tobacco business of Xxxxxxx Group
Inc., a Delaware corporation ("Xxxxxxx"), with the tobacco
business of RJRN and (iv) a proposal to amend the by-laws of RJRN
in any manner that may be necessary in order to ensure that RJRN
stockholders are permitted to call a Special Meeting and to vote
freely at such Special Meeting or at the 1996 Annual Meeting on
any or all of the Proposals, or in any other way necessary to
facilitate the Proposals (the "By-Law Amendment Proposal"). In
connection with the foregoing, BGL and BGLS may seek written
demands or requests from RJRN stockholders ("Stockholder
Demands") that a Special Meeting be held for the purpose of
voting on any or all of the Proposals. BGL and BGLS may also
seek written consents from RJRN stockholders ("Written Consents")
to adopt any or all of the Proposals.
(c) Prior to the 1996 Annual Meeting, BGL or BGLS
shall solicit Written Consents in favor of the Spinoff Proposal
and the By-Law Amendment Proposal. BGL or BGLS may also, in its
sole discretion, conduct solicitations, in addition to the
solicitation described in the preceding sentence, of Stockholder
Demands or Written Consents in favor of the other Proposals, or
of proxies to be voted in favor of one or more of the Proposals
at the 1996 Annual Meeting or a Special Meeting ("Proxies"). In
respect of any such solicitation of Stockholder Demands, Written
Consents or Proxies:
(i) BGL or BGLS shall prepare and file with the
Securities and Exchange Commission (the "SEC") and mail to
RJRN stockholders, a solicitation statement under Regulation
14A of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), relating to such solicitation (the
"Solicitation Statement");
(ii) the Solicitation Statement relating to any
solicitation of Written Consents or Proxies seeking RJRN
stockholder approval of the Election Proposal, or of
Stockholder Demands for a Special Meeting at which RJRN
stockholder approval of the Election Proposal will be
sought, shall contain a pledge (the "BGL Pledge") by BGL and
BGLS stating, in substance, that (A) BGL, BGLS and their
affiliates (the "BGL Group") will not engage in any Business
Combination (as defined below in Section 3(a)) other than a
Permitted Business Combination (as defined below in Section
3(b)) at any time (I) prior to the earlier of (x) the 1996
Annual Meeting and (y) the occurrence of a Termination Event
(as defined below in Section 3(c)) described in Section
3(c)(iii) (in the case of a solicitation of Stockholder
Demands), Section 3(c)(iv) (in the case of a solicitation of
Written Consents) or Section 3(c)(v) (in the case of a
solicitation of Proxies), or (II) when BGL Nominees
constitute a majority of the RJRN Board, (B) the BGL Group
will not exercise any management control over Nabisco prior
to the consummation of the Spinoff and (C) the BGL Group
will halt its solicitation of Stockholder Demands, Written
Consents or Proxies, as the case may be, if the RJRN Board
takes any action described in Section 3(c)(vi); and
(iii) if BGL and BGLS take the actions described
in clause (ii) with respect to any solicitation described in
clause (i), then (A) promptly upon the request of BGL or
BGLS, High River shall (and shall cause each of its
affiliates to) execute and deliver to BGL or BGLS a valid
Stockholder Demand, Written Consent or Proxy, as the case
may be (and not withdraw such Stockholder Demand, Written
Consent or Proxy), with respect to all of the Shares and all
of the depositary shares representing Series C Conversion
Preferred Stock, par value $.01 per share ("Series C
Depositary Shares"), of RJRN beneficially owned by it and
(B) each of BGL and BGLS shall (and shall cause each of its
affiliates to) vote in favor of such Proposal all Shares and
all Series C Depositary Shares beneficially owned by it.
Section 2. Termination. (a) This Agreement shall
automatically terminate upon the earlier of (i) the first
anniversary of the date hereof and (ii) the termination of the
Agreement dated as of October 17, 1995 among New Valley, ALKI
Corp., a Delaware corporation ("NV Sub"), and High River (the
"New Valley Agreement") by High River, and any party hereto may
terminate this Agreement sooner at any time in its sole
discretion by written notice to the other parties hereto,
provided, however, that if New Valley or NV Sub terminates the
New Valley Agreement, then BGL and BGLS shall be deemed to have
simultaneously terminated this Agreement.
(b) If this Agreement is terminated pursuant to this
Section 2, this Agreement shall forthwith become null and void,
and there shall be no liability or obligation on the part of any
party hereto, except for the obligations of the parties hereto
pursuant to Section 4, Section 5 and Section 8, which shall
remain in full force and effect for the periods set forth
therein.
Section 3. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated
below:
(a) "Business Combination," with respect to any party
hereto, means:
(i) Any material sale of capital stock or other
equity interests of RJRN beneficially owned by such party or
any of such party's affiliates to RJRN or any of RJRN's
affiliates, other than a sale effected on a registered
securities exchange or through the NASDAQ system that
satisfies the following conditions: (A) such sale is not
pursuant to any agreement, understanding or arrangement with
RJRN or any of its affiliates, agents or representatives,
(B) either (I) such party and its affiliates do not know
that RJRN or one of its affiliates is the buyer or (II) such
sale is pursuant to a market repurchase program which has
previously been publicly announced by RJRN or one of its
affiliates and (C) such party has given notice to the other
parties at least one day prior to such sale of its intention
to sell such Shares (which notice shall describe the
approximate number of Shares to be sold and the approximate
time period in which such sales will be made, but need not
specify the exact number of Shares to be sold or the exact
timing of such sales);
(ii) Any material sale of capital stock or other
equity interests of such party or any of such party's
affiliates to RJRN or any of RJRN's affiliates, other than
pursuant to a sale effected on a registered securities
exchange or through the NASDAQ system which is not pursuant
to any agreement, understanding or arrangement with RJRN or
any of its affiliates, agents or representatives and such
party and its affiliates do not know that RJRN or one of its
affiliates is the buyer;
(iii) Any merger, consolidation or combination of
such party or any of such party's material affiliates with
RJRN or any of RJRN's affiliates;
(iv) Any material borrowings by such party or any
of such party's affiliates from RJRN or any of RJRN's
affiliates, or by RJRN or any of RJRN's affiliates from such
party or any of such party's affiliates, other than credit
in the ordinary course of business substantially in
accordance with industry practice or past practice;
(v) Any sale or other disposition of any material
assets or properties of such party or any of such party's
affiliates to RJRN or any of RJRN's affiliates, or of any
material assets or properties of RJRN or any of RJRN's
affiliates to such party or any of such party's affiliates,
other than in the ordinary course of business substantially
in accordance with industry practice or past practice; or
(vi) Any receipt by such party or any of such
party's affiliates of any material benefit, including any
material payment in cash or in kind from RJRN, other than
benefits or payments in the ordinary course of business
substantially in accordance with industry practice or past
practice;
except, in each case, for a transaction that is made available to
all other holders of Shares substantially at the same time on
substantially equivalent terms.
(b) "Permitted Business Combination" means any
Business Combination which is either (i) consummated
substantially simultaneously with or subsequently to (A) a
dividend or other distribution to RJRN's stockholders of all or
substantially all of RJRN's remaining equity interest in Nabisco
or (B) another transaction with respect to RJRN's investment in
Nabisco which would provide substantially equivalent value to
RJRN's stockholders or (ii) approved by the holders of a majority
of the outstanding Shares not then beneficially owned by the BGL
Group or by New Valley and its affiliates (the "New Valley
Group").
(c) "Termination Event" means any of the following
events:
(i) Any judgment, ruling, order or decree of any
court or any other governmental agency or authority
prohibiting, enjoining or restraining, or which has the
effect of prohibiting, enjoining or restraining, any party
to this Agreement or the New Valley Agreement from
fulfilling its material obligations under this Agreement or
the New Valley Agreement, or which would otherwise render
unlawful, the fulfillment of any party's material
obligations under this Agreement or the New Valley
Agreement, except any judgment, ruling, order or decree (A)
arising out of a breach of any representation contained in
Section 7 of this Agreement or in Section 8 of the New
Valley Agreement or (B) prohibiting, enjoining or
restraining, or which has the effect of prohibiting,
enjoining or restraining, or otherwise rendering unlawful
any Business Combination other than a Permitted Business
Combination (an "Order") is in effect and such party has not
appealed such Order by appropriate proceedings prior to or
on the tenth day after such Order is entered, or any Order
has been in effect for at least 30 days and has not been
vacated or reversed, or any governmental agency or authority
has indicated to any party, orally or in writing, its
intention to issue or to seek to obtain an Order (an "Order
Threat"); provided, however, that any such event shall be a
Termination Event only if (x) in the case of any party which
is (or a member of whose Group is) the subject of an Order
or Order Threat, such party gives prompt notice thereof to
the other party and thereafter terminates this Agreement or
the New Valley Agreement prior to or on the tenth day after
such event occurs and (y) in the case of a party which is
not (and all of the members of whose Group are not) the
subject of such an Order or Order Threat, such party
thereafter terminates this Agreement or the New Valley
Agreement prior to or on the tenth day following the time
such party receives notice thereof from the subject party;
(ii) The Federal Trade Commission (the "FTC") or
the Antitrust Division of the Department of Justice (the
"Antitrust Division") has instituted any action or
proceeding seeking to prohibit, enjoin or restrain any party
to this Agreement or the New Valley Agreement from
fulfilling its material obligations under this Agreement or
the New Valley Agreement or to require any such party or any
of its affiliates to make any material divestitures as a
condition to the fulfillment of such obligations, or
otherwise to impose any conditions or restrictions which
could have a material adverse effect on any party hereto or
on the transactions contemplated by this Agreement or the
New Valley Agreement, or the FTC or the Antitrust Division
has indicated to any such party, orally or in writing, its
intention to institute any such action or proceeding, in
each case other than any action, proceeding, requirement,
condition or restriction with respect to any Business
Combination except a Permitted Business Combination;
provided, however, that any such event shall be a
Termination Event only if the party which is the subject of
such action, proceeding, requirement, condition or
restriction thereafter terminates this Agreement or the New
Valley Agreement prior to or on the tenth day after such
event occurs;
(iii) BGL or BGLS has commenced a solicitation of
Stockholder Demands and has failed to receive within 120
days after the date of commencement the number of validly
executed and unwithdrawn Stockholder Demands necessary to
require RJRN to hold a Special Meeting, unless (A) the
Special Meeting has otherwise been called or held or (B) on
or prior to such 120th day, BGL and BGLS have taken all
actions necessary to cause one or more of the Proposals to
be brought before the 1996 Annual Meeting;
(iv) BGL or BGLS has commenced a solicitation of
Written Consents with respect to one or more Proposals and
has failed to receive within 120 days after the date of
commencement the number of validly executed and unwithdrawn
Written Consents necessary to approve at least one such
Proposal, unless (A) at least one such Proposal has been
otherwise approved at the 1996 Annual Meeting or a Special
Meeting or (B) on or prior to such 120th day, BGL and BGLS
have taken all actions necessary to cause at least one such
Proposal to be submitted for a stockholder vote at the 1996
Annual Meeting or a Special Meeting;
(v) A Special Meeting or the 1996 Annual Meeting
has been held, and one or more of the Proposals has been
voted upon thereat, the BGL Nominees have not been elected
to constitute a majority of the RJRN directors then in
office and either (A) BGL and BGLS have determined not to
pursue any further judicial review of the results of the
vote at the Special Meeting or the 1996 Annual Meeting, as
the case may be, or (B) no such further judicial review is
available;
(vi) The RJRN Board has irrevocably declared a
dividend or other distribution to RJRN's stockholders of all
or substantially all of RJRN's remaining equity interest in
Nabisco or has made any other legally binding commitment to
engage in a transaction with respect to RJRN's investment in
Nabisco which would provide substantially equivalent
economic benefits to RJRN's stockholders;
(vii) Any event has occurred, or RJRN has taken
any action, which is reasonably likely to have a material
adverse effect on the business, operations or financial
condition of RJRN and its subsidiaries, taken as a whole;
(viii) BGL or BGLS determines, reasonably and in
good faith, that any event has occurred as a result of which
no solicitation of Stockholder Demands, Written Consents or
Proxies with respect to the Proposals would have a
reasonable chance of success; provided, however, that any
such event shall be a Termination Event only if BGL or BGLS
notifies High River of such determination (which notice
shall specify in reasonable detail the nature of the event
which has occurred and the reasons for such determination)
at least five business days prior to terminating this
Agreement or the New Valley Agreement and thereafter BGL or
BGLS terminates this Agreement, and New Valley or NV Sub
terminates the New Valley Agreement, on such fifth business
day; and provided that in any challenge by High River of a
termination under this subpart (viii), High River shall bear
the burden, in order to prevail, of establishing that BGL's
or BGLS's determination as first set forth in this subpart
(viii) was unreasonable or was made in bad faith;
(ix) BGL and BGLS (A) fail to nominate the BGL
Nominees prior to November 20, 1995, or such later date as
may be designated by RJRN as the final date for such
nominations to be made, for election to the RJRN Board at
the 1996 Annual Meeting in accordance with the procedures
set forth in the most recent version of the by-laws of RJRN
filed with the SEC prior to such date, (B) fail to mail to
RJRN stockholders a Solicitation Statement relating to a
solicitation of Written Consents with respect to the Spinoff
Proposal and/or the By-Law Amendment Proposal prior to
December 15, 1995, (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) the date on which a Solicitation Statement described in
clause (B) of this Section 3(c)(ix) is first mailed to RJRN
stockholders, (D) fail to make the BGL Pledge in any
Solicitation Statement relating to any solicitation of
Written Consents or Proxies seeking RJRN stockholder
approval of the Election Proposal, or of Stockholder Demands
for a Special Meeting at which RJRN stockholder approval of
the Election Proposal will be sought, or (E) take any action
in violation of the BGL Pledge after it is made; provided,
however, that any such event shall be a Termination Event
only if High River thereafter terminates this Agreement or
the New Valley Agreement prior to or on the tenth day after
the first date that High River becomes aware that such event
has occurred, but in no event shall the failure to terminate
this Agreement after the occurrence of any such event
prohibit the termination of this Agreement upon the
subsequent occurrence of any other such event; or
(x) Either Group sells any Shares under the
circumstances described in clause (x) of the first proviso
to the first sentence of Section 1(d)(i) of the New Valley
Agreement, or is required to offer any Shares to another
party pursuant to the first sentence of Section 1(d)(ii) of
the New Valley Agreement; provided, however, that any such
event shall be a Termination Event only if a party to the
New Valley Agreement which is not a member of such Group
thereafter terminates the New Valley Agreement prior to or
on the tenth day after the first date that such party
becomes aware that such event has occurred.
Section 4. Certain Fees and Percentage Payments. (a)
BGLS shall pay or cause to be paid to High River the sum of $50
million promptly upon:
(i) any termination of this Agreement by BGL or
BGLS at a time when (A) no Termination Event has occurred
and (B) High River is not in material breach of its
obligations (the "High River Obligations") under Section
1(c)(iii) or Section 8 of this Agreement or Section 1(a),
the fourth sentence of Section 1(c)(v), the ninth sentence
of Section 1(c)(v) or Section 1(d)(i) of the New Valley
Agreement;
(ii) any termination of this Agreement by High
River at a time when (A) no Termination Event has occurred,
(B) BGL or BGLS is in material breach of its obligations
(the "BGL Obligations") under Section 1(c)(iii) of this
Agreement and (C) High River is not in material breach of
the High River Obligations; or
(iii) the consummation of any Business
Combination (including any Permitted Business Combination)
with respect to the BGL Group, if:
(A) such Business Combination is consummated
prior to the later of (I) the date of RJRN's annual
meeting of stockholders for 1997 and (II) the first
anniversary of the date of termination of this
Agreement (the later of such dates being referred to
herein as the "Reference Date");
(B) a legally binding agreement to enter into
such Business Combination or any other Business
Combination is entered into prior to the Reference Date
and such Business Combination is consummated prior to
the second anniversary of the date of such agreement;
or
(C) the BGL Nominees are elected to
constitute a majority of the RJRN Board prior to the
Reference Date and such Business Combination is
consummated prior to the fifth anniversary of the date
of such election;
provided, however, that (x) High River shall not be entitled to
more than one fee under this Section 4(a), (y) High River shall
not be entitled to any fee under this Section 4(a) if BGL shall
have previously or shall concurrently become entitled to the fee
described in Section 4(b) of this Agreement or if New Valley
shall have previously become entitled to the fee described in
Section 5(b) of the New Valley Agreement and (z) the amount of
any fee to which High River may be entitled at any time pursuant
to this Section 4(a) shall be reduced by the amount of any fee
(the "New Valley Fee") which High River shall theretofore have
been paid pursuant to Section 5(a) of the New Valley Agreement
and by any percentage payment (the "New Valley Percentage
Payment") which High River shall theretofore have been paid
pursuant to Section 5(d) of the New Valley Agreement, in either
of which events BGL or BGLS shall promptly upon request by New
Valley reimburse New Valley for all or any part of the New Valley
Fee or the New Valley Percentage Payment paid by or on behalf of
New Valley.
(b) High River shall pay or cause to be paid to BGL
the sum of $50 million promptly upon:
(i) any termination of this Agreement by High
River at a time when (A) no Termination Event has occurred,
(B) BGL and BGLS are not in material breach of any of the
BGL Obligations and (C) New Valley and NV Sub are not in
material breach of any of their obligations (the "New Valley
Obligations") under Section 1(a), the fourth sentence of
Section 1(c)(v), the ninth sentence of Section 1(c)(v),
Section 1(d)(i) or Section 2 of the New Valley Agreement;
(ii) any termination of this Agreement by BGL or
BGLS at a time when (A) no Termination Event has occurred,
(B) High River is in material breach of its obligations
under Section 1(c)(iii) or Section 8 of this Agreement, (C)
BGL and BGLS are not in material breach of the BGL
Obligations and (D) New Valley and NV Sub are not in
material breach of the New Valley Obligations;
provided, however, that (x) BGL shall not be entitled to more
than one fee under this Section 4(b), (y) BGL shall not be
entitled to any fee under this Section 4(b) if High River shall
have previously or shall concurrently become entitled to the fee
described in Section 4(a) of this Agreement or the fee described
in Section 5(a) of the New Valley Agreement and (z) the amount of
any fee to which BGL may be entitled at any time pursuant to this
Section 4(b) shall be reduced by the amount of any fee which New
Valley shall theretofore have been paid pursuant to Section 5(b)
of the New Valley Agreement.
(c) Notwithstanding anything in this Agreement or the
New Valley Agreement to the contrary,
(i) if the New Valley Group (as such term is
defined in the New Valley Agreement) or the BGL Group sells
any Shares or any Other Securities (as such term is defined
in the New Valley Agreement) of any class or series prior to
the Reference Date, then BGLS shall pay or cause to be paid
to High River promptly upon the consummation of such sale a
percentage payment equal to the product of (A) the Net
Profit Override (as such term is defined in the New Valley
Agreement) realized in such sale, multiplied by (B) a
fraction (the "Sale Fraction," which shall be calculated
separately for the Shares and for each class or series of
Other Securities), the numerator of which is the number of
Shares or such Other Securities (as the case may be) held as
of the date hereof, or hereafter acquired prior to such
sale, by the BGL Group and the denominator of which is the
number of Shares or such Other Securities (as the case may
be) held as of the date hereof, or hereafter acquired prior
to such sale, by the BGL Group and the New Valley Group; and
(ii) if the New Valley Group or the BGL Group
holds any Shares or any Other Securities of any class or
series on the Reference Date, then New Valley shall pay or
cause to be paid to High River promptly upon the Reference
Date a percentage payment equal to the product of (A) the
Net Profit Override existing on the Reference Date in
respect of such Shares or such Other Securities, multiplied
by (B) a fraction (the "Holdings Fraction," which shall be
calculated separately for the Shares and for each class or
series of Other Securities), the numerator of which is the
number of Shares or such Other Securities (as the case may
be) held as of the date hereof, or hereafter acquired prior
to the Reference Date, by the BGL Group and the denominator
of which is the number of Shares or such Other Securities
(as the case may be) held as of the date hereof, or
hereafter acquired prior to the Reference Date, by the BGL
Group and the New Valley Group;
provided, however, that (x) the amount of any percentage payment
to which High River is entitled at any time under this Section
4(c) shall be reduced by the product of (1) the amount of any fee
which High River shall have theretofore been paid by or on behalf
of New Valley under Section 5(a) of the New Valley Agreement or
by BGLS under Section 4(a) of this Agreement, multiplied by (2)
the Sale Fraction or the Holdings Fraction, as the case may be,
(y) High River shall not be entitled to any percentage payment
under this Section 4(c) if BGL shall have previously become
entitled to the fee described in Section 4(b) of this Agreement
or if New Valley shall have previously become entitled to the fee
described in Section 5(b) of the New Valley Agreement and (z) in
the event that the New Valley Group or the BGL Group realizes a
Net Loss (as defined in the New Valley Agreement) on any sale of
any Shares or any Other Securities of any class or series, or
that any Net Loss exists on the Reference Date in respect of any
Shares or any Other Securities of any class or series held by the
New Valley Group or the BGL Group on the Reference Date, then in
each such event High River shall repay or cause to be repaid to
BGLS promptly upon receipt of notice from BGLS an amount equal to
the product of (1) the excess, if any, of (X) 20% of such Net
Loss over (Y) the aggregate amount of such percentage payments
theretofore received by High River, multiplied by (2) a fraction,
the numerator of which is the aggregate amount of such percentage
payments theretofore paid by or on behalf of BGLS and the
denominator of which is the aggregate amount of such percentage
payments theretofore paid by or on behalf of New Valley and BGLS.
BGL and BGLS shall use their reasonable best efforts to provide
to High River (x) once each calendar week, commencing from the
date of this Agreement, a report containing a reasonably detailed
calculation of the number of Shares and the amount of Other
Securities then held by the BGL Group and the Weighted-Average
Cost (as defined in the New Valley Agreement) of such Shares and
Other Securities and (y) promptly after the close of business on
each business day on which any Shares are sold by the BGL Group,
a report setting forth the number of Shares or Other Securities
sold since the close of business on the previous business day,
the aggregate price realized in such sales and the aggregate
commissions paid in such sales; provided, however, that BGL and
BGLS shall not incur any liability or suffer any prejudice as a
result of its provision of any such estimate.
(d) The parties hereto hereby acknowledge and agree
that the arrangements in Section 4(c) with respect to percentage
payments constitute a partnership for Federal income tax purposes
and that the parties hereto shall file income tax returns in a
consistent manner.
(e) Each of BGL and High River shall give notice to
the other promptly upon becoming aware that a Termination Event
has occurred or that any event has occurred that would be a
Termination Event but for the giving of notice or the termination
of this Agreement.
Section 5. Costs and Expenses. (a) Except as set
forth in Section 5(b), the BGL Group shall be responsible for all
out-of-pocket costs and expenses of soliciting Stockholder
Demands, Written Consents and Proxies from the stockholders of
RJRN, including without limitation, to the extent related
thereto, (i) all registration and filing fees under the Exchange
Act or the Securities Act of 1933, as amended (the "Securities
Act"), (ii) all printing, messenger, telephone and delivery
expenses, (iii) all fees and disbursements of counsel and (iv)
all fees and disbursements of public relations firms, proxy
solicitation firms, investment bankers and other financial
advisors.
(b) Notwithstanding the provisions of Section 5(a),
each party hereto shall be solely responsible for (i) all costs
and expenses relating to the acquisition of the Shares
beneficially owned or hereafter acquired by such party and its
affiliates, (ii) its internal expenses (including, without
limitation, all salaries and expenses of its officers and
employees performing duties relating to the transactions
contemplated by this Agreement) and (iii) all other expenses
incurred by it, other than expenses described in Section 5(a),
all of which shall be the sole responsibility of the BGL Group.
Section 6. Required Filings; Publicity. (a) Each of
the parties hereto shall (and shall cause each of its affiliates
to) (i) take all actions necessary to comply promptly with all
legal requirements which may be imposed on such party (or its
affiliates) as a result of this Agreement or any of the
transactions contemplated hereby, and (ii) without limiting the
foregoing, make all required filings pursuant to the Securities
Act and the Exchange Act.
(b) To the extent reasonably practicable, the parties
hereto shall consult with each other prior to all public
statements or filings to be issued or made by any of them or
their affiliates with respect to this Agreement and the
transactions contemplated hereby.
Section 7. Representations and Warranties. (a) Each
of the parties hereto hereby represents and warrants to the other
parties hereto as follows:
(i) Such party is a corporation or partnership
duly organized, validly existing and in good standing under
the laws of the state of its incorporation or organization,
and has full corporate or partnership power and authority to
execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions
contemplated hereby.
(ii) The execution and delivery by such party of
this Agreement and the performance by such party of its
obligations hereunder have been duly and validly authorized
by all necessary corporate or partnership action. This
Agreement has been duly and validly executed and delivered
by such party and constitutes a legal, valid and binding
obligation of such party enforceable against such party in
accordance with its terms.
(iii) The execution and delivery by such party of
this Agreement do not, and the performance by such party of
its obligations under this Agreement will not, conflict with
or result in a violation or breach of any of the provisions
of the certificate of incorporation, bylaws or other
organizational documents of such party, any law or order
applicable to such party or any of such party's contractual
obligations to other persons, in each case, in any manner
that would prevent or materially impede such party from
fulfilling its obligations hereunder.
(b) BGL and BGLS hereby represent and warrant to High
River that as of the date hereof the BGL Group owns beneficially
and of record 200 Shares, free and clear of all liens and
encumbrances whatsoever, which Shares were purchased by the BGL
Group at an aggregate cost (including all brokerage fees and
commissions incurred in the acquisition of such Shares) of
$5,675, and in respect of which the BGL Group has not received
any dividends, except dividends of $75 received on July 3, 1995
and dividends of $75 received on October 2, 1995.
(c) High River represents and warrants to BGL and BGLS
that High River has as of the date hereof, and will have on each
date prior to the termination of this Agreement, net partners'
equity of at least $22 million.
Section 8. Certain Actions. High River shall not (and
shall cause its affiliates not to) engage in, agree to engage in
or propose (either publicly or to RJRN or any of its affiliates)
to engage in, individually or in combination with any other
person, any Business Combination at any time prior to the
earliest of (a) the Reference Date, (b) any termination of this
Agreement that occurs at or after the time when a Termination
Event has occurred and (c) any termination of this Agreement by
BGL or BGLS, or of the New Valley Agreement by New Valley or NV
Sub, at a time when High River is not in material breach of the
High River Obligations.
Section 9. Miscellaneous. (a) For purposes of this
Agreement, (i) the terms "affiliate" and "associate" have the
meanings assigned to them in Rule 12b-2 promulgated under the
Exchange Act, provided, however, that New Valley and NV Sub shall
not be deemed to be "affiliates" or "associates" of the BGL Group
for any purpose of this Agreement, (ii) Xxxxxxx shall be deemed
to be a material affiliate of BGL and BGLS, (iii) the term
"shall" is used herein to refer to actions which are compulsory
and thus to create binding obligations among the parties hereto,
(iv) the terms "will," "expect," "expectation," "intend" and
"intention," and other terms of similar import, are used herein
solely to refer to the aspirations and objectives of the parties
hereto and thus are not used herein to create binding obligations
among the parties hereto and (v) the term "may" is used herein to
refer solely to conduct which is optional and not compulsory and
thus is not used herein to create binding obligations among the
parties hereto.
(b) The parties hereto shall have no rights, power or
duties except as specified herein, and no such rights, powers or
duties shall be implied. Nothing herein shall give any party
hereto the power to bind any other party hereto to any contract,
agreement or obligation to any third party.
(c) All notices and other communications hereunder
shall be in writing and shall be deemed given when received by
the parties hereto at the following addresses (or at such other
address for any party hereto as shall be specified by like
notice):
If to BGL or BGLS:
000 X.X. Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. XxXxx
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
If to High River:
c/o Icahn Associates Corp.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Icahn
Telecopy: (000) 000-0000
With a copy to:
Xxxx Xxxxxxx, Esq.
Xxxxxx Xxxxxx Butowsky Xxxxxxx
Shalov & Xxxx
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
(d) This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same
agreement.
(e) This Agreement constitutes the entire agreement
among the parties hereto and supersedes all prior agreements and
understandings among the parties hereto with respect to the
subject matter hereof.
(f) This Agreement shall be governed and construed in
accordance with the laws of the state of New York applicable to a
contract executed and performed in such State, without giving
effect to the conflicts of laws principles thereof.
(g) Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties hereto;
provided, however, that High River may assign any of its rights
and interests hereunder to (i) any corporation incorporated in
any state of the United States or in the District of Columbia if
at least 98.5% of the shares of each class of capital stock of
such corporation are owned by Xxxx X. Icahn (a "wholly-owned
Icahn subsidiary"), either directly or through one or more
wholly-owned Icahn subsidiaries or (ii) any partnership whose
partners are all wholly-owned Icahn subsidiaries; and provided
further that no such assignment shall relieve High River of any
of its obligations hereunder. Subject to the preceding sentence,
this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective
successors and assigns.
(h) This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on
behalf of each party hereto. No waiver of any term or condition
in this Agreement shall be effective unless set forth in writing
and signed by or on behalf of the waiving party. No waiver by
any party hereto of any term or condition of this Agreement shall
be deemed to be or construed as a waiver of the same or any other
term or condition of this Agreement on any future occasion.
(i) The terms and provisions of this Agreement are
intended solely for the benefit of the parties hereto and their
successors and permitted assigns and are not intended to confer
upon any other person any rights or remedies hereunder, except
that the provisions of clause (z) of the proviso to Section 4(a),
as they relate to the reimbursement obligations of BGL and BGLS,
are expressly for the benefit of New Valley and shall be
enforceable by New Valley against BGL and BGLS (but not against
High River) by appropriate proceedings in any court of competent
jurisdiction.
(j) In the event that any party hereto prevails in any
action or proceeding alleging a breach of this Agreement, such
party shall be entitled to recover all reasonable attorney's fees
and other costs of prosecuting such action or proceeding and, in
addition, shall be entitled to receive simple interest on any
damages awarded in such action or proceeding at the rate of 10%
per annum from the date of such breach.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their representatives thereunto duly
authorized, all as of the date first above written.
BROOKE GROUP LTD.
By:
BGLS INC.
By:
HIGH RIVER LIMITED PARTNERSHIP
By:
[Signature page to Agreement among Brooke Group Ltd., BGLS Inc.
and High River Limited Partnership dated October 17, 1995]
