Tender-Offer Statement — Third-Party Tender Offer — Schedule 14D-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D1 Borden Acquisition Corp. 6 48K
2: EX-11.(A)(1) Statement re: Computation of Earnings Per Share 133 731K
3: EX-11.(A)(2) Statement re: Computation of Earnings Per Share 14 69K
4: EX-11.(A)(3) Statement re: Computation of Earnings Per Share 2 20K
5: EX-11.(A)(4) Statement re: Computation of Earnings Per Share 3 24K
6: EX-11.(A)(5) Statement re: Computation of Earnings Per Share 3 23K
7: EX-11.(A)(6) Statement re: Computation of Earnings Per Share 5± 22K
8: EX-11.(A)(7) Statement re: Computation of Earnings Per Share 5 35K
9: EX-11.(A)(8) Statement re: Computation of Earnings Per Share 2 16K
10: EX-11.(C)(1) Statement re: Computation of Earnings Per Share 124 273K
11: EX-11.(C)(2) Statement re: Computation of Earnings Per Share 18 70K
12: EX-11.(C)(3) Statement re: Computation of Earnings Per Share 2 17K
13: EX-11.(C)(4) Statement re: Computation of Earnings Per Share 34 71K
14: EX-11.(G)(1) Statement re: Computation of Earnings Per Share 10 32K
23: EX-11.(G)(10) Statement re: Computation of Earnings Per Share 4 23K
24: EX-11.(G)(11) Statement re: Computation of Earnings Per Share 13 35K
25: EX-11.(G)(12) Statement re: Computation of Earnings Per Share 13 33K
26: EX-11.(G)(13) Statement re: Computation of Earnings Per Share 18 47K
27: EX-11.(G)(14) Statement re: Computation of Earnings Per Share 12 35K
28: EX-11.(G)(15) Statement re: Computation of Earnings Per Share 18 49K
29: EX-11.(G)(16) Statement re: Computation of Earnings Per Share 12 36K
30: EX-11.(G)(17) Statement re: Computation of Earnings Per Share 12 32K
31: EX-11.(G)(18) Statement re: Computation of Earnings Per Share 11 30K
32: EX-11.(G)(19) Statement re: Computation of Earnings Per Share 12 32K
15: EX-11.(G)(2) Statement re: Computation of Earnings Per Share 10 32K
33: EX-11.(G)(20) Statement re: Computation of Earnings Per Share 18 49K
34: EX-11.(G)(21) Statement re: Computation of Earnings Per Share 9 27K
35: EX-11.(G)(22) Statement re: Computation of Earnings Per Share 9 32K
16: EX-11.(G)(3) Statement re: Computation of Earnings Per Share 10 32K
17: EX-11.(G)(4) Statement re: Computation of Earnings Per Share 10 32K
18: EX-11.(G)(5) Statement re: Computation of Earnings Per Share 10 32K
19: EX-11.(G)(6) Statement re: Computation of Earnings Per Share 10 32K
20: EX-11.(G)(7) Statement re: Computation of Earnings Per Share 10 32K
21: EX-11.(G)(8) Statement re: Computation of Earnings Per Share 11 32K
22: EX-11.(G)(9) Statement re: Computation of Earnings Per Share 9 31K
EX-11.(C)(4) — Statement re: Computation of Earnings Per Share
Exhibit Table of Contents
EXHIBIT 11(c)(4)
DEALER MANAGER AGREEMENT
November 22, 1994
Morgan Stanley & Co.
Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
1. General. Borden Acquisition Corp., a
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New Jersey corporation ("Bidder") and a subsidiary of
Whitehall Associates, L.P. (and, prior to the consummation
of the Exchange Offer referred to below, common stock of
which will also be held by KKR Partners II, L.P.
(collectively "Parents")), limited partnerships affiliated
with Kohlberg Kravis Roberts & Co., L.P., plans to make an
offer (such offer, as it may from time to time be amended
and supplemented, being the "Exchange Offer") for all
outstanding shares of common stock, par value $.625 per
share (the "Shares"), of Borden, Inc., a New Jersey
corporation (the "Company"), in exchange for shares of
common stock, par value $.01 per share (the "Exchange
Shares") of RJR Nabisco Holdings Corp. ("Holdings"), on the
terms and subject to the conditions set forth in the
Exchange Offer Materials (as defined below).
2. Engagement as Dealer Manager. Bidder hereby
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engages you as sole Dealer Manager in connection with the
Exchange Offer. As Dealer Manager, you agree, in accordance
with your customary practice, to perform in connection with
the Exchange Offer the services that are customarily
performed by investment banking concerns in connection with
similar exchange offers, including, without limitation,
soliciting the tender of Shares pursuant to the Exchange
Offer. As Dealer Manager in connection with the Exchange
Offer, you shall act as an independent contractor (and shall
not be deemed to act as an agent of Bidder) with duties
solely to Bidder.
3. Solicitation of Tenders. In soliciting
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tenders, no securities broker or dealer, commercial bank or
trust company shall be deemed to act as your agent or the
agent of Bidder or Parent; and you, as Dealer Manager, shall
not be deemed the agent of any other securities broker or
dealer or of any commercial bank or trust company.
4. Exchange Offer Material. (a) Holdings has
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filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended
(the "Act"), and the rules and regulations of the Commission
thereunder, a registration statement (File No. 33-55767) in
respect of the Exchange Shares issuable pursuant to the
Exchange Offer and such registration statement and any post-
effective amendment thereto has been declared effective by
the Commission. Any offering circular-prospectus used
before the time such registration statement becomes
effective is hereinafter referred to as a "Preliminary
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Prospectus"; the various parts of such registration
statement, including all exhibits thereto and including the
documents incorporated by reference in the offering
circular-prospectus contained in the registration statement
at the time such part of the registration statement became
effective, each as amended at the time such part of the
registration statement became effective, is hereinafter
called the "Registration Statement"; and the final offering
circular-prospectus, in the form included in the
Registration Statement at the time it became effective, is
hereinafter called the "Prospectus," except that if the
final offering circular-prospectus furnished to you for use
in connection with the Exchange Offer differs from the
offering circular-prospectus set forth in the Registration
Statement (whether or not such prospectus is required to be
filed pursuant to Rule 424(b) under the Act), the term
"Prospectus" shall refer to the final offering circular-
prospectus furnished to you for such use. Any reference
herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated
by reference therein pursuant to Item 11 of Form S-4 under
the Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary
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Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of
Holdings filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the
Registration Statement.
(b) Bidder has prepared and filed, or agrees that
prior to or on the Commencement Date (as defined below) it
will file, with the Commission under the Exchange Act and
the rules and regulations promulgated thereunder a Statement
on Schedule 14D-1 with respect to the Exchange Offer
(including the exhibits thereto and any documents
incorporated by reference therein, the "Schedule 14D-1").
(c) The Registration Statement and the
Prospectus, and the related letter of transmittal to be used
by holders tendering Shares pursuant to the Exchange Offer
(the "Letter of Transmittal"), notice of guaranteed
delivery, and any other offering materials and information
as the Bidder may use or prepare, approve or authorize for
use in connection with the Exchange Offer, including the
Schedule 14D-1, each as amended or supplemented from time to
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time, are herein collectively referred to as the "Exchange
Offer Materials."
(d) Bidder agrees that, a reasonable time prior
to using, or filing with the Commission, it will furnish to
you draft copies of the Exchange Offer Materials (other than
documents incorporated by reference therein by Holdings) and
will give reasonable consideration to your and your
counsel's prompt comments, if any, thereon, provided,
however, that Bidder may issue press releases without
furnishing you with draft copies thereof if due to time
constraints it is not practicable to do so.
5. Exchange Offer. (a) Bidder intends to
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commence the Exchange Offer as soon as practicable after the
Registration Statement becomes effective under the Act by
publicly announcing its commencement and by mailing, or
causing to be mailed on its behalf, copies of the
Prospectus, the related Letter of Transmittal and such of
the other Exchange Offer Materials as may be required or as
Bidder may elect to furnish to each holder of record of the
Shares (the date of the commencement of such distribution
being herein called the "Commencement Date").
(b) Bidder has approved the Exchange Offer
Materials and authorizes you and any other securities dealer
or any commercial bank or trust company to use the Exchange
Offer Materials in connection with the solicitation of
tenders and you agree not to provide any information to
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holders of Shares in connection with any solicitation other
than the information contained in the Exchange Offer
Materials. You shall not have any obligation to cause any
Exchange Offer Materials to be transmitted generally to the
holders of the Shares.
6. Withdrawal. In the event that (i) Bidder or
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Parent uses or permits the use of, any Exchange Offer
Materials (a) which are required to be but have not been
timely submitted to you previously for your and your
counsel's comments or (b) which have been so submitted, and
you have or your counsel has made comments which have not
been reflected in a manner reasonably satisfactory to you
and your counsel; (ii) any of Bidder or Holdings shall have
breached, in any material respect, any of its
representations, warranties, agreements or covenants herein;
(iii) the Registration Statement shall not have become
effective on or prior to the Commencement Date, or, at any
time during the Exchange Offer, a stop order suspending the
effectiveness of the Registration Statement shall have been
issued or a proceeding for that purpose shall have been
instituted or shall be pending or threatened by the
Commission, or a request for additional information on the
part of the Commission shall not have been satisfied to your
reasonable satisfaction; or there shall have been issued, at
any time during the Exchange Offer, any temporary
restraining order or injunction restraining or enjoining you
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from acting in your capacity as Dealer Manager with respect
to the Exchange Offer; (iv) Deloitte & Touche LLP,
independent public accountants to Holdings, shall not have
furnished to you on the Commencement Date, a letter dated
the date of delivery thereof, in form and substance
satisfactory to you, containing statements and information
of the type ordinarily included in accountants' "procedures
letters" with respect to the financial statements and
certain financial information relating to Holdings contained
in or incorporated by reference into the Registration
Statement or the Prospectus and confirming that they are
independent accountants within the meaning of the Act and
the Exchange Act and the respective applicable published
rules and regulations thereunder; or (v) on the Commencement
Date you shall not have received a certificate of an
executive officer of Bidder, dated as of the date of
delivery thereof, to the effect that all representations and
warranties of Bidder contained herein are true and correct
in all material respects as though expressly made at such
time and Bidder has performed in all material respects, all
of its obligations hereunder theretofore required to be
performed; then you shall be entitled to withdraw as Dealer
Manager in connection with the Exchange Offer without any
liability or penalty to you or any other Indemnified Person
(as defined in Section 14 below) and without loss of any
right to indemnification or contribution provided in
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Section 14. If you withdraw as Dealer Manager in connection
with the Exchange Offer, you shall promptly refund any fee
paid to you as a result of the commencement of the Exchange
Offer by Bidder pursuant to the Engagement Letter.
7. Fees. Pursuant to a letter agreement dated
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September 12, 1994 between Bidder and you (the "Engagement
Letter"), Bidder has agreed, among other things, to
compensate you for your services as financial advisor to
Bidder, including your services as Dealer Manager. No
separate compensation shall be payable hereunder.
8. Reimbursement of Expenses, Etc. Whether or
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not any Shares are acquired pursuant to the Exchange Offer,
Bidder agrees to reimburse all dealers and brokers
(including you), commercial banks, trust companies and
nominees for their customary mailing and handling expenses
incurred in forwarding the Exchange Offer Materials to their
customers. The expense reimbursement provisions of the
Engagement Letter are incorporated herein by reference as if
restated herein in their entirety, and Bidder agrees to
reimburse your expenses as provided therein.
9. The Exchange Agent and Information Agent.
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Bidder has appointed, and authorizes you to communicate
with, First Chicago Trust Company of New York, in its
capacity as exchange agent (the "Exchange Agent"), and
D.F. King & Co., Inc., in its capacity as information agent
(the "Information Agent"), in connection with the Exchange
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Offer. Bidder shall advise or cause the Exchange Agent to
advise you at 5:00 p.m., New York City time, or as promptly
as practicable thereafter, daily or more frequently if
requested as to major tally figures, by telephone or
facsimile transmission as to, as of 4:00 p.m., the following
information with respect to Shares (and Rights if
applicable) tendered: (i) the number of Shares (and Rights
if applicable) validly tendered on such day; (ii) the number
of Shares (and Rights if applicable) 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
Shares (and Rights if applicable) into its account at a
Book-Entry Transfer Facility pursuant to the procedures set
forth in the Exchange Offer) on such day; (iii) the number
of Shares (and Rights if applicable) represented by Notices
of Guaranteed Delivery on such day; (iv) the number of
Shares (and Rights if applicable) properly withdrawn on such
day; and (v) the cumulative totals of the number of Shares
(and Rights if applicable) in categories (i) through (iv)
above. On the day following such oral communication, Bidder
shall furnish or cause the Exchange Agent to furnish you
with a written report confirming the above information which
has been communicated orally. Bidder shall furnish or cause
the Exchange Agent to furnish you with such reasonable
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information on the tendering shareholders of Borden as may
be reasonably requested from time to time.
10. Representations and Warranties of Bidder.
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Bidder represents and warrants to you that:
(a) Bidder is a corporation duly organized,
validly existing and in good standing under the laws of
the jurisdiction of its incorporation, each Parent is a
limited partnership duly organized, validly existing
and in good standing under the laws of the jurisdiction
of its organization, Bidder has all necessary power and
authority to execute and deliver this Agreement and to
perform its obligations hereunder and each of Bidder
and each Parent has all necessary power and authority
to consummate the Exchange Offer.
(b) The Exchange Offer, this Agreement and
all other actions by Bidder and each Parent
contemplated in the Exchange Offer Materials and this
Agreement have been duly and validly authorized by all
necessary corporate or partnership action by Bidder and
each Parent, and no other corporate or partnership
proceedings by Bidder or either Parent are necessary to
authorize any such actions.
(c) This Agreement has been duly and validly
executed and delivered by Bidder and is a legal, valid
and binding obligation of Bidder, enforceable against
Bidder in accordance with its terms, except as affected
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by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a
proceeding in equity or at law), an implied covenant of
good faith and fair dealing and considerations of
public policy. The Engagement Letter and the indemnity
letter dated September 12, 1994 between Bidder and you
(the "Indemnity Letter") each has been duly and validly
executed and delivered by Bidder and each is a legal,
valid and binding obligation of Bidder enforceable
against it in accordance with their respective terms,
except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether
considered in a proceeding in equity or at law), an
implied covenant of good faith and fair dealing and
considerations of public policy.
(d) The Registration Statement conforms, and
the Prospectus and any further amendments or
supplements to the Registration Statement or the
Prospectus will conform, in all material respects to
the requirements of the Act and the Exchange Act and
the rules and regulations of the Commission thereunder;
the Registration Statement did not, as of its effective
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date, and will not, as of the date of effectiveness of
any amendment thereto, contain an untrue statement of a
material fact or omit to state a material fact required
to be stated therein or necessary to make the
statements therein not misleading; and the Prospectus
did not and will not, as of its filing date or as of
the filing date of any amendment or supplement thereto,
include an 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; provided,
however, that this representation and warranty shall
not apply to any statements or omissions made in
reliance upon and in conformity with information
furnished in writing to Bidder or Holdings by you
expressly for use therein; provided, further, that this
representation and warranty does not cover information
regarding the Company.
(e) The Schedule 14D-1, as originally filed
and subsequently amended, the other Exchange Offer
Materials and any amendment or supplement thereto con-
form, or will conform, in all material respects with
all applicable requirements of the Act and the Exchange
Act and the rules and regulations of the Commission
thereunder; and none of the Schedule 14D-1, the other
Exchange Offer Materials or any amendment or supplement
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thereto includes, or will include, an 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; provided, however, that this
representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to
Bidder or Holdings by you expressly for use therein;
provided, further, that this representation and
warranty does not cover information regarding the
Company.
(f) Bidder will accept Shares for exchange
in accordance with and subject to the terms and
conditions of the Exchange Offer; and Bidder has
requested the Exchange Agent and the Exchange Agent has
agreed with Bidder to make appropriate arrangements
with The Depository Trust Company, the Midwest
Securities Trust Company, the Philadelphia Depository
Trust Company and any other "qualified" registered
securities depository to allow for the book-entry
movement of exchanged Shares between depository
participants and the Exchange Agent.
(g) Except as disclosed in the Prospectus,
(i) the Exchange Offer, the consummation of the
transactions contemplated by the Exchange Offer and the
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execution and delivery of, and the consummation of the
transactions contemplated in, this Agreement will
comply in all material respects with all applicable
requirements of law, including the Act, the Exchange
Act, the various state securities or "blue sky" laws
and state "takeover" statutes (collectively, "State
Statutes") and all applicable regulations of the
Commission or any other governmental agency (an "Other
Agency"), and (ii) except for permits and similar
authorizations required under the securities or "blue
sky" laws of certain jurisdictions, and except for such
consents which are required and have been obtained, the
commencement and consummation by Bidder and Parent of
the Exchange Offer and the other transactions
contemplated herein and in the Exchange Offer do not
and will not require any material consent, approval,
authorization or permit of, filing with or notification
to, the Commission or any Other Agency.
(h) Except as would not have a material
adverse effect on the ability of Bidder to perform its
obligations hereunder and of Bidder and each Parent to
consummate the Exchange Offer and the other
transactions contemplated thereby, the Exchange Offer,
the consummation of the transactions contemplated by
the Exchange Offer and the execution and delivery of,
and the consummation of the transactions contemplated
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in, this Agreement do not and will not (i) conflict
with or violate the certificate of incorporation or by-
laws or equivalent organizational documents of Bidder
or either Parent, (ii) conflict with or violate any
order, judgment or decree applicable to Bidder or
either Parent or by which any property or asset of
Bidder or either Parent is bound, or (iii) result in a
breach of or constitute a default (or an event which
with notice or lapse of time or both would become a
default) under, or give to others any rights of
termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encum-
brance on any property or asset of Bidder or either
Parent pursuant to, any loan or credit agreement,
indenture, mortgage, note or other agreement or
instrument to which Bidder or either Parent or any of
their subsidiaries or affiliates is a party or by which
any of them or any of their respective properties or
assets is bound.
(i) Neither Bidder nor either Parent is, or
will be as a result of the consummation of the Exchange
Offer, an "investment company" under the Investment
Company Act of 1940, as amended, and the rules and
regulations promulgated by the Commission thereunder.
11. Representations and Warranties Relating to
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Holdings. Bidder represents and warrants to you that:
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(a) Holdings is a corporation duly
organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, and
has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its
obligations hereunder.
(b) The execution and delivery of this
Agreement and the performance by Holdings of its
obligations hereunder have been duly and validly
authorized by all necessary corporate actions by
Holdings.
(c) This Agreement has been duly and validly
executed and delivered by Holdings and is a legal,
valid and binding obligation of Holdings, enforceable
against it in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether
considered in a proceeding in equity or at law), an
implied covenant of good faith and fair dealing and
considerations of public policy.
(d) The execution and delivery of this
Agreement and the performance by Holdings of its
obligations hereunder do not and will not (i) conflict
with the certificate of incorporation or by-laws of
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Holdings, (ii) conflict with or violate any order,
judgment or decree applicable to Holdings or by which
any property or asset of Holdings is bound, or
(iii) except as disclosed in the Exchange Offer
Materials result in a material breach of or constitute
a material default (or an event which with notice or
lapse of time or both would become a default) under, or
give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property
or asset of Holdings pursuant to, any loan or credit
agreement, indenture, mortgage, note or other agreement
or instrument to which Holdings or any of its
subsidiaries or affiliates is a party or by which any
of them or any of their respective properties or assets
is bound.
(e) Holdings has obtained all consents,
approvals, authorizations and orders of, and has duly
made all registrations, qualifications and filings
with, any court or regulatory authority or other
governmental agency or instrumentality required on its
part to be obtained or made in connection with the
execution, delivery and performance of this Agreement
by it and the registration of the Exchange Shares for
exchange.
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(f) The financial statements of Holdings and
its subsidiaries set forth or incorporated by reference
in the Exchange Offer Materials fairly present the
financial condition of Holdings and its consolidated
subsidiaries as of the dates indicated and the results
of operations and changes in financial position for the
periods therein specified, and have been prepared in
conformity with generally accepted accounting
principles consistently applied throughout the periods
involved (except as otherwise stated therein).
(g) No order preventing or suspending the
use of any Preliminary Prospectus has been issued by
the Commission, and the Registration Statement on the
date it became effective did not contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; provided, however, that this representation
and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to Holdings by you
expressly for use therein.
(h) Except as disclosed in the Prospectus,
since the date of the most recent audited financial
statements included in the Exchange Offer Materials,
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Holdings has conducted its business only in the
ordinary course consistent with past practice, and
there is not and has not been any change in the
business, financial condition or results of operations
of Holdings or any of its subsidiaries which has had,
or would reasonably be expected to have, a material
adverse effect on the business, financial condition or
results of operations of Holdings and its subsidiaries,
taken as a whole.
(i) All of the issued and outstanding shares
of Holdings common stock have been duly and validly
authorized and issued, are fully paid and
non-assessable and conform to the description of the
Holdings common stock contained in the Prospectus. All
of the Exchange Shares transferred to holders of the
Shares pursuant to the Exchange Offer will be
transferred free and clear of all liens, charges and
encumbrances of all kinds.
12. Opinions of Counsel to Bidder and Holdings.
------------------------------------------
Bidder has delivered to you opinions in form and substance
satisfactory to you, of Lowenstein, Sandler, Kohl, Fisher &
Boylan, P.A., special New Jersey counsel to Bidder, Simpson
Thacher & Bartlett, counsel to Bidder, Davis, Polk &
Wardwell, counsel to Holdings, and Jo-Ann Ford, counsel of
Holdings.
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13. Covenants of Bidder and Holdings. (a)
--------------------------------
Bidder will notify you, promptly after it receives notice
thereof, of the time when the Registration Statement, or any
amendment thereto, has been filed or becomes effective, or
any amendment or supplement to the Prospectus or any
amendment to the Schedule 14D-1 or any amended or additional
Exchange Offer Materials shall have been filed, of the
receipt of any comments from the Commission relating to the
Exchange Offer, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use
of any Preliminary Prospectus or Prospectus or any of the
Exchange Offer Materials, of the suspension of the
qualification of the Exchange Shares for offering or sale in
connection with the Exchange Offer in any jurisdiction, of
any request by the Commission to amend or supplement the
Registration Statement, the Prospectus, or the Schedule
14D-1 or the other Exchange Offer Materials. Bidder will
also inform you, promptly after it receives notice thereof,
of any material litigation or other administrative
proceeding with respect to the Exchange Offer.
(b) Holdings will notify you, promptly after it
receives notice thereof, of the time when the Registration
Statement, or any amendment thereto, has been filed or
becomes effective, or any amendment or supplement to the
Prospectus of the receipt of any comments from the
Commission relating to the Registration Statement, of the
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issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary
Prospectus or Prospectus, of the suspension of the
qualification of the Exchange Shares for offering or sale in
connection with the Exchange Offer in any jurisdiction, of
any request by the Commission to amend or supplement the
Registration Statement. Holdings will also inform you,
promptly after it receives notice thereof, of any material
litigation or other administrative proceeding with respect
to the Exchange Offer in which it is named as a party.
(c) Bidder will cause all amendments and
supplements filed with the Commission to be distributed to
holders of the Shares as may be required by the Act and the
Exchange Act and the rules and regulations of the Commission
thereunder. During the period referred to in the second
sentence of paragraph (d) below, Bidder will deliver to you,
without charge, such number of copies of the Prospectus and
the other Exchange Offer Materials (as supplemented or
amended) as you may reasonably request. Prior to the
consummation of the Exchange Offer and before amending or
supplementing the Registration Statement, any Preliminary
Prospectus, the Prospectus, the Schedule 14D-1 or the other
Exchange Offer Materials, or approving any other material
for use in connection with the Exchange Offer, other than,
in each case, documents incorporated by reference therein by
Holdings, Bidder will furnish you with a copy of each such
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proposed amendment or supplement, provided, however, that
Bidder may issue press releases without furnishing you with
draft copies thereof if due to time constraints it is not
practicable to do so.
(d) Bidder will comply in all material respects
with the Act and the Exchange Act and the rules and
regulations of the Commission thereunder in connection with
the Registration Statement and the Prospectus, and the other
Exchange Offer Materials, the Exchange Offer and the
transactions contemplated hereby and thereby. If at any
time during the period when a prospectus is required to be
delivered by the Act or the Exchange Act and the rules and
regulations promulgated thereunder in connection with the
Exchange Offer any event shall occur as a result of which it
is necessary to amend or supplement the Prospectus or any of
the other Exchange Offer Materials in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus or other Exchange
Offer Materials are delivered, not misleading, or if in the
opinion of your counsel or in the opinion of Bidder, it
shall be necessary to amend or supplement the Registration
Statement or the Prospectus or any of the other Exchange
Offer Materials in order to comply with law, Bidder will
notify you and promptly prepare and furnish, at its own
expense, to you and file with the Commission, if required,
such amendment or supplement as may be necessary so that the
-22-
statements in the Prospectus or other Exchange Offer
Materials, as amended or supplemented, will not, in the
light of the circumstances under which they were made when
the Prospectus or the other Exchange Offer Materials are
delivered, be misleading or so that the Registration
Statement and the Prospectus or such other Exchange Offer
Materials comply with law.
(e) Holdings will comply in all material respects
with the Act and the Exchange Act and the rules and
regulations of the Commission thereunder in connection with
the Registration Statement and the Prospectus. If at any
time during the period when a prospectus is required to be
delivered by the Act or the Exchange Act and the rules and
regulations promulgated thereunder in connection with the
Exchange Offer any event shall occur as a result of which it
is necessary to amend or supplement the Prospectus in order
to make the statements therein, in the light of the
circumstances under which they were made when such
Prospectus is delivered, not misleading, or if in the
opinion of your counsel or in the opinion of Holdings, it
shall be necessary to amend or supplement the Registration
Statement or the Prospectus in order to comply with law,
Holdings will notify you and promptly prepare and furnish,
at its own expense, to you and file with the Commission, if
required, such amendment or supplement as may be necessary
so that the statements in the Prospectus, as amended or
-23-
supplemented, will not, in the light of the circumstances
under which they were made when the Prospectus is delivered,
be misleading or so that the Registration Statement and the
Prospectus comply with law.
(f) Bidder and Holdings will endeavor to qualify
the Exchange Shares for offering and sale under the
securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and Bidder will pay all expenses
(including reasonable fees and disbursements of its counsel)
in connection therewith.
(g) Holdings will make generally available to its
security holders as soon as practicable, but in any event
not later than 12 months after the effective date of the
Registration Statement (as defined in Rule 158(c) under the
Act) an earnings statement of Holdings and its subsidiaries
complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the
option of Holdings, Rule 158 under the Act).
(h) Bidder shall promptly give you notice of any
change of the expiration date of the Exchange Offer, of the
occurrence of any event which could cause Bidder and Parent
to withdraw, rescind, modify or amend the Exchange Offer and
of any consummation of the Exchange Offer.
(i) Bidder shall promptly give you notice of any
material request for additional information or other
material action by (i) the Federal Trade Commission or the
-24-
Antitrust Division of the Department of Justice under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, or the rules promulgated thereunder, (ii) the
European Commission under Regulations (EEC) No. 4064/89, or
(iii) the Director of Investigation and Research under
Canada's Competition Act.
(j) Bidder shall promptly give you any other
information relating to the Exchange Offer which you may
from time to time reasonably request.
14. Indemnification and Contribution; Settlement
--------------------------------------------
of Litigation; Release. (a) The provisions of the
----------------------
Indemnity Letter relating to indemnification are
incorporated herein by reference as if restated herein in
their entirety, and Bidder agrees to indemnify you and the
other Indemnified Persons as provided in the Indemnity
Letter.
(b) In case any proceeding (including any
governmental investigation) shall be instituted involving
any person in respect of which indemnity may be sought
pursuant to Section 14(a), such person (the "indemnified
party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party in such proceeding and shall pay the
-25-
reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but
the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have
mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and
the indemnified party and representation of both parties by
the same counsel would be inappropriate due to actual or
potential differing interests between them. It is under-
stood that the indemnifying party shall not, in connection
with any proceeding or related proceeding in the same
jurisdiction, be liable for the reasonable fees and expenses
of more than one separate firm (in addition to any local
counsel) for all such indemnified parties, and that all such
fees and expenses shall be reimbursed as they are incurred.
The indemnifying party shall not be liable for any settle-
ment of any proceeding effected without its written consent,
but if settled with such consent or if there shall be a
final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or
judgment. Bidder will not, without your prior written
consent, settle, compromise, consent to the entry of any
-26-
judgment in or otherwise seek to terminate any action,
claim, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not you
are a party thereto) unless such settlement, compromise,
consent or termination includes a release of you from any
liabilities arising out of such action, claim, suit or
proceeding.
(c) If the indemnification provided for in
Section 14(a) above is unavailable to an indemnified party
or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabil-
ities (i) in such proportion as is appropriate to reflect
the relative benefits received by Bidder on the one hand and
you 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) above but also the relative fault of Bidder and Holdings
on the one hand and of you on the other, in the case of
statements or omissions in connection with the statements or
omission or, in the case of any other action or omission,
the action or omission which resulted in such losses,
claims, damages or liabilities, as well as any other
-27-
relevant equitable considerations. The relative benefits
received by Bidder on the one hand and you on the other in
connection with the Exchange Offer shall be deemed to be in
the same proportion as the maximum aggregate value of the
consideration proposed to be paid by Bidder to acquire the
Shares pursuant to the Exchange Offer bears to the maximum
aggregate fee proposed to be paid to you pursuant to Section
7 of this Agreement (including any such fee payable pursuant
to the Engagement Letter) as a result of the acquisition of
the Shares pursuant to the Exchange Offer. The relative
fault of Bidder and Holdings on the one hand and you on the
other shall be determined by reference to, among other
things, in the case of statements or omission, whether the
untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact
relates to information supplied by Bidder or Holdings on the
one hand or you on the other and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission and, in the
case of any other action or omission, whether such action or
omission was taken or omitted to be taken by Bidder or
Holdings on the one hand or you on the other and the
parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such action or
omission.
-28-
(d) Bidder and you agree that it would not be
just and equitable if contribution pursuant to subsection
(c) of this Section 14 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 subsection (c) of this Section 14. The amount paid or
payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in Section 14(c)
above shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 14, you shall
not be required to contribute any amount in excess of the
amount by which the fee paid to you as provided in Section 7
of this Agreement (including any such fee payable pursuant
to the Engagement Letter) exceeds the amount of any damages
which you have been required to pay in the case of
statements or omissions, by reason of such untrue or alleged
untrue statement or omission or alleged omission, or, in the
case of actions or omissions, by reason of such action or
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
-29-
(e) The agreements contained in Section 7, the
indemnity and contribution agreement contained in this
Section 14 and the representations and warranties of Bidder
set forth in Sections 10 and 11 hereof shall remain
operative and in full force and effect regardless of (i) any
termination or cancellation of this Agreement, (ii) any
completion of the engagement provided by this Agreement or
(iii) any investigation made by or on behalf of you and your
officers, partners or directors or of any person controlling
you and shall survive any acquisition of the Shares, whether
pursuant to the Exchange Offer or otherwise.
(f) The reimbursement, indemnity and contribution
obligations of Bidder under this Section 14 shall be in
addition to any liability which the Bidder may otherwise
have, shall extend upon the same terms and conditions to
your affiliates and your partners, directors, agents,
employees and controlling persons, if any (such persons,
collectively referred to herein as, the "Indemnified
Person"), and shall inure to the benefit of any successors,
assigns, heirs and personal representative of Morgan Stanley
& Co. Incorporated and any other such Indemnified Persons
referred to above.
15. Severability. If any term or other provision
------------
of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other
provisions of this Agreement shall nevertheless remain in
-30-
full force and effect so long as the economic and legal
substance of the agreements contained herein is not affected
in any manner adverse to any party.
16. Counterparts. This Agreement may be executed
------------
by the different parties hereto in one or more separate
counterparts, each of which when executed shall be deemed an
original, but all of which together shall constitute one and
the same agreement.
17. Binding Effect. This Agreement shall be
--------------
binding upon and inure solely to the benefit of each party
hereto and the Indemnified Persons, and nothing in this
Agreement, express or implied, is intended to or shall
confer upon any other person any right, benefit or remedy.
18. Governing Law. This Agreement shall be
-------------
governed by and construed in accordance with the laws of the
State of New York applicable to contracts executed in and to
be performed in that State.
19. Entire Agreement. This Agreement, together
----------------
with the Engagement Letter and the Indemnity Letter, consti-
tute the entire agreement among the parties hereto with
respect to the subject matter hereof and supersede all prior
agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject
matter hereof.
20. Amendment. This Agreement may not be amended
---------
except in writing signed by each party to be bound thereby.
-31-
21. Notices. All notices and other communica-
-------
tions required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly
given if delivered in person, or by registered or certified
mail (postage prepaid, return receipt requested) to the
parties hereto as follows (or, as to each party, at such
other address as shall be designated by such party in a
written notice complying as to delivery with the terms of
this paragraph):
(a) If to you:
Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Attention: O. Griffith Sexton
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Neil T. Anderson
(b) If to Bidder:
c/o Kohlberg Kravis Roberts & Co.
9 West 57th Street, Suite 4200
New York, New York 10019
Attention: Clifton S. Robbins and
Scott M. Stuart
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attention: Charles I. Cogut and
David J. Sorkin
-32-
(c) If to Holdings:
RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Attention: Lawrence R. Ricciardi
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Samuel F. Pryor III
22. Subheadings. The descriptive headings
-----------
contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning
or interpretation of this Agreement.
Please indicate your willingness to act as Dealer
Manager on the terms set forth herein and your acceptance of
the foregoing provisions by signing in the space provided
below for that purpose and returning to us a copy of this
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letter, whereupon this letter and your acceptance shall
constitute a binding agreement among us.
Very truly yours,
BORDEN ACQUISITION CORP.
By
-----------------------------
Name:
Title:
RJR NABISCO HOLDINGS CORP.
By
-----------------------------
Name:
Title:
Accepted as of the date
first set forth above:
MORGAN STANLEY & CO.
INCORPORATED
By
-----------------------
Name:
Title:
-34-
Dates Referenced Herein and Documents Incorporated by Reference
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