As filed with the Securities and Exchange Commission on December 10, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<S> <C>
R.J. REYNOLDS TOBACCO HOLDINGS, INC. R.J. REYNOLDS TOBACCO COMPANY
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
Delaware New Jersey
(State or jurisdiction of incorporation or organization) (State or jurisdiction of incorporation or organization)
56-0950247 56-0375955
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
401 North Main St. 401 North Main St.
Winston-Salem, NC 27102 Winston-Salem, NC 27102
(336) 741-5500 (336) 741-5000
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number, including area
area code, of Registrants' principal executive offices) code, of Registrants' principal executive offices)
</TABLE>
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Charles A. Blixt, Esq.
General Counsel
R.J. Reynolds Tobacco Holdings, Inc.
401 North Main St.
Winston-Salem, NC 27102
(336) 741-5500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
Jeffrey Small, Esq.
Joseph A. Hall, Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
Title of Each Class Proposed Maximum Amount of
of Securities to be Registered Aggregate Offering Price(1)(2) Registration Fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debt Securities of R.J. Reynolds Tobacco Holdings, Inc......... $1,876,250,000 (3)
Guarantees of Debt Securities of R.J. Reynolds Tobacco
Holdings, Inc. by R.J. Reynolds Tobacco Company.............. (4) (4)
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to rule 457(o).
(2) Such indeterminate amount of Debt Securities and the related Guarantees as
may from time to time be issued at indeterminate prices.
(3) Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act, the Prospectus which is a part of this Registration
Statement relates to $1,876,250,000 of securities registered and remaining
unissued under Registration Statement No. 333-60811 previously filed by R.J.
Reynolds Tobacco Holdings (then named RJR Nabisco, Inc.) and certain
affiliates and declared effective by the Commission.
(4) Pursuant to Rule 457(n), no registration fee is required with respect to the
Guarantees of the Debt Securities registered hereby.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED DECEMBER 10, 1999
PROSPECTUS
$1,876,250,000
R.J. REYNOLDS TOBACCO HOLDINGS, INC.
DEBT SECURITIES
Guaranteed by
R.J. REYNOLDS TOBACCO COMPANY
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We may offer debt securities from time to time. Specific terms of these
securities will be provided in supplements to this prospectus. You should read
this prospectus and any supplement carefully before you invest.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is ,
2
<PAGE>
In this prospectus we use the term "RJR Tobacco Holdings" to refer to R.J.
Reynolds Tobacco Holdings, Inc. and "RJR Tobacco Company" to refer to R.J.
Reynolds Tobacco Company. The terms "we," "us," and "our" refer to RJR Tobacco
Holdings.
You should rely only on the information contained in or incorporated by
reference in this prospectus. Neither RJR Tobacco Holdings nor RJR Tobacco
Company has authorized anyone to provide you with different information. Neither
RJR Tobacco Holdings nor RJR Tobacco Company is making an offer of these
securities in any state where the offer is not permitted. You should not assume
that the information contained in or incorporated by reference in this
prospectus is accurate as of any date other than the date on the front of this
prospectus.
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TABLE OF CONTENTS
Page
----
The Companies..................................................................2
Where You Can Find More Information............................................2
Special Note on Forward-Looking Statements.....................................3
Consolidated Ratio of Earnings to Fixed Charges/Deficiency in the
Coverage of Fixed Charges by Earnings before Fixed Charges................3
Use of Proceeds................................................................4
Description of the Debt Securities.............................................5
Forms of Securities .....................................................15
Plan of Distribution..........................................................17
Legal Matters.................................................................18
Experts.......................................................................18
About this Prospectus
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. Under this shelf process, we may
sell the securities described in this prospectus in one or more offerings up to
a total dollar amount of $1,876,250,000. This prospectus provides you with a
general description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also
add, update or change information contained in this prospectus. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading Where You Can Find More Information.
<PAGE>
THE COMPANIES
RJR Tobacco Holdings, formerly named RJR Nabisco, Inc., is a holding
company that owns 100% of the stock of RJR Tobacco Company. RJR Tobacco Company
is the second largest cigarette manufacturer in the United States. RJR Tobacco
Company had an approximate 24.05% overall share of retail domestic consumer
cigarette sales for the third quarter of 1999, and an approximate 25.17% overall
share in 1998. RJR Tobacco Company's largest selling cigarette brands include
DORAL, CAMEL, WINSTON, and SALEM. CAMEL, WINSTON and SALEM are its largest
selling full-price brands, while DORAL is its largest selling savings brand. RJR
Tobacco Company markets its other brands, including VANTAGE, MONARCH, MORE, NOW,
BEST VALUE and CENTURY, to meet a variety of smoker preferences.
WHERE YOU CAN FIND MORE INFORMATION
RJR Tobacco Holdings files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
document that we file at the Public Reference Room of the SEC at 450 Fifth
Street, NW, Washington, D.C. 20549. You may obtain information on the operation
of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also
inspect our filings at the regional offices of the SEC located at Citicorp, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, New York, New York 10048 or over the Internet at the SEC's WEB site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. Any statement,
including financial statements, contained in our Annual Report on Form 10-K for
the year ended December 31, 1998 shall be deemed to be modified or superseded to
the extent that a statement, including financial statements, contained in this
prospectus or in any other later incorporated document modifies or supersedes
that statement. In particular, the financial statements contained in our Annual
Report on Form 10-K for the year ended December 31, 1998 have been superseded by
the financial statements contained in our Prospectus dated October 8, 1999 and
filed October 12, 1999 pursuant to Rule 424(b) under the Securities Act. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities
Exchange Act of 1934, including filings made after the date of the initial
registration statement and prior to effectiveness of the registration statement,
until we sell all of the securities:
(a) Prospectus dated October 8, 1999 and filed October 12, 1999
pursuant to Rule 424(b) under the Securities Act;
(b) Quarterly Reports on Form 10-Q for the periods ended March 31,
1999, June 30, 1999 and September 30, 1999;
(c) Annual Report on Form 10-K for the year ended December 31, 1998
(excluding Items 7 and 8); and
(d) Current Reports on Form 8-K dated March 9, 1999, April 13, 1999,
May 12, 1999, June 14, 1999 and September 22, 1999.
You may request a copy of these filings at no cost, by writing or
telephoning the office of
Corporate Secretary
R.J. Reynolds Tobacco Holdings, Inc.
401 North Main Street
Winston-Salem, North Carolina 27102
Telephone: 336-741-5500
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<PAGE>
We have not included or incorporated by reference in this prospectus
separate financial statements of RJR Tobacco Company because we do not believe
that those financial statements would be material to buyers of debt securities.
However, we have included condensed consolidating financial statements for RJR
Tobacco Company at September 30, 1999 and for the three months and nine months
ended September 30, 1999 and 1998 in Note 6 to RJR Tobacco Holdings' condensed
consolidated financial statements in the Quarterly Report on Form 10-Q for the
period ended September 30, 1999, and at December 31, 1998 and 1997 and for the
years ended December 31, 1998, 1997 and 1996 in note 15 to RJR Tobacco Holdings'
consolidated financial statements in the Prospectus dated October 8, 1999 and
filed October 12, 1999 pursuant to Rule 424(b) under the Securities Act.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
Statements included in this prospectus and in the documents incorporated by
reference which are not historical in nature are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements regarding RJR Tobacco Holdings'
future performance and financial results are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
set forth in the forward-looking statements, including, among others, the
substantial and increasing regulation and taxation of the cigarette industry;
various legal actions, proceedings and claims arising out of the sale,
distribution, manufacture, development, advertising, marketing and claimed
health effects of cigarettes that are pending or may be instituted against RJR
Tobacco Holdings or its subsidiaries; the substantial payment obligations of RJR
Tobacco Company, and limitations on the advertising and marketing of cigarettes,
under various litigation settlement agreements; the recent decline in sales in
the domestic cigarette industry; competition from other cigarette manufacturers;
competitive pricing for products; the success of new product innovations and
acquisitions; the ratings of RJR Tobacco Holdings' securities; the level of
savings associated with the reorganization of the businesses of RJR Tobacco
Holdings, anticipated lower interest expense and increased interest income; and
the successful discovery and correction of potential "Year 2000" computer
sensitive problems by both RJR Tobacco Holdings and its subsidiaries and their
key suppliers and customers. Due to such uncertainties and risks, readers are
cautioned not to place undue reliance on such forward-looking statements, which
speak only as of the date hereof.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES/
DEFICIENCY IN THE COVERAGE OF FIXED CHARGES BY EARNINGS BEFORE FIXED CHARGES
The following table sets forth RJR Tobacco Holdings' consolidated ratio of
earnings to fixed charges. The data for the nine-month period ended September
30, 1999 are derived from the unaudited condensed consolidated financial
statements of RJR Tobacco Holdings. These financial statements segregate the
account balances and activities of the international tobacco business and
Nabisco and report those account balances and activities as discontinued
operations.
<TABLE>
Nine Months Year Ended
Ended December 31,
September 30, ----------------------------------------
1999 1998 1997 1996 1995 1994
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Ratio of earnings to fixed charges............ 2.2 -- 1.5 2.2 1.7 1.5
Deficiency in the coverage of fixed charges
by earnings before fixed charges (in
millions).................................... -- $(679) -- -- -- --
</TABLE>
For purposes of these computations, earnings consist of income before
income taxes and fixed charges. Fixed charges consist of interest on
indebtedness, amortization of debt issuance costs, and that portion of operating
rental expense representative of the interest factor.
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USE OF PROCEEDS
Unless otherwise indicated in a prospectus supplement, the net proceeds
from the sale of the securities will be used for general corporate purposes,
primarily to fund our operations, to acquire capital equipment and to refinance
debt.
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<PAGE>
DESCRIPTION OF THE DEBT SECURITIES
This prospectus describes certain general terms and provisions of the debt
securities. When we offer to sell a particular series of debt securities, we
will describe the specific terms for the debt securities in a supplement to this
prospectus. The prospectus supplement will also indicate whether the general
terms and provisions described in this prospectus apply to a particular series
of debt securities.
The debt securities will be issued under an indenture dated as of ,
among RJR Tobacco Holdings, RJR Tobacco Company and The Bank of New York, as
Trustee.
The following summary highlights selected provisions of the indenture
(which includes the guarantees) and the debt securities and may not contain all
the information that is important to you. To understand the indenture and the
debt securities fully and for a complete description of their terms, you should
read carefully all of their provisions. We have filed a copy of the indenture as
an exhibit to the registration statement to which this prospectus relates. See
"Where You Can Find More Information." In addition, this summary is qualified in
its entirety by reference to the Trust Indenture Act of 1939. You can find
definitions of certain capitalized terms used in the following summary under the
subheading "--Certain Definitions." Certain terms contained in this summary but
not capitalized in this summary or defined under the subheading "--Certain
Definitions" are defined in the indenture or the Trust Indenture Act.
Brief Description of the Debt Securities
All of the debt securities:
o will be general obligations of RJR Tobacco Holdings;
o will be guaranteed by RJR Tobacco Company and any other subsidiary of
RJR Tobacco Company that issues a guarantee of the obligations of RJR
Tobacco Holdings under its bank credit agreement;
o will rank equally with each other and all other existing and future
unsecured and unsubordinated debt of RJR Tobacco Holdings and the
guarantors; and
o will accrue interest, payable semi-annually, from the date they are
issued.
The indenture also contains the following covenants:
o liens,
o sale and lease-back transactions and
o consolidations, mergers and transfers of all or substantially all
assets.
Paying Agent and Registrar for the Debt Securities
The trustee under the indenture will initially act as the paying agent and
registrar for all of the debt securities. RJR Tobacco Holdings may change the
paying agent or registrar under the indenture without prior notice to the
holders of the relevant series of debt securities.
Ranking
The debt securities will be unsecured and unsubordinated obligations of RJR
Tobacco Holdings and will rank equally with all other existing and future
unsecured and unsubordinated obligations of RJR Tobacco Holdings (except those
obligations preferred by operation of law). The guarantee of RJR Tobacco Company
and any other
5
<PAGE>
guarantees, when and if issued, will be unsecured and unsubordinated obligations
of the relevant guarantor and rank equally with all other existing and future
unsecured and unsubordinated obligations of such guarantor (except those
obligations preferred by operation of law). The debt securities will effectively
rank junior to any secured debt of RJR Tobacco Holdings, and the guarantees will
effectively rank junior to any secured debt of the guarantors, in each case to
the extent of the assets securing such debt.
Certain Covenants of RJR Tobacco Holdings
The following restrictions will apply to each series of debt securities.
Restrictions on Liens
The indenture provides that RJR Tobacco Holdings will not, and will not
permit any Restricted Subsidiary to, mortgage or pledge as security for any
indebtedness any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property of RJR Tobacco Holdings or a Restricted
Subsidiary, whether such shares of stock, indebtedness or other obligations of a
Subsidiary or Principal Property is owned at the date of the indenture or
thereafter acquired, unless RJR secures or causes such Restricted Subsidiary to
secure the outstanding debt securities equally and ratably with all indebtedness
secured by such mortgage or pledge, so long as such indebtedness shall be so
secured. This covenant does not apply in the case of:
(a) the creation of any mortgage, pledge or other lien or any shares
of stock, indebtedness or other obligations of a Subsidiary or any
Principal Property acquired after the date of the indenture (including
acquisitions by way of merger or consolidation) by RJR Tobacco Holdings or
a Restricted Subsidiary contemporaneously with such acquisition, or within
120 days thereafter, to secure or provide for the payment or financing of
any part of the purchase price thereof, or the assumption of any mortgage,
pledge or other lien upon any shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property acquired after the
date of the indenture existing at the time of such acquisition, or the
acquisition of any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property subject to any mortgage, pledge or
other lien without the assumption thereof, provided that every such
mortgage, pledge or lien referred to in this clause (a) shall attach only
to the shares of stock, indebtedness or other obligations of a Subsidiary
or any Principal Property so acquired and fixed improvements thereon;
(b) any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
existing at the date of the indenture;
(c) any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
in favor of RJR Tobacco Holdings or any Restricted Subsidiary;
(d) any mortgage, pledge or other lien on Principal Property being
constructed or improved securing loans to finance such construction or
improvements;
(e) any mortgage, pledge or other lien on shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
incurred in connection with the issuance of tax exempt governmental
obligations; and
(f) any renewal of or substitution for any mortgage, pledge or other
lien permitted by any of the preceding clauses (a) through (e), provided,
in the case of a mortgage, pledge or other lien permitted under clause (a),
(b) or (d), the debt secured is not increased nor the lien extended to any
additional assets.
Notwithstanding the foregoing, RJR Tobacco Holdings or any Restricted
Subsidiary may create or assume liens in addition to those permitted by clauses
(a) through (f), and renew, extend or replace such liens, provided that at the
time of such creation, assumption, renewal, extension or replacement, and after
giving effect thereto, Exempted Debt (as hereinafter defined) does not exceed
10% of Consolidated Net Worth.
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Restrictions on Sale and Lease-Back Transactions
The indenture provides that RJR Tobacco Holdings will not, and will not
permit any Restricted Subsidiary to, sell or transfer, directly or indirectly,
except to RJR Tobacco Holdings or a Restricted Subsidiary, any Principal
Property as an entirety, or any substantial portion thereof, with the intention
of taking back a lease of such property, except a lease for a period of three
years or less at the end of which it is intended that the use of such property
by the lessee will be discontinued; provided that RJR Tobacco Holdings or any
Restricted Subsidiary may sell any such Principal Property and lease it back for
a longer period
(a) if RJR Tobacco Holdings or such Restricted Subsidiary would be
entitled, pursuant to the provisions of the indenture described above under
"--Restrictions on Liens," to create a mortgage on the property to be
leased securing Funded Debt in an amount equal to the Attributable Debt (as
hereinafter defined) with respect to such sale and lease-back transaction
without equally and ratably securing the outstanding debt securities or
(b) if
(1) RJR Tobacco Holdings promptly informs the Trustee of such
transaction,
(2) the net proceeds of such transaction are at least equal to
the fair value (as determined by resolution of the Board of Directors
of RJR Tobacco Holdings) of such property and
(3) RJR Tobacco Holdings causes an amount equal to the net
proceeds of the sale to be applied to the retirement, within 120 days
after receipt of such proceeds, of Funded Debt incurred or assumed by
RJR Tobacco Holdings or a Restricted Subsidiary (including the debt
securities); provided further that, in lieu of applying all of or any
part of such net proceeds to such retirement, RJR Tobacco Holdings may,
within 75 days after such sale, deliver or cause to be delivered to the
applicable trustee for cancellation either debentures or notes
evidencing Funded Debt of RJR Tobacco Holdings (which may include the
outstanding debt securities) or of a Restricted Subsidiary previously
authenticated and delivered by the applicable trustee, and not
theretofore tendered for sinking fund purposes or called for a sinking
fund or otherwise applied as a credit against an obligation to redeem
or retire such notes or debentures. If RJR Tobacco Holdings so delivers
debentures or notes to the applicable trustee with an Officers'
Certificate, the amount of cash which RJR Tobacco Holdings will be
required to apply to the retirement of Funded Debt will be reduced by
an amount equal to the aggregate of the then applicable optional
redemption prices (not including any optional sinking fund redemption
prices) of such debentures or notes, or if there are no such redemption
prices, the principal amount of such debentures or notes, provided,
that in the case of debentures or notes which provide for an amount
less than the principal amount thereof to be due and payable upon a
declaration of the maturity thereof, such amount of cash shall be
reduced by the amount of principal of such debentures or notes that
would be due and payable as of the date of such application upon a
declaration of acceleration of the maturity thereof pursuant to the
terms of the indenture pursuant to which such debentures or notes were
issued.
Notwithstanding the foregoing, RJR Tobacco Holdings or any Restricted
Subsidiary may enter into sale and lease-back transactions in addition to those
permitted in this paragraph and without any obligation to retire any outstanding
debt securities or other Funded Debt, provided that at the time of entering into
such sale and lease-back transactions and after giving effect thereto, Exempted
Debt does not exceed 10% of Consolidated Net Worth.
The indenture does not contain provisions which would afford the holders of
debt securities protection in the event of a decline in our credit quality
resulting from a change of control transaction, a highly leveraged transaction
or other similar transactions involving RJR Tobacco Holdings or RJR Tobacco
Company.
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<PAGE>
Guarantees
RJR Tobacco Company will guarantee all of the obligations of RJR Tobacco
Holdings under the debt securities, and RJR Tobacco Holdings will cause each
other Subsidiary that is or becomes a guarantor under the Bank Credit Agreement
to execute and deliver to the Trustee a guarantee pursuant to which such
Subsidiary will unconditionally guarantee, on a joint and several basis, the
full and prompt payment of the principal of, premium, if any, and interest on
the debt securities on an unsecured and unsubordinated basis.
The indenture provides that the obligations of each guarantor will be
limited to the maximum amount that, after giving effect to all other contingent
and fixed liabilities of such guarantor (including, without limitation, any
guarantees under the Bank Credit Agreement) and after giving effect to any
collections from or payments made by or on behalf of any other guarantor in
respect of the obligations of such other guarantor under its guarantee or
pursuant to its contribution obligations under the indenture, would cause the
obligations of such guarantor under its guarantee not to constitute a fraudulent
conveyance or fraudulent transfer under federal or state law.
Each guarantor may consolidate with or merge into or sell its assets to us
or another guarantor without limitation. Each guarantor may consolidate with or
merge into or sell all or substantially all its assets to a Person other than
RJR Tobacco Holdings or another guarantor (whether or not affiliated with the
guarantor), except that if the Person surviving any such merger or
consolidation, or the Person to whom such sale is made, is a Subsidiary of RJR
Tobacco Holdings, such Subsidiary shall not be a Foreign Subsidiary. Upon the
sale or disposition of a guarantor (by merger, consolidation, the sale of its
Capital Stock or the sale of all or substantially all of its assets) to a Person
(whether or not an Affiliate of the guarantor) which is not a Subsidiary of
ours, which sale or disposition is otherwise in compliance with the indenture,
such guarantor will be deemed released from all its obligations under the
indenture and its guarantee and such guarantee will terminate.
Under the indenture, if a guarantor ceases to be a guarantor under the Bank
Credit Agreement for any reason, such guarantor will be deemed released from all
its obligations under the indenture and its guarantee of the debt securities and
such guarantee will terminate.
Certain Definitions
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, is defined to mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Attributable Debt" means, when used in connection with a sale and
lease-back transaction, at any date as of which the amount thereof is to be
determined, the product of
(a) the net proceeds from such sale and lease-back transaction
multiplied by
(b) a fraction, the numerator of which is the number of full years of
the term of the lease relating to the property involved in such sale and
lease-back transaction (without regard to any options to renew or extend
such term) remaining at the date of the making of such computation and the
denominator of which is the number of full years of the term of such lease
measured from the first day of such term.
"Bank Credit Agreement" means the $1.235 billion credit agreement among RJR
Tobacco Holdings, The Chase Manhattan Bank, as Administrative Agent, and the
lending institutions named on the signature pages thereof, as such agreement may
be amended, modified, renewed, refunded, restated, refinanced or replaced from
time to time.
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"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, partnership interests and limited liability company membership interests,
but excluding any debt securities convertible into such equity.
"Consolidated Net Worth" means, at any date of determination, the
consolidated stockholders' equity of RJR Tobacco Holdings, as set forth on the
then most recently available consolidated balance sheet of RJR Tobacco Holdings
and its consolidated Subsidiaries.
"Exempted Debt" means the sum, without duplication, of the following items
outstanding as of the date Exempted Debt is being determined:
(a) indebtedness of RJR Tobacco Holdings and the Restricted
Subsidiaries incurred after the date of the indenture and secured by liens
created, assumed or otherwise incurred or permitted to exist pursuant to
the indenture described above under "Certain Covenants of RJR Tobacco
Holdings--Restrictions on Liens" and
(b) Attributable Debt of RJR Tobacco Holdings and the Restricted
Subsidiaries in respect of all sale and lease-back transactions with regard
to any Principal Property entered into pursuant to the indenture described
above under "Certain Covenants of RJR Tobacco Holdings--Restrictions on
Sale and Lease-Back Transactions."
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any state thereof
or the District of Columbia.
"Funded Debt" means all indebtedness for money borrowed, including purchase
money indebtedness, having a maturity of more than one year from the date of its
creation or having a maturity of less than one year but by its terms being
renewable or extendible, at the option of the obligor in respect thereof, beyond
one year from its creation.
"guarantee" means any obligation, contingent or otherwise, of any person
directly or indirectly guaranteeing any indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person
(a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or
(b) entered into for purposes of assuring in any other manner the
obligee of such indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided,
however, that the term "guarantee" will not include endorsements for
collection or deposit in the ordinary course of business. The term
"guarantee" used as a verb has a corresponding meaning.
"guarantor" means RJR Tobacco Company and each other Subsidiary of RJR
Tobacco Holdings that is also or becomes a guarantor under the Bank Credit
Agreement, after such time as such Person shall have executed and delivered a
guarantee.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Principal Property" means land, land improvements, buildings and
associated factory and laboratory equipment owned or leased pursuant to a
capital lease and used by RJR Tobacco Holdings or a Restricted Subsidiary
primarily for processing, producing, packaging or storing its products, raw
materials, inventories, or
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other materials and supplies and located within the United States of America and
having an acquisition cost plus capitalized improvements in excess of 2% of
Consolidated Net Worth, as of the date of such determination, but not including
any such property financed through the issuance of tax exempt governmental
obligations, or any such property that has been determined by resolution of the
Board of Directors of RJR Tobacco Holdings not to be of material importance to
the respective businesses conducted by RJR Tobacco Holdings or such Restricted
Subsidiary effective as of the date such resolution is adopted.
"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 RJR Tobacco Holdings and all its Subsidiaries exceeds 5% of
Consolidated Net Worth as of the date of such determination other than
(a) 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; and
(b) each Subsidiary formed or acquired after the date of the
indenture 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 RJR Tobacco Holdings or any Restricted Subsidiary.
However, the Board of Directors of RJR Tobacco Holdings may declare any
such Subsidiary to be a Restricted Subsidiary. The principal Restricted
Subsidiary as of the date of this prospectus is RJR Tobacco Company.
"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 has or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned by RJR Tobacco Holdings, or by one or more Subsidiaries of RJR
Tobacco Holdings or by RJR Tobacco Holdings and one or more Subsidiaries.
Restrictions on Mergers and Sales of Assets
Nothing contained in the indenture or in the debt securities will prevent
any consolidation or merger of RJR Tobacco Holdings into any other corporation
or corporations (whether or not affiliated with RJR Tobacco Holdings), or
successive consolidations or mergers to which RJR Tobacco Holdings or its
successor will be a party, or will prevent any sale, lease or conveyance of the
property of RJR Tobacco Holdings, as an entirety or substantially as an
entirety; provided that upon any such consolidation, merger, sale, lease or
conveyance to which RJR Tobacco Holdings is a party and in which RJR Tobacco
Holdings is not the surviving corporation, the due and punctual performance and
observance of all of the covenants and conditions of the indenture and the
guarantees to be performed or observed by RJR Tobacco Holdings and the due and
punctual payment of the principal of and interest on all of the debt securities
and the guarantees, 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 corporation formed by such consolidation, or
into which RJR Tobacco Holdings shall have been merged, or which shall have
acquired such property.
Events of Default
An event of default with respect to any series of debt securities is
defined under the indenture in relevant part as being:
(a) default in payment of any principal of the debt securities of
such series when the same shall become due and payable, either at maturity,
upon any redemption, by declaration or otherwise;
(b) default for 30 days in payment of any interest on any debt
securities of such series;
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(c) default in the payment of any sinking fund installment on the
debt securities of such series when the same shall become due and payable;
(d) default for 90 days after written notice in the observance or
performance of any other covenant or agreement in respect of the debt
securities of such series;
(e) certain events of bankruptcy, insolvency or reorganization;
(f) any guarantee ceases to be in full force and effect (except as
contemplated by the terms of the indenture) or any guarantor denies or
disaffirms in writing its obligations under the indenture or its guarantee;
and
(g) any other event of default provided in a supplemental indenture
or board resolution relating to such securities.
The indenture provides that
(a) if an event of default due to the default in payment of principal
of, premium, if any, or any interest on, any series of debt securities or
due to the default in the performance or breach of any other covenant or
warranty of RJR Tobacco Holdings applicable to the debt securities of such
series but not applicable to all outstanding debt securities shall have
occurred and be continuing, either the Trustee or the holders of not less
than 25% in principal amount of the debt securities of each affected series
then outstanding (voting as a single class) by notice in writing may then
declare the principal of all debt securities of all such affected series
and interest accrued thereon to be due and payable immediately; and
(b) if an event of default due to a default in the performance of any
other of the covenants or agreements in the indenture applicable to all
outstanding debt securities or due to certain events of bankruptcy,
insolvency and reorganization of RJR Tobacco Holdings or any other event of
default provided in a supplemental indenture or board resolution relating
to the debt securities shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of all debt
securities then outstanding (treated as one class) by notice in writing may
declare the principal of all debt securities and interest accrued thereon
to be due and payable immediately, but upon certain conditions such
declarations may be annulled and past defaults may be waived (except a
continuing default in payment of principal of, premium, if any, or any
interest on such debt securities) by the holders of a majority in principal
amount of the debt securities of all affected series then outstanding.
The indenture contains a provision entitling the Trustee, subject to the
duty of the trustee during a default to act with the required standard of care,
to be indemnified by the holders of debt securities before proceeding to
exercise any right or power under the indenture at the request of such holders.
Subject to such provisions in the indenture for the indemnification of the
Trustee and certain other limitations, the holders of a majority in aggregate
principal amount of the debt securities of each affected series then outstanding
(with each such series voting as a separate class) may direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee.
The indenture provides that no holder of debt securities may institute any
action against RJR Tobacco Holdings under the indenture (except actions for
payment of overdue principal or interest) unless such holder previously shall
have given to the Trustee written notice of default and continuance thereof and
unless the holders of not less than 25% in aggregate principal amount of the
debt securities of each affected series then outstanding (treated as a single
class) shall have requested the Trustee to institute such action and shall have
offered the Trustee reasonable indemnity, the Trustee shall not have instituted
such action within 60 days of such request and the Trustee shall not have
received direction inconsistent with such written request by the holders of a
majority in principal amount of the debt securities of each affected series
(treated as one class).
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The indenture contains a covenant that RJR Tobacco Holdings will file
annually, not more than four months after the end of its fiscal year, with the
Trustee a certificate that no default existed or a certificate specifying any
default that existed.
Modification of the Indenture
The indenture provides that RJR Tobacco Holdings, the guarantors and the
Trustee may enter into supplemental indentures without the consent of the
holders of debt securities to:
o secure any debt securities,
o evidence the assumption by a successor corporation of the obligations
of RJR Tobacco Holdings and the guarantors,
o add covenants for the protection of the holders of one or more series
of debt securities or to add events of default,
o cure any ambiguity or correct any inconsistency in the indenture or to
make other changes not materially adverse to the interest of holders
of the debt securities,
o establish the forms or terms of debt securities of any series,
o provide for uncertificated debt securities,
o evidence the acceptance of appointment by a successor trustee,
o add an additional guarantor or
o comply with the Trust Indenture Act.
The indenture also contains provisions permitting RJR Tobacco Holdings, the
guarantors (each when authorized by a board resolution) and the Trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of debt securities of all series then outstanding and affected (voting as
one class), to add any provisions to, or change in any manner or eliminate any
of the provisions of, the indenture or modify in any manner the rights of the
holders of the debt securities of each series so affected; provided that RJR
Tobacco Holdings and the Trustee may not, without the consent of the holder of
each outstanding debt security affected thereby,
(a) extend the final maturity of any debt security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce any amount payable on the redemption thereof
or change the currency in which the principal thereof (including any amount
in respect of original issue discount), or any interest thereon is payable,
or reduce the amount of the principal of any original issue discount
security payable upon acceleration or provable in bankruptcy, or alter
certain provisions of the indenture relating to the debt securities issued
thereunder not denominated in U.S. dollars or impair the right to institute
suit for the enforcement of any payment on any note when due or any right
of repayment at the option of the holder of a note or
(b) reduce the aforesaid percentage in principal amount of debt
securities of any series, the consent of the holders of which is required
for any such modification.
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Transfer and Exchange
A holder may transfer or exchange debt securities in accordance with the
indenture. Upon any transfer or exchange, the registrar and the Trustee may
require a holder, among other things, to furnish appropriate endorsements and
transfer documents and RJR Tobacco Holdings may require a holder to pay any
taxes required by law or permitted by the indenture, including any transfer tax
or other similar governmental charge payable in connection therewith. RJR
Tobacco Holdings is not required to transfer or exchange any note selected for
redemption or to transfer or exchange any note for a period of 15 days prior to
a selection of debt securities to be redeemed. The debt securities will be
issued in registered form and the registered holder of a note will be treated as
the owner of such note for all purposes.
Defeasance
The indenture provides with respect to each series of debt securities that,
except to the extent the terms of such series of debt securities provide
otherwise, RJR Tobacco Holdings and the guarantors, as applicable, may elect
(a) to be released from any and all obligations (except for the
obligations to register the transfer or exchange of the debt securities of
such series and RJR Tobacco Holdings' rights of optional redemption, to
replace mutilated, destroyed, lost or stolen debt securities of such
series, rights of holders of debt securities to receive payments of
principal thereof and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), to maintain an office or agency in
respect of the debt securities of such series and to hold moneys for
payment in trust) with respect to debt securities of any series for which
the exact amount of principal and interest due can be determined at the
time of the deposit with the Trustee as described below and all the debt
securities of such series 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 ("one-year defeasance"),
(b) to defease and be discharged from any and all obligations with
respect to the debt securities of such series on the 91st day after the
deposit with the Trustee as described below (except for the obligations set
forth as exceptions in the preceding clause (a)) ("legal defeasance") or
(c) to be released from its obligations with respect to the debt
securities of such series (except for the obligations set forth as
exceptions in the preceding clause (a) and the obligations to compensate
and indemnify the Trustee, to appoint a successor Trustee, to repay certain
moneys held by the Paying Agent and to return certain unclaimed moneys held
by the Trustee and to comply with the Trust Indenture Act) ("covenant
defeasance"),
upon the deposit with the Trustee, in trust for such purpose, of cash or, in the
case of debt securities payable in U.S. dollars, U.S. Government Obligations (as
defined in the indenture) which through the payment of principal and interest in
accordance with their terms will insure the availability of monies sufficient,
or a combination thereof, sufficient in the opinion of a nationally recognized
firm of independent accountants, to pay the principal of, premium, if any, and
any interest on the debt securities of such series, and any mandatory sinking
fund thereon, on the due date thereof. Such a trust may (except with respect to
one-year defeasance or to the extent the terms of the debt securities of such
series otherwise provide) only be established, if among other things, RJR
Tobacco Holdings has delivered to the Trustee an opinion of counsel that the
holders of the debt securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such legal defeasance or
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same time as would have been the case if
such legal defeasance or covenant defeasance had not occurred. Such opinion, in
the case of legal defeasance under clause (b) above, must (except to the extent
the terms of the debt securities of the relevant series otherwise provide) refer
to and be based upon a ruling of the Internal Revenue Service or a change in
applicable federal income tax law occurring after the date of the indenture. If
RJR Tobacco Holdings exercises its legal defeasance or covenant defeasance
option, the guarantees in effect at such time will terminate.
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The indenture will not limit the amount of debt securities which we may
issue. We may issue debt securities up to an aggregate principal amount as we
may authorize from time to time. The prospectus supplement will describe the
terms of any debt securities being offered, including:
Concerning our Relationship with the Trustee
We have a credit facility and, together with our subsidiaries, maintain
ordinary banking relationships with The Bank of New York.
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FORMS OF SECURITIES
Each debt security will be represented either by a certificate issued in
definitive form to a particular investor or by one or more global securities
representing the entire issuance of securities. Certificated securities in
definitive form and global securities will be issued in registered form.
Definitive securities name you or your nominee as the owner of the security, and
in order to transfer or exchange these securities or to receive payments other
than interest or other interim payments, you or your nominee must physically
deliver the securities to the trustee, registrar, paying agent or other agent,
as applicable. Global securities name a depositary or its nominee as the owner
of the debt securities represented by these global securities. The depositary
maintains a computerized system that will reflect each investor's beneficial
ownership of the securities through an account maintained by the investor with
its broker/dealer, bank, trust company or other representative, as we explain
more fully below.
Global Securities
Registered Global Securities. We may issue the registered debt securities
in the form of one or more fully registered global securities that will be
deposited with a depositary or its nominee identified in the applicable
prospectus supplement and registered in the name of that depositary or nominee.
In those cases, one or more registered global securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal or face amount of the securities to be represented by registered
global securities. Unless and until it is exchanged in whole for securities in
definitive registered form, a registered global security may not be transferred
except as a whole by and among the depositary for the registered global
security, the nominees of the depositary or any successors of the depositary or
those nominees.
If not described below, any specific terms of the depositary arrangement
with respect to any securities to be represented by a registered global security
will be described in the prospectus supplement relating to those securities. We
anticipate that the following provisions will apply to all depositary
arrangements.
Ownership of beneficial interests in a registered global security will be
limited to persons, called participants, that have accounts with the depositary
or persons that may hold interests through participants. Upon the issuance of a
registered global security, the depositary will credit, on its book-entry
registration and transfer system, the participants' accounts with the respective
principal or face amounts of the securities beneficially owned by the
participants. Any dealers, underwriters or agents participating in the
distribution of the securities will designate the accounts to be credited.
Ownership of beneficial interests in a registered global security will be shown
on, and the transfer of ownership interests will be effected only through,
records maintained by the depositary, with respect to interests of participants,
and on the records of participants, with respect to interests of persons holding
through participants. The laws of some states may require that some purchasers
of securities take physical delivery of these securities in definitive form.
These laws may impair your ability to own, transfer or pledge beneficial
interests in registered global securities.
So long as the depositary, or its nominee, is the registered owner of a
registered global security, that depositary or its nominee, as the case may be,
will be considered the sole owner or holder of the securities represented by the
registered global security for all purposes under the applicable indenture,
warrant agreement, guaranteed trust preferred security or unit agreement. Except
as described below, owners of beneficial interests in a registered global
security will not be entitled to have the securities represented by the
registered global security registered in their names, will not receive or be
entitled to receive physical delivery of the securities in definitive form and
will not be considered the owners or holders of the securities under the
applicable indenture, warrant agreement, guaranteed trust preferred security or
unit agreement. Accordingly, each person owning a beneficial interest in a
registered global security must rely on the procedures of the depositary for
that registered global security and, if that person is not a participant, on the
procedures of the participant through which the person owns its interest, to
exercise any rights of a holder under the applicable indenture, warrant
agreement, guaranteed trust preferred security or unit agreement. We understand
that under existing industry practices, if we request any action of holders or
if an owner of a beneficial interest in a registered global security desires to
give or take any action that a holder is entitled to give or take under the
applicable indenture, warrant agreement, guaranteed trust preferred
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security or unit agreement, the depositary for the registered global security
would authorize the participants holding the relevant beneficial interests to
give or take that action, and the participants would authorize beneficial owners
owning through them to give or take that action or would otherwise act upon the
instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on debt securities, and
any payments to holders with respect to warrants, guaranteed trust preferred
securities or units, represented by a registered global security registered in
the name of a depositary or its nominee will be made to the depositary or its
nominee, as the case may be, as the registered owner of the registered global
security. None of RJR Tobacco Holding's RJR Tobacco Company, the trustees, the
warrant agents, the unit agents or any other agent of RJR Tobacco Holdings, RJR
Tobacco Company, agent of the trustees or agent of the warrant agents or unit
agents will have any responsibility or liability for any aspect of the records
relating to payments made on account of beneficial ownership interests in the
registered global security or for maintaining, supervising or reviewing any
records relating to those beneficial ownership interests.
We expect that the depositary for any of the securities represented by a
registered global security, upon receipt of any payment of principal, premium,
interest or other distribution of underlying securities or other property to
holders on that registered global security, will immediately credit
participants' accounts in amounts proportionate to their respective beneficial
interests in that registered global security as shown on the records of the
depositary. We also expect that payments by participants to owners of beneficial
interests in a registered global security held through participants will be
governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of those
participants.
If the depositary for any of these securities represented by a registered
global security is at any time unwilling or unable to continue as depositary or
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, and a successor depositary registered as a clearing agency under the
Securities Exchange Act of 1934 is not appointed by us within 90 days, we will
issue securities in definitive form in exchange for the registered global
security that had been held by the depositary. In addition, we may at any time
and in our sole discretion decide not to have any of the securities represented
by one or more registered global securities. If we make that decision, we will
issue securities in definitive form in exchange for all of the registered global
security or securities representing those securities. Any securities issued in
definitive form in exchange for a registered global security will be registered
in the name or names that the depositary gives to the relevant trustee, warrant
agent, unit agent or other relevant agent of ours or theirs. It is expected that
the depositary's instructions will be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in the registered global security that had been held by the depositary.
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PLAN OF DISTRIBUTION
We may sell the securities in any of three ways (or in any combination):
(a) through underwriters or dealers; (b) directly to a limited number of
purchasers or to a single purchaser; or (c) through agents. The prospectus
supplement will set forth the terms of the offering of such securities,
including
(a) the name or names of any underwriters, dealers or agents and the
amounts of securities underwritten or purchased by each of them,
(b) the initial public offering price of the securities and the
proceeds to us and any discounts, commissions or concessions
allowed or reallowed or paid to dealers, and
(c) any securities exchanges on which the securities may be listed.
Any initial public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in the sale of any securities, the securities will
be acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at the time of
sale. The securities may be either offered to the public through underwriting
syndicates represented by managing underwriters, or directly by underwriters.
Generally, the underwriters' obligations to purchase the securities will be
subject to certain conditions precedent. The underwriters will be obligated to
purchase all of the securities if they purchase any of the securities.
We may sell the securities through agents from time to time. The prospectus
supplement will name any agent involved in the offer or sale of the securities
and any commissions we pay to them. Generally, any agent will be acting on a
best efforts basis for the period of its appointment.
We may authorize underwriters, dealers or agents to solicit offers by
certain purchasers to purchase the securities from RJR Tobacco Holdings at the
public offering price set forth in the prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. The contracts will be subject only to those conditions set forth in the
prospectus supplement, and the prospectus supplement will set forth any
commissions we pay for solicitation of these contracts.
Agents and underwriters may be entitled to indemnification by us against
certain civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engage in transactions with, or perform services for us in the ordinary
course of business.
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LEGAL MATTERS
The validity of the securities in respect of which this prospectus is being
delivered will be passed on for us by Davis Polk & Wardwell.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Prospectus dated October 8, 1999 and filed October 12, 1999
pursuant to Rule 424(b) under the Securities Act have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated by reference herein, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale of the securities being registered
hereby. All amounts are estimates except the registration fee.
Amount to be
Paid
------------
Registration fee...................................... $ --
Printing.............................................. 60,000
Legal fees and expenses (including Blue Sky fees)..... 110,000
Trustee fees.......................................... 10,000
Rating Agency fees.................................... 275,000
Accounting fees and expenses.......................... 50,000
Miscellaneous......................................... 12,000
-------
TOTAL................................................ $ 517,000
=======
Item 15. Indemnification of Directors and Officers.
RJR Tobacco Holdings
Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any of its directors or officers who was or is a party, or is
threatened to be made a party, to any third party proceeding by reason of the
fact that such person is or was a director or officer of the corporation,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reason to believe that such person's conduct was unlawful. In
a derivative action, i.e., one by or in the right of a corporation, the
corporation is permitted to indemnify directors and officers against expenses
(including attorneys' fees) actually and reasonably incurred by them in
connection with the defense or settlement of an action or suit if they acted in
good faith and in a manner that they reasonably believed to be in or not opposed
to the best interests of the corporation, except that no indemnification shall
be made if such person shall have been adjudged liable to the corporation,
unless and only to the extent that the court in which the action or suit was
brought shall determine upon application that the defendant directors or
officers are fairly and reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
Expenses, including attorneys' fees, incurred by any such person in
defending any such action, suit or proceeding may be paid or reimbursed by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt by it of an undertaking of such person to repay such
expenses if it shall ultimately be determined that such person is not entitled
to be indemnified by the corporation.
Delaware law does not permit a corporation to indemnify persons against
judgments in actions brought by or in the right of the corporation unless the
Delaware Court of Chancery approves the indemnification.
RJR Tobacco Holdings' certificate of incorporation provides that each
person who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed action or proceeding, whether civil, criminal,
administrative or investigative, because that person is or was an RJR Tobacco
Holdings director or officer or is or was serving at RJR Tobacco Holdings'
request as a director or officer of another entity, shall be
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indemnified and held harmless by RJR Tobacco Holdings to the fullest extent
permitted by Delaware law. This right to indemnification also includes the right
to be paid by RJR Tobacco Holdings the expenses incurred in connection with that
proceeding in advance of its final disposition to the fullest extent authorized
by Delaware law. This right to indemnification is a contract right. RJR Tobacco
Holdings' certificate of incorporation authorizes its Board of Directors to
indemnify any of RJR Tobacco Holdings' employees or agents to the extent
approved by the Board of Directors and authorized under Delaware law.
RJR Tobacco Holdings intends to purchase and maintain insurance on behalf
of any person who is or was one of its directors, officers, employees or agents,
or is or was serving at the request of RJR Tobacco Holdings as a director,
officer, employee or agent of another entity against any liability asserted
against him or her and incurred by him or her in that capacity, or arising out
of his or her status as such, whether or not RJR Tobacco Holdings would have the
power or the obligation to indemnify him or her against that liability under the
provisions of the certificate of incorporation of RJR Tobacco Holdings.
RJR Tobacco Company
Section 14A:3-5 of the Business Corporation Act of the State of New Jersey
("NJBCA") permits a New Jersey corporation to indemnify its directors, officers,
employees and agents against expenses and liability for such person's acts taken
in his or her capacity as a director, officer, employee or agent of the
corporation if such actions were taken in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal proceeding, if he or she had no
reasonable cause to believe his or her conduct was unlawful.
Article V of RJR Tobacco Company's Bylaws provides that RJR Tobacco Company
shall indemnify all past and present directors, officers, employees or other
agents of RJR Tobacco Company under substantially all the circumstances
permissible under the NJBCA.
The proposed forms of Underwriting Agreement filed as Exhibit 1.1 to this
Registration Statement provide for indemnification of directors and officers of
the Registrants by the underwriters against certain liabilities.
Item 16. Exhibits.
See Exhibit Index.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
securities registered hereby, a post-effective amendment to this
registration statement :
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Securities and Exchange Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
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(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (i) and (ii) above do not apply if
the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby understands that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrants pursuant to the foregoing
provisions, or otherwise, the registrants have been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Winston-Salem, State of North Carolina, on December
10, 1999.
R.J. REYNOLDS TOBACCO HOLDINGS, INC.
By: /s/ Andrew J. Schindler
-------------------------------------
Andrew J. Schindler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on December 10, 1999.
Signature Title
--------- -----
/s/ Andrew J. Schindler
- ----------------------------------- Chairman of the Board, President and
Andrew J. Schindler Chief Executive Officer
/s/ Kenneth J. Lapiejko Executive Vice President and
- ----------------------------------- Chief Financial Officer
Kenneth J. Lapiejko (principal financial officer)
/s/ Thomas R. Adams Senior Vice President and
- ----------------------------------- Controller
Thomas R. Adams (principal accounting officer)
*
- ----------------------------------- Director
Mary K. Bush
*
- ----------------------------------- Director
John T. Chain, Jr.
*
- ----------------------------------- Director
A.D. Frazier, Jr.
*
- ----------------------------------- Director
Denise Ilitch
*
- ----------------------------------- Director
John G. Medlin, Jr.
*
- ----------------------------------- Director
Nana Mensah
II-4
<PAGE>
Signature Title
--------- -----
*
- ----------------------------------- Director
Joseph P. Viviano
*
- ----------------------------------- Director
Thomas C. Wajnert
*By: /s/ McDara P. Folan, III
-----------------------------
McDara P. Folan, III
Pursuant to power of attorney
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Winston-Salem, State of North Carolina, on December
10, 1999.
R.J. REYNOLDS TOBACCO COMPANY
By: /s/ Andrew J. Schindler
-------------------------------------
Andrew J. Schindler
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities indicated on December 10, 1999.
Signature Title
--------- -----
/s/ Andrew J. Schindler
- ----------------------------------- Chairman of the Board, President and
Andrew J. Schindler Chief Executive Officer
/s/ Kenneth J. Lapiejko Executive Vice President and
- ----------------------------------- Chief Financial Officer
Kenneth J. Lapiejko (principal financial officer)
/s/ Thomas R. Adams Senior Vice President and
- ----------------------------------- Controller
Thomas R. Adams (principal accounting officer)
/s/ Charles A. Blixt
- ----------------------------------- Director
Charles A. Blixt
/s/ Robert R. Gordon, Jr.
- ----------------------------------- Director
Robert R. Gordon, Jr.
*
- ----------------------------------- Director
James H. Wilson
*By: /s/ McDara P. Folan, III
-----------------------------
McDara P. Folan, III
Pursuant to power of attorney
II-6
<PAGE>
EXHIBIT INDEX
Exhibit No. Document
----------- --------
1.1* Form of Underwriting Agreement
4.2 Form of Indenture among the Registrants and The Bank of New York,
as trustee
5.1 Opinion of Davis Polk & Wardwell
12.1 Statement regarding computation of Consolidated Ratio of Earnings
to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
24.1 Powers of Attorney
25.1 Statement of Eligibility on Form T-1 of The Bank of New York
- ------------
* To be filed.
II-7
=================================================================
R.J. REYNOLDS TOBACCO HOLDINGS, INC.
Issuer,
R.J. REYNOLDS TOBACCO COMPANY,
as Guarantor
and
THE BANK OF NEW YORK,
as Trustee
INDENTURE
dated as of
,
=================================================================
<PAGE>
TABLE OF CONTENTS
-------------
PAGE
----
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions...............................................1
SECTION 1.02. Incorporation by Reference of TIA.........................8
SECTION 1.03. Rules of Construction.....................................9
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally..........................................10
SECTION 2.02. Form of Trustee's Certification of Authentication........10
SECTION 2.03. Amount Unlimited; Issuable in Series.....................10
SECTION 2.04. Execution, Authentication and Denominations..............12
SECTION 2.05. Registrar and Paying Agent...............................13
SECTION 2.06. Paying Agent to Hold Money in Trust......................14
SECTION 2.07. Transfer and Exchange....................................14
SECTION 2.08. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities...............................................15
SECTION 2.09. Outstanding Securities...................................16
SECTION 2.10. Temporary Securities.....................................16
SECTION 2.11. Cancellation.............................................17
SECTION 2.12. Payment of Interest; Defaulted Interest..................17
SECTION 2.13. Computation of Interest..................................18
SECTION 2.14. CUSIP Numbers............................................18
ARTICLE 3
COVENANTS
SECTION 3.01. Payment of Securities....................................19
SECTION 3.02. Maintenance of Office or Agency..........................19
SECTION 3.03. SEC Reports and Available Information....................20
SECTION 3.04. Certificate to Trustee...................................20
SECTION 3.05. Negative Pledge..........................................21
SECTION 3.06. Certain Sale and Lease-back Transactions.................22
SECTION 3.07. Corporate Existence......................................23
SECTION 3.08. Payment of Taxes and Other Claims........................23
SECTION 3.09. Waiver of Stay, Extension or Usury Laws..................24
SECTION 3.10. Further Instruments and Acts.............................24
SECTION 3.11. Notice of Defaults.......................................24
i
<PAGE>
PAGE
----
ARTICLE 4
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 4.01. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.................24
SECTION 4.02. Successor Corporation Substituted........................25
SECTION 4.03. Opinion of Counsel to Trustee............................25
ARTICLE 5
REDEMPTION OF SECURITIES
SECTION 5.01. Applicability of Article.................................26
SECTION 5.02. Selection of Securities to Be Redeemed...................26
SECTION 5.03. Exclusion of Certain Securities from Eligibility for
Selection for Redemption.................................26
SECTION 5.04. Notice of Redemption.....................................26
SECTION 5.05. Effect of Notice of Redemption...........................27
SECTION 5.06. Deposit of Redemption Price..............................27
SECTION 5.07. Securities Payable on Redemption Date....................27
SECTION 5.08. Securities Redeemed in Part..............................28
SECTION 5.09. Mandatory and Optional Sinking Funds.....................28
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default........................................31
SECTION 6.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt.....................................................33
SECTION 6.03. Application of Proceeds..................................36
SECTION 6.04. Suits for Enforcement....................................37
SECTION 6.05. Restoration of Rights on Abandonment of Proceedings......37
SECTION 6.06. Limitations on Suits by Securityholders..................38
SECTION 6.07. Unconditional Right of Securityholders to Institute
Certain Suits............................................38
SECTION 6.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default........................................38
SECTION 6.09. Control by Securityholders...............................39
SECTION 6.10. Waiver of Past Defaults..................................39
SECTION 6.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances....................................40
SECTION 6.12. Right of Court to Require Filing of Undertaking to Pay
Costs....................................................40
ii
<PAGE>
PAGE
----
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee........................................41
SECTION 7.02. Rights of Trustee........................................43
SECTION 7.03. Individual Rights of Trustee.............................43
SECTION 7.04. Trustee's Disclaimer.....................................43
SECTION 7.05. Notice of Defaults.......................................44
SECTION 7.06. Reports by Trustee to Holders............................44
SECTION 7.07. Compensation and Indemnity...............................44
SECTION 7.08. Replacement of Trustee...................................45
SECTION 7.09. Successor Trustee by Merger..............................47
SECTION 7.10. Eligibility; Disqualification............................47
SECTION 7.11. Preferential Collection of Claims Against the Company....47
ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 8.01. Satisfaction and Discharge of Indenture..................48
SECTION 8.02. Application by Trustee of Funds Deposited for Payment
of Securities............................................52
SECTION 8.03. Repayment of Moneys Held by Paying Agent.................52
SECTION 8.04. Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years..................................52
ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.......................53
SECTION 9.02. With Consent of Securityholders..........................54
SECTION 9.03. Effect of Supplemental Indenture.........................56
SECTION 9.04. Documents to Be Given to Trustee.........................56
SECTION 9.05. Notation on Securities in Respect of Supplemental
Indentures...............................................56
SECTION 9.06. Compliance with TIA......................................56
SECTION 9.07. Revocation and Effect of Consents and Waivers............56
SECTION 9.08. Trustee to Sign Amendments...............................57
ARTICLE 10
GUARANTEES
SECTION 10.01. Guarantees...............................................57
SECTION 10.02. Limitation on Liability; Termination, Release and
Discharge................................................59
SECTION 10.03. Right of Contribution....................................60
iii
<PAGE>
PAGE
----
SECTION 10.04. No Subrogation..........................................60
SECTION 10.05. Future Guarantors.......................................60
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TIA Controls............................................61
SECTION 11.02. Notices.................................................61
SECTION 11.03. Communication by Holders with Other Holders.............62
SECTION 11.04. Certificate and Opinion as to Conditions Precedent......62
SECTION 11.05. Statements Required in Certificate or Opinion...........62
SECTION 11.06. When Securities Disregarded.............................63
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar............63
SECTION 11.08. Legal Holidays..........................................63
SECTION 11.09. GOVERNING LAW...........................................63
SECTION 11.10. No Recourse Against Others..............................64
SECTION 11.11. Successors..............................................64
SECTION 11.12. Multiple Originals......................................64
SECTION 11.13. Variable Provisions.....................................64
SECTION 11.14. Qualification of Indenture..............................64
SECTION 11.15. Incorporators, Stockholders, Officers and Directors of
Company Exempt and Individual Liability.................64
SECTION 11.16. Provisions of Indenture for the Sole Benefit of Parties
and Securityholders.....................................65
iv
<PAGE>
INDENTURE dated as of , , among R.J. REYNOLDS TOBACCO HOLDINGS,
INC., a Delaware corporation (the "Company"), R.J. REYNOLDS TOBACCO COMPANY, a
New Jersey Corporation, as Guarantor (as defined herein) and THE BANK OF NEW
YORK, a New York banking corporation (the "Trustee") as Trustee.
WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
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, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done and the Company has done all
things necessary to make the Securities (as defined herein), when executed by
the Company and authenticated and delivered by the Trustee hereunder and duly
issued by the Company, valid obligations of the Company as hereinafter provided;
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 as follows.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, is defined to mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
<PAGE>
"Agent" means any Registrar, Co-Registrar, Paying Agent, Transfer Agent
or authenticating agent.
"Attributable Debt" means, when used in connection with a sale and
lease-back transaction, at any date as of which the amount thereof is to be
determined, the product of (a) the net proceeds from such sale and lease-back
transaction multiplied by (b) a fraction, the numerator of which is the number
of full years of the term of the lease relating to the property involved in such
sale and lease-back transaction (without regard to any options to renew or
extend such term) remaining at the date of the making of such computation and
the denominator of which is the number of full years of the term of such lease
measured from the first day of such term.
"Authorized Newspaper" means a newspaper (which, in the case of The
City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition), and in the case of the United Kingdom, will, if practicable, be the
Financial Times (London Edition) 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 and the United Kingdom.
"Bank Credit Agreement" means the Credit Agreement, dated as of May 7,
1999 among the Company, The Chase Manhattan Bank, as Administrative Agent and
the various lending institutions named on the signature pages thereof, as such
agreement may be amended, modified, renewed, refunded, restated,
refinanced or replaced from time to time.
"Bank Credit Agreement Guarantor" means RJRT and every Subsidiary of
the Company that is or becomes a guarantor under the Bank Credit Agreement from
time to time; provided that, to the extent that any Subsidiary ceases to be a
guarantor under the Bank Credit Agreement, such Subsidiary shall cease to be
Bank Credit Agreement Guarantor.
"Bankruptcy Law" means the Bankruptcy Reform Act of 1978, as amended
and as codified in Title 11 of the United States Code, as amended from time to
time hereafter, or any successor federal bankruptcy law.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee thereof duly authorized to act on
behalf of such Board of Directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
2
<PAGE>
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means a day which is not, in New York City, a Saturday,
Sunday, legal holiday or other day on which banking institutions are authorized
or obligated by law to close.
"capital stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, partnership interests and limited liability company membership interests,
but excluding any debt securities convertible into such equity.
"Company Order" means a written request or order signed in the name of
the Company (i) by its Chairman of the Board, its Chief Executive Officer, its
President, an Executive Vice President, a Senior Vice President, a Vice
President or its Chief Financial Officer and (ii) by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary and delivered to the Trustee;
provided, however, that such written request or order may be signed by any two
officers or directors listed in clause (i) above in lieu of being signed by one
of such officers or directors listed in such clause (i) and one of the officers
listed in clause (ii) above.
"Consolidated Net Worth" means, at any date of determination, the
consolidated stockholder's equity of the Company and its consolidated
subsidiaries, as set forth on the then most recently available consolidated
balance sheet of the Company and its consolidated Subsidiaries.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. A Person
shall be deemed to Control another Person if such Person (i) is an officer or
director of such other Person or (ii) directly or indirectly owns or controls
10% or more of such other Person's capital stock. "Controlling" and "Controlled"
have meanings correlative thereof.
"Corporate Trust Office" means the principal office of the Trustee at
which any particular time its corporate trust business shall be administered
which office at the date of the execution of the Indenture is located at 101
Barclay Street, Floor 21 West, New York, New York 10286 or at any other time at
such other address as the Trustee may designate from time to time by notice to
the Holders.
"Covenant Defeasance" has the meaning set forth in Section 8.01.
3
<PAGE>
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.12.
"Dollar" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempted Debt" means the sum, without duplication, of the following
items outstanding as of the date Exempted Debt is being determined: (i)
indebtedness of the Company and the Restricted Subsidiaries incurred after the
date hereof and secured by liens created, assumed or otherwise incurred or
permitted to exist pursuant to Section 3.05(b); and (ii) Attributable Debt of
the Company and the Restricted Subsidiaries in respect of all sale and
lease-back transactions with regard to any Principal Property entered into
pursuant to Section 3.06(b).
"Foreign Subsidiary" means any Subsidiary that is organized under the
laws of a jurisdiction other than the United States of America or any state
thereof or the District of Columbia.
"Funded Debt" means all indebtedness for money borrowed, including
purchase money indebtedness, having a maturity of more than one year from the
date of its creation or having a maturity of less than one year but by its terms
being renewable or extendible, at the option of the obligor in respect thereof,
beyond one year from its creation.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date hereof.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities
4
<PAGE>
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, however, that
the term "guarantee" will not include endorsements for collection or deposit in
the ordinary course of business. The term "guarantee" used as a verb has a
corresponding meaning.
"Guarantee" means, individually, any guarantee of payment of the
Securities by a Guarantor pursuant to the terms of this Indenture, and,
collectively, all such Guarantees.
"Guarantor" means RJRT and each other Subsidiary of the Company that is
or becomes a Bank Credit Agreement Guarantor and any other Person that becomes a
Bank Credit Agreement Guarantor; provided that, to the extent that RJRT or any
or all of such Subsidiaries cease to be Bank Credit Agreement Guarantors, such
Subsidiaries shall cease to be Guarantors.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Legal Holiday" has the meaning set forth in Section 11.08.
"Lien" means, with respect to any asset, any lien, mortgage, deed of
trust, pledge, security interest, charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any lease in the nature
thereof and any agreement to give any security interest.)
"Nonrecourse Obligation" means indebtedness or other obligations
substantially related to (i) the acquisition of assets not previously owned by
the Company, any Guarantor or any of their respective Subsidiaries or (ii) the
financing of a project involving the development or expansion of properties of
the Company, any Guarantor or any of their respective Subsidiaries, as to which
the obligee with respect to such indebtedness or obligation has no recourse to
the Company, any Guarantor or any of their respective Subsidiaries or any assets
of the Company, any Guarantor or any of their respective Subsidiaries other than
the
5
<PAGE>
assets which were acquired with the proceeds of such transaction or the project
financed with the proceeds of such transaction (and the proceeds thereof).
"Notice of Default" has the meaning set forth in Section 6.01.
"Obligations" has the meaning provided in Section 10.01.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, an Executive Vice President, a Senior Vice President, a Vice
President, the Treasurer, the Chief Financial Officer or the Secretary of the
Company, as applicable.
"Officers' Certificate" means a certificate signed by any two Officers
of the Company.
"Opinion of Counsel" means a written opinion from Davis Polk & Wardwell
or any other legal counsel to the Company. The counsel may be an employee of or
counsel to the Company.
"Paying Agent" has the meaning provided in Section 2.05, except that,
for the purposes of Article Eight, the Paying Agent shall not be the Company or
a Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Principal" means the principal of the Security plus the premium, if
any, payable on the Security which is due or overdue or is to become due at the
relevant time; provided, however, that for purposes of calculating any such
premium, the term "principal" shall not include the premium with respect to
which such calculation is being made.
"Principal Property" means land, land improvements, buildings and
associated factory and laboratory equipment owned or leased pursuant to a
capital lease and used by the Company or a Restricted Subsidiary primarily for
processing, producing, packaging or storing its products, raw materials,
inventories, or other materials and supplies and located within the United
States of America and having an acquisition cost plus capitalized improvements
in excess of 2% of Consolidated Net Worth, as of the date of such determination,
but not including any such property financed through the issuance of tax exempt
governmental obligations, or any such property that has been determined by
6
<PAGE>
Board Resolution of the Company not to be of material importance to the
respective businesses conducted by the Company or such Restricted Subsidiary
effective as of the date such resolution is adopted.
"Registrar" has the meaning set forth in Section 2.05.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
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 such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"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 Company 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; and (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 Company
or any Restricted Subsidiary. However, the Board of Directors of the Company may
declare any such Subsidiary to be a Restricted Subsidiary.
"RJRT" means R.J. Reynolds Tobacco Company.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such SEC is not existing and performing the duties
now assigned to it under the TIA, then the body performing such duties at such
time.
"Securities Act" means the Securities Act of 1933, as amended.
"Security" and "Securities" means any of the securities, as defined in
the first paragraph of the recitals hereof, that are authenticated and delivered
under this Indenture. For purposes of this Indenture, all Securities shall vote
together as one series of Securities under this Indenture.
7
<PAGE>
"Security Register" has the meaning set forth in Section 2.05.
"Special Interest Payment Date" has the meaning set forth in Section
2.12.
"Special Record Date" has the meaning set forth in Section 2.12.
"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 has or might have voting
power by reason of the happening of any contingency) is at the time, directly or
indirectly, owned by the Company, or by one or more Subsidiaries of the Company
or by the Company and one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that, in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendments, the TIA as so
amended.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means such successor.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the Company's option.
SECTION 1.02. Incorporation by Reference of TIA. This Indenture is
subject to the mandatory provisions of the TIA which are incorporated by
reference in and made a part of this Indenture. The following TIA terms have the
following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
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"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined in the TIA by reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular;
(f) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision;
(g) all ratios and computations based on GAAP contained in this
Indenture shall be computed in accordance with the definition of GAAP set forth
in Section 1.01; and
(h) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
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ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to a resolution of the Board of Directors 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, 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, as evidenced by their execution of the Securities.
The definitive Securities 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.
SECTION 2.02. Form of Trustee's Certification of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
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
SECTION 2.03. 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. There shall be
established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
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(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture (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 2.07, 2.08, 2.10 or 5.08 );
(c) the date or dates on which the principal of the Securities of the
series is payable;
(d) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate shall be determined, the date
or dates from which such interest shall accrue, the interest payment dates on
which such interest shall be payable and the record dates for the determination
of Holders to whom interest is payable;
(e) 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
3.02);
(f) the price or prices at which, the period or periods within which
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company, pursuant to any
sinking fund or otherwise;
(g) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any 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 the terms and conditions upon which
Securities of the series shall be redeemed, purchased or repaid, in whole or in
part, pursuant to such obligation;
(h) if other than denominations of $1,000 and any multiple thereof,
the denominations in which Securities of the series shall be issuable;
(i) 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 pursuant to Section 6.01 or
provable in bankruptcy pursuant to Section 6.02;
(j) whether the Securities will be issued in global form or as
uncertificated securities;
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(k) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(l) any trustees, authenticating or paying agents, transfer agents or
registrars or any other agents with respect to the Securities of such series.
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors or in any such indenture
supplemental hereto.
SECTION 2.04. Execution, Authentication and Denominations. The
Securities shall be executed by two Officers of the Company. The signature of
these Officers on the Securities may be by facsimile or manual signature in the
name and on behalf of the Company. If an Officer whose signature is on a
Security no longer holds that office at the time the Trustee or authenticating
agent authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
written order signed by an Officer of the Company authenticate for original
issue Securities in the aggregate principal amount specified in such order;
provided that the Trustee shall be entitled to receive an Officers' Certificate
and an Opinion of Counsel of the Company in connection with such authentication
of Securities. Such order shall specify the amount of Securities to be
authenticated and the date on which the original issue of Securities is to be
authenticated.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such authenticating agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an Affiliate
of the Company.
In case the Company or any Guarantor, pursuant to Articles 4 or 10,
shall be consolidated or merged with or into any other Person or shall convey,
transfer, lease or otherwise dispose of its properties and assets substantially
as an entirety to any Person, and the successor Person resulting from such
consolidation, or
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surviving such merger, or into which the Company or any Guarantor shall have
been merged, or the Person which shall have received a conveyance, transfer,
lease or other disposition as aforesaid, shall have executed an indenture
supplemental hereto with the Trustee pursuant to Article 4 or 10, any of the
Securities authenticated or delivered prior to such consolidation, merger,
conveyance, transfer, lease or other disposition may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Order of the successor Person, shall authenticate and deliver
Securities as specified in such order for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section 2.04 in exchange or substitution for
or upon registration of transfer of any Securities such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time outstanding for Securities authenticated
and delivered in such new name.
SECTION 2.05. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Company shall cause each of
the Registrar and the Paying Agent to maintain an office or agency in the
Borough of Manhattan, The City of New York. The Registrar shall keep a register
of the Securities and of their transfer and exchange (the "Security Register").
The Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company, any Subsidiary or any Affiliate of any of them may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with TIA ss. 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee as of
each record date and at
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such other times as the Trustee may reasonably request the names and addresses
of Holders as they appear in the Security Register, including the aggregate
principal amount of Securities held by each Holder.
SECTION 2.06. Paying Agent to Hold Money in Trust. By at least 10:00
a.m (New York City time) on the date on which any principal of, premium, if any,
and interest on any Securities is due and payable, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal, premium, if any,
and interest when due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that such Paying Agent shall hold in trust for
the benefit of the Holders or the Trustee all money held by such Paying Agent
for the payment of principal of, premium, if any, and interest on the Securities
and shall notify the Trustee in writing of any default by the Company or any
Guarantor in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.07. Transfer and Exchange. The Securities are issuable only
in registered form. A Holder may transfer a Security only by written application
to the Registrar or another transfer agent stating the name of the proposed
transferee and otherwise complying with the terms of this Indenture. No such
transfer shall be effected until, and such transferee shall succeed to the
rights of a Holder only upon, final acceptance and registration of the transfer
by the Registrar in the Security Register. Prior to the registration of any
transfer by a Holder as provided herein, the Company, the Trustee, and any agent
of the Company shall treat the person in whose name the Security is registered
as the owner thereof for all purposes whether or not the Security shall be
overdue, and neither the Company, the Trustee, nor any such agent shall be
affected by notice to the contrary. When Securities are presented to the
Registrar or another transfer agent with a request to register the transfer or
to exchange them for an equal principal amount of Securities of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met (including that such
Securities are duly endorsed or accompanied by a written instrument of transfer
duly executed by the Holder thereof or by an attorney who is authorized in
writing to act on behalf of the Holder). To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's request. No
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service charge shall be made for any registration of transfer or exchange or
redemption of the Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or other similar
governmental charge payable upon exchanges pursuant to Section 2.10, 5.08 or
9.05).
Neither the Registrar nor any other transfer agent shall be required
(i) to issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the day of the mailing of a
notice of redemption of Securities selected for redemption under Section 5.02
and ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
SECTION 2.08. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated
or defaced or be destroyed, lost or stolen, the Company in its discretion may
execute, and upon the written request of any officer of the Company, the Trustee
shall authenticate and deliver, a new Security of the same series, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so destroyed, lost or stolen. In every case the applicant for a substitute
Security shall furnish to the Company and to the Trustee and any agent of the
Company 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 and of the ownership thereof.
Upon the issuance of any substitute Security, the Company 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) connected therewith. In case any Security
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
Company may, instead of issuing a substitute Security, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
or defaced Security), if the applicant for such payment shall furnish to the
Company and to the Trustee and any agent of the Company 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, evidence to their satisfaction
of the destruction, loss or theft of such Security and of the ownership thereof.
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Every substitute Security of any series issued pursuant to the
provisions of this section by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security 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 of such
series duly authenticated and delivered hereunder. All Securities 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 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 2.09. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event the
Company or an Affiliate of the Company holds the Security, provided, however,
that for purposes of determining which are outstanding for consent or voting
purposes hereunder, in determining whether the Trustee shall be protected in
making a determination whether the holders of the requisite principal amount of
outstanding Securities are present at a meeting of holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which a Responsible Officer of the Trustee actually knows to be held by the
Company or an Affiliate of the Company shall not be considered outstanding.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal, premium, if any, and interest, payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.10. Temporary Securities. Until definitive Securities of
any series are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
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considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities.
After the preparation of definitive Securities, the temporary Securities shall
be exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of definitive Securities.
SECTION 2.11. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
return to the Company all Securities surrendered for registration of transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.
SECTION 2.12. Payment of Interest; Defaulted Interest. Interest on any
Security which is payable, and is punctually paid or duly provided for, on any
interest payment date shall be paid to the Person in whose name such Security
(or one or more predecessor Securities) is registered at the close of business
on the regular record date for such interest at the office or agency of the
Company maintained for such purpose pursuant to Section 2.05.
Any interest on any Security which is payable, but is not paid when the
same becomes due and payable and such nonpayment continues for a period of 30
days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Company, at its election in
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective predecessor
Securities) are registered at the close of business on a Special Record Date (as
defined below) for the payment of such Defaulted Interest, which shall be fixed
in the following manner. The Company shall notify the Trustee in writing of the
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amount of Defaulted Interest proposed to be paid on each Security and the date
(not less than 30 days after such notice) of the proposed payment (the "Special
Interest Payment Date"), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the Special Interest Payment Date and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date, and in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date and Special Interest Payment
Date therefor to be given in the manner provided for in Section 11.02, not less
than 10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date and Special Interest
Payment Date therefor having been so given, such Defaulted Interest shall be
paid on the Special Interest Payment Date to the Persons in whose names the
Securities (or their respective predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of, transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.13. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.14. CUSIP Numbers. The Company 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 or exchange as a convenience to
Holders; provided, however, that any such notice may state that no
representation
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is made as to the correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption or exchange and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption or exchange shall not be affected by any
defect in or omission of such CUSIP numbers.
ARTICLE 3
COVENANTS
SECTION 3.01. Payment of Securities. The Company shall promptly pay the
principal of, interest and premium, if any, on the Securities on the dates and
in the manner provided in the Securities and in this Indenture. Principal,
interest and premium, if any, shall be considered paid on the date due if on
such date the Trustee or the Paying Agent holds in accordance with this
Indenture money sufficient to pay all principal, interest and premium, if any,
then due and the Trustee or the Paying Agent, as the case may be, is not
prohibited from paying such money to the Holders on that date pursuant to the
terms of this Indenture.
The Company shall pay interest on overdue principal, interest and
premium, if any, at the rate specified therefor in the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 3.02. Maintenance of Office or Agency. The Company shall
maintain the office or agency required under Section 2.05. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation
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or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
SECTION 3.03. SEC Reports and Available Information. The Company
shall comply with all the applicable provisions of TIA ss. 314(a).
SECTION 3.04. Certificate to Trustee. (a) The Company shall deliver to
the Trustee, within 45 days after the end of each fiscal quarter (120 days after
the end of the last fiscal quarter of each year), an Officer's Certificate
stating whether or not the signers know of any Default or Event of Default that
occurred during such fiscal year. In the case of the Officer's Certificate
delivered within 120 days after the end of the Company's fiscal year, such
certificate shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer of the Company that
a review has been conducted of the activities of the Company and its Restricted
Subsidiaries and the Company's and its Restricted Subsidiaries' performance
under this Indenture and that the Company has complied with all conditions and
covenants under this Indenture. For purposes of this Section 3.04, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If any of the Officers
signing such certificate has knowledge of such a Default or Event of Default,
the certificate shall describe any such Default or Event of Default and its
status. The first certificate to be delivered pursuant to this Section 3.04(a)
shall be for the first fiscal quarter beginning after the execution of this
Indenture.
(b) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, beginning with the fiscal year in which this
Indenture was executed, a certificate signed by the Company's independent
certified public accountants stating (i) that their audit examination has
included a review of the terms of this Indenture and the Securities as they
relate to accounting matters, (ii) that they have read the most recent Officers'
Certificate delivered to the Trustee pursuant to paragraph (a) of this Section
3.04 and (iii) whether, in connection with their audit examination, anything
came to their attention that caused them to believe that the Company was not in
compliance with any of the terms, covenants, provisions or conditions of Article
3 and Article 4 of this Indenture as they pertain to accounting matters and, if
any Default or Event of Default has come to their attention, specifying the
nature and period of existence thereof; provided that such independent certified
public accountants shall not be liable in respect of such statement by reason of
any failure to obtain knowledge of any such Default or Event of Default that
would not be disclosed in the course of an audit examination
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conducted in accordance with generally accepted auditing standards in effect at
the date of such examination.
SECTION 3.05. Negative Pledge. (a) The Company will not, and will not
permit any Restricted Subsidiary to, mortgage or pledge as security for any
indebtedness any shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property of the Company or a Restricted Subsidiary,
whether such shares of stock, indebtedness or other obligations of a Subsidiary
or Principal Property is owned at the date of this Indenture or hereafter
acquired, unless the Company secures or causes such Restricted Subsidiary to
secure the outstanding Securities equally and ratably with all indebtedness
secured by such mortgage or pledge, so long as such indebtedness shall be so
secured; provided, however, that this covenant shall not apply in the case of:
(i) the creation of any mortgage, pledge or other lien on any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
hereafter acquired (including acquisitions by way of merger or consolidation) by
the Company or a Restricted Subsidiary contemporaneously with such acquisition,
or within 120 days thereafter, to secure or provide for the payment or financing
of any part of the purchase price thereof, or the assumption of any mortgage,
pledge or other lien upon any shares of stock, indebtedness or other obligations
of a Subsidiary or any Principal Property hereafter acquired existing at the
time of such acquisition, or the acquisition of any shares of stock,
indebtedness or other obligations of a Subsidiary or any Principal Property
subject to any mortgage, pledge or other lien without the assumption thereof,
provided that every such mortgage, pledge or lien referred to in this clause (i)
shall attach only to the shares of stock, indebtedness or other obligations of a
Subsidiary or any Principal Property so acquired and fixed improvements thereon;
(ii) any mortgage, pledge or other lien on any shares of stock, indebtedness or
other obligations of a Subsidiary or any Principal Property existing at the date
of this Indenture; (iii) any mortgage, pledge or other lien on any shares of
stock, indebtedness or other obligations of a Subsidiary or any Principal
Property in favor of the Company or any Restricted Subsidiary; (iv) any
mortgage, pledge or other lien on Principal Property being constructed or
improved securing loans to finance such construction or improvements; (v) any
mortgage, pledge or other lien on shares of stock, indebtedness or other
obligations of a Subsidiary or any Principal Property incurred in connection
with the issuance of tax-exempt governmental obligations; (vi) any renewal of or
substitution for any mortgage, pledge or other lien permitted by any of the
preceding clauses (i) through (v), provided, in the case of a mortgage, pledge
or other lien permitted under clause (i), (ii) or (iv), the debt secured is not
increased nor the lien extended to any additional assets.
(b) Notwithstanding the provisions of paragraph (a) of this Section,
the Company or any Restricted Subsidiary may create or assume liens in addition
to
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those permitted by paragraph (a) of this Section, and renew, extend or replace
such liens, provided that at the time of such creation, assumption, renewal,
extension or replacement, and after giving effect thereto, Exempted Debt does
not exceed 10% of Consolidated Net Worth.
SECTION 3.06. Certain Sale and Lease-back Transactions. (a) The Company
will not, and will not permit any Restricted Subsidiary to, sell or transfer,
directly or indirectly, except to the Company or a Restricted Subsidiary, any
Principal Property as an entirety, or any substantial portion thereof, with the
intention of taking back a lease of such property, except a lease for a period
of three years or less at the end of which it is intended that the use of such
property by the lessee will be discontinued; provided that, notwithstanding the
foregoing, the Company or any Restricted Subsidiary may sell any such Principal
Property and lease it back for a longer period (i) if the Company or such
Restricted Subsidiary would be entitled, pursuant to the provisions of Section
3.05(a), to create a mortgage on the property to be leased securing Funded Debt
in an amount equal to the Attributable Debt with respect to such sale and
lease-back transaction without equally and ratably securing the outstanding
Securities or (ii) if (A) the Company promptly informs the Trustee of such
transaction, (B) the net proceeds of such transaction are at least equal to the
fair value (as determined by Board Resolution of the Company) of such property
and (C) the Company causes an amount equal to the net proceeds of the sale to be
applied to the retirement, within 120 days after receipt of such proceeds, of
Funded Debt incurred or assumed by the Company or a Restricted Subsidiary
(including the Securities); provided further that, in lieu of applying all of or
any part of such net proceeds to such retirement, the Company may, within 75
days after such sale, deliver or cause to be delivered to the applicable trustee
for cancellation either debentures or notes evidencing Funded Debt of the
Company (which may include the outstanding Securities) or of a Restricted
Subsidiary previously authenticated and delivered by the applicable trustee, and
not theretofore tendered for sinking fund purposes or called for a sinking fund
or otherwise applied as a credit against an obligation to redeem or retire such
notes or debentures, and an Officers' Certificate (which Certificate shall be
delivered to the Trustee and each paying agent and which need not contain the
statements prescribed by the second paragraph of Section 11.05) stating that the
Company elects to deliver or cause to be delivered such debentures or notes in
lieu of retiring Funded Debt as hereinabove provided. If the Company shall so
deliver debentures or notes to the applicable trustee and the Company shall duly
deliver such Officers' Certificate, the amount of cash which the Company shall
be required to apply to the retirement of Funded Debt under this Section 3.06(a)
shall be reduced by an amount equal to the aggregate of the then applicable
optional redemption prices (not including any optional sinking fund redemption
prices) of such debentures or notes, or, if there are no such redemption prices,
the principal amount of such debentures or notes; provided, that in the case
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of debentures or notes which provide for an amount less than the principal
amount thereof to be due and payable upon a declaration of the maturity thereof,
such amount of cash shall be reduced by the amount of principal of such
debentures or notes that would be due and payable as of the date of such
application upon a declaration of acceleration of the maturity thereof pursuant
to the terms of the indenture pursuant to which such debentures or notes were
issued.
(b) Notwithstanding the provisions of paragraph (a) of this Section
3.06, the Company or any Restricted Subsidiary may enter into sale and
lease-back transactions in addition to those permitted by paragraph (a) of this
Section 3.06 and without any obligation to retire any outstanding Securities or
other Funded Debt, provided that at the time of entering into such sale and
lease-back transactions and after giving effect thereto, Exempted Debt does not
exceed 10% of Consolidated Net Worth.
SECTION 3.07. Corporate Existence. Subject to Article 4 and Section
10.02, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and that of each
Restricted Subsidiary and the corporate rights (charter and statutory) licenses
and franchises of the Company and each Restricted Subsidiary; provided, however,
that the Company shall not be required to preserve any such existence (except
the Company), right, license or franchise if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders, and provided,
further, the Company or any Guarantor, as the case may be, may merge in
accordance with Sections 4.01 and 10.02.
SECTION 3.08. Payment of Taxes and Other Claims. The Company will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary and (ii) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a material
liability or lien upon the property of the Company or any Restricted Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Company), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
disadvantageous to the Holders.
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SECTION 3.09. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium, if any, or interest on the Securities as contemplated
herein, wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) the Company hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 3.10. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.11. Notice of Defaults. In the event that any Officer becomes
aware of any Default or Event of Default, the Company shall promptly deliver to
a Responsible Officer of the Trustee an Officers' Certificate specifying such
Default or Event of Default.
ARTICLE 4
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 4.01. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions. Nothing contained in this Indenture or
in any of the Securities or Guarantees shall prevent any consolidation or merger
of the Company into any other corporation or corporations (whether or not
affiliated with the Company), or successive consolidations or mergers to which
the Company 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
Company as an entirety or substantially as an entirety or, subject to Section
3.06, otherwise; provided, that upon any such consolidation, merger, sale, lease
or conveyance to which the Company is a party and in which the Company 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 Company and the due and punctual payment of the principal of,
interest and premium, if any, on all of the Securities, according to their
tenor, shall be expressly assumed by supplemental indenture executed and
delivered to the
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Trustee, by the corporation formed by such consolidation, or into which the
Company shall have been merged, or which shall have acquired such property.
SECTION 4.02. 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 Company, 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 Company prior to such succession any or
all of the Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Trustee; and, upon the order of such
successor corporation instead of the Company 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 Company 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 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 Company 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 4.03. Opinion of Counsel to Trustee. The Trustee, subject to
the provisions of Sections 7.01 and 7.02, shall receive an Opinion of Counsel,
prepared in accordance with Section 11.04, 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.
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ARTICLE 5
REDEMPTION OF SECURITIES
SECTION 5.01. 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 2.03 for
Securities of such series.
SECTION 5.02. Selection of Securities to Be Redeemed. If fewer than all
the Securities of a series are to be redeemed, the Trustee shall select the
Securities (not more than 60 days prior to the redemption date) to be redeemed
in such manner that the Trustee considers to be fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company of the
Securities or portions of Securities to be redeemed.
SECTION 5.03. 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 Company 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 Company 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 Company.
SECTION 5.04. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, notice of redemption shall
be mailed by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price (or the method of calculating such price) and
the amount of accrued interest to be paid, if any;
(c) the name and address of the Paying Agent;
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(d) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price plus accrued and unpaid interest,
if any;
(e) if fewer than all the outstanding Securities are to be redeemed,
the Bond No. (if certificated) and principal amounts of the particular
Securities to be redeemed;
(f) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;
(g) the CUSIP number, if any, printed on the Securities being
redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the name of the Company and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required by
this Section 5.04.
SECTION 5.05. Effect of Notice of Redemption. Once notice of redemption
is mailed in accordance with Section 5.04, Securities called for redemption
shall become due and payable on the redemption date and at the redemption price
as stated in the notice. Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
SECTION 5.06. Deposit of Redemption Price. By no later than 10:00 a.m.
(New York City time) on the date of redemption, the Company shall deposit with
the Paying Agent (or, if the Company or any of its respective Subsidiaries is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
redemption price of and accrued and unpaid interest on all Securities to be
redeemed on that date other than Securities or portions of Securities called for
redemption which are owned by the Company or a Subsidiary and have been
delivered by the Company or such Subsidiary to the Trustee for cancellation.
SECTION 5.07. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the redemption date, become due and payable at the redemption price
therein specified (together with accrued interest, if any, to the redemption
date), and from and after such date (unless the Company shall default in the
payment of the
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redemption price and accrued interest) such Securities shall cease to bear such
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the redemption price,
together with accrued interest, if any, to the redemption date (subject to the
rights of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date.)
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption because of the Company's failure to deposit
money sufficient to pay the redemption price of and accrued and unpaid interest
on all Securities to be redeemed, the principal (and premium, if any) shall,
until paid, bear interest from the redemption date at the rate borne by the
Securities.
SECTION 5.08. Securities Redeemed in Part. Any Securities which are to
be redeemed only in part (pursuant to the provision of this Article) shall be
surrendered at the office or agency of the Company maintained for such purpose
pursuant to Section 3.02 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and make available for delivery to the Holder of such
Security at the expense of the Company, a new Security or Securities, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered, provided, that each such new Security will be in a
principal amount of $1,000 or integral multiple thereof.
SECTION 5.09. 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 Securities
of any series is herein referred to as an "optional sinking fund payment". The
date 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 Company 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 Company or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Company and delivered to the Trustee for cancellation pursuant
to Section 2.11, (b) receive credit for optional sinking fund payments (not
previously so credited)
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made pursuant to this Section, or (c) receive credit for Securities of such
series (not previously so credited) redeemed by the Company 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 Company will deliver to the Trustee a written statement
(which need not contain the statements required by Section 11.05) signed by an
authorized officer of the Company (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, (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 Company 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 Company
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 Company 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 2.11 to the Trustee with such written statement
(or reasonably promptly thereafter if acceptable to the Trustee). Such written
statement shall be irrevocable and upon its receipt by the Trustee the Company
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 Company, on or before any such sixtieth day, to
deliver such written statement 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 Company (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 Company 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 a lesser sum if the Company 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
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date fixed for redemption. If such amount shall be $50,000 or less and the
Company makes no such request then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the manner provided
in Section 5.02, 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 Company) inform the Company of
the serial numbers of the Securities of such series (or portions thereof) so
selected. Securities of any series which are (a) owned by the Company or an
entity known by the Trustee to be directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, as
shown by the Security Register, and not known to the Trustee to have been
pledged or hypothecated by the Company or any such entity or (b) identified in
an Officers' Certificate at least 60 days prior to the sinking fund payment date
as being beneficially owned by, and not pledged or hypothecated by, the Company
or an entity directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company shall be excluded from Securities of
such series eligible for selection for redemption. The Trustee, in the name and
at the expense of the Company (or the Company, 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 5.02 (and
with the effect provided in Section 5.05) for the redemption of Securities of
such series in part at the option of the Company. The amount of any sinking fund
payments not so applied or 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.
At least one Business Day before each sinking fund payment date, the
Company 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,
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provided that it shall have received from the Company 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
6 and held for the payment of all such Securities. In case such Event of Default
shall have been waived as provided in Section 6.10 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.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. 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; 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 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 Company or the Guarantors 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 first class mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of
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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 Company or the Guarantors in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official)
of the Company 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 Company 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 Company or for any substantial part of
its property, or make any general assignment for the benefit of creditors; or
(g) any Guarantee ceases to be in full force and effect (except as
contemplated by the terms hereof), or any Guarantee is declared in a judicial
proceeding to be null and void, or any Guarantor denies or disaffirms in writing
its obligations under the terms of this Indenture or its Guarantee; or
(h) any other Event of Default provided in the supplemental indenture
or Board Resolution under which 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 (h)
above (if the Event of Default under clause (d) or (h) 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 each such affected series then outstanding hereunder (voting as a
single class) by notice in writing to the Company (and to the Trustee if given
by Securityholders), may declare the entire principal 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 clauses (d) or
(h) (if the Event of Default under clause (d) or (h), as the case may be, is
with respect to all series of Securities then outstanding), (e), (f)
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or (g) 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),
by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal of all the Securities then
outstanding and interest accrued thereon, if any, to be due and payable
immediately, and upon 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 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 Company or any Guarantor
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 specified in the Securities of each such series 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 gross 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, then outstanding, by written notice to the Company 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
or shall affect any subsequent default or shall impair any right consequent
thereon.
SECTION 6.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company 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
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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, repurchase or by
declaration or otherwise, then upon demand of the Trustee, the Company or any
Guarantor 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 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 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 Company or any Guarantor
may pay the principal of and interest on the 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 Company or the Guarantors 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 Company or
other obligor upon the Securities and collect in the manner provided by law out
of the property of the Company 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 Company 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 Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor upon the Securities, or to the creditors or property of the
Company 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
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provisions of this Section, shall be entitled and empowered, by intervention in
such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest 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 gross negligence or bad faith) and of the Securityholders
allowed in any judicial proceedings relative to the Company or other
obligor upon the Securities or to the creditors or property of the
Company or such other obligor,
(ii) 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
(iii) 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 gross
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.
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All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series, may be enforced by the Trustee
without the possession of any of the Securities of such series 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 attorneys, shall be for the ratable benefit of the Holders of 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 in respect of which such action was taken, and it shall not
be necessary to make any Holders of such Securities parties to any such
proceedings.
SECTION 6.03. Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of any series of Securities 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 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 specified in such Securities, such payments to be
made
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ratably to the persons entitled thereto, without
discrimination or preference;
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 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,
without preference or priority of principal over interest, or
of interest 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; and
FOURTH: To the payment of the remainder, if any, to
the Company or any other person lawfully entitled thereto as
directed in writing.
SECTION 6.04. Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may 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 6.05. 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 Company, the Guarantors, and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Company, the Guarantors, the Trustee and the Securityholders shall
continue as though no such proceedings had been taken.
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SECTION 6.06. Limitations on Suits by Securityholders. No Holder of any
Security of any series 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 a Responsible Officer of 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 each affected series then outstanding (treated as a single
class) 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 security or 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 6.09; it being understood and intended, and being
expressly covenanted by the taker and Holder of every Security with every other
taker and Holder and the Trustee, that no one or more Holders of Securities of
any series 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 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. 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 6.07. Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security to receive
payment of the principal of, premium, if any, and interest on such Security on
or after the respective due dates expressed in such Security, 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.
SECTION 6.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 6.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities 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
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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 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 6.06, every power and remedy given by this
Indenture or by law to the Trustee or to the Holders of Securities may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders of Securities.
SECTION 6.09. Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities of each series affected (with each
such series voting as a separate class) 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 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 7.01) 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, or a trust committee 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 7.01) 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 to take
any action deemed proper by the Trustee and which is not inconsistent with such
direction or directions by Securityholders.
SECTION 6.10. Waiver of Past Defaults. Prior to the acceleration of the
maturity of the Securities as provided in Section 6.01, 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) may on behalf of the Holders of all
such Securities waive any past Default or Event of Default described in Section
6.01 and its
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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 Company, the Guarantors,
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.
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 6.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within 90 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 actually known to a Responsible Officer of
the Trustee and to all Holders of Securities of such series in the manner and to
the extent provided in Section 313(c) of the TIA, unless in each case such
Defaults shall have been cured before the mailing or publication of such notice;
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 a Responsible Officer of the Trustee in
good faith determines that the withholding of such notice is in the interests of
the Securityholders of such series.
SECTION 6.12. Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security 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 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
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amount of the Securities of such series, or, in the case of any suit relating to
or arising under clauses (d) or (h) of Section 6.01 (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 (h) (if the suit under (d)
or (h) relates to all the Securities then outstanding), (c), (e), (f), (g) or
(i) of Section 6.01, 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 7
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise 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 Person would exercise or use under the circumstances
in the conduct of such Person's own affairs; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
reasonable indemnity or security satisfactory to the Trustee against loss,
liability or expense.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties 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 its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officers'
Certificates and Opinions of Counsel furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case
of any such Officers' Certificates and Opinions of Counsel which by any
provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such Officers' Certificates and
Opinions of Counsel to determine whether or not they conform to the
requirements of this Indenture (but need not confirm
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or investigate the accuracy of mathematical calculations or other facts
stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.09.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the TIA.
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the costs,
expenses (including
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reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be charged with knowledge of any Default or
Event of Default with respect to the Securities unless either (i) a Trust
Officer shall have actual knowledge of such Default or Event of Default or (ii)
written notice of such Default or Event of Default shall have been given to a
Trust Officer of the Trustee by an Company or any other obligor on the
Securities or by any Holder of the Securities.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company with the same rights it would have if it
were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities or any offering document, it shall not be
accountable for the
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Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of an Company in this Indenture or in any document
issued in connection with the sale of the Securities or in the Securities other
than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default or an Event of Default
occurs with respect to the Securities and is continuing and if it is known to
the Trustee, the Trustee shall mail to each Securityholder notice of the Default
within 90 days after it is known to a Trust Officer or written notice of it is
received by a Trust Officer of the Trustee. Except in the case of a Default in
payment of Principal of, premium, if any or interest on any Security (including
payments pursuant to the optional redemption or required repurchase provisions
of such Security, if any), the Trustee may withhold the 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 withholding the notice is not opposed to the interests of
Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as practicable
after each May 15 beginning with the May 15 following the date of this
Indenture, and in any event prior to July 15 in each year, the Trustee shall
mail to each Securityholder a brief report dated as of such May 15 that complies
with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b). The
Trustee shall promptly deliver to the Company a copy of any report it delivers
to Holders pursuant to this Section 7.06.
A copy of each report at the time of its mailing to Securityholders
shall be filed by the Trustee with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company and the
Guarantors jointly and severally covenant and agree to pay to the Trustee from
time to time such compensation for its services as the Company and the Trustee
shall from time to time agree in writing. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. The
Company and the Guarantors shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it in accordance with the
provisions of this Indenture, including costs of collection, costs of preparing
and reviewing reports, certificates and other documents, costs of preparation
and mailing of notices to Securityholders and reasonable fees and expenses of
counsel retained by the Trustee in connection with the delivery of an Opinion of
Counsel or otherwise, in addition to such compensation for its services, except
any such
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expense, disbursement or advance as may arise from its negligence, wilful
misconduct or bad faith. Such expenses shall include the reasonable compensation
and expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Trustee shall provide the Company reasonable notice
of any expenditure not in the ordinary course of business; provided that prior
approval by the Company of any such expenditure shall not be a requirement for
the making of such expenditure nor for reimbursement by the Company thereof. The
Company and the Guarantors shall indemnify each of the Trustee, its officers,
directors, employees and any predecessor Trustees against any and all loss,
damage, claim, liability or expense (including reasonable attorneys' fees and
expenses) (other than taxes applicable to the Trustee's compensation hereunder)
incurred by it without negligence or bad faith on its part in connection with
the acceptance or administration of this trust and the performance of its duties
hereunder including the costs and expenses of enforcing this Indenture
(including this Section 7.07) and of defending itself against any claims
(whether asserted by any Securityholder, the company or otherwise). The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee so to notify the Company shall not relieve the Company
and the Guarantors of each of its obligations hereunder, except to the extent
that the Company and the Guarantors have been prejudiced by such failure. The
Company and the Guarantors shall defend the claim and the Trustee may have
separate counsel and the Company and the Guarantors shall pay the fees and
expenses of such counsel. The Company and the Guarantors need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
The Company and the Guarantors need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld or delayed.
To secure the payment obligations of the Company and the Guarantors in
this Section 7.07, the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee other than money or property
held in trust to pay Principal of and interest on particular Securities.
The payment obligations of the Company and the Guarantors pursuant to
this Section 7.07 shall survive the resignation or removal of the Trustee and
any discharge of this Indenture including any discharge under any Bankruptcy
Law. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.01(e) or (f), the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time with 30 days notice to the Company. The Holders of a majority in principal
amount of the Securities then outstanding, may remove the Trustee with 30 days
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notice to the Trustee and may appoint a successor Trustee, which successor
Trustee shall be reasonably acceptable to the Company. The Company shall
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Such retiring trustee must receive all funds owed to it prior to the
completion of such resignation.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company and the Company or the
Guarantors shall pay all amounts due and owing to the Trustee under Section
7.07. Thereupon the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights, powers and
duties of the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Securityholders affected by such resignation or
removal. The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07.
If a successor Trustee does not take office with respect to the
Securities within 30 days after the retiring Trustee resigns or is removed, the
retiring Trustee or the Holders of 10% in aggregate principal amount of the
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee at the expense of the Company.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to this Section
7.08, each Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided that such corporation shall
be eligible under this Article 7 and TIA Section 3.10(a).
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have 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 so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) and any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
either Company are outstanding if the requirements for such exclusion set forth
in TIA ss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with ss. TIA 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.
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ARTICLE 8
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 8.01. Satisfaction and Discharge of Indenture. (a) If at any
time (i) the Company or any Guarantor shall have paid or caused to be paid the
principal of, premium, if any, and interest on all the Securities of any series
outstanding hereunder (other than Securities of such series which have been
mutilated, defaced, destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.08) as and when the same shall have become due and
payable, or (ii) the Company shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authenticated (other than
any Securities of such series which shall have been destroyed, lost or stolen
and which shall have been replaced or paid as provided in Section 2.08) or (iii)
in the case of any series of Securities where the exact amount (including the
currency of payment) of principal of, premium, if any, 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 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 Company or any Guarantor 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 Company in accordance with Section 8.04) or, 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 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, premium, if any, and
interest on all Securities of such series on each date that such principal,
premium, if any, 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 and the Securities of such series;
and if, in any such case, the Company or any Guarantor shall also pay or cause
to be paid all other sums payable hereunder by the Company, 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 the Company's right of
optional redemption, if any, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Securities, (iii) rights of Holders of Securities to receive
payments of principal thereof, premium, if any, 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
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Securities of such 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 Company under Section 2.05) and the Trustee, on demand of the
Company accompanied by an Officer's Certificate and an Opinion of Counsel which
comply with Section 11.04 and at the cost and expense of the Company, shall
execute proper instruments acknowledging such satisfaction of and discharging
this Indenture; provided, that the rights of Holders of the Securities to
receive amounts in respect of principal of, premium, if any, and interest on the
Securities 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 Company and the Guarantors agree 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 Company and the Guarantors
to the Trustee under Section 7.07 and the obligations of the Trustee under
Section 8.01 shall survive.
(b) In addition to discharge of the Indenture pursuant to the
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 Company and the Guarantors shall be deemed to have paid and
discharged the entire indebtedness on all the Securities and the Guarantees of
such a series 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 the Guarantees shall no longer be in effect
(except as to (i) rights of registration of transfer and exchange of Securities
of such series and the Company's right of optional redemption, if any, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities, (iii)
rights of Holders of Securities to receive payments of principal thereof,
premium, if any, 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 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 Company under Section 2.05) and the Trustee, at the expense
of the Company and the Guarantors, shall at the Company's request, execute
proper instruments acknowledging the same, if
(A) with reference to this provision the Company or any
Guarantor has irrevocably deposited or caused to be
irrevocably deposited with the Trustee as trust funds in
trust, specifically
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pledged as security for, and dedicated solely to, the benefit
of the Holders of the Securities of such series (1) cash in an
amount, or (2) 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 (3) 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, premium,
if any, and interest on all Securities of such series on each
date that such principal, premium, if any, 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 and the Securities of such
series;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument
to which the Company or any Guarantor is a party or by which
it is bound;
(C) the Company has delivered to the Trustee an Opinion
of Counsel based on the fact that (x) the Company 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 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 Company 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 Company and the Guarantors shall be released from each of
their obligations with respect to the Securities of any series 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) appoint a
successor Trustee, (y) repay certain moneys held by the Paying Agent and (z)
return certain unclaimed moneys held by the Trustee; and (iii) such obligations
of the Company
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and the Guarantors as are required by the TIA) 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 Company and the Guarantors are
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
6.01. The following shall be the conditions to application of this Section 8.01:
(i) The Company or any Guarantor 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, (A) cash in an amount, or (B) 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, premium, if any, and interest on
all Securities of such series 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.
(ii) Such Covenant Defeasance shall not cause the Trustee to have a
conflicting interest as set forth in Article 7 and for purposes of the
TIA with respect to any securities of the Company.
(iii) 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 Company or any Guarantor is
a party or by which it is bound.
(iv) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Securities of such series
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.
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(v) The Company 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 Defeasance contemplated
by this provision have been complied with.
SECTION 8.02. Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 8.04, all moneys deposited with the Trustee
pursuant to Section 8.01 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent), to the Holders of the particular Securities of
such series 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 8.03. 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 Company, 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 8.04. Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys or Government Obligations deposited with or
paid to the Trustee or any Paying Agent for the payment of the principal of,
premium, if any, or interest on any Security of any series and not applied but
remaining unclaimed for two years after the date upon which such principal,
premium, if any, or interest shall have become due and payable, shall, upon the
written request of the Company and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Company 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 Company or the Guarantors 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.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders. The Company and the
Guarantors, 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 a
Company 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 Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company pursuant to Article 4;
(c) to add to the covenants of the Company 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, (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 in any material respect;
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(e) to establish the form or forms or terms of Securities of any
series as permitted by Section 2.01;
(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 by more than one trustee, pursuant to the requirements of Article 7;
(g) to provide for uncertificated Securities and to make all
appropriate changes for such purpose;
(h) to comply with the requirements of the TIA;
(i) to add additional Guarantors with respect to the Securities; and
(j) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee.
The Trustee is hereby authorized to join with the Company and the
Guarantors 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 9.02.
SECTION 9.02. With Consent of Securityholders. With the consent 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), the Company and the Guarantors, each 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 a Company 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
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the Securities of each such series; provided, that no such supplemental
indenture shall (a) extend the final maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption thereof or make the
principal thereof, premium, if any, or interest thereon, payable in any coin or
currency other than that provided in the Securities or in accordance with the
terms thereof, premium, if any, that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 6.01 or the amount
thereof provable in bankruptcy pursuant to Section 6.02, 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, 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.
Upon the request of the Company and the Guarantors, 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 a Company Order)
certified by the secretary or an assistant secretary of the Company and the
Guarantors authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid and other documents, if any, required by Sections 7.01 and 9.04,
the Trustee shall join with the Company and the Guarantors 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 Company, the Guarantors and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section,
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the Trustee shall give notice thereof to the Holders of then outstanding
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 and in each case such notice shall set forth in general terms
the substance of such supplemental indenture. Any failure of the Company 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 9.03. 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 Company, the Guarantors 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 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 9.04. Documents to Be Given to Trustee. The Trustee, subject to
the provisions of Sections 7.01 and 7.02, shall receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 9 complies with the applicable provisions of
this Indenture.
SECTION 9.05. 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 Company so determines, new Securities of any
series so modified as to conform, in the opinion of the Board of Directors, to
any modification of this Indenture contained in any such supplemental indenture
may be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the Securities of such series then outstanding.
SECTION 9.06. Compliance with TIA. Every amendment to this Indenture or
the Securities shall comply with the TIA as then in effect.
SECTION 9.07. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation
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of the consent or waiver is not made on the Security. However, any such Holder
or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, is shall bind every Security holder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.01 or 9.02 as applicable.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to give this consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION 9.08. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article Nine if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall receive indemnity reasonably satisfactory to it and to receive,
and (subject to Sections 7.01 and 7.02) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such
supplemental indenture constitutes the legal valid and binding obligation of the
Company and the Guarantors in accordance with its terms subject to customary
exceptions.
ARTICLE 10
GUARANTEES
SECTION 10.01. Guarantees. Each Guarantor hereby fully, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, jointly
and severally with each other Guarantor, to each Holder of the Securities and
the Trustee the full and punctual payment when due, whether at maturity, by
acceleration, by redemption, by repurchase, or otherwise, of the principal of,
premium, if any, and interest on the Securities and all other obligations of the
Company under this Indenture (all the foregoing being hereinafter collectively
called the "Obligations"). Each Guarantor further agrees
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(to the extent permitted by law) that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from it, and that
it will remain bound under this Article 10 notwithstanding any extension or
renewal of any Obligation.
Each Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of each Guarantor hereunder shall
not be affected by (a) the failure of any Holder to assert any claim or
demand or to enforce any right or remedy against the Company or any other person
under this Indenture, the Securities or any other agreement or otherwise; (b)
any extension or renewal of any thereof; (c) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Indenture, the
Securities or any other agreement; (d) the release of any security held by any
Holder or the Trustee for the Obligations or any of them; (e) the failure of any
Holder to exercise any right or remedy against any other Guarantor; or (f) any
change in the ownership of the Company.
Each Guarantor further agrees that its Guarantee herein constitutes a
Guarantee of payment when due (and not a Guarantee of collection) and waives any
right to require that any resort be had by any Holder to any security held for
payment of the Obligations.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than
payment of the Obligations in full), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense of
setoff, counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder to assert any claim or demand or to enforce any remedy
under this Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any of the Obligations is
rescinded or
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must otherwise be restored by any Holder upon the bankruptcy or reorganization
of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Company to pay any of the Obligations when and
as the same shall become due, whether at maturity, by acceleration, by
redemption, by repurchase or otherwise, each Guarantor hereby promises to and
will, upon receipt of written demand by the Trustee, forthwith pay, or cause to
be paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
Each Guarantor further agrees that, as between such Guarantor, on the
one hand, and the Holders, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in this Indenture
for the purposes of its Guarantee herein, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby and (y) in the event of any such declaration of acceleration
of such Obligations, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of this
Guarantee.
Each Guarantor also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section.
SECTION 10.02. Limitation on Liability; Termination, Release and
Discharge. The obligations of each Guarantor hereunder will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor (including, without limitation, any guarantees
under the Bank Credit Agreement) and after giving effect to any collections from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under this Indenture, result in the obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law.
Each Guarantor may consolidate with or merge into or sell its assets to
the Company or another Guarantor without limitation. Each Guarantor may
consolidate with or merge into or sell its assets to a Person other than the
Company or another Guarantor (whether or not an Affiliate of the Guarantor),
provided, that upon any such consolidation, merger or sale to which such
Guarantor is a party, other than transactions in which such Guarantor is not the
59
<PAGE>
surviving corporation, the Obligations shall be expressly assumed by
supplemental indenture executed and delivered to the Trustee, by the corporation
formed by such consolidation, or into which such Guarantor shall have been
merged, or which shall have acquired such property, provided, such corporation
is also a Bank Credit Agreement Guarantor, and such Guarantor will be deemed
released from all its obligations under the Indenture and its Guarantee and such
Guarantee will terminate. If a Guarantor ceases to be a Bank Credit Agreement
Guarantor for any reason, such Guarantor will be deemed released from all of its
obligations under the Indenture and its Guarantee of the Securities and such
Guarantee will terminate.
SECTION 10.03. Right of Contribution. Each Guarantor hereby agrees that
to the extent that any Guarantor shall have paid more than its proportionate
share of any payment made on the obligations under the Guarantees, such
Guarantor shall be entitled to seek and receive contribution from and against
the Company or any other Guarantor who has not paid its proportionate share of
such payment. The provisions of this Section 10.03 shall in no respect limit the
obligations and liabilities of each Guarantor to the Trustee and the Holders and
each Guarantor shall remain liable to the Trustee and the Holders for the full
amount guaranteed by such Guarantor hereunder.
SECTION 10.04. No Subrogation. Notwithstanding any payment or payments
made by each Guarantor hereunder, no Guarantor shall be entitled to be
subrogated to any of the rights of the Trustee or any Holder against the Company
or any other Guarantor or any collateral security or guarantee or right of
offset held by the Trustee or any Holder for the payment of the Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Trustee and the
Holders by the Company on account of the Obligations are paid in full. If any
amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all of the Obligations shall not have been paid in full, such
amount shall be held by such Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Trustee in the exact form received by
such Guarantor (duly indorsed by such Guarantor to the Trustee, if required), to
be applied against the Obligations.
SECTION 10.05. Future Guarantors. After the date on which a Subsidiary
other than RJRT (whether previously existing or created or acquired by the
Company) becomes a Bank Credit Agreement Guarantor, the Company will execute and
deliver and cause such Subsidiary to execute and deliver to the Trustee a
supplemental indenture pursuant to which such Subsidiary will
60
<PAGE>
unconditionally guarantee, on a joint and several basis with the other
Guarantors, the full and prompt payment of the principal of, premium, if any,
and interest on the Securities on an unsecured and unsubordinated basis and
become a party to this Indenture as a Guarantor for all purposes of the
Indenture.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TIA Controls. If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the provision required by the TIA shall control.
Each Guarantor in addition to performing its obligations under its Guarantee
shall perform such other obligations as may be imposed upon it with respect to
this Indenture under the TIA.
SECTION 11.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
R.J. Reynolds Tobacco Holdings, Inc.
401 North Main Street
Winston-Salem, North Carolina 27102
Attention: General Counsel
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Joseph A. Hall
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West,
New York, New York 10286
Attention: Corporation Trust Administration
61
<PAGE>
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a registered Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA ss. 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Notwithstanding the foregoing, the Trustee shall not be required to
obtain and Officers' Certificate from the Guarantor with respect to the initial
issuance of the Guarantees.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(a) a statement that the individual making such certificate or opinion
has read such covenant or condition;
62
<PAGE>
(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 individual, 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
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 11.06. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly Controlling or Controlled by or under direct or indirect
common Control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 11.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
63
<PAGE>
SECTION 11.10. No Recourse Against Others. An incorporator, director,
officer, employee, stockholder or controlling person, as such, of each of the
Company or any Guarantor shall not have any liability for any obligations of the
Company under the Securities, this Indenture or the Guarantees or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company and the
Guarantors in this Indenture and the Securities shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind their
successors.
SECTION 11.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 11.13. Variable Provisions. The Company initially appoints the
Trustee as Paying Agent and Registrar.
SECTION 11.14. Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and the Company and the Guarantors shall pay all
reasonable costs and expenses (including attorneys' fees and expenses for the
Company, the Guarantors, the Trustee and the Holders) incurred in connection
therewith, including, but not limited to, costs and expenses of qualification of
this Indenture and the Securities and printing this Indenture and the
Securities. The Trustee shall be entitled to receive from the Company any such
Officers' Certificates, Opinions of Counsel or other documentation as it may
reasonably request in connection with any such qualification of this Indenture
under the TIA.
SECTION 11.15. Incorporators, Stockholders, Officers and Directors of
Company Exempt and Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, 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 Company or the Guarantors or of any
successor, either directly or through the Company or the Guarantors 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
64
<PAGE>
being expressly waived and release by the acceptance of the Securities by the
holders thereof and as part of the consideration for the issue of the
Securities.
SECTION 11.16. Provisions of Indenture for the Sole Benefit of Parties
and Securityholders. Nothing in this Indenture or in the Securities 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 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 Holder of the Securities.
65
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
R.J. REYNOLDS TOBACCO HOLDINGS,
INC.
By:
-----------------------------------
Name:
Title:
R.J. REYNOLDS TOBACCO COMPANY
By:
-----------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
-----------------------------------
Name:
Title:
66
Exhibits 5.1 and 23.2
December 10, 1999
R.J. Reynolds Tobacco Holdings, Inc.
141 North Main Street
Winston-Salem, North Carolina 27102
R.J. Reynolds Tobacco Company
141 North Main Street
Winston-Salem, North Carolina 27102
Ladies and Gentlemen:
We have acted as counsel for R.J. Reynolds Tobacco Holdings, Inc., a
Delaware corporation (the "Company") and R.J. Reynolds Tobacco Company, a New
Jersey corporation (the "Guarantor") in connection with the Registration
Statement on Form S-3 (File No. 333-____) (the "Registration Statement") filed
by the Company and the Guarantor with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended, for the registration of the
sale from time to time of (i) the Company's debt securities (the "Debt
Securities") which may be issued pursuant to an indenture among the Company, the
Guarantor and The Bank of New York, as trustee (the "Trustee") (the "Indenture")
and (ii) the Guarantor's guarantees (the "Guarantees") of such debt securities
under the Indenture.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for the purposes of
rendering this opinion.
On the basis of the foregoing, we are of the opinion that when the
Indenture and any supplemental indenture to be entered into in connection with
the issuance of any Debt Securities have been duly authorized, executed and
delivered by the Trustee and the Company; the specific terms of a particular
series of Debt Securities have been duly authorized and established in
accordance with the Indenture; and such Debt Securities have been duly
authorized, executed, authenticated, issued and delivered in accordance with the
Indenture and the applicable underwriting or other agreement, such Debt
Securities and the related Guarantees will constitute valid and binding
obligations of the Company and the Guarantor, respectively, enforceable in
accordance with their terms, subject to the effects of applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and equitable
principles of general applicability.
In connection with the opinions expressed above, we have assumed that, at
or prior to the time of the delivery of any such security, (i) the Board of
Directors shall have duly established the terms of such security and duly
authorized the issuance and sale of such security and such authorization shall
not have been modified or rescinded; (ii) the Registration Statement shall have
been declared effective and such effectiveness shall not have been terminated or
rescinded;
<PAGE>
and (iii) there shall not have occurred any change in law affecting the validity
or enforceability of such security. We have also assumed that none of the terms
of any security to be established subsequent to the date hereof, nor the
issuance and delivery of such security, nor the compliance by the Company or the
Guarantor with the terms of such security will violate any applicable law or
will result in a violation of any provision of any instrument or agreement then
binding upon the Company or the Guarantor, or any restriction imposed by any
court or governmental body having jurisdiction over the Company or the
Guarantor.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In addition, we consent to the reference to us under the
caption "Legal Matters" in the prospectus.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
by or furnished to any other person without our prior written consent.
Very truly yours,
Davis Polk & Wardwell
Exhibit 12.1
R.J. REYNOLDS TOBACCO HOLDINGS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES/DEFICIENCY
IN THE COVERAGE OF FIXED CHARGES BY EARNINGS BEFORE FIXED CHARGES
(Dollars in Millions)
<TABLE>
Nine
Months Year Ended
Ended December 31,
September ----------------------------------------------
30,
1999 1998 1997 1996 1995 1994
--------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Earnings before fixed charges:
Income (loss) before income taxes............... $ 281 $(679) $ 204 $ 563 $ 348 $ 310
Interest and debt expense....................... 225 426 433 462 484 651
Interest portion of rental expense.............. 12 16 16 14 14 14
--- --- --- ----- --- ---
Earnings before fixed charges................... $ 518 $(237) $ 653 $1,039 $ 846 $ 975
=== === === ===== === ===
Fixed charges:
Interest and debt expense....................... $ 225 $ 426 $ 433 $ 462 $ 484 $ 651
Interest portion of rental expense.............. 12 16 16 14 14 14
--- --- --- ----- --- ---
Total fixed charges............................. $ 237 $ 442 $ 449 $ 476 $ 498 $ 665
=== === === ===== === ===
Ratio of earnings to fixed charges.............. 2.2 -- 1.5 2.2 1.7 1.5
=== === === ===== === ===
Deficiency in the coverage of fixed charges by
earnings before fixed charges................... -- $(679) -- -- -- --
=== === === ===== === ===
</TABLE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of R.J. Reynolds Tobacco Holdings, Inc. and R.J. Reynolds Tobacco Company on
Form S-3 and the related Prospectus of our report dated May 18, 1999 (July 14,
1999 as to notes 10 and 16 and October 6, 1999 as to note 17) appearing in the
Prospectus dated October 8, 1999 and filed October 12, 1999 pursuant to Rule
424(b) under the Securities Act and to the reference to us under the heading
"Experts" in the Prospectus which is a part of this Registration Statement.
Deloitte & Touche LLP
Winston-Salem, North Carolina
December 10, 1999
Exhibit 24.1
R.J. REYNOLDS TOBACCO HOLDINGS, INC.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints CHARLES A. BLIXT, GUY M. BLYNN and McDARA
P. FOLAN, III, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement or registration statements on Form S-3 and any and all amendments
(including post-effective amendments) and supplements thereto, regarding the
offering of debt securities of R.J. Reynolds Tobacco Holdings, Inc., and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and hereby grants to
such attorneys-in-fact and agents, full power and authority to do and perform
each and every act and thing requisite or necessary to be done, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned have executed this power of attorney
this 22nd day of September, 1999.
/s/ Mary K. Bush /s/ Nana Mensah
- ---------------------------------- ----------------------------------
Mary K. Bush, Director Nana Mensah, Director
/s/ John T. Chain /s/ Andrew J. Schindler
- ---------------------------------- ----------------------------------
John T. Chain, Director Andrew J. Schindler, Chairman of the
Board, President, Chief Executive
Officer and Director
/s/ A. D. Frazier /s/ Joseph P. Viviano
- ---------------------------------- ----------------------------------
A.D. Frazier, Director Joseph P. Viviano, Director
/s/ Denise Ilitch /s/ Thomas C. Wajnert
- ---------------------------------- ----------------------------------
Denise Ilitch, Director Thomas C. Wajnert, Director
/s/ John G. Medlin, Jr. /s/ Kenneth J. Lapiejko
- ---------------------------------- ----------------------------------
John G. Medlin, Jr., Director Kenneth J. Lapiejko, Executive Vice
President and Chief Financial Officer
/s/ Thomas R. Adams
- ----------------------------------
Thomas R. Adams, Senior Vice
President and Controller
(Principal Accounting Officer)
<PAGE>
R.J. REYNOLDS TOBACCO COMPANY
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints CHARLES A. BLIXT, GUY M. BLYNN and McDARA
P. FOLAN, III, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign a registration
statement or registration statements on S-3 regarding the offering of debt
securities by R.J. Reynolds Tobacco Holdings, Inc., and the related guarantees
of such securities by R.J. Reynolds Tobacco Company, and any and all amendments
(including post-effective amendments) and supplements thereto, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and hereby grants to such
attorneys-in-fact and agents, full power and authority to do and perform each
and every act and thing requisite or necessary to be done, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any of them, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, the undersigned have executed this power of attorney
this 22nd day of September, 1999.
/s/ Andrew J. Schindler
- --------------------------------- Chairman of the Board, President, Chief
Andrew J. Schindler Executive Officer
/s/ Kenneth J. Lapiejko Executive Vice President, Chief Financial
- --------------------------------- Officer and Director (principal financial
Kenneth J. Lapiejko officer)
/s/ Thomas R. Adams
- --------------------------------- Senior Vice President and Controller
Thomas R. Adams (principal accounting officer)
/s/ Charles A. Blixt
- --------------------------------- Director
Charles A. Blixt
/s/ Robert R. Gordon, Jr.
- --------------------------------- Director
Robert R. Gordon, Jr.
/s/ James H. Wilson
- --------------------------------- Director
James H. Wilson
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
-------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------
R.J. REYNOLDS TOBACCO HOLDINGS, INC.
(Exact name of obligor as specified in its charter)
Delaware 56-0950247
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
R.J. REYNOLDS TOBACCO COMPANY
(Exact name of obligor as specified in its charter)
New Jersey 56-0375955
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
401 North Main St.
Winston-Salem, NC 27102
(Address of principal executive offices) (Zip code)
-------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 9th day of December, 1999.
THE BANK OF NEW YORK
By: /s/ MARY LAGUMINA
-------------------------------
Name: MARY LAGUMINA
Title: ASSISTANT VICE PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1999, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS In Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $6,394,412
Interest-bearing balances........................... 3,966,749
Securities:
Held-to-maturity securities......................... 805,227
Available-for-sale securities....................... 4,152,260
Federal funds sold and Securities purchased under
agreements to resell................................ 1,449,439
Loans and lease financing receivables:
Loans and leases, net of unearned
income..................................37,900,739
LESS: Allowance for loan and
lease losses...............................572,761
LESS: Allocated transfer risk
reserve.....................................11,754
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,316,224
Trading Assets......................................... 1,646,634
Premises and fixed assets (including capitalized
leases)............................................. 678,439
Other real estate owned................................ 11,571
Investments in unconsolidated subsidiaries and
associated companies................................ 183,038
Customers' liability to this bank on acceptances
outstanding......................................... 349,282
Intangible assets...................................... 790,558
Other assets........................................... 2,498,658
----------
Total assets........................................... $60,242,491
==========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $26,030,231
Noninterest-bearing.......................11,348,986
Interest-bearing..........................14,681,245
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 18,530,950
Noninterest-bearing..........................156,624
Interest-bearing..........................18,374,326
Federal funds purchased and Securities sold under
agreements to repurchase............................ 2,094,678
Demand notes issued to the U.S.Treasury................ 232,459
Trading liabilities.................................... 2,081,462
Other borrowed money:
With remaining maturity of one year or less......... 863,201
With remaining maturity of more than one year
through three years............................... 449
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 351,286
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 3,055,031
----------
Total liabilities...................................... 54,578,827
==========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 815,314
Undivided profits and capital reserves................. 3,759,164
Net unrealized holding gains (losses) on
available-for-sale securities....................... (15,440)
Cumulative foreign currency translation adjustments.... (30,658)
Total equity capital................................... 5,663,664
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Total liabilities and equity capital................... $60,242,491
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<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ]
Alan R. Griffith ] Directors
Gerald L. Hassell ]
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