Exhibit 4.1
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RJR NABISCO HOLDINGS CORP,
Issuer
AND
THE BANK OF NEW YORK
Trustee
Indenture
Dated as of
________, 1995
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TABLE OF CONTENTS
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Page
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS
Authorization of Indenture . . . . . . . . . . . . . . . . . . . . . 1
Compliance with Legal Requirements . . . . . . . . . . . . . . . . . 1
Purpose of and Consideration for Indenture . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined . . . . . . . . . . . . . . . . . . 1
Authenticating Agent . . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Securities . . . . . . . . . . . . . . . . . . . . 3
Composite Rate . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Net Worth . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . 4
Coupon . . . . . . . . . . . . . . . . . . . . . . . . . . 4
covenant defeasance . . . . . . . . . . . . . . . . . . . 4
Declaration of Trust . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . 4
Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Event of Default . . . . . . . . . . . . . . . . . . . . . 5
Foreign Currency . . . . . . . . . . . . . . . . . . . . . 5
Holder, Holder of Securities, Securityholder . . . . . . . 5
Indenture . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 5
Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Issuer Order . . . . . . . . . . . . . . . . . . . . . . . 5
Judgment Currency . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . 6
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 6
original issue date . . . . . . . . . . . . . . . . . . . 6
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Original Issue Discount Security . . . . . . . . . . . . . 6
Outstanding . . . . . . . . . . . . . . . . . . . . . . . 6
Periodic Offering . . . . . . . . . . . . . . . . . . . . 7
Person . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Preferred Securities . . . . . . . . . . . . . . . . . . . 7
principal . . . . . . . . . . . . . . . . . . . . . . . . 7
RJR Nabisco Holdings Capital Trust . . . . . . . . . . . . 7
Registered Global Security . . . . . . . . . . . . . . . . 8
Registered Security . . . . . . . . . . . . . . . . . . . 8
Responsible Officer . . . . . . . . . . . . . . . . . . . 8
Restricted Subsidiary . . . . . . . . . . . . . . . . . . 8
Security or Securities . . . . . . . . . . . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . 9
Security Exchange . . . . . . . . . . . . . . . . . . . . 9
Senior Obligations . . . . . . . . . . . . . . . . . . . . 9
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . 10
Trust Indenture Act of 1939 . . . . . . . . . . . . . . . 10
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 10
U.S. Government Obligations . . . . . . . . . . . . . . . 10
Unregistered Security . . . . . . . . . . . . . . . . . . 10
Vice President . . . . . . . . . . . . . . . . . . . . . . 10
Yield to Maturity . . . . . . . . . . . . . . . . . . . . 10
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . 11
SECTION 2.2 Form of Trustee's Certificate of
Authentication. . . . . . . . . . . . . . . . . 11
SECTION 2.3 Amount Unlimited; Issuable in Series . . . . . . . 12
SECTION 2.4 Authentication and Delivery of Securities . . . . 16
SECTION 2.5 Execution of Securities . . . . . . . . . . . . . 19
SECTION 2.6 Certificate of Authentication . . . . . . . . . . 19
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest. . . . . . . . . . . . . . 20
SECTION 2.8 Registration, Transfer and Exchange . . . . . . . 21
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and
Stolen Securities . . . . . . . . . . . . . . . 25
SECTION 2.10 Cancellation of Securities; Destruction
Thereof . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.11 Temporary Securities . . . . . . . . . . . . . . 27
SECTION 2.12 CUSIP Numbers . . . . . . . . . . . . . . . . . . 28
SECTION 2.13 Series May Include Tranches. . . . . . . . . . . 28
tranche . . . . . . . . . . . . . . . . . . . . 28
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ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest . . . . . . . . 29
SECTION 3.2 Offices for Payments, etc . . . . . . . . . . . . 30
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee . . . . . . . . . . . . . . . . . . . . 31
SECTION 3.4 Paying Agents . . . . . . . . . . . . . . . . . . 31
SECTION 3.5 Certificate to Trustee . . . . . . . . . . . . . . 33
SECTION 3.6 Luxembourg Publications . . . . . . . . . . . . . 33
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to
Names and Addresses of Securityholders . . . . . . . . . . 33
SECTION 4.2 Reports by the Issuer . . . . . . . . . . . . . . 34
SECTION 4.3 Reports by the Trustee . . . . . . . . . . . . . . 34
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration of
Maturity; Waiver of Default . . . . . . . . . . 34
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. . . . . . . . . . . . . 38
SECTION 5.3 Application of Proceeds . . . . . . . . . . . . . 41
SECTION 5.4 Suits for Enforcement . . . . . . . . . . . . . . 42
SECTION 5.5 Restoration of Rights on Abandonment of
Proceedings . . . . . . . . . . . . . . . . . . 42
SECTION 5.6 Limitations on Suits by Securityholders . . . . . 43
SECTION 5.7 Unconditional Right of Securityholders to
Institute Certain Suits . . . . . . . . . . . . 43
SECTION 5.8 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default. . . . . . . . . 44
SECTION 5.9 Control by Securityholders . . . . . . . . . . . . 44
SECTION 5.10 Waiver of Past Defaults . . . . . . . . . . . . . 45
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SECTION 5.11 Trustee to Give Notice of Default, But May
Withhold in Certain Circumstances . . . . . . . 46
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs. . . . . . . . . . . . 46
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee;
During Default; Prior to Default. . . . . . . . 47
SECTION 6.2 Certain Rights of the Trustee . . . . . . . . . . 49
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of
Proceeds Thereof. . . . . . . . . . . . . . . . 50
SECTION 6.4 Trustee and Agents May Hold Securities;
Collections, etc. . . . . . . . . . . . . . . . 51
SECTION 6.5 Moneys Held by Trustee . . . . . . . . . . . . . . 51
SECTION 6.6 Compensation and Indemnification of Trustee
and Its Prior Claim . . . . . . . . . . . . . . 51
SECTION 6.7 Right of Trustee to Rely on Officers'
Certificate, etc. . . . . . . . . . . . . . . . 52
SECTION 6.8 Indentures Not Creating Potential
Conflicting Interests for the Trustee . . . . . 52
SECTION 6.9 Persons Eligible for Appointment as Trustee . . . 52
SECTION 6.10 Resignation and Removal; Appointment of
Successor Trustee . . . . . . . . . . . . . . . 53
SECTION 6.11 Acceptance of Appointment by Successor
Trustee . . . . . . . . . . . . . . . . . . . . 55
SECTION 6.12 Merger, Conversion, Consolidation or
Succession to Business of Trustee . . . . . . . 56
SECTION 6.13 Appointment of Authenticating Agent . . . . . . . 57
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders . . . 58
SECTION 7.2 Proof of Execution of Instruments and of
Holding of Securities; Record Date. . . . . . . 59
SECTION 7.3 Holders to be Treated as Owners . . . . . . . . . 60
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SECTION 7.4 Right of Revocation of Action Taken . . . . . . . 61
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders . . . . . . . . . . . . . . . . 61
SECTION 8.2 Supplemental Indentures With Consent of
Securityholders . . . . . . . . . . . . . . . . 63
SECTION 8.3 Effect of Supplemental Indenture . . . . . . . . . 65
SECTION 8.4 Documents to Be Given to Trustee . . . . . . . . . 66
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures . . . . . . . . . . . . 66
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain
Conditions. . . . . . . . . . . . . . . . . . . 66
SECTION 9.2 Successor Corporation Substituted . . . . . . . . 67
SECTION 9.3 Opinion of Counsel to Trustee . . . . . . . . . . 67
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
SECTION 10.1 Satisfaction and Discharge of Indenture . . . . . 68
SECTION 10.2 Application by Trustee of Funds Deposited
for Payment of Securities . . . . . . . . . . . 73
SECTION 10.3 Repayment of Moneys Held by Paying Agent . . . . 73
SECTION 10.4 Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years . . . . . . . . . 73
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ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from
Individual Liability . . . . . . . . . . . . . 74
SECTION 11.2 Provisions of Indenture for the Sole
Benefit of Parties and Securityholders . . . . 74
SECTION 11.3 Successors and Assigns of Issuer Bound by
Indenture . . . . . . . . . . . . . . . . . . 74
SECTION 11.4 Notices and Demands on Issuer, Trustee and
Securityholders . . . . . . . . . . . . . . . 74
SECTION 11.5 Officers' Certificates and Opinions of
Counsel; Statements to Be Contained Therein. . 75
SECTION 11.6 Payments Due on Saturdays, Sundays and
Holidays . . . . . . . . . . . . . . . . . . . 77
SECTION 11.7 Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939 . . . . . . . . . 77
SECTION 11.8 New York Law to Govern . . . . . . . . . . . . . 77
SECTION 11.9 Counterparts . . . . . . . . . . . . . . . . . . 77
SECTION 11.10 Effect of Headings. . . . . . . . . . . . . . . 77
SECTION 11.11 Securities in a Foreign Currency or in ECU. . . 77
SECTION 11.12 Judgment Currency . . . . . . . . . . . . . . . 78
SECTION 11.13 Severability of Provisions. . . . . . . . . . . 79
SECTION 11.14 Company Released from Indenture
Requirements Under Certain Circumstances. . . 79
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article . . . . . . . . . . . . 80
SECTION 12.2 Notice of Redemption; Partial Redemptions . . . . 80
SECTION 12.3 Payment of Securities Called for Redemption . . . 82
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. . . . 83
SECTION 12.5 Mandatory and Optional Sinking Funds . . . . . . 83
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ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1 Subordination . . . . . . . . . . . . . . 87
SECTION 13.2 Rights of Holders of Senior
Obligations . . . . . . . . . . . . . . . 87
SECTION 13.3 Payments and Distributions . . . . . . . . 88
SECTION 13.4 Payments by the Company . . . . . . . . . 90
SECTION 13.5 Appointment of the Trustee by
Securityholders . . . . . . . . . . . . . 90
SECTION 13.6 Notice to Trustee . . . . . . . . . . . . 91
SECTION 13.7 Rights of Trustee . . . . . . . . . . . . 91
SECTION 13.8 Paying Agent . . . . . . . . . . . . . . . 91
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
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THIS INDENTURE, dated as of ________, 1995 between RJR NABISCO
HOLDINGS CORP., a Delaware corporation (the "Issuer"), and THE BANK OF NEW
YORK, a national association (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time
of its debentures, notes or other evidences of indebtedness to be issued in
one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Issuer has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and delivery
of this Indenture to provide, among other things, for the authentication,
delivery and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective
holders from time to time of the Securities or of series thereof and of the
Coupons, if any, appertaining thereto as follows:
ARTICLE ONE
DEFINITIONS
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SECTION 1.1 Certain Terms Defined. The following terms (except as
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otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined in the
Trust Indenture Act of 1939 or the definitions of which in the Securities Act
of 1933 are referred to in the Trust Indenture Act of 1939, including terms
defined therein by reference to the Securities Act of 1933 (except as herein
otherwise expressly provided or unless the context otherwise clearly
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with generally
accepted accounting principles, and the term "generally accepted accounting
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principles" means such accounting principles as are generally accepted at the
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time of any computation. The words "herein", "hereof" and "hereunder" and
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other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision. The terms defined in
this Article have the meanings assigned to them in this Article and include
the plural as well as the singular.
"Authenticating Agent" shall have the meaning set forth in Section
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6.13.
"Authorized Newspaper" means a newspaper (which, in the case of The
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City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition), in the case of the United Kingdom, will, if practicable, be the
Financial Times (London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in The City
of New York, the United Kingdom or in Luxembourg, as applicable. If it shall
be impractical in the opinion of the Trustee to make any publication of any
notice required hereby in an Authorized Newspaper, any publication or other
notice in lieu thereof which is made or given with the approval of the
Trustee shall constitute a sufficient publication of such notice.
"Board of Directors" means either the Board of Directors of the
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Issuer or any committee of such Board duly authorized to act hereunder.
"Board Resolution" means a copy of one or more resolutions
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certified by the Secretary or any Assistant Secretary of the Issuer to have
been duly adopted or consented to by the Board of Directors and as being in
full force and effect as of the date of certification, which copy is
delivered to the Trustee.
"Business Day" means any day, other than a Saturday or Sunday, that
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is neither a legal holiday nor a day on which banking institutions are
authorized or required by law or regulation to close in The City of New York
and
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(i) with respect to any Note the interest of which is based on LIBOR, in the
City of London, (ii) with respect to Notes denominated in a specified
currency other than U.S. dollars, Australian dollars or European Currency
Units, in the principal financial center of the country of the specified
currency, (iii) with respect to Notes denominated in Australian dollars, in
Sydney and (iv) with respect to Notes denominated in European Currency Units,
in Luxembourg and that is not a non-European Currency Units clearing day, as
determined by the European Currency Units Banking Association in Paris.
"Commission" means the Securities and Exchange Commission, as from
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time to time constituted, created under the Securities Exchange Act of 1934,
as amended or if at any time after the execution and delivery of this
Indenture such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties on such date.
"Common Securities" means the common undivided beneficial interests
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in the assets of the applicable RJR Nabisco Holdings Capital Trust.
"Composite Rate" means, at any time, the rate of interest, per
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annum, compounded semiannually, equal to the sum of the rates of interest
borne by each of the Securities of a series Outstanding hereunder (as
specified on the face of each of the Securities, provided, that, in the case
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of the Securities with variable rates of interest, the interest rate to be
used in calculating the Composite Rate shall be the interest rate applicable
to such Securities at the beginning of the year in which the Composite Rate
is being determined and, provided, further, that, in the case of Securities
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of a series which do not bear interest, the interest rate to be used in
calculating the Composite Rate shall be a rate equal to the yield to maturity
on such Securities, calculated at the time of issuance of such Securities)
multiplied, in the case of each of the Securities of a series, by the
percentage of the aggregate principal amount of all of the Securities then
Outstanding represented by such Security. For the purposes of this
calculation, the aggregate principal amounts of Outstanding Securities of a
series that are denominated in a foreign currency, shall be calculated in the
manner set forth in Section 11.11.
"Consolidated Net Worth" means, at any date of determination, the
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consolidated stockholder's equity of the Issuer, as set forth on the then
most recently available consolidated balance sheet of the Issuer and its
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consolidated Subsidiaries; provided that if at such date Nabisco Holdings
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Corp., including its successors and assigns, is a consolidated Subsidiary of
the Issuer, such calculation shall be increased by (i) the amount of the
minority interest in Nabisco Holdings Corp., including its successors and
assigns, as set forth on the then most recently available consolidated
balance sheet of the Issuer and its consolidated Subsidiaries, and reduced by
(ii) the consolidated stockholders' equity of Nabisco Holdings Corp.,
including its successors and assigns, as set forth on the then most recently
available consolidated balance sheet of Nabisco Holdings Corp. and its
consolidated subsidiaries; provided, further, that if at such date Nabisco
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Holdings Corp., including its successors and assigns, is not a consolidated
Subsidiary of the Issuer, such calculation shall be reduced by the amount of
the Issuer's investment in Nabisco Holdings Corp., including its successors
and assigns, if any, as set forth on the then most recently available
consolidated balance sheet of the Issuer and its consolidated Subsidiaries.
"Corporate Trust Office" means the office of the Trustee at which
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the corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, as of the date hereof, located at
120 Wall Street, 13th Floor, New York, New York 10043, Attention: Corporate
Trust Administration.
"Coupon" means any interest coupon appertaining to a Security.
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"covenant defeasance" shall have the meaning set forth in Section
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10.1(C).
"Declaration of Trust" means the Declaration of Trust of the RJR
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Nabisco Holdings Capital Trust, if any, specified in the applicable Board
Resolution or supplemental indenture establishing a particular series of
Securities pursuant to Section 2.3 hereof.
"Depositary" means, with respect to the Securities of any series
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issuable or issued in the form of one or more Registered Global Securities,
the Person designated as Depositary by the Company pursuant to Section 2.3
until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary" shall
mean or include each Person who is then a Depositary hereunder, and if at any
time there is more than one such Person, "Depositary" as used with respect to
the Securities of any such series shall mean the Depositary with respect to
the Registered Global Securities of that series.
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"Dollar" means the coin or currency of the United States of America
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as at the time of payment is legal tender for the payment of public and
private debts.
"ECU" means the European Currency Unit as defined and revised from
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time to time by the Council of European Communities.
"Event of Default" means any event or condition specified as such
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in Section 5.1, continued for the period of time, if any, therein designated.
"Foreign Currency" means either (i) a currency issued by the
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government of a country other than the United States or (ii) ECU's or another
composite currency the value of which is determined by reference to the
values of the currencies of any group of countries.
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"Holder", "Holder of Securities", "Securityholder" or other similar
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terms mean (a) in the case of any Registered Security, the person in whose
name such Security is registered in the security register kept by or on
behalf of the Issuer for that purpose in accordance with the terms hereof,
and (b) in the case of any Unregistered Security, the bearer of such
Security, or any Coupon appertaining thereto, as the case may be.
"Indenture" means this instrument as originally executed and
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delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
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Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Article Five) RJR
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Nabisco Holdings Corp., a Delaware corporation, and, its successors and
assigns through the operation of or pursuant to the provisions of Article
Nine.
"Issuer Order" means a written statement, request or order of the
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Issuer signed in its name by the Chief Executive Officer, the President, any
Vice President, the Treasurer or the Controller of the Issuer and delivered
to the Trustee.
"Judgment Currency" shall have the meaning set forth in Section
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11.12.
5
"Officers' Certificate" means a certificate signed by the Chairman
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of the Board of Directors or Vice Chairman of the Board of Directors or the
President or the Chief Executive Officer or any Vice President and by the
Treasurer or Controller or the Secretary or any Assistant Treasurer or
Assistant Controller or Assistant Secretary of the Issuer and delivered to
the Trustee. Each such certificate shall comply with Section 314 of the
Trust Indenture Act of 1939 and include (except as otherwise provided in this
Indenture) the statements provided for in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal
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counsel who may be an employee of or counsel to the Issuer. Each such
opinion shall comply with Section 314 of the Trust Indenture Act of 1939 and
include the statements provided for in Section 11.5, if and to the extent
required hereby.
"original issue date" of any Security (or portion thereof) means
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the earlier of (a) the date of authentication of such Security or (b) the
date of any Security (or portion thereof) for which such Security was issued
(directly or indirectly) on registration of transfer, exchange or
substitution.
"Original Issue Discount Security" means any Security that provides
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for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.1.
"Outstanding", when used with reference to Securities, shall mean,
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as of any particular time, all Securities authenticated and delivered by the
Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption
of which moneys or U.S. Government Obligations (as provided in Section
10.1) in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Issuer) or shall
have been set aside, segregated and held in trust by the Issuer for the
Holders of such Securities (if the Issuer shall act as its own paying
agent), provided that if such Securities, or portions thereof, are to be
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redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to
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the Trustee shall have been made for giving such notice; and
(c) Securities in substitution for which other Securities shall
have been authenticated and delivered, or which shall have been paid,
pursuant to the terms of Section 2.9 (except with respect to any such
Security as to which proof satisfactory to the Trustee is presented that
such Security is held by a person in whose hands such Security is a
legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon a declaration of acceleration of the maturity thereof pursuant to
Section 5.1.
"Periodic Offering" means an offering of Securities of a series
-----------------
from time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Company or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Preferred Securities" means the preferred undivided beneficial
--------------------
interests in the assets of the applicable RJR Nabisco Holdings Capital Trust.
"principal" whenever used with reference to the Securities or any
---------
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"RJR Nabisco Holdings Capital Trust" shall mean any statutory
----------------------------------
business trust created under the laws of the State of Delaware specified in
the applicable Board Resolution or supplemental indenture establishing a
particular series of Securities pursuant to Section 2.3 hereof.
7
"Registered Global Security", means a Security evidencing all or a
--------------------------
part of a series of Registered Securities, issued to the Depositary for such
series in accordance with Section 2.4, and bearing the legend prescribed in
Section 2.4.
"Registered Security" means any Security registered on the Security
-------------------
register of the Issuer.
"Responsible Officer" means, when used with respect to the Trustee,
-------------------
any Senior Trust Officer, any Vice President, any Trust Officer, any
Assistant Trust Officer, or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary organized and existing
---------------------
under the laws of the United States of America and the principal business of
which is carried on within the United States of America which owns or is a
lessee pursuant to a capital lease of any Principal Property and in which the
investment of the Issuer and all its Subsidiaries exceeds 5% of Consolidated
Net Worth as of the date of such determination other than:
(i) each Subsidiary the major part of whose business consists
of finance, banking, credit, leasing, insurance, financial services
or other similar operations, or any combination thereof;
(ii) each Subsidiary formed or acquired after the date hereof
for the purpose of acquiring the business or assets of another
Person and which does not acquire all or any substantial part of
the business or assets of the Issuer or any Restricted Subsidiary;
and
(iii) Nabisco Holdings Corp., each subsidiary of Nabisco Holdings
Corp. and each of their successors and assigns,
provided, however, that the Board of Directors of the Issuer may by Board
-------- -------
Resolution declare any such Subsidiary to be a Restricted Subsidiary,
effective as of the date such resolution is adopted.
"Security" or "Securities" has the meaning stated in the first
-------- ----------
recital of this Indenture, and to the extent a
8
Security is issued as an Unregistered Security, the term Security or
Securities shall also include the Coupon (if any) appertaining to such
Security if the context so requires, or, as the case may be, Securities that
have been authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Security Exchange" when used with respect to the Securities of any
-----------------
series which are held as trust assets of a RJR Nabisco Holdings Capital Trust
pursuant to the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust, means the distribution of the Securities of such series by such RJR
Nabisco Holdings Capital Trust in exchange for the Preferred Securities and
Common Securities of such RJR Nabisco Holdings Capital Trust in dissolution
of such RJR Nabisco Holdings Capital Trust pursuant to the Declaration of
Trust of such RJR Nabisco Holdings Capital Trust.
"Senior Obligations" means (a) the principal of and premium, if
------------------
any, and interest on all indebtedness of the Company, whether outstanding on
the date of this Indenture or thereafter created, (i) for money borrowed by
the Company (including, without limitation, ______________), (ii) for money
borrowed by, or obligations of, others and either assumed or guaranteed,
directly or indirectly, by the Company, (iii) in respect of letters of credit
and acceptances issued or made by banks, (iv) constituting purchase money
indebtedness, or indebtedness secured by property included in the property,
plant and equipment accounts of the Company at the time of the acquisition of
such property by the Company, for the payment of which the Company is
directly liable, or (v) constituting unsecured indebtedness of the Company,
(b) all deferrals, renewals, extensions and refundings of, and amendments,
modifications and supplements to, any such indebtedness and (c) all other
general unsecured obligations, including without limitation, trade payables.
As used in the preceding sentence the term "purchase money indebtedness"
means indebtedness evidenced by a note, debenture, bond or other instrument
(whether or not secured by any lien or other security interest) issued or
assumed as all or a part of the consideration for the acquisition of
property, whether by purchase, merger, consolidation or otherwise, unless by
its terms such indebtedness is subordinate to other indebtedness of the
Company. Notwithstanding anything to the contrary in this Indenture or the
Securities, Senior Obligations shall not include (i) any indebtedness of the
Company which, by its terms or the terms of the instrument creating or
evidencing
9
it, is subordinate in right of payment to or pari passu with the Securities,
---- -----
as the case may be, and, in particular, the Securities shall rank pari passu
with all other debt securities and guarantees in respect of those debt
securities, issued to (y) any other RJR Nabisco Holdings Capital Trust and
(z) any other trusts, partnerships or any other entity affiliated with the
Company which is a financing vehicle of the Company ("Financing Entity") in
connection with an issuance of preferred securities by such Financing Entity,
or (ii) any indebtedness of the Company to a Subsidiary.
"Subsidiary" means any corporation of which at least a majority of
----------
all outstanding stock having by the terms thereof ordinary voting power in
the election of directors of such corporation (irrespective of whether or not
at the time stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned by the Issuer, or by one or more
Subsidiaries of the Issuer or by the Issuer and one or more Subsidiaries.
"Trust Indenture Act of 1939" means the Trust Indenture Act of
---------------------------
1939, as amended, as in force at the date as of which this Indenture was
originally executed.
"Trustee" means the Person identified as "Trustee" in the first
-------
paragraph hereof and, pursuant to the provisions of Article Five, shall also
include any successor trustee. "Trustee" shall also mean or include each
Person who is then a trustee hereunder and if at any time there is more than
one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the trustee with respect to the Securities of such series.
"U.S. Government Obligations" shall have the meaning set forth in
---------------------------
Section 10.1(A).
"Unregistered Security" means any Security other than a Registered
---------------------
Security.
"Vice President" when used with respect to the Issuer or the
--------------
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title of "Vice President".
"Yield to Maturity" means as the context may require the yield to
-----------------
maturity (i) on a series of Securities or (ii) if the Securities of a series
are issuable from time to time, on a Security of such series, calculated at
the
10
time of issuance of such series in the case of clause (i) or at the time of
issuance of such Security of such series in the case of clause (ii), or, if
applicable, at the most recent redetermination of interest on such series or
on such Security, and calculated in accordance with the constant interest
method or such other accepted financial practice as is specified in the terms
of such Security.
ARTICLE TWO
SECURITIES
----------
SECTION 2.1 Forms Generally. The Securities of each series and
---------------
the Coupons, if any, to be attached thereto shall be substantially in such
form (not inconsistent with this Indenture) as shall be established by or
pursuant to one or more Board Resolutions (as set forth, in a Board
Resolution or, to the extent established pursuant to, rather than set forth,
in a Board Resolution, an Officer's Certificate detailing such establishment)
or in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not inconsistent
with the provisions of this Indenture, as may be required to comply with any
law or with any rules or regulations pursuant thereto, or with any rules of
any securities exchange or to conform to general usage, all as may be
determined by the officers executing such Securities and Coupons, if any, as
evidenced by their execution of the Securities and Coupons.
Unless otherwise specified as contemplated by Section 2.3,
Unregistered Securities shall have coupons attached. The definitive
Securities and Coupons, if any, shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities and Coupons, if any.
SECTION 2.2 Form of Trustee's Certificate of Authentication. The
-----------------------------------------------
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
11
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
Dated: THE BANK OF NEW YORK
as Trustee
By______________________
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed
with respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities referred to in the within-mentioned
Indenture."
THE BANK OF NEW YORK
as Trustee
_________________________,
as Authenticating Agent
By_______________________
Authorized Signatory
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and each such
series shall rank equally and pari passu with all other senior and
unsubordinated debt of the Issuer. There shall be established in or pursuant
to one or more Board Resolutions (and to the extent established pursuant to
rather than set forth in a Board Resolution, in an Officers' Certificate
detailing such establishment) or established in one or more indentures
supplemental hereto, prior to the initial issuance of Securities of any
series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all
other series;
12
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture and any limitation on the ability of the Issuer to
increase such aggregate principal amount after the initial issuance of
the Securities of that Series (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 2.8, 2.9,
2.11, 8.5 or 12.3);
(3) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited
to, any Foreign Currency);
(4) the date or dates on which the principal of the Securities of
the series is payable (which date or dates may be fixed or extendible);
(5) the rate or rates (which may be fixed on variable) per annum
at which the Securities of the series shall bear interest, if any, the
date or dates from which such interest shall accrue, on which such
interest shall be payable and (in the case of Registered Securities) on
which a record shall be taken for the determination of Holders to whom
interest is payable and/or the method by which such rate or rates or
date or dates shall be determined;
(6) the place or places where the principal of and any interest on
Securities of the series shall be payable (if other than as provided in
Section 3.2), any Registered Securities of the series may be surrendered
for exchange, notices, demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and where
notice to Holders pursuant to Section 11.4 may be published;
(7) the right, if any, of the Issuer to redeem Securities of such
series, in whole or in part, at its option and the period or periods
within which, the price or prices at which and any terms and conditions
upon which Securities of the series may be so redeemed, pursuant to any
sinking fund or otherwise;
(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder
thereof and the price or prices at which and the period or periods
within which and any of the terms and
13
conditions upon which Securities of the series shall be redeemed,
purchased or repaid, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof in case of Registered Securities, or $1,000 and $5,000
in the case of Unregistered Securities, the denominations in which
Securities of the series shall be issuable;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(11) if other than the coin or currency in which the Securities of
that series are denominated, the coin or currency in which payment of
the principal of or interest on the Securities of such series shall be
payable;
(12) if the principal of or interest on the Securities of such
series are to be payable, at the election of the Issuer or a Holder
thereof, in a coin or currency other than that in which the Securities
are denominated, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(13) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index
based on a coin or currency other then that in which the Securities of
the series are denominated, the manner in which such amounts shall be
determined;
(14) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be
issuable as Registered Global Securities) or Unregistered Securities
(with or without Coupons), or any combination of the foregoing, any
restrictions applicable to the offer, sale or delivery of Unregistered
Securities or the payment of interest thereon and, if other than as
provided in Section 2.8, the terms upon which Unregistered Securities of
any series may be exchanged for Registered Securities of such series and
vice versa;
(15) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a person who
is not a U.S. person in
14
respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Issuer will have the option to redeem
such Securities rather than pay such additional amounts;
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, the
form and terms of such certificates, documents or conditions;
(17) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the
Securities of such series;
(18) the terms of any warrants attached to the Securities of the
series;
(19) provisions, if any, for the defeasance of Securities of a
particular series (including provisions permitting defeasance of less
than all Securities of a particular series), which provisions may be in
addition to, in substitution for, in subtraction from, or in
modification of (or any combination of the foregoing) the provisions of
Article Ten;
(20) whether the Securities of the series are issuable in whole or
in part as one or more global Securities and, in such case, the identity
of the Depositary for such global Security or Securities;
(21) any other events of default or covenants with respect to
the Securities of such series; and
(22) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officers' Certificate referred to above
or as set forth in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by
or pursuant to such Board Resolution, such
15
Officer's Certificate or in any such indenture supplemental hereto. If any
of the terms of the series are established by action taken pursuant to a
Board Resolution, a copy of an appropriate record of such action shall be
certified by a Secretary or Assistant Secretary of the Issuer and delivered
to the trustee at or prior to the delivery of the Officer's Certificate
setting forth the terms of the series.
SECTION 2.4 Authentication and Delivery of Securities. At any
-----------------------------------------
time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Securities of any series having attached
thereto appropriate Coupons, if any, executed by the Issuer to the Trustee
for authentication together with the applicable documents referred to below
in this Section, and the Trustee shall thereupon authenticate and deliver
such Securities to or upon the order of the Issuer (contained in the Issuer
Order referred to below in this Section) or pursuant to such procedures
acceptable to the Trustee and to such recipients as may be specified from
time to time by an Issuer Order. The maturity date, original issue date,
interest rate and any other terms of the Securities of such series and
Coupons, if any, appertaining thereto shall be determined by or pursuant to
such Issuer Order and procedures. If provided for in such procedures, such
Issuer Order may authorize authentication and delivery pursuant to oral
instructions from the Issuer or its duly authorized agent, which instructions
shall be promptly confirmed in writing in the form of an Issuer Order or in
the form of instructions delivered by a person who is authorized under an
Issuer Order previously delivered to the Trustee by facsimile or electronic
transmission. In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in the case of subparagraphs 2, 3 and 4
below only at or before the time of the first request of the Issuer to the
Trustee to authenticate Securities of such series) and (subject to Section
6.1) shall be fully protected in relying upon, unless and until such
documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities and Coupons,
if any, are not to be delivered to the Issuer, provided that, with
respect to Securities of a series subject to a Periodic Offering,
(a) such Issuer Order may be delivered by the Issuer to the Trustee
prior to the delivery to the Trustee of such Securities for
authentication and delivery, (b) the Trustee shall authenticate and
deliver Securities of such series
16
for original issue from time to time, in an aggregate principal amount
not exceeding the aggregate principal amount established for such
series, pursuant to an Issuer Order or pursuant to procedures acceptable
to the Trustee as may be specified from time to time by an Issuer Order,
(c) the maturity date or dates, original issue date or dates, interest
rate or rates and any other terms of Securities of such series shall be
determined by an Issuer Order or pursuant to such procedures and (d) if
provided for in such procedures, such Issuer Order may authorize authen-
tication and delivery pursuant to oral or electronic instructions from
the Issuer or its duly authorized agent or agents, which oral instruc-
tions shall be promptly confirmed in writing;
(2) any Board Resolution, Officers' Certificate and/or
executed supplemental indenture referred to in Sections 2.1 and 2.3
by or pursuant to which the forms and terms of the Securities of a
series and Coupons, if any, were established;
(3) an Officers' Certificate setting forth the form or forms
and terms of the Securities and Coupons, if any, stating that the
form or forms and terms of the Securities of such series and
Coupons, if any, have been established pursuant to Sections 2.1 and
2.3 and comply with this Indenture, and covering such other matters
as the Trustee may reasonably request; and
(4) At the option of the Issuer, either an Opinion of
Counsel, or a letter addressed to the Trustee permitting it to rely
on an Opinion of Counsel, substantially to the effect that the
Securities have been duly authorized and, if executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and duly paid for by the purchasers thereof on the
date of such opinion, would be entitled to the benefits of the
Indenture and would be valid and binding obligations of the Issuer,
enforceable against the Issuer in accordance with their respective
terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws
affecting the rights and remedies of creditors generally and of
general principles of equity whether applied by a court of law or
equity.
17
Such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the State of New York and the federal law of the
United States, upon opinions of other counsel (copies of which shall be
delivered to the Trustee), who shall be counsel reasonably satisfactory to
the Trustee, in which case the opinion shall state that such counsel believes
he and the Trustee are entitled so to rely. Such counsel may also state
that, insofar as such opinion involves factual matters, he has relied, to the
extent he deems proper, upon certificates of officers of the Issuer and its
subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer
or if the Trustee in good faith by its board of directors or board of
trustees, executive committee, or a trust committee of directors or trustees
or Responsible Officers shall determine that such action would expose the
Trustee to personal liability to existing Holders or would affect the
Trustee's own rights, duties or immunities under the Securities, this
Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such
series, authenticate and deliver one or more Registered Global Securities
that (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of all of the Securities of such series issued and
not yet cancelled, (ii) shall be registered in the name of the Depositary for
such Registered Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive registered form, this Security
may not be transferred except as a whole by the Depositary to the nominee of
the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the
time of its designation and at all times while it serves as Depositary, be a
clearing agency registered
18
under the Securities Exchange Act of 1934 and any other applicable statute or
regulation.
SECTION 2.5 Execution of Securities. The Securities and, if
-----------------------
applicable, each Coupon appertaining thereto shall be signed on behalf of the
Issuer by both (a) the Chairman of its Board of Directors or any Vice
Chairman of its Board of Directors or its President or any Vice President and
(b) by its Treasurer or any Assistant Treasurer or its Secretary or any
Assistant Secretary, under its corporate seal (except in the case of Coupons
and in the case of any Registered Global Security) which may, but need not,
be attested. Such signatures may be the manual or facsimile signatures of
the present or any future such officers. The seal of the Issuer may be in
the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. Typographical and other minor errors
or defects in any such reproduction of the seal or any such signature shall
not affect the validity or enforceability of any Security that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed
of by the Issuer, such Security or Coupon nevertheless may be authenticated
and delivered or disposed of as though the person who signed such Security or
Coupon had not ceased to be such officer of the Issuer; and any Security or
Coupon may be signed on behalf of the Issuer by such persons as, at the
actual date of the execution of such Security or Coupon, shall be the proper
officers of the Issuer, although at the date of the execution and delivery of
this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities
-----------------------------
as shall bear thereon a certificate of authentication substantially in the
form hereinbefore recited, executed by the Trustee by the manual signature of
one of its authorized signatories, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. No Coupon shall be
entitled to the benefits of this Indenture or shall be valid and obligatory
for any purpose until the certificate of authentication on the Security to
which such Coupon appertains shall have been duly executed by the Trustee.
The execution of such certificate by the Trustee upon any Security or Coupon
executed by the Issuer shall be conclusive evidence that the Security or
Coupon so authenticated has been duly
19
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
SECTION 2.7 Denomination and Date of Securities; Payments of
------------------------------------------------
Interest. The Securities of each series shall be issuable as Registered
--------
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.3. or, with respect to Registered Securities of any
series, if any so established, in denominations of $1,000 and any integral
multiple thereof. If the denominations of Unregistered Securities of any
series are not so established, such Securities shall be issuable in
denominations of $1,000 and $5,000. The Securities of each series shall be
numbered, lettered, or otherwise distinguished in such manner or in
accordance with such plan as the officers of the Issuer executing the same
may determine, as evidenced by the execution thereof.
Each Registered Security shall be dated the date of its
authentication. Each Unregistered Security shall be dated as provided in the
resolution or resolutions of the Board of Directors of the Issuer referred to
in Section 2.3. The Securities of each series shall bear interest, if any,
from the date, and such interest and shall be payable on the dates,
established as contemplated by Section 2.3.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment
date, except if and to the extent the Issuer shall default in the payment of
the interest due on such interest payment date for such series, in which case
such defaulted interest shall be paid to the persons in whose names
Outstanding Registered Securities for such series are registered at the close
of business on a subsequent record date (which shall be not less than five
Business Days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the Issuer to the
Holders of Registered Securities not less than 15 days preceding such
subsequent record date. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) for
the Securities of any series shall mean the date specified as such in the
terms of the Registered Securities of such series established as contemplated
by Section 2.3, or, if no such date is so established, if such interest
payment date is the first day
20
of a calendar month, the fifteenth day of the next preceding calendar month
or, if such interest payment date is the fifteenth day of a calendar month,
the first day of such calendar month, whether or not such record date is a
Business Day.
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
-----------------------------------
keep or cause to be kept at each office or agency to be maintained for the
purpose as provided in Section 3.2, for each series of Securities, a register
or registers in which, subject to such reasonable regulations as it may
prescribe, it will provide for the registration of Registered Securities of
such series and the registration of transfer of Registered Securities of such
series. Such register shall be in written form in the English language or in
any other form capable of being converted into such form within a reasonable
time. At all reasonable times such register or registers shall be open for
inspection by the Trustee.
Upon due presentation for registration of transfer of any
Registered Security of any series at any such office or agency to be
maintained for the purpose as provided in Section 3.2, the Issuer shall
execute and the Trustee shall authenticate and deliver in the name of the
transferee or transferees a new Registered Security or Registered Securities
of the same series, maturity date, interest rate and original issue date in
authorized denominations for a like aggregate principal amount.
Unregistered Securities (except for any temporary global
Unregistered Securities) and Coupons (except for Coupons attached to any
temporary global Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below)
may be exchanged for a Registered Security or Registered Securities of such
series having authorized denominations and an equal aggregate principal
amount, upon surrender of such Registered Securities to be exchanged at the
agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.2 and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. If the Securities of any series are issued in
both registered and unregistered form, except as otherwise specified pursuant
to Section 2.3, at the option of the Holder thereof, Unregistered Securities
of any series may be exchanged for Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
21
surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with
Section 3.2, with, in the case of Unregistered Securities that have Coupons
attached, all unmatured Coupons and all matured Coupons in default thereto
appertaining, and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. At the option of the Holder thereof, if
Unregistered Securities of any series, maturity date, interest rate and
original issue date are issued in more than one authorized denomination,
except as otherwise specified pursuant to Section 2.3, such Unregistered
Securities may be exchanged for Unregistered Securities of such series having
authorized denominations and an equal aggregate principal amount, upon
surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with
Section 3.2 or as specified pursuant to Section 2.3, with, in the case of
Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. Unless
otherwise specified pursuant to Section 2.3, Registered Securities of any
series may not be exchanged for Unregistered Securities of such series.
Whenever any Securities are so surrendered for exchange, the Issuer shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. All Securities and
Coupons surrendered upon any exchange or transfer provided for in this
Indenture shall be promptly cancelled and returned to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee
duly executed by, the holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge shall
be made for any such transaction.
The Issuer shall not be required to exchange or register a transfer
of (a) any Securities of any series for a period of 15 days next preceding
the first mailing of notice of redemption of Securities of such series to be
redeemed, or (b) any Securities of such series selected,
22
called or being called for redemption, in whole or in part, except, in the
case of any Security of such series where public notice has been given that
such Security is to be redeemed in part, the portion thereof not so to be
redeemed.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion
of the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a
series represented by one or more Registered Global Securities notifies the
Issuer that it is unwilling or unable to continue as Depositary for such
Registered Securities or if at any time the Depositary for such Registered
Securities shall no longer be eligible under Section 2.4, the Issuer shall
appoint a successor Depositary eligible under Section 2.4 with respect to
such Registered Securities. If a successor Depositary eligible under Section
2.4 for such Registered Securities is not appointed by the Issuer within 90
days after the Issuer receives such notice or becomes aware of such
ineligibility, the Issuer's election pursuant to Section 2.3 that such
Registered Securities be represented by one or more Registered Global
Securities shall no longer be effective and the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and
deliver, Securities of such series in definitive registered form without
coupons, in any authorized denominations, in an aggregate principal amount
equal to the principal amount of the Registered Global Security or Securities
representing such Registered Securities in exchange for such Registered
Global Security or Securities.
The Issuer may at any time and in its sole discretion determine
that the Registered Securities of any series issued in the form of one or
more Registered Global Securities shall no longer be represented by a
Registered Global Security or Securities. In such event the Issuer will
execute, and the Trustee, upon receipt of an Officer's Certificate for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an
23
aggregate principal amount equal to the principal amount of the Registered
Global Security or Securities representing such Registered Securities, in
exchange for such Registered Global Security or Securities.
Any time the Securities are not represented by Registered Global
Securities pursuant to the preceding two paragraphs, the Issuer agrees to
supply the Trustee with a reasonable supply of certificated Securities
without the legend required by Section 2.4 hereof and the Trustee agrees to
hold such Securities in safekeeping until authenticated pursuant to the terms
of this Indenture.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for
such Registered Global Security may surrender such Registered Global Security
in exchange in whole or in part for Securities of the same series in
definitive registered form on such terms as are acceptable to the Issuer and
such Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary a new
Registered Security or Securities of the same series, of any
authorized denominations as requested by such Person, in an
aggregate principal amount equal to and in exchange for such
Person's beneficial interest in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Registered Global Security and the
aggregate principal amount of Registered Securities authenticated
and delivered pursuant to clause (i) above.
Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of
the Issuer or the Trustee. Securities in definitive registered form without
Coupons issued in exchange for a Registered Global Security pursuant to this
Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Registered Global Security, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Issuer or the Trustee. The
24
Trustee or such agent shall deliver such Securities to or as directed by the
Persons in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of
the Issuer or the Trustee (any of which, other than the Issuer, shall be
entitled to rely on an Officer's Certificate and an Opinion of Counsel) shall
be required to exchange any Unregistered Security for a Registered Security
if such exchange would result in adverse Federal income tax consequences to
the Issuer (such as, for example, the inability of the Issuer to deduct from
its income, as computed for Federal income tax purposes, the interest payable
on the Unregistered Securities) under then applicable United States Federal
income tax laws.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen
----------------------------------------------
Securities. In case any temporary or definitive Security or any Coupon
----------
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the
written request of any officer of the Issuer, the Trustee shall authenticate
and deliver, a new Security of the same series, maturity date, interest rate
and original issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the mutilated
or defaced Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen with Coupons (if any) corresponding to the Coupons
appertaining to the Securities so mutilated, defaced, destroyed, lost or
stolen, or in exchange or substitution for the Security to which such
mutilated, defaced, destroyed, lost or stolen Coupon appertained, with
Coupons appertaining thereto corresponding to the Coupons so mutilated,
defaced, destroyed, lost or stolen. In every case the applicant for a
substitute Security or Coupon shall furnish to the Issuer and to the Trustee
and any agent of the Issuer or the Trustee such security or indemnity as may
be required by them to indemnify and defend and to save each of them harmless
and, in every case of destruction, loss or theft, evidence to their
satisfaction of the destruction, loss or theft of such Security or Coupon and
of the ownership thereof and in the case of mutilation or
25
defacement shall surrender the Security and related Coupons (if any) to the
Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security or Coupon which has matured or is
about to mature or has been called for redemption in full shall become
mutilated or defaced or be destroyed, lost or stolen, the Issuer may instead
of issuing a substitute Security or Coupon, pay or authorize the payment of
the same or the relevant Coupon (without surrender thereof except in the case
of a mutilated or defaced Security or Coupon), if the applicant for such
payment shall furnish to the Issuer and to the Trustee and any agent of the
Issuer or the Trustee such security or indemnity as any of them may require
to save each of them harmless, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Issuer and the Trustee and any
agent of the Issuer or the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Security or Coupon and of the ownership
thereof.
Every substitute Security or Coupon of any series issued pursuant
to the provisions of this Section by virtue of the fact that any such
Security or Coupon is destroyed, lost or stolen shall constitute an
additional contractual obligation of the Issuer, whether or not the
destroyed, lost or stolen Security or Coupon shall be at any time enforceable
by anyone and shall be entitled to all the benefits of (but shall be subject
to all the limitations of rights set forth in) this Indenture equally and
proportionately with any and all other Securities or Coupons of such series
duly authenticated and delivered hereunder. All Securities and Coupons shall
be held and owned upon the express condition that, to the extent permitted by
law, the foregoing provisions are exclusive with respect to the replacement
or payment of mutilated, defaced or destroyed, lost or stolen Securities and
Coupons and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Destruction Thereof. All
-----------------------------------------------
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a
sinking or analogous fund, if surrendered to the Issuer or
26
any agent of the Issuer or the Trustee or any agent of the Trustee, shall be
delivered to the Trustee or its agent for cancellation or, if surrendered to
the Trustee, shall be cancelled by it; and no Securities or Coupons shall be
issued in lieu thereof except as expressly permitted by any of the provisions
of this Indenture. The Trustee shall destroy cancelled Securities held by it
and deliver a certificate of destruction to the Issuer. If the Issuer shall
acquire any of the Securities or Coupons, such acquisition shall not operate
as a redemption or satisfaction of the indebtedness represented by such
Securities unless and until the same are delivered to the Trustee or its
agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
--------------------
definitive Securities for any series, the Issuer may execute and upon Issuer
Order the Trustee shall authenticate and deliver temporary Securities for
such series (printed, lithographed, typewritten or otherwise reproduced, in
each case in form satisfactory to the Trustee). Temporary Securities of any
series shall be issuable as Registered Securities without coupons, or as
Unregistered Securities with or without coupons attached thereto, of any
authorized denomination, and substantially in the form of the definitive
Securities of such series but with such omissions, insertions and variations
as may be appropriate for temporary Securities, all as may be determined by
the Issuer with the concurrence of the Trustee as evidenced by the execution
and authentication thereof. Temporary Securities may contain such references
to any provisions of this Indenture as may be appropriate. Every temporary
Security shall be executed by the Issuer and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with like
effect, as the definitive Securities. Without unreasonable delay the Issuer
shall execute and shall furnish definitive Securities of such series and
thereupon temporary Registered Securities of such series may be surrendered
in exchange therefor without charge at each office or agency to be maintained
by the Issuer for that purpose pursuant to Section 3.2 and, in the case of
Unregistered Securities, at an agency maintained by the Issuer for such
purpose as specified pursuant to Section 2.3, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the
same series having authorized denominations and, in the case of Unregistered
Securities, having attached thereto any appropriate Coupons. Until so
exchanged, the temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series,
unless otherwise established pursuant to
27
Section 2.3. The provisions of this Section are subject to any restrictions
or limitations on the issue and delivery of temporary Unregistered Securities
of any series that may be established pursuant to Section 2.3 (including any
provision that Unregistered Securities of such series initially be issued in
the form of a single global Unregistered Security to be delivered to a
depositary or agency located outside the United States and the procedures
pursuant to which definitive or global Unregistered Securities of such series
will be issued in exchange for such temporary global Unregistered Security).
SECTION 2.12 CUSIP Numbers. The Issuer in issuing the Securities
-------------
may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee
shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is
--------
made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
SECTION 2.13 Series May Include Tranches. A series of Securities
---------------------------
may include one or more tranches (each a "tranche") of Securities, including
-------
Securities issued in a Periodic Offering. The Securities of different
tranches may have one or more different terms, including authentication dates
and public offering prices, but all the Securities within each such tranche
shall have identical terms, including authentication date and public offering
price. Notwithstanding any other provision of this Indenture, with respect
to Sections 2.3, 2.4 (other than the first paragraph thereof), 2.5, 2.7, 2.8,
2.11, 3.2, 5.1 through 5.12, 8.2, 10.1, and 12.1 through 12.5, if any series
of Securities includes more than one tranche, all provisions of such sections
applicable to any series of Securities shall be deemed equally applicable to
each tranche of any series of Securities in the same manner as though
originally designated a series unless otherwise provided with respect to such
series or tranche pursuant to Section 2.3. In particular, and without
limiting the scope of the next preceding sentence, any of the provisions of
such sections which provide for or permit action to be taken with respect to
a series of Securities shall also be deemed to provide for and permit such
action to be taken instead only with respect to Securities of one or more
tranches within that series (and such provisions shall be deemed satisfied
thereby), even if no comparable action is taken with respect to Securities in
the remaining tranches of that series.
28
ARTICLE THREE
COVENANTS OF THE ISSUER
-----------------------
SECTION 3.1 Payment of Principal and Interest. The Issuer
---------------------------------
covenants and agrees for the benefit of each series of Securities that it
will duly and punctually pay or cause to be paid the principal of, and
interest on, each of the Securities of such series (together with any
additional amounts payable pursuant to the terms of such Securities) at the
place or places, at the respective times and in the manner provided in such
Securities and in the Coupons, if any, appertaining thereto and in this
Indenture. The interest on Securities with Coupons attached (together with
any additional amounts payable pursuant to the terms of such Securities)
shall be payable only upon presentation and surrender of the several Coupons
for such interest installments as are evidenced thereby as they severally
mature. The interest on any temporary Unregistered Securities (together with
any additional amounts payable pursuant to the terms of such Securities)
shall be paid, as to the installments of interest evidenced by Coupons
attached thereto, if any, only upon presentation and surrender thereof, and,
as to the other installments of interest, if any, only upon presentation of
such Securities for notation thereon of the payment of such interest. The
interest on Registered Securities (together with any additional amounts
payable pursuant to the terms of such Securities) shall be payable only to or
upon the written instructions of the Holders thereof and at the option of the
Issuer may be paid by wire transfer or mailing checks for such interest
payable to or upon the written order of such Holders at their last addresses
as they appear on the registry books of the Issuer.
Notwithstanding any provisions of this Indenture and the Securities
of any series to the contrary, if the Issuer and a Holder of Registered
Securities so agree, payments of interest on, and any portion of the
principal of any Securities (other than interest payable at maturity or on
any redemption or repayment date or the final payment of principal on a
Security), shall be made by the Paying Agent upon receipt from the Issuer of
immediately available funds by 11:00 A.M., New York City time (or such other
time as may be agreed to between the Company and the Trustee), directly to
the Holder of such Security (whether by Federal funds, wire transfer or
otherwise) if the Holder has delivered written instructions to the Trustee 15
days prior to such payment date requesting that such payment will be so made
and designating the bank account to which such payments
29
shall be so made and in the case of payments of principal surrenders the same
to the Trustee in exchange for a Security or Securities aggregating the same
principal amount as the unredeemed principal amount of the Securities
surrendered. The Trustee shall be entitled to rely on the last instruction
delivered by the Holder pursuant to this Section 3.1 unless a new instruction
is delivered 15 days prior to a payment date. The Issuer will indemnify and
hold the Trustee harmless against any loss, liability or expense (including
attorneys' fees) resulting from any act or omission to act on the part of the
Issuer or any such Holder in connection with any such agreement or which the
Paying Agent may incur as a result of making any payment in accordance with
any such agreement.
SECTION 3.2 Offices for Payments, etc. The Issuer will maintain
--------------------------
in the Borough of Manhattan, The City of New York, an agency where the
Registered Securities of each series may be presented for payment, an agency
where the Securities of each series may be presented for exchange as is
provided in this Indenture and, if applicable, pursuant to Section 2.3 an
agency where the Registered Securities of each series may be presented for
registration of transfer as in this Indenture provided. Unless otherwise
provided pursuant to Section 2.3, the Issuer initially appoints the Corporate
Trust Office of the Trustee, in New York, New York, as such office or agency
for the purposes of this Section.
The Issuer will maintain one or more agencies in a city or cities
located outside the United States (including any city in which such an agency
is required to be maintained under the rules of any stock exchange on which
the Securities of such series are listed) where the Unregistered Securities,
if any, of each series and Coupons, if any, appertaining thereto may be
presented for payment. No payment on any Unregistered Security or Coupon
will be made upon presentation of such Unregistered Security or Coupon at an
agency of the Issuer within the United States nor will any payment be made by
transfer to an account in, or by mail to an address in, the United States
unless pursuant to applicable United States laws and regulations then in
effect such payment can be made without adverse tax consequences to the
Issuer. Notwithstanding the foregoing, if full payment in Dollars at each
agency maintained by the Issuer outside the United States for payment on such
Unregistered Securities or Coupons appertaining thereto is illegal or
effectively precluded by exchange controls or other similar restrictions,
payments in Dollars of Unregistered Securities of any series and Coupons
appertaining thereto which are payable in Dollars may be
30
made at an agency of the Issuer maintained in the Borough of Manhattan, The
City of New York.
The Issuer will maintain in the Borough of Manhattan, The City of
New York, an agency where notices and demands to or upon the Issuer in
respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.
The Issuer will give to the Trustee written notice of the location
of each such agency and of any change of location thereof. In case the
Issuer shall fail to maintain any agency required by this Section to be
located in the Borough of Manhattan, The City of New York, or shall fail to
give such notice of the location or of any change in the location of any of
the above agencies, presentations and demands may be made and notices may be
served at the Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional
agencies where the Securities of a series and Coupons appertaining thereto
may be presented for payment, where the Securities of that series may be
presented for exchange as provided in this Indenture and pursuant to Section
2.3 where the Registered Securities of that series may be presented for
registration of transfer as in this Indenture provided, and the Issuer may
from time to time rescind any such designation, as the Issuer may deem
desirable or expedient; provided, however, that no such designation or
-------- -------
rescission shall in any manner relieve the Issuer of its obligation to
maintain the agencies provided for in the immediately preceding paragraphs.
The Issuer will give to the Trustee prompt written notice of any such
designation or rescission thereof.
SECTION 3.3 Appointment to Fill a Vacancy in Office of Trustee.
--------------------------------------------------
The Issuer, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a successor
Trustee, so that there shall at all times be a Trustee with respect to each
series of Securities hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
-------------
paying agent other than the Trustee with respect to the Securities of any
series, it will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section that such paying agent,
31
(a) will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities of such series
(whether such sums have been paid to it by the Issuer or by any other
obligor on the Securities of such series) in trust for the benefit of
the holders of the Securities of such series, or Coupons appertaining
thereto, or of the Trustee, until such sums shall be paid to such
holders or otherwise disposed of as herein provided;
(b) will give the Trustee notice of any failure by the Issuer (or
by any other obligor on the Securities of such series) to make any
payment of the principal of or interest on the Securities of such series
when the same shall be due and payable, and
(c) at any time during the continuance of any such failure, upon
the written request of the Trustee, it will forthwith pay to the Trustee
all sums so held in trust by such paying agent.
The Issuer will, on or prior to each due date of the principal of
or interest on the Securities of such series, deposit with the paying agent a
sum sufficient to pay such principal or interest so becoming due, and (unless
such paying agent is the Trustee) the Issuer will promptly notify the Trustee
of its action or of any failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the
principal of or interest on the Securities of such series, set aside,
segregate and hold in trust for the benefit of the holders of the Securities
of such series or the Coupons appertaining thereto a sum sufficient to pay
such principal or interest so becoming due. The Issuer will promptly notify
the Trustee of its action or of any failure to take such action.
The Issuer hereby initially appoints the Trustee as registrar and
paying agent. Anything in this Section to the contrary notwithstanding, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge with respect to one or more or all series of Securities hereunder,
or for any other reason, pay or cause to be paid, or by Issuer Order direct
any paying agent to pay to the Trustee all sums held in trust for any such
series by the Issuer or any paying agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein
contained.
32
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 10.3 and 10.4.
SECTION 3.5 Certificate to Trustee. The Issuer will furnish to
----------------------
the Trustee annually, on or before a date not more than four months after the
end of its fiscal year (which, on the date hereof, is a calendar year), a
brief certificate (which need not comply with Section 11.5) from its
principal executive, financial or accounting officer as to his or her
knowledge of the compliance of the Issuer with all conditions and covenants
under the Indenture (such compliance to be determined without regard to any
period of grace or requirement of notice provided under the Indenture).
SECTION 3.6 Luxembourg Publications. In the event of the
-----------------------
publication of any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.2, 12.2
or 12.5, the party making such publication in the Borough of Manhattan, The
City of New York and London shall also, to the extent that notice is required
to be given to Holders of Securities of any series listed on The Luxembourg
exchange by applicable Luxembourg law or stock exchange regulation, make a
similar publication in Luxembourg.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
----------------------
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
-----------------------------------------------------
Addresses of Securityholders. If and so long as the Trustee shall not be the
----------------------------
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the
Trustee a list in such form as the Trustee may reasonably require of the
names and addresses of the Holders of the Registered Securities of such
series pursuant to Section 312 of the Trust Indenture Act of 1939 (a)
semi-annually not more than 15 days after each record date for the payment of
interest on such Registered Securities, as hereinabove specified, as of such
record date and on dates to be determined pursuant to Section 2.3 for
non-interest bearing Registered Securities in each year as of a date not more
than 15 days prior to the time such information is furnished, and (b) at such
other times as the Trustee may request in writing, within 30 days after
receipt
33
by the Issuer of any such request as of a date not more than 15 days prior to
the time such information is furnished.
SECTION 4.2 Reports by the Issuer. The Issuer covenants to file
---------------------
with the Trustee, within 15 days after the Issuer is required to file the
same with the Commission, copies of the annual reports and of the
information, documents, and other reports which the Issuer may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 or pursuant to Section 314 of the Trust
Indenture Act of 1939.
SECTION 4.3 Reports by the Trustee. Any Trustee's report required
----------------------
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted
on or before July 15 in each year following the date hereof, so long as any
Securities are outstanding hereunder, and shall be dated as of a date
convenient to the Trustee no more than 60 nor less than 45 days prior
thereto.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
-------------------
SECTION 5.1 Event of Default Defined; Acceleration of Maturity;
---------------------------------------------------
Waiver of Default. "Event of Default" with respect to Securities of any
-----------------
series wherever used herein, means each one of the following events which
shall have occurred and be continuing (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due
and payable, and continuance of such default for a period of 30 days
provided, however, that a valid extension of an interest payment period
-------- -------
by the Issuer in accordance with the terms of any indenture supplemental
hereto, shall not constitute a default in the payment of interest for
this purpose; or
(b) default in the payment of all or any part of the principal on
any of the Securities of such series as and when the same shall become
due and payable
34
either at maturity, upon any redemption, by declaration or otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the
Securities of such series; or
(d) default in the performance, or breach, of any covenant or
agreement of the Issuer in respect of the Securities of such series
(other than a covenant or agreement in respect of the Securities of such
series a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default
or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Issuer by the Trustee or to the
Issuer and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of all series affected thereby, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer or any Restricted
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of the Issuer or for any substantial
part of its property or ordering the winding up or liquidation of its
affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(f) the Issuer or any Restricted Subsidiary shall commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent
to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of
the Issuer or for any substantial part of its property, or make any
general assignment for the benefit of creditors; or
(g) any other Event of Default provided in the supplemental
indenture or Board Resolution under which
35
such series of Securities is issued or in the form of Security for such
series.
If an Event of Default described in clauses (a), (b), (c), (d) or (g) above
(if the Event of Default under clause (d) or (g) is with respect to less than
all series of Securities then Outstanding) occurs and is continuing, then,
and in each and every such case, except for any series of Securities the
principal of which shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Securities of all such affected series then Outstanding hereunder (voting
as a single class) (and, in the case of any series of Securities held as
trust assets of an RJR Nabisco Holdings Capital Trust and with respect to
which a Security Exchange has not theretofore occurred, such consent of
holders of the Preferred Securities and the Common Securities of such RJR
Nabisco Holdings Capital Trust as may be required under the Declaration of
Trust of such RJR Nabisco Holdings Capital Trust) by notice in writing to the
Issuer (and to the Trustee if given by Securityholders), may declare the
entire principal (or, if the Securities of any such affected series are
Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of such series) of all Securities of all such
affected series, and the interest accrued thereon, if any, to be due and
payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in clause (d)
or (g) (if the Event of Default under clause (d) or (g), as the case may be,
is with respect to all series of Securities then Outstanding), (e) or (f)
occurs and is continuing, then and in each and every such case, unless the
principal of all the Securities shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of all the Securities then Outstanding hereunder (treated as one
class) (and, in the case of any series of Securities held as trust assets of
an RJR Nabisco Holdings Capital Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such RJR Nabisco Holdings
Capital Trust as may be required under the Declaration of Trust of such RJR
Nabisco Holdings Capital Trust), by notice in writing to the Issuer (and to
the Trustee if given by Securityholders), may declare the entire principal
(or, if any Securities are Original Issue Discount Securities, such portion
of the principal as may be specified in the terms thereof) of all the
Securities then Outstanding and interest accrued thereon, if any, to be due
and payable immediately, and upon
36
any such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition
that if, at any time after the principal (or, if the Securities are Original
Issue Discount Securities, such portion of the principal as may be specified
in the terms thereof) of the Securities of any series (or of all the
Securities, as the case may be) shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due shall
have been obtained or entered as hereinafter provided, the Issuer shall pay
or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of each such series (or of
all the Securities, as the case may be) and the principal of any and all
Securities of each such series (or of all the Securities, as the case may be)
which shall have become due otherwise than by acceleration (with interest
upon such principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest, at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Securities of each such
series (or at the respective rates of interest or Yields to Maturity of all
the Securities, as the case may be) to the date of such payment or deposit)
and such amount as shall be sufficient to cover reasonable compensation to
the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result
of negligence or bad faith, and if any and all Events of Default under the
Indenture, other than the non-payment of the principal of Securities which
shall have become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein, then and in every such case the
Holders of a majority in aggregate principal amount of all the Securities of
each such series, or of all the Securities, in each case voting as a single
class (and, in the case of any series of Securities held as trust assets of
an RJR Nabisco Holdings Capital Trust and with respect to which a Security
Exchange has not theretofore occurred, such consent of holders of the
Preferred Securities and the Common Securities of such RJR Nabisco Holdings
Capital Trust as may be required under the Declaration of Trust of such RJR
Nabisco Holdings Capital Trust), then Outstanding, by written notice to the
Issuer and to the Trustee, may waive all defaults with respect to each such
series (or with respect to all the Securities, as the case may be) and
rescind and annul such declaration and its consequences, but no such waiver
or rescission and annulment shall extend to
37
or shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the
principal of any Original Issue Discount Securities shall have been
accelerated and declared due and payable pursuant to the provisions hereof,
then, from and after such declaration, unless such declaration has been
rescinded and annulled, the principal amount of such Original Issue Discount
Securities shall be deemed, for all purposes hereunder, to be such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall
be due and payable as a result of such acceleration, together with interest,
if any, thereon and all other amounts owing thereunder, shall constitute
payment in full of such Original Issue Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee; Trustee May
--------------------------------------------------
Prove Debt. The Issuer covenants that (a) in case default shall be made in
----------
the payment of any installment of interest on any of the Securities of any
series when such interest shall have become due and payable, and such default
shall have continued for a period of 30 days or (b) in case default shall be
made in the payment of all or any part of the principal of any of the
Securities of any series when the same shall have become due and payable,
whether upon maturity of the Securities of such series or upon any redemption
or by declaration or otherwise, then upon demand of the Trustee, the Issuer
will pay to the Trustee for the benefit of the Holders of the Securities of
such series the whole amount that then shall have become due and payable on
all Securities of such series and such Coupons for principal or interest, as
the case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series); and in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to the
Trustee and each predecessor Trustee, their respective agents, attorneys and
counsel, and any reasonable expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result
of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the
38
Securities of any series to the Holders, whether or not the principal of and
interest on the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any action or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Issuer or other obligor
upon the Securities and collect in the manner provided by law out of the
property of the Issuer or other obligor upon the Securities, wherever
situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the Issuer
or any other obligor upon the Securities under Title 11 of the United States
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to
the Issuer or other obligor upon the Securities, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such proceedings
or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may
be specified in the terms of such series) owing and unpaid in respect of
the Securities, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Securityholders allowed in
any
39
judicial proceedings relative to the Issuer or other obligor upon the
Securities or to the creditors or property of the Issuer or such other
obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the holders of the Securities of any series in any election
of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or person
performing similar functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received
with respect to the claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or
other similar official is hereby authorized by each of the
Securityholders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel,
and all other expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of
negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture,
or under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of
the Securities of such series or Coupons appertaining to such Securities or
the production thereof at any trial or other proceedings relative thereto,
and any such action or proceedings instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation of the
Trustee, each predecessor Trustee and their respective agents and
40
attorneys, shall be for the ratable benefit of the Holders of such Securities
or Coupons appertaining to such Securities in respect of which such action
was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Holders of the Securities or Coupons appertaining to such Securities in
respect of which such action was taken, and it shall not be necessary to make
any Holders of such Securities or Coupons appertaining to such Securities
parties to any such proceedings.
SECTION 5.3 Application of Proceeds. Any moneys collected by the
-----------------------
Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series
in reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such
series in respect of which monies have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee and
their respective agents and attorneys and of all expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee and their respective agents and attorneys except as
a result of negligence or bad faith;
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of
such series in default in the order of the maturity of the installments
of such interest, with interest (to the extent that such interest has
been collected by the Trustee) upon the overdue installments of interest
at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in such
Securities, such payments to be made ratably to the persons entitled
thereto, without discrimination or preference;
41
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall
be then due and payable, to the payment of the whole amount then owing
and unpaid upon all the Securities of such series for principal and
interest, with interest upon the overdue principal, and (to the extent
that such interest has been collected by the Trustee) upon overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series; and in case such moneys
shall be insufficient to pay in full the whole amount so due and unpaid
upon the Securities of such series, then to the payment of such
principal and interest or Yield to Maturity, without preference or
priority of principal over interest or Yield to Maturity, or of interest
or Yield to Maturity over principal, or of any installment of interest
over any other installment of interest, or of any Security of such
series over any other Security of such series, ratably to the aggregate
of such principal and accrued and unpaid interest or Yield to Maturity;
and
FOURTH: To the payment of the remainder, if any, to the Issuer or
any other person lawfully entitled thereto.
SECTION 5.4 Suits for Enforcement. In case an Event of Default
---------------------
has occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment of Proceedings.
---------------------------------------------------
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned for
any reason, or shall have been determined adversely to the Trustee, then and
in every such case the Issuer and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Issuer, the Trustee and the Securityholders shall continue as
though no such proceedings had been taken.
42
SECTION 5.6 Limitations on Suits by Securityholders. No Holder of
---------------------------------------
any Security of any series or of any Coupon appertaining thereto shall have
any right by virtue or by availing of any provision of this Indenture to
institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Securities of all
affected series then Outstanding (treated as a single class) (and, in the
case of any series of Securities held as trust assets of an RJR Nabisco
Holdings Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust), shall have made written request upon the Trustee to institute such
action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby and the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 5.9; it being understood and intended, and being
expressly covenanted by the taker and Holder of every Security or Coupon with
every other taker and Holder and the Trustee, that no one or more Holders of
Securities of any series or Coupons appertaining to such Securities shall
have any right in any manner whatever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of any
other such Holder of Securities or Coupons appertaining to such Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders
of Securities of the applicable series and Coupons appertaining to such
Securities. For the protection and enforcement of the provisions of this
Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
SECTION 5.7 Unconditional Right of Securityholders to Institute
---------------------------------------------------
Certain Suits. Notwithstanding
-------------
43
any other provision in this Indenture and any provision of any Security or
Coupon, the right of any Holder of any Security or Coupon to receive payment
of the principal of and interest on such Security or Coupon on or after the
respective due dates expressed in such Security or Coupon, or to institute
suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder
provided, however, that a valid extension of an interest payment period by
-------- -------
the Issuer in accordance with the terms of any indenture supplemental hereto,
shall not constitute the failure to pay interest for this purpose.
SECTION 5.8 Powers and Remedies Cumulative; Delay or Omission Not
-----------------------------------------------------
Waiver of Default. Except as provided in Section 5.6, no right or remedy
-----------------
herein conferred upon or reserved to the Trustee or to the Holders of
Securities or Coupons is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
No delay or omission of the Trustee or of any Holder of Securities
or Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.6, every power and remedy
given by this Indenture or by law to the Trustee or to the Holders of
Securities or Coupons may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders of Securities or
Coupons.
SECTION 5.9 Control by Securityholders. The Holders of a majority
--------------------------
in aggregate principal amount of the Securities of all series affected (with
all such series voting as a single class) (and, in the case of any series of
Securities held as trust assets of an RJR Nabisco Holdings Capital Trust and
with respect to which a Security Exchange has not theretofore occurred, such
consent of holders of the Preferred Securities and the Common Securities of
such RJR Nabisco Holdings Capital Trust as may be required under the
Declaration of Trust of such RJR Nabisco Holdings Capital Trust) at the time
Outstanding shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
44
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; provided that such direction
--------
shall not be otherwise than in accordance with law and the provisions of this
Indenture and provided further that (subject to the provisions of Section
-------- -------
6.1) the Trustee shall have the right to decline to follow any such direction
if the Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good
faith by its board of directors, the executive committee, or a trust
committee of directors or Responsible Officers of the Trustee shall determine
that the action or proceedings so directed would involve the Trustee in
personal liability or if the Trustee in good faith shall so determine that
the actions or forebearances specified in or pursuant to such direction would
be unduly prejudicial to the interests of Holders of the Securities of all
series so affected not joining in the giving of said direction, it being
understood that (subject to Section 6.1) the Trustee shall have no duty to
ascertain whether or not such actions or forebearances are unduly prejudicial
to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in
its discretion to take any action deemed proper by the Trustee and which is
not inconsistent with such direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to the acceleration
-----------------------
of the maturity of the Securities as provided in Section 5.1, the Holders of
a majority in aggregate principal amount of the Securities of all series at
the time Outstanding with respect to which an event of default shall have
occurred and be continuing (voting as a single class) (and, in the case of
any series of Securities held as trust assets of an RJR Nabisco Holdings
Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of holders of the Preferred Securities and
the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust) may on behalf of the Holders of all such Securities waive any past
default or Event of Default described in Section 5.1 and its consequences,
except a default in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Security
affected. In the case of any such waiver, the Issuer, the Trustee and the
Holders of all such Securities of each series affected shall be restored to
their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right
consequent thereon.
45
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have
occurred for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default, But May Withhold
---------------------------------------------------
in Certain Circumstances. The Trustee shall, within ninety days after the
------------------------
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i)
if any Unregistered Securities of that series are then Outstanding, to the
Holders thereof, by publication at least once in an Authorized Newspaper in
the Borough of Manhattan, The City of New York and at least once in an
Authorized Newspaper in London (and, if required by Section 3.9, at least
once in an Authorized Newspaper in Luxembourg) and (ii) to all Holders of
Securities of such series in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act of 1939, unless in each case such defaults
shall have been cured before the mailing or publication of such notice (the
term "default" or "defaults" for the purposes of this Section being hereby
defined to mean any event or condition which is, or with notice or lapse of
time or both would become, an Event of Default); provided that, except in the
--------
case of default in the payment of the principal of or interest on any of the
Securities of such series, or in the payment of any sinking fund installment
on such series, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee, or a trust
committee of directors or trustees and/or Responsible Officers of the Trustee
in good faith determines that the withholding of such notice is in the
interests of the Securityholders of such series.
SECTION 5.12 Right of Court to Require Filing of Undertaking to
--------------------------------------------------
Pay Costs. All parties to this Indenture agree, and each Holder of any
---------
Security or Coupon by his acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
such suit, having due regard to the merits and good faith of the claims
46
or defenses made by such party litigant; but the provisions of this Section
shall not apply to:
(A) any suit instituted by the Trustee,
(B) any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series, or, in the case
of any suit relating to or arising under clauses (d) or (g) of Section 5.1
(if the suit relates to Securities of more than one but less than all
series), 10% in aggregate principal amount of Securities Outstanding affected
thereby, or in the case of any suit relating to or arising under clauses (d)
or (g) (if the suit under (d) or (g) relates to all the Securities then
Outstanding), (c), (e) or (f) of Section 5.1, 10% in aggregate principal
amount of all Securities Outstanding, or
(C) any suit instituted by any Securityholder for the enforcement
of the payment of the principal of or interest on any Security on or after
the due date expressed in such Security or any date fixed for redemption.
ARTICLE SIX
CONCERNING THE TRUSTEE
----------------------
SECTION 6.1 Duties and Responsibilities of the Trustee; During
--------------------------------------------------
Default; Prior to Default. With respect to the Holders of any series of
-------------------------
Securities issued hereunder, the Trustee, prior to the occurrence of an Event
of Default with respect to the Securities of a particular series and after
the curing or waiving of all Events of Default which may have occurred with
respect to such series, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default with respect to the Securities of a series has occurred (which has
not been cured or waived) the Trustee shall exercise with respect to such
series of Securities such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that
47
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance
48
of any of its duties or in the exercise of any of its rights or powers,
if there shall be reasonable ground for believing that the repayment of such
funds or adequate indemnity against such liability is not reasonably assured
to it.
The provisions of this Section 6.1 are in furtherance of and
subject to Sections 315 and 316 of the Trust Indenture Act of 1939.
SECTION 6.2 Certain Rights of the Trustee. In furtherance of and
-----------------------------
subject to the Trust Indenture Act of 1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
Opinion of Counsel (or both) or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
secretary or an assistant secretary of the Issuer;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and any written advice or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in reliance thereon in
accordance with such advice or Opinion of Counsel;
(e) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions
49
of this Indenture, unless such Securityholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred therein or thereby;
(f) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(g) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall
not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture,
note, coupon, security, or other paper or document unless requested in
writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Securities of all series affected then
Outstanding; provided that, if the payment within a reasonable time to
--------
the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be
paid by the Issuer or, if paid by the Trustee or any predecessor
trustee, shall be repaid by the Issuer upon demand; and
(h) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
----------------------------------------------------
Securities or Application of Proceeds Thereof. The recitals contained herein
---------------------------------------------
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities
50
or Coupons. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds
thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
----------------------------------------------------
etc. The Trustee or any agent of the Issuer or the Trustee, in its
---
individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and may otherwise deal with the Issuer and receive, collect, hold
and retain collections from the Issuer with the same rights it would have if
it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
----------------------
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the
extent required by mandatory provisions of law. Neither the Trustee nor any
agent of the Issuer or the Trustee shall be under any liability for interest
on any moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
---------------------------------------------------
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
-----------
to time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this Indenture and
the Securities or the issuance of the Securities or of series thereof
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ)
except to the extent any such expense, disbursement or advance may arise from
its negligence or bad faith. The Issuer also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against,
any loss, liability or expense arising out of or in connection with the
acceptance or administration of this Indenture and the Securities or the
issuance of the Securities or of series thereof or the trusts hereunder and
the performance of its duties hereunder, including the costs and expenses of
defending itself against or investigating any claim of liability in the
premises, except to the extent such loss liability or expense is due to the
negligence or bad faith of the Trustee
51
or such predecessor Trustee. The obligations of the Issuer under this
Section to compensate and indemnify the Trustee and each predecessor Trustee
and to pay or reimburse the Trustee and each predecessor Trustee for
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture
or the rejection or termination of this Indenture under bankruptcy law. Such
additional indebtedness shall be a senior claim to that of the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities
or Coupons, and the Securities are hereby subordinated to such senior claim.
If the Trustee renders services and incurs expenses following an Event of
Default under Section 5.1(e) or Section 5.1(f) hereof, the parties hereto and
the holders by their acceptance of the Securities hereby agree that such
expenses are intended to constitute expenses of administration under any
bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officers' Certificate,
--------------------------------------------------
etc. Subject to Sections 6.1 and 6.2, whenever in the administration of the
----
trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of negligence
or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officers' Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted by it under the provisions of this Indenture upon the
faith thereof.
SECTION 6.8 Indentures Not Creating Potential Conflicting
---------------------------------------------
Interests for the Trustee. The following indentures are hereby specifically
-------------------------
described for the purposes of Section 310(b)(l) of the Trust Indenture Act of
1939: Indenture dated as of April 15, 1991, as amended, and Amended and
Restated Indenture dated as of May 18, 1992.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The
-------------------------------------------
Trustee for each series of Securities hereunder shall at all times be a
corporation having a combined capital and surplus of at least $50,000,000,
and which is eligible in accordance with the provisions of Section 310(a) of
the Trust Indenture Act of 1939. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of a
Federal,
52
State or District of Columbia supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published.
SECTION 6.10 Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
-------
may at any time resign with respect to one or more or all series of
Securities by giving written notice of resignation to the Issuer and (i) if
any Unregistered Securities of a series affected are then Outstanding, by
giving notice of such resignation to the Holders thereof, by publication at
least once in an Authorized Newspaper in the Borough of Manhattan, the City
of New York, and at least once in an Authorized Newspaper in London (and, if
required by Section 3.9, at least once in an Authorized Newspaper in
Luxembourg), (ii) if any Unregistered Securities of a Series affected are
then Outstanding, by mailing notice of such resignation to the Holders
thereof who have filed their names and addresses with the Trustee pursuant to
Section 313(c)(2) of the Trust Indenture Act of 1939 at such addresses as
were so furnished to the Trustee and (iii) by mailing notice of such
resignation to the Holders of then Outstanding Registered Securities of each
series affected at their addresses as they shall appear on the registry
books. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees with respect to the applicable series
by written instrument in duplicate, executed by authority of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed with respect to any series and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
Securityholder who has been a bona fide Holder of a Security or Securities of
the applicable series for at least six months may, subject to the provisions
of Section 5.12, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act
53
of 1939 with respect to any series of Securities after written request
therefor by the Issuer or by any Securityholder who has been a bona fide
Holder of a Security or Securities of such series for at least six
months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.9 hereunder and Section 310(a) of the Trust
Indenture Act of 1939 and shall fail to resign after written request
therefor by the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to
any series of Securities, or shall be adjudged a bankrupt or insolvent,
or a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such
series by written instrument, in duplicate, executed by order of the Board of
Directors of the Issuer, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or, subject to
the provisions of Section 315(e) of the Trust Indenture Act of 1939, any
Securityholder who has been a bona fide Holder of a Security or Securities of
such series for at least six months may on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee
with respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor
54
trustee with respect to such series pursuant to any of the provisions
of this Section 6.9 shall become effective upon acceptance of appointment by
the successor trustee as provided in Section 6.10.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
----------------------------------------------
successor trustee appointed as provided in Section 6.9 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and
obligations with respect to such series of its predecessor hereunder, with
like effect as if originally named as trustee for such series hereunder; but,
nevertheless, on the written request of the Issuer or of the successor
trustee, upon payment of its charges then unpaid, the trustee ceasing to act
shall, subject to Section 10.4, pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Issuer shall
execute any and all instruments in writing for more fully and certainly
vesting in and confirming to such successor trustee all such rights and
powers. Any trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or collected by such trustee to secure any
amounts then due it pursuant to the provisions of Section 6.6.
If a successor trustee is appointed with respect to the Securities
of one or more (but not all) series, the Issuer, the predecessor Trustee and
each successor trustee with respect to the Securities of any applicable
series shall execute and deliver an indenture supplemental hereto which shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the predecessor Trustee
with respect to the Securities of any series as to which the predecessor
Trustee is not retiring shall continue to be vested in the predecessor
Trustee, and shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one trustee, it being understood that nothing
herein or in such supplemental indenture shall constitute such trustees
co-trustees of the same trust and that each such trustee shall be trustee of
a trust or trusts under separate indentures.
55
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of
such acceptance such successor trustee shall be qualified under Section
310(b) of the Trust Indenture Act of 1939 and eligible under the provisions
of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided
in this Section 6.11, the Issuer shall give notice thereof (a) if any
Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, by publication of such notice at least once in an Authorized
Newspaper in the Borough of Manhattan, the City of New York and at least once
in an Authorized Newspaper in London (and, if required by Section 3.9, at
least once in an Authorized Newspaper in Luxembourg), (b) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof
who have filed their names and addresses with the Trustee pursuant to Section
313(c)(2) of the Trust Indenture Act of 1939, by mailing such notice to such
Holders at such addresses as were so furnished to the Trustee (and the
Trustee shall make such information available to the Issuer for such purpose)
and (c) to the Holders of Registered Securities of each series affected, by
mailing such notice to such Holders at their addresses as they shall appear
on the registry books. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section
6.10. If the Issuer fails to give such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business of Trustee. Any corporation into which the Trustee may be merged or
-------------------
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
--------
corporation shall be qualified under Section 310(b) of the Trust Indenture
Act of 1939 and eligible under the provisions of Section 6.9, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to
the trusts created by this Indenture any of the Securities or Coupons (if
any) of any series shall have
56
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and
deliver such Securities or Coupons so authenticated; and, in case at that
time any of the Securities or Coupons (if any) of any series shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities or Coupons either in the name of any predecessor hereunder or in
the name of the successor Trustee; and in all such cases such certificate
shall have the full force which it is anywhere in the Securities or Coupons
of such series or in this Indenture provided that the certificate of the
Trustee shall have; provided, that the right to adopt the certificate of
--------
authentication of any predecessor Trustee or to authenticate Securities or
Coupons (if any) of any series in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 6.13 Appointment of Authenticating Agent. As long as any
-----------------------------------
Securities of a series remain Outstanding, the Trustee may, by an instrument
in writing, appoint with the approval of the Issuer and authenticating agent
(the "Authenticating Agent") which shall be authorized to act on behalf of
the Trustee to authenticate Securities, including Securities issued upon
exchange, registration of transfer, partial redemption or pursuant to Section
2.9. Securities of each such series authenticated by such Authenticating
Agent shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee. Whenever
reference is made in this Indenture to the authentication and delivery of
Securities of any series by the Trustee or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent for such series
and a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States
of America or of any State, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $10,000,000
(determined as provided in Section 6.9 with respect to the Trustee) and
subject to supervision or examination by Federal or State authority.
Any corporation into which any Authenticating Agent may be merged
or converted, or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall
57
continue to be the Authenticating Agent with respect to all series of
Securities for which it served as Authenticating Agent without the execution
or filing of any paper or any further act on the part of the Trustee or such
Authenticating Agent. Any Authenticating Agent may at any time, and if it
shall cease to be eligible shall, resign by giving written notice of
resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.13 with
respect to one or more series of Securities, the Trustee shall upon receipt
of an Issuer Order appoint a successor Authenticating Agent. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall
become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as
Authenticating Agent. The Issuer agrees to pay to the Authenticating Agent
for such series from time to time reasonable compensation. The
Authenticating Agent for the Securities of any series shall have no
responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6, 6.9 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
------------------------------
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
-------------------------------------------
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 6.1 and 6.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article.
58
SECTION 7.2 Proof of Execution of Instruments and of Holding of
---------------------------------------------------
Securities; Record Date. Subject to Sections 6.1 and 6.2, the execution of
-----------------------
any instrument by a Securityholder or his agent or proxy may be proved in the
following manner:
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of
deeds or administer oaths that the person executing such instruments
acknowledged to him the execution thereof, or by an affidavit of a
witness to such execution sworn to before any such notary or other such
officer. Where such execution is by or on behalf of any legal entity
other than an individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person executing the
same. The fact of the holding by any Holder of an Unregistered Security
of any series, and the identifying number of such Security and the date
of his holding the same, may be proved by the production of such
Security or by a certificate executed by any trust company, bank, banker
or recognized securities dealer wherever situated satisfactory to the
Trustee, if such certificate shall be deemed by the Trustee to be
satisfactory. Each such certificate shall be dated and shall state that
on the date thereof a Security of such series bearing a specified
identifying number was deposited with or exhibited to such trust
company, bank, banker or recognized securities dealer by the person
named in such certificate. Any such certificate may be issued in
respect of one or more Unregistered Securities of one or more series
specified therein. The holding by the person named in any such
certificate of any Unregistered Securities of any series specified
therein shall be presumed to continue for a period of one year from the
date of such certificate unless at the time of any determination of such
holding (1) another certificate bearing a later date issued in respect
of the same Securities shall be produced, or (2) the Security of such
series specified in such certificate shall be produced by some other
person, or (3) the Security of such series specified in such certificate
shall have ceased to be Outstanding. Subject to Sections 6.1 and 6.2,
the fact and date of the execution of any such instrument and the amount
and numbers of Securities of any series held by the person so executing
such instrument and the amount and numbers of any Security or Securities
for such series may also be proven in accordance with such reasonable
rules and
59
regulations as may be prescribed by the Trustee for such series or in
any other manner which the Trustee for such series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a certificate
of the Security registrar.
The Issuer may set a record date for purposes of determining the
identity of holders of Securities of any series entitled to vote or consent
to any action referred to in Section 7.1, which record date may be set at any
time or from time to time by notice to the Trustee, for any date or dates (in
the case of any adjournment or reconsideration) not more than 60 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof with respect to
Registered Securities of any series, only Holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or
give such consent or revoke such vote or consent.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
-------------------------------
Trustee and any agent of the Issuer or the Trustee may deem and treat the
person in whose name any Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and, subject to the provisions of this
Indenture, interest on such Security and for all other purposes; and neither
the Issuer nor the Trustee nor any agent of the Issuer or the Trustee shall
be affected by any notice to the contrary. The Issuer, the Trustee and any
agent of the Issuer or the Trustee may treat the Holder of any Unregistered
Security and the Holder of any Coupon as the absolute owner of such
Unregistered Security or Coupon (whether or not such Unregistered Security or
Coupon shall be overdue) for the purpose of receiving payment thereof or on
account thereof and for all other purposes and neither the Issuer, the
Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such person, or
upon his order, shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Registered Security, Unregistered Security or Coupon.
60
SECTION 7.4 Right of Revocation of Action Taken. At any time
-----------------------------------
prior to (but not after) the evidencing to the Trustee, as provided in
Section 7.1, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the
case may be, specified in this Indenture in connection with such action, any
Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which
have consented to such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this Article, revoke
such action so far as concerns such Security. Except as aforesaid any such
action taken by the Holder of any Security shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Security and
of any Securities issued in exchange or substitution therefor or on
registration of transfer thereof, irrespective of whether or not any notation
in regard thereto is made upon any such Security. Any action taken by the
Holders of the percentage in aggregate principal amount of the Securities of
any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer,
the Trustee and the Holders of all the Securities affected by such action.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 8.1 Supplemental Indentures Without Consent of
------------------------------------------
Securityholders. The Issuer, when authorized by a Board Resolution (which
---------------
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures
supplemental hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another corporation to the
Issuer, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Nine;
61
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as its Board of Directors and the
Trustee shall consider to be for the protection or benefit of the
Holders of all or any Series of Securities or Coupons, (and if such
covenants, restrictions, conditions or provisions are for the protection
or benefit of less than all series of Securities, stating that they are
expressly being included solely for the benefit or protection of such
series), and to make the occurrence, or the occurrence and continuance,
of a default in any such additional covenants, restrictions, conditions
or provisions an Event of Default permitting the enforcement of all or
any of the several remedies provided in this Indenture as herein set
forth; provided, that in respect of any such additional covenant,
--------
restriction, condition or provision such supplemental indenture may
provide for a particular period of grace after default (which period may
be shorter or longer than that allowed in the case of other defaults) or
may provide for an immediate enforcement upon such an Event of Default
or may limit the remedies available to the Trustee upon such an Event of
Default or may limit the right of the Holders of a majority in aggregate
principal amount of the Securities of such series to waive such an Event
of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or
in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or
desirable and which shall not adversely affect the interests of the
Holders of the Securities or Coupons in any material respect;
(e) to establish the form or forms or terms of Securities of any
series or of the Coupons appertaining to such Securities as permitted by
Sections 2.1 and 2.3;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder
62
by more than one trustee, pursuant to the requirements of Section 6.11;
(g) to provide for uncertificated Securities and to make all
appropriate changes for such purpose; and
(h) to comply with the requirements of the Trust Indenture Act of
1939.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed without the consent of the Holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of
---------------------------------------
Securityholders. With the consent (evidenced as provided in Article Seven)
---------------
of the Holders of not less than a majority in aggregate principal amount of
the Securities at the time Outstanding of all series affected by such
supplemental indenture (voting as one class) (and, in the case of any series
of Securities held as trust assets of an RJR Nabisco Holdings Capital Trust
and with respect to which a Security Exchange has not theretofore occurred,
such consent of holders of the Preferred Securities and the Common Securities
of such RJR Nabisco Holdings Capital Trust as may be required under the
Declaration of Trust of such RJR Nabisco Holdings Capital Trust), the Issuer,
when authorized by a Board Resolution (which resolution may provide general
terms or parameters for such action and may provide that the specific terms
of such action may be determined in accordance with or pursuant to an Issuer
Order), and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of any supplemental indenture or of modifying in any
manner the rights of the Holders of the Securities of each such series or of
the Coupons appertaining to such Securities; provided, that no such
--------
supplemental indenture shall (a) extend the final maturity of any Security,
or
63
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon (except that a valid extension of an interest
payment period by the Issuer in accordance with the terms of any indenture
supplemental hereto, shall not constitute an extension of interest for this
purpose), or reduce any amount payable on redemption thereof or make the
principal thereof (including any amount in respect of original issue
discount), or interest thereon payable in any coin or currency other than
that provided in the Securities and Coupons or in accordance with the terms
thereof, or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon an acceleration of the maturity
thereof pursuant to Section 5.1 or the amount thereof provable in bankruptcy
pursuant to Section 5.2, or alter the provisions of Sections 11.11 or 11.12
or impair or affect the right of any Securityholder to institute suit for the
payment thereof or, if the Securities provide therefor, any right of
repayment at the option of the Securityholder in each case without the
consent of the Holder of each Security so affected (and, in the case of any
series of Securities held as trust assets of an RJR Nabisco Holdings Capital
Trust and with respect to which a Security Exchange has not theretofore
occurred, such consent of holders of the Preferred Securities and the Common
Securities of such RJR Nabisco Holdings Capital Trust as may be required
under the Declaration of Trust of such RJR Nabisco Holdings Capital Trust),
or (b) reduce the aforesaid percentage in principal amount of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security
so affected.
A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of Holders of Securities with respect to such covenant or
provision, shall be deemed not to affect the rights under this Indenture of
the Holders of Securities of any other series or of the Coupons appertaining
to such Securities.
Upon the request of the Issuer, accompanied by a copy of a Board
Resolution (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order) certified by
the secretary or an assistant secretary of the Issuer authorizing the
execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence
64
of the consent of Securityholders as aforesaid and other documents, if any,
required by Sections 7.1 and 8.4, the Trustee shall join with the Issuer in
the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders
under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the
Trustee shall give notice thereof (i) to the Holders of then Outstanding
Registered Securities of each series affected thereby, by mailing a notice
thereof by first class mail to such Holders at their addresses as they shall
appear on the Security register, (ii) if any Unregistered Securities of a
series affected thereby are then Outstanding, to the Holders thereof who have
filed their names and addresses with the Trustee pursuant to Section
313(c)(2) of the Trust Indenture Act of 1939, by mailing a notice thereof by
first class mail to such Holders at such addresses as were so furnished to
the Trustee and (iii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to all Holders thereof, by publication of a
notice thereof at least one in an Authorized Newspaper in the Borough of
Manhattan, The City of New York and at least once in an Authorized Newspaper
in London (and, if required by Section 3.9, at least once in an Authorized
Newspaper in Luxembourg), and in each case such notice shall set forth in
general terms the substance of such supplemental indenture. Any failure of
the Issuer to give such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and
65
conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 8.4 Documents to Be Given to Trustee. The Trustee,
--------------------------------
subject to the provisions of Sections 6.1 and 6.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with
the applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of Supplemental
-------------------------------------------------
Indentures. Securities of any series authenticated and delivered after the
----------
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series
as to any matter provided for by such supplemental indenture or as to any
action taken at any such meeting. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any modification of
this Indenture contained in any such supplemental indenture may be prepared
by the Issuer, authenticated by the Trustee and delivered in exchange for the
Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
-----------------------------------------
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey
--------------------------------------------------
Property Except Under Certain Conditions. Nothing contained in this
----------------------------------------
Indenture or in any of the Securities shall prevent any consolidation or
merger of the Issuer into any other corporation or corporations (whether or
not affiliated with the Issuer), or successive consolidations or mergers to
which the Issuer or its respective successor or successors shall be a party
or parties, or shall prevent any sale, lease or conveyance of the property of
the Issuer as an entirety or substantially as an entirety; provided, that
--------
upon any such consolidation, merger, sale, lease or conveyance to which the
Issuer is a party and in which the Issuer is not the surviving corporation,
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Issuer and
the due and punctual payment of the principal of and interest on all of the
Securities, according to their tenor, shall be expressly assumed by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by the
66
corporation formed by such consolidation, or into which the Issuer shall have
been merged, or which shall have acquired such property.
SECTION 9.2 Successor Corporation Substituted. In case of any
---------------------------------
such consolidation, merger, sale or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it
had been named herein. Such successor corporation may cause to be signed,
and may issue either in its own name or in the name of the Issuer prior to
such succession any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Issuer and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the
officers of the Issuer to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All of the Securities so issued
shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance
with the terms of this Indenture as though all of such Securities had been
issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Securities or Coupons thereafter to be issued as may be
appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor corporation which
shall theretofore have become such in the manner described in this Article
shall be discharged from all obligations and covenants under this Indenture
and the Securities and may be liquidated and dissolved.
SECTION 9.3 Opinion of Counsel to Trustee. The Trustee, subject
-----------------------------
to the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel,
prepared in accordance with Section 11.5, as conclusive evidence that any
such consolidation, merger, sale, lease or conveyance, and any such
assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
67
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS.
----------------
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at
---------------------------------------
any time (a) the Issuer shall have paid or caused to be paid the principal of
and interest on all the Securities of any series Outstanding hereunder and
all unmatured Coupons appertaining thereto (other than Securities of such
series and Coupons appertaining thereto which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.9) as
and when the same shall have become due and payable, or (b) the Issuer shall
have delivered to the Trustee for cancellation all Securities of any series
theretofore authenticated and all unmatured Coupons appertaining thereto
(other than any Securities of such series and Coupons appertaining thereto
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.9) or (c) in the case of any series
of Securities where the exact amount (including the currency of payment) of
principal of and interest due on which can be determined at the time of
making the deposit referred to in clause (ii) below, (i) all the Securities
of such series and all unmatured Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation shall have become due and payable,
or are by their terms to become due and payable within one year or are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption, and (ii) the Issuer shall
have irrevocably deposited or caused to be deposited with the Trustee as
trust funds the entire amount in cash (other than moneys repaid by the
Trustee or any paying agent to the Issuer in accordance with Section 10.4)
or, in the case of any series of Securities the payments on which may only be
made in Dollars, direct obligations of, or obligations guaranteed by, the
United States of America, backed by its full faith and credit ("U.S.
Government Obligations"), maturing as to principal and interest at such times
and in such amounts as will insure the availability of cash, or a combination
thereof, sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (X) the principal and interest on all
Securities of such series and Coupons appertaining thereto on each date that
such principal or interest is due and payable and (Y) any mandatory sinking
fund payments on the dates on which such payments are due and payable in
accordance with the terms of the Indenture
68
and the Securities of such series; and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder by the Issuer,
then this Indenture shall cease to be of further effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series
and of Coupons appertaining thereto and the Issuer's right of optional
redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost
or stolen Securities or Coupons, (iii) rights of Holders of Securities and
Coupons appertaining thereto to receive payments of principal thereof and
interest thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to
all or any of them, and (vi) the obligations of the Issuer under Section 3.2)
and the Trustee, on demand of the Issuer accompanied by an Officer's
Certificate and an Opinion of Counsel which comply with Section 11.5 and at
the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture; provided,
--------
that the rights of Holders of the Securities and Coupons to receive amounts
in respect of principal of and interest on the Securities and Coupons held by
them shall not be delayed longer than required by then-applicable mandatory
rules or policies of any securities exchange upon which the Securities are
listed. The Issuer agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Securities of such series.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 6.6 and the
obligations of the Trustee under Section 10.1 shall survive.
(B) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution,
Officers' Certificate or indenture supplemental hereto provided pursuant to
Section 2.3. In addition to discharge of the Indenture pursuant to the next
preceding paragraph, in the case of any series of Securities the exact
amounts (including the currency of payment) of principal of and interest due
on which can be determined at the time of making the deposit referred to in
clause (a) below, the Issuer shall be deemed to have paid and discharged the
entire indebtedness on all the Securities
69
of such a series and the Coupons appertaining thereto on the 91st day after
the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Securities of such series
and Coupons appertaining thereto shall no longer be in effect (except as to
(i) rights of registration of transfer and exchange of Securities of such
series and of Coupons appertaining thereto and the Issuer's right of optional
redemption, if any, (ii) substitution of mutilated, defaced, destroyed, lost
or stolen Securities or Coupons, (iii) rights of Holders of Securities and
Coupons appertaining thereto to receive payments of principal thereof and
interest thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) the rights, obligations, duties and
immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to
all or any of them and (vi) the obligations of the Issuer under Section 3.2)
and the Trustee, at the expense of the Issuer, shall at the Issuer's request,
execute proper instruments acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with
the Trustee as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders
of the Securities of such series and Coupons appertaining thereto
(i) cash in an amount, or (ii) in the case of any series of
Securities the payments on which may only be made in Dollars, U.S.
Government Obligations, maturing as to principal and interest at
such times and in such amounts as will insure the availability of
cash or (iii) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee, to pay (A) the principal and interest on all Securities of
such series and Coupons appertaining thereto on each date that such
principal or interest is due and payable and (B) any mandatory
sinking fund payments on the dates on which such payments are due
and payable in accordance with the terms of the Indenture and the
Securities of such series;
70
(b) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument to which
the Issuer is a party or by which it is bound;
(c) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling
or (y) since the date hereof, there has been a change in the
applicable Federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series and Coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit, defeasance and discharge and will be
subject to Federal income tax on the same amount and in the same
manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred; and
(d) the Issuer has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the defeasance
contemplated by this provision have been complied with.
(C) The Issuer shall be released from its obligations with respect
to the Securities of any series, and any Coupons appertaining thereto,
Outstanding (except for: (i) the obligations set forth as exceptions above
in paragraph (A); (ii) the obligations to (w) compensate and indemnify the
Trustee, (x) to appoint a successor Trustee, (y) to repay certain moneys held
by the Paying Agent and (z) to return certain unclaimed moneys held by the
Trustee; and (iii) such obligations of the Issuer as are required by the
Trust Indenture Act) on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that, with respect to the Outstanding Securities of
any series, the Issuer is required only to comply with the above obligations
and shall have no liability in respect of any term, condition or limitation
set forth in any other Section, whether directly or indirectly by reason of
any reference to such Section by any other remaining provision or in any
other document and such compliance only to the above obligations shall not
constitute an Event of Default under Section 5.1. The following shall be the
conditions to application of this subsection C of this Section 10.1:
71
(a) The Issuer has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose
of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the holders of the
Securities of such series and coupons appertaining thereto, (i)
cash in an amount, or (ii) in the case of any series of Securities
the payments on which may only be made in Dollars, U.S. Government
Obligations maturing as to principal and interest at such times and
in such amounts as will insure the availability of cash or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (X)
the principal and interest on all Securities of such series and
Coupons appertaining thereto and (Y) any mandatory sinking fund
payments on the day on which such payments are due and payable in
accordance with the terms of the Indenture and the Securities of
such series.
(b) Such covenant defeasance shall not cause the Trustee to
have a conflicting interest as defined in Section 6.8 and for
purposes of the Trust Indenture Act of 1939 with respect to any
securities of the Issuer.
(c) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any
other agreement or instrument to which the Issuer is a party or by
which it is bound.
(d) The Issuer shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders of the Securities of such
series and Coupons appertaining thereto will not recognize income,
gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred.
(e) The Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to the covenant
72
defeasance contemplated by this provision have been complied with.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
-----------------------------------------------------
of Securities. Subject to Section 10.4, all moneys deposited with the
-------------
Trustee pursuant to Section 10.1 shall be held in trust and applied by it to
the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment
or redemption of which such moneys have been deposited with the Trustee, of
all sums due and to become due thereon for principal and interest; but such
money need not be segregated from other funds except to the extent required
by law.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In
----------------------------------------
connection with the satisfaction and discharge of this Indenture with respect
to Securities of any series, all moneys then held by any paying agent under
the provisions of this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
-------------------------------------------------
Unclaimed for Two Years. Any moneys or Government Securities deposited with
-----------------------
or paid to the Trustee or any paying agent for the payment of the principal
of or interest on any Security of any series or Coupons appertaining thereto
and not applied but remaining unclaimed for two years after the date upon
which such principal or interest shall have become due and payable, shall,
upon the written request of the Issuer and unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law, be repaid to the Issuer by the Trustee for such series or such paying
agent, and the Holder of the Security of such series shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property laws, thereafter look only to the Issuer for any payment
which such Holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such moneys shall thereupon
cease.
73
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
------------------------
SECTION 11.1 Incorporators, Stockholders, Officers and Directors
---------------------------------------------------
of Issuer Exempt from Individual Liability. No recourse under or upon any
------------------------------------------
obligation, covenant or agreement contained in this Indenture, or in any
Security or Coupons, or because of any indebtedness evidenced thereby, shall
be had against any incorporator, as such or against any past, present or
future stockholder, officer or director, as such, of the Issuer or of any
successor, either directly or through the Issuer or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities and the Coupons appertaining thereto by the holders thereof and as
part of the consideration for the issue of the Securities and the Coupons
appertaining thereto.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of
-----------------------------------------------
Parties and Securityholders. Nothing in this Indenture or in the Securities
---------------------------
and the Coupons appertained thereto, expressed or implied, shall give or be
construed to give to any person, firm or corporation, other than the parties
hereto and their successors and the Holders of the Securities and the Coupons
appertaining thereto, any legal or equitable right, remedy or claim under
this Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities or Coupons, if any.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
---------------------------------------------------
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and
------------------------------------------
Securityholders. Any notice or demand which by any provision of this
---------------
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities to or on the Issuer may be given or served (i) in
the case of the Trustee, by telecopier, confirmed by overnight courier, and
(ii) in the case of the Holders of Securities, by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by
74
the Issuer with the Trustee) to RJR Nabisco, Inc. at 1301 Avenue of the
Americas, New York, New York, 10019, (telefax 212-969-9230), Attention:
General Counsel. Any notice, direction, request or demand by the Issuer or
any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made (i) in the
case of the Issuer, by telecopier and confirmed by overnight courier and (ii)
in the case of any Securityholder, at the Corporate Trust Office which is on
the date hereof 120 Wall Street, New York, New York 10043, Attention:
Corporate Trust Administration (telefax 212-480-1614).
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first class postage prepaid, to
each such Holder entitled thereto, at his last address as it appears in the
Security register. In any case where notice to such Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Issuer
and Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall
be satisfactory to the Trustee shall be deemed to be a sufficient giving of
such notice.
SECTION 11.5 Officers' Certificates and Opinions of Counsel;
-----------------------------------------------
Statements to Be Contained Therein. Upon any application or demand by the
----------------------------------
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such application or
demand as to which the furnishing of such
75
documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate
or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that
the person making such certificate or opinion has read such covenant or
condition, (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such certificate or opinion are based, (c) a statement that, in the
opinion of such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with and (d) a statement as to
whether or not, in the opinion of such person, such condition or covenant has
been complied with.
Any certificate, statement or opinion of an officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same
are erroneous. Any certificate, statement or opinion of counsel may be
based, insofar as it relates to factual matters, information with respect to
which is in the possession of the Issuer, upon the certificate, statement or
opinion of or representations by an officer of officers of the Issuer, unless
such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Issuer
or of counsel may be based, insofar as it relates to accounting matters, upon
a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate, statement
or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
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Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm
is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If
-----------------------------------------------
the date of maturity of interest on or principal of the Securities of any
series or any Coupons appertaining thereto or the date fixed for redemption
or repayment of any such Security or Coupon shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day (unless otherwise provided in the
terms of the Security) with the same force and effect as if made on the date
of maturity or the date fixed for redemption, and no interest shall accrue
for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
-------------------------------------------------
Indenture Act of 1939. If and to the extent that any provision of this
---------------------
Indenture limits, qualifies or conflicts with another provision included in
this Indenture by operation of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939 (an "incorporated provision"), such incorporated
provision shall control.
SECTION 11.8 New York Law to Govern. This Indenture and each
----------------------
Security shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
such State, regardless of the laws that might otherwise govern under
applicable New York principles of conflicts of law and except as may
otherwise be required by mandatory provisions of law.
SECTION 11.9 Counterparts. This Indenture may be executed in any
------------
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section
------------------
headings herein and the Table of Contents are for convenience only and shall
not affect the construction hereof.
SECTION 11.11 Securities in a Foreign Currency or in ECU. Unless
------------------------------------------
otherwise specified in an Officers' Certificate delivered pursuant to Section
2.3 of this Indenture with respect to a particular series of Securities,
whenever for purposes of this Indenture any action may be taken by the
Holders of a specified percentage in aggregate principal amount of Securities
of all series or all series
77
affected by a particular action at the time Outstanding and, at such time,
there are Outstanding Securities of any series which are denominated in a
coin or currency other than Dollars (including ECUs), then the principal
amount of Securities of such series which shall be deemed to be Outstanding
for the purpose of taking such action shall be that amount of Dollars that
could be obtained for such amount at the Market Exchange Rate. For purposes
of this Section 11.11, Market Exchange Rate shall mean the noon Dollar buying
rate in New York City for cable transfers of that currency as published by
the Federal Reserve Bank of New York; provided, however, in the case of ECUs,
-------- -------
Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Communities (or any successor thereto) as
published in the Official Journal of the European Communities (such
publication or any successor publication, the "Journal"). If such Market
Exchange Rate is not available for any reason with respect to such currency,
the Trustee shall use, in its sole discretion and without liability on its
part, such quotation of the Federal Reserve Bank of New York or, in the case
of ECUs, the rate of exchange as published in the Journal, as of the most
recent available date, or quotations or, in the case of ECUs, rates of
exchange from one or more major banks in The City of New York or in the
country of issue of the currency in question, which for purposes of the ECU
shall be Brussels, Belgium, or such other quotations or, in the case of ECU,
rates of exchange as the Trustee shall deem appropriate. The provisions of
this paragraph shall apply in determining the equivalent principal amount in
respect of Securities of a series denominated in a currency other than
Dollars in connection with any action taken by Holders of Securities pursuant
to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law for all purposes
and irrevocably binding upon the Issuer and all Holders.
SECTION 11.12 Judgment Currency. The Issuer agrees, to the
-----------------
fullest extent that it may effectively do so under applicable law, that (a)
if for the purpose of obtaining judgment in any court it is necessary to
convert the sum due in respect of the principal of or interest on the
Securities of any series (the "Required Currency") into a currency in which a
judgment will be rendered (the "Judgment Currency"), the rate of exchange
used shall be the rate at which in accordance with normal banking procedures
78
the Trustee could purchase in The City of New York the Required Currency with
the Judgment Currency on the day on which final unappealable judgment is
entered, unless such day is not a New York Banking Day, then, to the extent
permitted by applicable law, the rate of exchange used shall be the rate at
which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on
the New York Banking Day preceding the day on which final unappealable
judgment is entered and (b) its obligations under this Indenture to make
payments in the Required Currency (i) shall not be discharged or satisfied by
any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in
the actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose
of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or
a legal holiday in The City of New York or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to close.
SECTION 11.13 Severability of Provisions. Any prohibition,
--------------------------
invalidity or unenforceability of any provision of this Indenture in any
jurisdiction shall not invalidate or render unenforceable the remaining
provisions hereof in such jurisdiction and shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.14 Company Released from Indenture Requirements Under
--------------------------------------------------
Certain Circumstances. Whenever in this Indenture the Issuer shall be
---------------------
required to do or not to do anything so long as any of the Securities of any
series shall be Outstanding, the Issuer shall, notwithstanding any such
provision, not be required to comply with such provisions if it shall be
entitled to have this Indenture satisfied and discharged pursuant to the
provisions hereof, even though in either case the Holders of any of the
Securities of that series shall have failed to present and surrender them for
payment pursuant to the terms of this Indenture.
79
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
------------------------------------------
SECTION 12.1 Applicability of Article. The provisions of this
------------------------
Article shall be applicable to the Securities of any series which are
redeemable before their maturity or to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by
Section 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
-----------------------------------------
redemption to the Holders of Registered Securities of any series to be
redeemed as a whole or in part at the option of the Issuer shall be given by
mailing notice of such redemption by first class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Registered Securities of such series at their
last addresses as they shall appear upon the registry books. Notice of
redemption to the Holders of Unregistered Securities to be redeemed as a
whole or in part, who have filed their names and addresses with the Trustee
pursuant to Section 313(c)(2) of the Trust Indenture Act of 1939, shall be
given by mailing notice of such redemption, by first class mail, postage
prepaid, at least 30 days and not more than 60 prior to the date fixed for
redemption, to such Holders at such addresses as were so furnished to the
Trustee (and, in the case of any such notice given by the Issuer, the Trustee
shall make such information available to the Issuer for such purpose).
Notice of redemption to all other Holders of Unregistered Securities shall be
published in an Authorized Newspaper in the Borough of Manhattan, The City of
New York and in an Authorized Newspaper in London (and, if required by
Section 3.9, in an Authorized Newspaper in Luxembourg), in each case, once in
each of three successive calendar weeks, the first publication to be not less
than 30 nor more than 60 days prior to the date fixed for redemption. Any
notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the
notice. Failure to give notice by mail, or any defect in the notice to the
Holder of any Security of a series designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of
any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and
80
surrender of such Securities and, in the case of Securities with Coupons
attached thereto, of all Coupons appertaining thereto maturing after the date
fixed for redemption, that such redemption is pursuant to the mandatory or
optional sinking fund, or both, if such be the case, that interest accrued to
the date fixed for redemption will be paid as specified in such notice and
that on and after said date interest thereon or on the portions thereof to be
redeemed will cease to accrue. In case any Security of a series is to be
redeemed in part only the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed
at the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with
the Trustee or with one or more paying agents (or, if the Issuer is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 3.4) an amount of money sufficient to redeem on the redemption date
all the Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If less than all the outstanding Securities of a series are to
be redeemed, the Issuer will deliver to the Trustee at least 15 days prior to
the last date on which notice of redemption may be given to Holders pursuant
to the first paragraph of this Section 12.2 (or such shorter period as shall
be acceptable to the Trustee) an Officers' Certificate stating the aggregate
principal amount of Securities to be redeemed. In case of a redemption at
the election of the Issuer prior to the expiration of any restriction on such
redemption, the Issuer shall deliver to the Trustee, prior to the giving of
any notice of redemption to Holders pursuant to this Section, an Officer's
Certificate stating that such redemption is not prohibited by such
restriction.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may
be redeemed in part in multiples equal to the minimum authorized denomination
for Securities of such series or any multiple thereof. The Trustee shall
promptly notify the
81
Issuer in writing of the Securities of such series selected for redemption
and, in the case of any Securities of such series selected for partial
redemption, the principal amount thereof to be redeemed. For all purposes of
this Indenture, unless the context otherwise requires, all provisions
relating to the redemption of Securities of any series shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
If all of the outstanding Securities of a series are to be
redeemed, the Issuer will deliver to the Trustee at least 10 days prior to
the last date on which notice of redemption may be given to Holders pursuant
to the first paragraph of this Section 12.2 an Officers' Certificate stating
that all such Securities are to be redeemed. In case of a redemption at the
election of the Issuer prior to the expiration of any restriction on such
redemption, the Issuer shall deliver to the Trustee, prior to the giving of
any notice of redemption to Holders pursuant to this Section, an Officer's
Certificate stating that such redemption is not prohibited by such
restriction.
SECTION 12.3 Payment of Securities Called for Redemption. If
-------------------------------------------
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in
the payment of such Securities at the redemption price, together with
interest accrued to said date) interest on the Securities or portions of
Securities so called for redemption shall cease to accrue, and the unmatured
Coupons, if any, appertaining thereto shall be void and, except as provided
in Sections 6.5 and 10.4, such Securities shall cease from and after the date
fixed for redemption to be entitled to any benefit or security under this
Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and
unpaid interest to the date fixed for redemption. On presentation and
surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the
date fixed for redemption, said Securities or the specified portions thereof
shall be paid and redeemed by the Issuer at the applicable redemption price,
together with interest accrued thereon to the date fixed for redemption;
provided that payment of interest becoming due on or prior to the date fixed
--------
for redemption shall be payable in the case of Securities with Coupons
82
attached thereto, to the Holders of the Coupons for such interest upon
surrender thereof, and in the case of Registered Securities, to the Holders
of such Registered Securities registered as such on the relevant record date
subject to the terms and provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after
the date fixed for redemption, the surrender of such missing Coupon or
Coupons may be waived by the Issuer and the Trustee, if there be furnished to
each of them such security or indemnity as they may require to save each of
them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the
order of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series (with Coupons attached, if any), of authorized
denominations, in principal amount equal to the unredeemed portion of the
Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
----------------------------------------------------
Selection for Redemption. Securities shall be excluded from eligibility for
------------------------
selection for redemption if they are identified by registration and
certificate number in a written statement signed by an authorized officer of
the Issuer and delivered to the Trustee at least 40 days prior to the last
date on which notice of redemption may be given as being owned of record and
beneficially by, and not pledged or hypothecated by either (a) the Issuer or
(b) an entity specifically identified in such written statement directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
------------------------------------
amount of any sinking fund payment provided for by the terms of Securities of
any series is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date
83
on which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at
its option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of
such series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.10, (b) receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this
Section, or (c) receive credit for Securities of such series (not previously
so credited) redeemed by the Issuer through any optional redemption provision
contained in the terms of such series. Securities so delivered or credited
shall be received or credited by the Trustee at the sinking fund redemption
price specified in such Securities.
On or before the sixtieth day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee an
Officer's Certificate (which need not contain the statements required by
Section 11.5) (a) specifying the portion of the mandatory sinking fund
payment to be satisfied by payment of cash and the portion to be satisfied by
credit of Securities of such series and the basis for such credit, (b)
stating that none of the Securities of such series has theretofore been so
credited, (c) stating that no defaults in the payment of interest or Events
of Default with respect to such series have occurred (which have not been
waived or cured) and are continuing and (d) stating whether or not the Issuer
intends to exercise its right to make an optional sinking fund payment with
respect to such series and, if so, specifying the amount of such optional
sinking fund payment which the Issuer intends to pay on or before the next
succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Issuer
to be entitled to credit therefor as aforesaid which have not theretofore
been delivered to the Trustee shall be delivered for cancellation pursuant to
Section 2.10 to the Trustee with such Officer's Certificate (or reasonably
promptly thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the
84
Issuer, on or before any such sixtieth day, to deliver such Officer's
Certificate and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund
payment for such series due on the next succeeding sinking fund payment date
shall be paid entirely in cash without the option to deliver or credit
Securities of such series in respect thereof and (ii) that the Issuer will
make no optional sinking fund payment with respect to such series as provided
in this Section.
If the sinking fund payment or payments (mandatory or optional or
both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000 (or the equivalent thereof in any Foreign Currency or
ECU) or a lesser sum if the Issuer shall so request with respect to the
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 (or the
equivalent thereof in any Foreign Currency or ECU) or less and the Issuer
makes no such request then it shall be carried over until a sum in excess of
$50,000 (or the equivalent thereof in any Foreign Currency or ECU) is
available. The Trustee shall select, in the manner provided in Section 12.2,
for redemption on such sinking fund payment date a sufficient principal
amount of Securities of such series to absorb said cash, as nearly as may be,
and shall (if requested in writing by the Issuer) inform the Issuer of the
serial numbers of the Securities of such series (or portions thereof) so
selected. Securities shall be excluded from eligibility for redemption under
this Section if they are identified by registration and certificate number in
an Officer's Certificate delivered to the Trustee at least 60 days prior to
the sinking fund payment date as being owned of record and beneficially by,
and not pledged or hypothecated by either (a) the Issuer or (b) an entity
specifically identified in such Officer's Certificate as directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect
provided in Section 12.3) for the redemption of Securities of such series in
part at the option of the Issuer. The amount of any sinking fund payments
not so applied or
85
allocated to the redemption of Securities of such series shall be added to
the next cash sinking fund payment for such series and, together with such
payment, shall be applied in accordance with the provisions of this Section.
Any and all sinking fund moneys held on the stated maturity date of the
Securities of any particular series (or earlier, if such maturity is
accelerated), which are not held for the payment or redemption of particular
Securities of such series shall be applied, together with other moneys, if
necessary, sufficient for the purpose, to the payment of the principal of,
and interest on, the Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay
to the Trustee in cash or shall otherwise provide for the payment of all
interest accrued to the date fixed for redemption on Securities to be
redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities
of a series with sinking fund moneys or mail any notice of redemption of
Securities for such series by operation of the sinking fund during the
continuance of a default in payment of interest on such Securities or of any
Event of Default except that, where the mailing of notice of redemption of
any Securities shall theretofore have been made, the Trustee shall redeem or
cause to be redeemed such Securities, provided that it shall have received
from the Issuer a sum sufficient for such redemption. Except as aforesaid,
any moneys in the sinking fund for such series at the time when any such
default or Event of Default shall occur, and any moneys thereafter paid into
the sinking fund, shall, during the continuance of such default or Event of
Default, be deemed to have been collected under Article Five and held for the
payment of all such Securities. In case such Event of Default shall have
been waived as provided in Section 5.10 or the default cured on or before the
sixtieth day preceding the sinking fund payment date in any year, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date
in accordance with this Section to the redemption of such Securities.
86
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1 Subordination. The Company, for itself, its
-------------
successors and assigns, covenants and agrees, and each holder of a Security,
by its acceptance thereof, likewise covenants and agrees, that the payment of
the principal of, premium, if any, and interest on, each and all of the
Securities is hereby expressly subordinated, to the extent and in the manner
hereinafter in this Article Thirteen set forth, in right of payment to the
prior payment in full of all Senior Obligations.
SECTION 13.2 Rights of Holders of Senior Obligations. (a) In
---------------------------------------
the event of any insolvency or bankruptcy proceedings, and any receivership,
liquidation, reorganization or other similar proceedings in connection
therewith, relative to the Company or to its creditors, as such, or to its
property, and in the event of any proceedings for voluntary liquidation,
dissolution or other winding up of the Company, whether or not involving
insolvency or bankruptcy, and in the event of any execution sale, then the
holders of Senior Obligations shall be entitled to receive payment in full of
principal thereof and interest due thereon (including without limitation,
except to the extent, if any, prohibited by mandatory provisions of law,
post-petition interest in any such proceedings) in money of all Senior
Obligations before the holders of Securities are entitled to receive any
payment on account of the principal of or interest on the indebtedness
evidenced by the Securities, and to that end the holders of Senior
Obligations shall be entitled to receive for application in payment thereof
any payment or distribution of any kind or character, whether in cash or
property or securities, which may be payable or deliverable in connection
with any such proceedings or sale in respect of the principal of or interest
on the Securities other than securities of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article Thirteen with
respect to the Securities, to the payment of all indebtedness of the nature
of Senior Obligations, provided that the rights of the holders of the Senior
Obligations are not altered by such reorganization or readjustment;
(b) In the event and during the continuation of any default in
payment of any Senior Obligations or if any event of default, as therein
defined, shall exist under any
87
Senior Obligations or any agreement pursuant to which any Senior Obligations
is issued, no payment of the principal of, premium if any, or interest on the
Securities shall be made and the Company covenants that it will, upon
ascertaining any such default or event of default, provide written notice to
the Trustee of such default or event of default;
(c) In the event that the Securities of any series are declared
due and payable before their expressed maturity because of the occurrence of
an Event of Default (under circumstances when the provisions of subsection
(a) of this Section 13.2 shall not be applicable), the holders of all Senior
Obligations shall be entitled to receive payment in full in money of such
Senior Obligations before such holders of Securities are entitled to receive
any payment on account of the principal of or interest on the Securities; and
(d) No holder of Senior Obligations shall be prejudiced in his
right to enforce subordination of the Securities by any act or failure to act
on the part of the Company.
SECTION 13.3 Payments and Distributions. In the event that,
--------------------------
notwithstanding the provisions of Section 13.2, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property
or securities (other than securities of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this Article 11 with respect
to the Securities, to the payment of all indebtedness of the nature of Senior
Obligations, provided that the rights of the holders of the Senior
Obligations are not altered by such reorganization or readjustment) shall be
received by the holders or by the Trustee for their benefit in connection
with any proceedings or sale referred to in subsection (a) of Section 13.2
before all Senior Obligations is paid in full in money, such payment or
distribution shall be paid over to the holders of such Senior Obligations or
their representative or representatives or to the trustee or trustees under
any indenture under which any instruments evidencing any of such Senior
Obligations may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Obligations held or represented by
each, for application to the payment of all Senior Obligations remaining
unpaid until all such Senior Obligations shall have been paid in full in
money, after
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giving effect to any concurrent payment or distribution to the holders of
such Senior Obligations.
From and after the payment in full in money of all Senior
Obligations, the holders of Securities (together with the holders of any
other indebtedness of the Company which is subordinate in right of payment to
the payment in full of all Senior Obligations, which is not subordinate in
right of payment to the Securities and which by its terms grants such right
of subrogation to the holder thereof) shall be subrogated to the rights of
the holders of Senior Obligations to receive payments or distributions of
assets or securities of the Company applicable to the Senior Obligations
until the Securities shall be paid in full, and, for the purposes of such
subrogation, no such payments or distributions to the holders of Senior
Obligations of assets or securities, which otherwise would have been payable
or distributable to holders of Securities, shall, as between the Company, its
creditors other than the holders of Senior Obligations, and the holders, be
deemed to be a payment by the Company to or on account of the Senior
Obligations, it being understood that the provisions of this Article 11 are
and are intended solely for the purpose of defining the relative rights of
the holders, on the one hand, and the holders of the Senior Obligations, on
the other hand, and nothing contained in this Article 11 or elsewhere in this
Indenture or in the Securities is intended to or shall impair as between the
Company, its creditors other than the holders of Senior Obligations, and the
holders, the obligation of the Company, which is unconditional and absolute,
to pay to the holders the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with their terms, or
to affect the relative rights of the holders and creditors of the Company
other than the holders of the Senior Obligations, nor shall anything herein
or therein prevent the Trustee or the holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture subject to the rights of the holders of Senior Obligations, under
Section 11.2, to receive cash, property or securities of the Company
otherwise payable or deliverable to the holders of the Securities.
Upon any distribution or payment in connection with any proceedings
or sale referred to in subsection (a) of Section 13.2, the Trustee, subject
as between the Trustee and the holders to the provisions of Sections 7.1 and
7.2 hereof, shall be entitled to rely upon a certificate of the liquidating
trustee or agent or other person making any distribution or payment to the
Trustee for the purpose of ascertaining the holders of Senior Obligations
entitled to
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participate in such payment or distribution, the amount of such Senior
Obligations or the amount payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
11. In the event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as a holder of
Senior Obligations to participate in any payment or distribution pursuant to
this Section 11.3, the Trustee may request such person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Obligations held by such person, as to the extent to which such person is
entitled to participate in such payment or distribution, and as to other
facts pertinent to the rights of such person under this Section 11.3, and if
such evidence is not furnished, the Trustee may defer any payment to such
person pending judicial determination as to the right of such person to
receive such payment.
The Trustee, however, shall not be deemed to owe any fiduciary duty
to the holders of Senior Obligations, and shall not be liable to any such
holders if it shall in good faith pay over or distribute to holders of
Securities or the Company or any other person moneys or assets to which any
holders of Senior Obligations shall be entitled by virtue of Article 11 of
this Indenture or otherwise.
SECTION 13.4 Payments by the Company. Nothing contained in this
-----------------------
Article 11 or elsewhere in this Indenture, or in any of the Securities, shall
prevent at any time, (a) the Company from making payments at any time of
principal of or interest on the Securities, except under the conditions
described in Section 11.2 or during the pendency of any proceedings or sale
therein referred to, provided, however, that payments of principal of or
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interest on the Securities shall only be made by the Company within three
business days of the due dates for such payments or (b) the application by
the Trustee of any moneys deposited with it hereunder to the payment of or on
account of the principal of or interest on the Securities, if at the time of
such deposit the Trustee did not have written notice in accordance with
Section 13.6 of any event prohibiting the making of such deposit by the
Company or if in the event of redemption, the Trustee did not have such
written notice prior to the time that the notice of redemption pursuant to
Section 12.2 was given (which notice of redemption shall in no event be given
more than 60 days prior to the date fixed for redemption).
SECTION 13.5 Appointment of the Trustee by Securityholders. Each
---------------------------------------------
Securityholder by his acceptance of a Security authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate
to
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acknowledge or effectuate the subordination as provided in this Article 11
and appoints the Trustee as attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors
or otherwise) tending towards liquidation of the business and assets of the
Company, the immediate filing of a claim for the unpaid balance of such
Securityholder's Securities in the form required in said proceedings and
cause said claim to be approved.
SECTION 13.6 Notice to Trustee. Notwithstanding the provisions
-----------------
of this Article Thirteen or any other provisions of this Indenture, the
Trustee shall not be charged with the knowledge of the existence of any facts
which would prohibit the making of any payment of moneys to the Trustee,
unless and until the Trustee shall have received written notice thereof from
the Company or from the holder or the representative of any class of Senior
Obligations; provided, however, that if at least two business days prior to
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the date upon which by the terms hereof any such monies may become payable
for any purpose (including, without limitation, the payment of either the
cash amount payable at maturity or interest on any Security) the Trustee
shall not have received with respect to such monies the notice provided for
in this Section 13.6, then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary, which may
be received by it on or after such two business days prior to such date.
SECTION 13.7 Rights of Trustee. The Trustee shall be entitled to
-----------------
all the rights set forth in this Article 11 with respect to any Senior
Obligations which may at any time be held by it, to the same extent as any
other holder of Senior Obligations.
SECTION 13.8 Paying Agent. In case at any time any paying agent
------------
other than the Trustee shall be appointed by the Company and be then acting
hereunder, the term "Trustee" as used in this Article 11 shall in such case
(unless the context shall otherwise require) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article Thirteen in place
of the Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the date first written above.
RJR NABISCO HOLDINGS CORP., ISSUER
By:
---------------------------------
Name:
Title:
Attest:
By:
-----------------------
Name:
Title:
THE BANK OF NEW YORK
By:
-------------------------
Name:
Title:
[CORPORATE SEAL]
Attest:
By:
-----------------------
Name:
Title:
92
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ______ before me personally
came __________________ to me personally known, who, being by me duly
sworn, did depose and say that he resides at New York, NY
that he is a __________________ of RJR NABISCO HOLDINGS CORP., one of
the corporations described in and which executed the above
instrument; and that he signed his name thereto by authority
of the Board of Directors of said corporation.
[NOTARIAL SEAL]
--------------------------
Notary Public
93
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ____, 1995 before me personally
came __________ to me personally known, who, being by me
duly sworn, did depose and say that she resides at ____________
that she is a ____________________ of The Bank of New York, one of
the corporations described in and which executed the above
instrument; that she knows the corporate seal of said
corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation, and that she
signed her name thereto by like authority.
[NOTARIAL SEAL]
-------------------------
Notary Public
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