SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________________
Date of Report (Date of earliest event reported): August 8, 1997
<TABLE>
<S> <C> <C>
RJR Nabisco Holdings Corp.
(Exact name of Registrant as
specified in its charter)
Delaware 1-10215 13-3490602
(Jurisdiction of Incorporation (Commission file number) (I.R.S. Employer
or Organization) Identification No.)
RJR Nabisco Holdings Capital Trust II
(Exact name of Registrant as specified
in its charter)
Delaware application pending application pending
(Jurisdiction of Incorporation (Commission file number) (I.R.S. Employer
or Organization) Identification No.)
1301 Avenue of the Americas
New York, New York 10019
(212) 258-5600
(Address and telephone number of principal
executive offices)
</TABLE>
Item 5. OTHER EVENTS
The consent of Davis Polk & Wardwell, special tax counsel to the
Registrant, to the filing of the opinion set forth in full under the caption,
"Certain Federal Tax Considerations" in the Prospectus Supplement dated
September 11, 1998, to the Prospectus dated August 31, 1998, included in
Registration Statement No. 333-60811 and the reference to such firm in such
Prospectus Supplement is attached to this report as Exhibit 23. The forms of
Second Supplemental Indenture for Junior Subordinated Debentures, Preferred
Securities Guarantee and Amended and Restated Declaration of Trust referred to
in such Prospectus and Prospectus Supplement are attached to this report as
Exhibits 4(a), 4(b) and 4(c), respectively.
Item 7. EXHIBITS
4(a) Form of Second Supplemental Indenture for Junior
Subordinated Debentures Securities
4(b) Form of Preferred Securities Guarantee
4(c) Form of Amended and Restated Declaration of Trust
23 Consent of Davis Polk & Wardwell, special tax counsel to the
Registrant
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
RJR NABISCO HOLDINGS CORP.
RJR NABISCO CAPITAL TRUST II
/s/ John J. Deluca
-----------------------------
/s/ John J. Deluca
Senior Vice President and
Treasurer
Date: September 16, 1998
LIST OF EXHIBITS
Name of Exhibit
4(a) Form of Second Supplemental Indenture for Junior Subordinated
Debentures
4(b) Form of Preferred Securities Guarantee
4(c) Form of Amended and Restated Declaration of Trust
23 Consent of Davis Polk & Wardwell, special tax counsel to the
Registrant
Exhibit 4(a)
==============================================================================
RJR NABISCO HOLDINGS CORP.
AND
THE BANK OF NEW YORK
as Trustee
------------------------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of September 16, 1998
TO
INDENTURE
Dated as of September 21, 1995
------------------------------
9 1/2% Junior Subordinated Debentures Due 2047
==============================================================================
SECOND SUPPLEMENTAL INDENTURE, dated as of the 16th day of
September, 1998 (the "Second Supplemental Indenture"), between RJR NABISCO
HOLDINGS CORP., a corporation duly organized and existing under the laws of
the State of Delaware (hereinafter sometimes referred to as "Holdings"), and
The Bank of New York, a New York banking corporation, as trustee (hereinafter
sometimes referred to as the "Trustee") under the Indenture dated as of
September 21, 1995 between Holdings and the Trustee, as supplemented by the
First Supplemental Indenture dated as of September 21, 1995 between Holdings
and the Trustee (said Indenture as so supplemented being hereinafter referred
to as the "Indenture"). All terms used and not defined herein are used as
defined in the Indenture.
WHEREAS, Holdings has executed and delivered the Indenture to
the Trustee to provide for the future issuance of its notes, debentures and
other evidences of indebtedness (the "Securities"), said Securities to be
issued from time to time in series as might be determined by Holdings under
the Indenture, in an unlimited aggregate principal amount which may be
authenticated and delivered thereunder as in the Indenture provided; and
WHEREAS, pursuant to the terms of the Indenture, Holdings
desires to provide for the establishment of a series of its junior
subordinated debentures ("Debentures") to be known as its 9 1/2% Junior
Subordinated Debentures Due 2047 (said series being hereinafter referred to as
the "Junior Subordinated Debentures"), the form and substance of such Junior
Subordinated Debentures and the terms, provisions and conditions thereof to be
as provided in the Indenture and this Second Supplemental Indenture; and
WHEREAS, Holdings has caused to be formed RJR Nabisco Holdings
Capital Trust II (the "Trust") as a statutory business trust under the Business
Trust Act of the State of Delaware (12 Del. Code Section 3801 et seq.)
pursuant to a declaration of trust dated August 5, 1998 (the "Original
Declaration") and the filing of a certificate of trust with the Secretary of
State of the State of Delaware on August 6, 1998; and
WHEREAS, the Original Declaration has been amended and restated
in its entirety pursuant to an Amended and Restated Declaration of Trust dated
as of September 16, 1998 (such Amended and Restated Declaration of Trust, as
amended from time to time, the "Declaration of Trust") with The Bank of New
York, as Institutional Trustee; and
WHEREAS, the Trust desires to issue its 9 1/2% Trust
Originated Preferred Securities (the "Preferred Securities") and sell such
Preferred Securities to initial purchasers; and
WHEREAS, pursuant to the Preferred Securities Guarantee (the
"Preferred Securities Guarantees"), Holdings has irrevocably and
unconditionally guaranteed, to the extent set forth therein, to pay in full,
to the holders of the Preferred Securities, the Guarantee Payments (as defined
therein), to the extent not paid by the Trust; and
WHEREAS, in connection with such issuance of Preferred
Securities and the related purchase by the Company of Common Securities (as
defined in the Declaration of Trust) of the Trust, the Trust will purchase
as trust assets Junior Subordinated Debentures; and
WHEREAS, pursuant to the Declaration of Trust, the legal title
to the Junior Subordinated Debentures shall be owned and held of record in the
name of The Bank of New York or its successor under the Declaration of Trust,
as Institutional Trustee (the "Institutional Trustee"); and
WHEREAS, each of the following shall constitute a "Dissolution
Event": (i) the Regular Trustees (as defined in the Declaration of Trust) of
the Trust dissolve the Trust and cause Junior Subordinated Debentures to be
distributed to the holders of the Preferred Securities and Common Securities
upon the occurrence of a Special Event (as defined in the Declaration of Trust)
or upon exercise by Holdings of its right to cause the trustees of the Trust to
do so, and (ii) in connection with a Liquidation Distribution (as defined in
the Declaration of Trust) the Regular Trustees cause Junior Subordinated
Debentures to be distributed to holders of Preferred Securities and Common
Securities; and
WHEREAS, Holdings desires and has requested the Trustee to join
with it in the execution and delivery of this Second Supplemental Indenture,
and all requirements necessary to make this Second Supplemental Indenture a
valid instrument, in accordance with its terms, and to make the Junior
Subordinated Debentures, when executed by Holdings and authenticated and
delivered by the Trustee, the valid obligations of Holdings, have been
performed and fulfilled, and the execution and delivery hereof have been in all
respects duly authorized;
NOW THEREFORE, in consideration of the purchase and acceptance
of the Junior Subordinated Debentures by the holders thereof, and for the
purpose of setting forth, as provided in the Indenture, the form and substance
of the Junior Subordinated Debentures and the terms, provisions and conditions
thereof, Holdings covenants and agrees with the Trustee as follows:
ARTICLE 1
General Terms and Conditions of the Junior Subordinated Debentures
Section 1.1. There shall be and is hereby authorized a
series of Debentures designated the "9 1/2% Junior Subordinated Debentures Due
2047", initially limited in aggregate principal amount to $335,051,550 which
is equal to the sum of (i) $325,000,000 plus (ii) $10,051,550 which is a dollar
amount equal to the principal amount of Junior Subordinated Debentures
purchased by the Trust with the proceeds received by the Trust from the
purchase by Holdings of the Common Securities of the Trust, which amount shall
be as set forth in any written order of Holdings for the authentication and
delivery of Junior Subordinated Debentures. Upon exercise of the
overallotment option set forth in the Underwriting Agreement (as defined in
the Declaration of Trust), additional Junior Subordinated Debentures in the
aggregate principal amount of up to $50,257,750 may be executed by Holdings
and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Junior Subordinated Debentures to or
upon the written order of Holdings, which order shall be accompanied by
evidence satisfactory to the Trustee that the overallotment option has been
exercised. The Junior Subordinated Debentures shall mature and the principal
shall be due and payable together with all accrued and unpaid interest thereon,
including Compounded Interest (as hereinafter defined) on September 30, 2047.
Section 1.2. (a) The Junior Subordinated Debentures shall be
issued in fully registered certificated form without interest coupons.
Principal and interest on the Junior Subordinated Debentures issued in
certificated form will be payable, the transfer of such Junior Subordinated
Debentures will be registrable and such Junior Subordinated Debentures will be
exchangeable for Junior Subordinated Debentures bearing identical terms and
provisions at the office or agency of Holdings in the Borough of Manhattan,
The City and State of New York; provided, however, that payment of interest
may be made at the option of Holdings by check mailed to the registered holder
at such address as shall appear in the Debenture register and that the payment
of principal with respect to the Junior Subordinated Debentures will only be
made upon surrender of the Junior Subordinated Debentures to the Trustee.
(b) In connection with a Dissolution Event:
(i) Junior Subordinated Debentures in certificated form may
be presented to the Trustee by the Institutional Trustee in exchange for a
Global Debenture or Debentures representing the Junior Subordinated Debentures
in an aggregate principal amount equal to all outstanding Junior Subordinated
Debentures, to be registered in the name of the Depositary, or its nominee,
and delivered by the Trustee to the Depositary for crediting to the accounts
of its participants pursuant to the instructions of the Regular Trustees (as
defined in the Declaration of Trust). Upon any such presentation, Holdings
shall execute one or more Global Debentures representing the Junior
Subordinated Debentures in such aggregate principal amount and deliver the
same to the Trustee for authentication and delivery in accordance with the
Indenture and this Second Supplemental Indenture. Payments on the Junior
Subordinated Debentures issued as Global Debentures will be made to the
Depositary; and
(ii) if any Preferred Securities are held in non book-entry
certificated form, Junior Subordinated Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee and any Preferred
Security Certificate (as defined in the Declaration of Trust) which represents
Preferred Securities other than Preferred Securities held by the Clearing
Agency (as defined in the Declaration of Trust) or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent beneficial
interests in Junior Subordinated Debentures presented to the Trustee by the
Institutional Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificate is presented to the Debenture Registrar
for transfer or reissuance at which time such Preferred Security Certificate
will be cancelled and a Junior Subordinated Debenture, registered in the name
of the holder of the Preferred Security Certificate or the transferee of the
holder of such Preferred Security Certificate, as the case may be, with an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Security Certificate canceled will be executed by Holdings and
delivered to the Trustee for authentication and delivery in accordance with
the Indenture and this Second Supplemental Indenture. On issue of such Junior
Subordinated Debentures, Junior Subordinated Debentures with an equivalent
aggregate amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been canceled.
Section 1.3. Each Junior Subordinated Debenture will bear
interest at the rate of 9 1/2% per annum from September 16, 1998 until the
principal thereof becomes due and payable, and on any overdue principal and
(to the extent that payment of such interest is enforceable under applicable
law) on any overdue installment of interest at the same rate per annum,
compounded quarterly, payable (subject to the provisions of Article Three)
quarterly in arrears on the 30th day of March, June, September and December of
each year (each, an "Interest Payment Date", commencing on December 30, 1998),
to the person in whose name such Junior Subordinated Debenture or any
predecessor Junior Subordinated Debenture is registered, at the close of
business on the regular record date for such interest installment, which,
except as set forth below, shall be the close of business on the Business Day
immediately preceding that Interest Payment Date. Notwithstanding the
foregoing sentence, if the Preferred Securities are no longer in book-entry
only form or if pursuant to the provisions of Section 2.4(4) of the Indenture,
the Junior Subordinated Debentures are not represented by a Global Debenture,
the regular record dates for such interest installment shall be the close of
business on the last day of the quarter next preceding that Interest Payment
Date. Any such interest installment not punctually paid or duly provided for
shall forthwith cease to be payable to the registered holders on such regular
record date, and may be paid to the person in whose name the Junior
Subordinated Debenture (or one or more Predecessor Debentures) is registered
at the close of business on a special record date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the registered holders of the Junior Subordinated Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Junior Subordinated Debentures may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in
the Indenture.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and for any partial
month in any period shorter than a full quarterly period for which interest is
computed, the amount of interest payable will be computed on the basis of the
actual number of days elapsed in such a 30-day month. In the event that any
date on which interest is payable on the Junior Subordinated Debentures is not
a Business Day, then payment of interest payable on such date will be made on
the next succeeding day which is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day (and the regular record date for such
interest installment shall be the Business Day immediately preceding such
Business Day), in each case with the same force and effect as if made on such
date.
ARTICLE 2
Optional Redemption of the Junior Subordinated Debentures
Section 2.1. Except as provided in Section 2.02, Junior
Subordinated Debentures may not be redeemed by Holdings prior to September 30,
2003. Subject to the terms of Article Three of the Indenture, Holdings shall
have the right to redeem the Junior Subordinated Debentures, in whole or in
part, from time to time, on or after September 30, 2003, at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest thereon, including Compounded Interest, if any, to the date
of such redemption (the "Optional Redemption Price"). Any redemption pursuant
to this paragraph will be made upon not less than 30 nor more than 60 days'
notice, at the Optional Redemption Price.
Section 2.2. In the case of a Tax Event (as defined below)
which occurs prior to the dissolution of the Trust (or, in the case of a Tax
Event described in clause (iii) of the definition of Tax Event, after such
dissolution), Holdings shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Junior Subordinated Debentures in
whole or in part for cash at the Optional Redemption Price within 90 days
following the occurrence of such Tax Event; provided, however, that, if at the
time there is available to Holdings or the Regular Trustees on behalf of the
Trust the opportunity to eliminate, within such 90 day period, the Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a
form or making an election, or pursuing some other similar reasonable measure,
which has no adverse effect on the Trust, Holdings or the holders of the
Preferred Securities, Holdings or the Regular Trustees on behalf of the Trust
will pursue such measure in lieu of redemption and the 90-day period shall be
extended by the amount of time spent on such Ministerial Action; and, provided
further that Holdings shall have no right to redeem the Junior Subordinated
Debentures while Holdings or the Regular Trustees on behalf of the Trust are
pursuing any such Ministerial Action.
"Tax Event" means that Holdings and the Regular Trustees shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that
on or after September 16, 1998, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or effective or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after September 16, 1998, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the
date thereof, subject to United States federal income tax with respect to
income accrued or received on the Junior Subordinated Debentures, (ii) the
Trust is, or will be within 90 days of the date thereof, subject to more than
a de minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by Holdings on the Junior Subordinated Debentures is not, or
within 90 days of the date thereof will not be, deductible by Holdings for
United States federal income tax purposes.
Section 2.3. If the Junior Subordinated Debentures are only
partially redeemed pursuant to this Article Two, the Junior Subordinated
Debentures will be redeemed pro rata or by lot or by any other method utilized
by the Trustee. Notwithstanding the foregoing, if a partial redemption of the
Junior Subordinated Debentures would result in the delisting of the Preferred
Securities by any national securities exchange or other organization on which
the Preferred Securities are then listed, Holdings shall not be permitted to
effect such partial redemption and will only redeem the Junior Subordinated
Debentures in whole.
ARTICLE 3
Extension of Interest Payment Period
Section 3.1. So long as Holdings is not in default in the
payment of interest on the Junior Subordinated Debentures, Holdings shall have
the right, at any time during the term of the Junior Subordinated Debentures,
from time to time to extend the interest payment period of such Junior
Subordinated Debentures for up to 20 consecutive quarterly interest periods
(the "Extended Interest Payment Period"), at the end of which period Holdings
shall pay all interest accrued and unpaid thereon (together with interest
thereon at the rate of 9 1/2% per annum, compounded quarterly to the extent
permitted by applicable law ("Compounded Interest")). During such Extended
Interest Payment Period Holdings shall not declare or pay any dividend on, or
redeem, purchase, acquire or make a distribution or liquidation payment with
respect to, any of its common stock or preferred stock, or make any guarantee
payments with respect thereto; provided that Holdings may pay accrued
dividends (and cash in lieu of fractional shares) upon the conversion, other
than at the option of Holdings, of any of its preferred stock, including its
ESOP Preferred Stock, in accordance with the terms of such stock. Prior to
the termination of any such Extended Interest Payment Period, Holdings may pay
all or any portion of the interest accrued on the Junior Subordinated
Debentures on any Interest Payment Date to holders of record on the regular
record date for such Interest Payment Date or from time to time further extend
such Period; provided that such Period together with all such previous and
further extensions thereof shall not exceed 20 consecutive quarterly interest
periods or extend beyond the stated maturity of the Junior Subordinated
Debentures. Upon the termination of any Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest then due, together with
Compounded Interest, Holdings may select a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof.
At the end of the Extended Interest Payment Period Holdings shall pay all
interest accrued and unpaid on the Junior Subordinated Debentures including
any Compounded Interest which shall be payable to the holders of the Junior
Subordinated Debentures in whose names the Junior Subordinated Debentures are
registered in the Debenture register on the record date for the first interest
payment date occurring on or after the end of the Extended Interest Payment
Period.
Section 3.2. (a) So long as the Trust is the legal owner and
holder of record of the Junior Subordinated Debentures, at the time Holdings
selects an Extended Interest Payment Period, Holdings shall give both the
Institutional Trustee and the Trustee written notice of its selection of such
Extended Interest Payment Period one Business Day prior to the earlier of (i)
the next succeeding date on which distributions on the Preferred Securities
are payable or (ii) the next succeeding date on which the Trust is required to
give notice of the record date or the date such distributions are payable to
the New York Stock Exchange or other applicable self-regulatory organization
or to holders of the Preferred Securities, but in any event not less than one
Business Day prior to such record date. Holdings shall cause the Trust to
give notice of Holdings's selection of such Extended Interest Payment Period
to the holders of the Preferred Securities.
(b) If as a result of a Dissolution Event, Junior Subordinated
Debentures have been distributed to holders of Preferred Securities and Common
Securities, at the time Holdings selects an Extended Interest Payment Period,
Holdings shall give the holders of the Junior Subordinated Debentures and the
Trustee written notice of its selection of such Extended Interest Payment
Period 10 Business Days prior to the earlier of (i) the next succeeding
Interest Payment Date or (ii) the date Holdings is required to give notice of
the record or payment date of such interest payment to the New York Stock
Exchange (if the Junior Subordinated Debentures are listed thereon) or other
applicable self-regulatory organization or to holders of the Junior
Subordinated Debentures.
Section 3.3. The quarter in which any notice is given
pursuant to Section 3.02 shall be counted as one of the 20 quarters permitted
in the maximum Extended Interest Payment Period permitted under this Article
Three.
ARTICLE 4
Covenants Applicable to Junior Subordinated Debentures
Section 4.1. So long as any Preferred Securities remain
outstanding, Holdings will not declare or pay any dividend on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock, or make any guarantee payments
with respect thereto, if at such time (i) Holdings shall be in default with
respect to its Guarantee Payments (as defined in the Guarantee Agreement) or
other payment obligations under the Guarantee Agreement, (ii) there shall have
occurred any Event of Default under the Indenture with respect to the Junior
Subordinated Debentures or (iii) Holdings shall have given notice of its
selection of an Extended Interest Payment Period and such Period, or any
extension thereof, is continuing; provided that Holdings will be permitted to
make payments under the Preferred Securities Guarantee and to pay accrued
dividends (and cash in lieu of fractional shares) upon the conversion, other
than at the option of Holdings, of any of its preferred stock, including its
ESOP Preferred Stock, in accordance with the terms of such stock.
Section 4.2. In connection with the distribution of the
Junior Subordinated Debentures to the holders of the Preferred Securities upon
a Dissolution Event, and if the Preferred Securities of the Trust are listed
on the New York Stock Exchange or other securities exchange, Holdings will use
its best efforts to list such Junior Subordinated Debentures on the New York
Stock Exchange or on such other exchange as the Preferred Securities are then
listed and traded.
Section 4.3. Holdings covenants and agrees for the benefit
of the holders of the Preferred Securities to comply fully with all of its
obligations and agreements under the Declaration of Trust, including, without
limitation, its obligations under Article 4 thereof.
Section 4.4. Prior to the distribution of Junior Subordinated
Debentures to the holders of Preferred Securities upon a Dissolution Event,
Holdings covenants and agrees for the benefit of the holders of the Preferred
Securities (i) not to cause or permit the Common Securities to be transferred
except as permitted by the Declaration of Trust and (ii) not to take any action
which would cause the Trust to cease to be treated as a grantor trust for
United States federal income tax purposes, except in connection with a
distribution of the Junior Subordinated Debentures as provided in the
Declaration of Trust.
ARTICLE 5
Form of Junior Subordinated Debentures
Section 5.1. The Junior Subordinated Debentures and the
Trustee's Certificate of Authentication to be endorsed thereon are to be
substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
[IF THE NOTE IS TO BE A GLOBAL DEBENTURE HELD BY A DEPOSITARY,
INSERT: This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Debenture is exchangeable for
Debentures registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Debenture (other than a transfer of this Debenture as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Debenture is presented by an authorized
representative to The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Debenture issued is registered in the name of Cede & Co. or
such other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.]
No. $
CUSIP NO. _________
RJR NABISCO HOLDINGS CORP.
9 1/2% JUNIOR SUBORDINATED DEBENTURE,
DUE 2047
RJR Nabisco Holdings Corp., a corporation duly organized and
existing under the laws of the State of Delaware (herein referred to as
"Holdings", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
, or registered assigns, the principal sum of _________ Dollars
on September 30, 2047, and to pay interest on said principal sum from
September 16, 1998 or from the most recent interest payment date (each such
date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears
on the 30th day of March, June, September and December of each year commencing
December 30, 1998 at the rate of 9 1/2% per annum plus Compounded Interest, if
any, until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum. The amount
of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months and for any period shorter
than a full quarterly interest period for which interest is computed, the
amount of interest payable will be computed on the basis of the actual number
of days elapsed in such a 30-day month. In the event that any date on which
interest is payable on this Debenture is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is
a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture is registered at the close
of business on the regular record date for such interest installment, which
shall be the close of business on the Business Day immediately preceding such
Interest Payment Date. Any such interest installment not punctually paid or
duly provided for shall forthwith cease to be payable to the registered holders
on such regular record date, and may be paid to the person in whose name this
Debenture is registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such defaulted interest, notice whereof
shall be given to the registered holders of this series of Debentures not less
than 10 days prior to such special record date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture. The principal of and the interest on this Debenture shall be
payable at the office or agency of Holdings maintained for that purpose in the
Borough of Manhattan, The City and State of New York, in any coin or currency
of the United States of America which at the time of payment is legal tender
for payment of public and private debts; provided, however, that payment of
interest may be made at the option of Holdings by check mailed to the
registered holder at such address as shall appear in the Debenture register and
that the payment of principal will only be made upon the surrender of this
Debenture to the Trustee. Notwithstanding the foregoing, so long as the owner
and record holder of this Debenture is the Trust (as defined in the Indenture
referred to on the reverse hereof), the payment of the principal of and
interest (including Compounded Interest, if any) on this Debenture will be
made at such place and to such account of the Trust as may be designated by
the Institutional Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each
such Holder upon said provisions.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed
by or on behalf of the Trustee.
Unless the Certificate of Authentication hereon has been
executed by the Trustee referred to on the reverse side hereof, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
IN WITNESS WHEREOF, Holdings has caused this Instrument to be
executed.
Dated ___________ __, ____
RJR NABISCO HOLDINGS CORP.
By___________________________
Name:
Title:
Attest:
By______________________
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures
described in the within-mentioned Indenture.
Dated:
The Bank of New York,
as Trustee
____________________________
or as Authentication Agent
____________________________
Authorized Signatory
By____________________________
Authorized Signatory
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of debentures
of Holdings (herein sometimes referred to as the "Debentures"), all issued or
to be issued in one or more series under and pursuant to an Indenture dated as
of September 21, 1995 duly executed and delivered between Holdings and The
Bank of New York, a New York banking corporation, as Trustee (herein referred
to as the "Trustee"), as supplemented by the First Supplemental Indenture
dated as of September 21, 1995 between Holdings and the Trustee, and as
further supplemented by the Second Supplemental Indenture dated as of
September 16, 1998 between Holdings and the Trustee (said Indenture as so
supplemented being hereinafter referred to as the "Indenture"), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, Holdings and the holders of the
Debentures, and, to the extent specifically set forth in the Indenture, the
holders of Senior Indebtedness and Preferred Securities. By the terms of the
Indenture, the Debentures are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in the Indenture
provided. This series of Debentures is designated the 9 1/2% Junior
Subordinated Debentures Due 2047 and is limited in aggregate principal amount
as specified in said Second Supplemental Indenture.
Except as provided in the next paragraph, the Debentures may
not be redeemed by Holdings prior to September 30, 2003. Holdings shall have
the right to redeem this Debenture at the option of Holdings, without premium
or penalty, in whole or in part at any time on or after September 30, 2003 (an
"Optional Redemption"), at a redemption price equal to 100% of the principal
amount plus any accrued but unpaid interest, including any Compounded
Interest, if any, to the date of such redemption (the "Optional Redemption
Price"). Any redemption pursuant to this paragraph will be made upon not less
than 30 nor more than 60 days' notice, at the Optional Redemption Price.
In the case of a Tax Event (as defined below) which occurs
prior to the dissolution of the Trust (or, in the case of a Tax Event
described in clause (iii) of the definition of Tax Event, after such
dissolution), Holdings shall have the right at any time, upon not less than 30
nor more than 60 days' notice, to redeem the Junior Subordinated Debentures in
whole or in part for cash at the Optional Redemption Price within 90 days
following the occurrence of such Tax Event; provided, however, that, if at the
time there is available to Holdings or the Regular Trustees on behalf of the
Trust the opportunity to eliminate, within such 90-day period, the Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a
form or making an election, or pursuing some other similar reasonable measure,
which has no adverse effect on the Trust, Holdings or the holders of the
Preferred Securities, Holdings or the Regular Trustees on behalf of the Trust
will pursue such measure in lieu of redemption and the 90-day period shall be
extended by the amount of time spent on such Ministerial Action; and, provided
further that Holdings shall have no right to redeem the Junior Subordinated
Debentures while Holdings or the Regular Trustees on behalf of the Trust are
pursuing any such Ministerial Action.
"Tax Event" means that Holdings and the Regular Trustees shall
have obtained an opinion of nationally recognized independent tax counsel
experienced in such matters (a "Dissolution Tax Opinion") to the effect that
on or after September 16, 1998, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change in, an
interpretation or application of any such laws or regulations by any
legislative body, court, governmental agency or regulatory authority
(including the enactment of any legislation and the publication of any
judicial decision or regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position or
(d) any action taken by any governmental agency or regulatory authority, which
amendment or change is enacted, promulgated, issued or effective or which
interpretation or pronouncement is issued or announced or which action is
taken, in each case on or after September 16, 1998, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the
date thereof, subject to United States federal income tax with respect to
income accrued or received on the Junior Subordinated Debentures, (ii) the
Trust is, or will be within 90 days of the date thereof, subject to more than
a de minimis amount of taxes, duties or other governmental charges or (iii)
interest payable by Holdings on the Junior Subordinated Debentures is not, or
within 90 days of the date thereof will not be, deductible by Holdings for
United States federal income tax purposes.
If the Debentures are only partially redeemed by Holdings
pursuant to an Optional Redemption or as a result of a Tax Event as described
above, the Debentures will be redeemed pro rata or by lot or in some other
equitable manner determined by the Trustee. Notwithstanding the foregoing, if
a partial redemption of the Junior Subordinated Debentures would result in the
delisting of the Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are then listed, Holdings
shall not be permitted to effect such partial redemption and will only redeem
the Junior Subordinated Debentures in whole.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will
be issued in the name of the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for defeasance at any time of
the entire indebtedness of this Debenture upon compliance by Holdings with
certain conditions set forth therein.
The Indenture contains provisions permitting Holdings and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of all series affected at the time
outstanding, as defined in the Indenture (and, in the case of any series of
Debentures held as trust assets of a RJR Nabisco Holdings Capital Trust and
with respect to which a Security Exchange has not theretofore occurred, such
consent of holders of the Preferred Securities and the Common Securities of
such RJR Nabisco Holdings Capital Trust as may be required under the
Declaration of Trust of such RJR Nabisco Holdings Capital Trust), to execute
supplemental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture
or of any supplemental indenture or of modifying in any manner the rights of
the Holders of the Debentures; provided, however, that no such supplemental
indenture shall (i) extend the final maturity of any Debentures of any series,
or reduce the principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon (except that a valid extension of an interest
payment period by the Issuer shall not constitute an extension of interest for
this purpose), or reduce any amount payable upon the redemption thereof or
reduce the amount of the principal of an original issue discount Debenture that
would be due and payable upon an acceleration of the maturity thereof pursuant
to the Indenture or the amount thereof provable in bankruptcy pursuant to the
Indenture, or alter the provisions of the Indenture concerning liability of
officers of the Issuer and the parties to the Indenture or impair or affect
the right of any Debenture holder to institute suit for the payment thereof in
each case without the consent of the holder of each Debenture so affected
(and, in the case of any series of Securities held as trust assets of an RJR
Nabisco Holdings Capital Trust and with respect to which a Security Exchange
has not theretofore occurred, such consent of holders of the Preferred
Securities and the Common Securities of such RJR Nabisco Holdings Capital
Trust as may be required under the Declaration of Trust of such RJR Nabisco
Holdings Capital Trust) or (ii) reduce the aforesaid percentage of Debentures,
the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of each Debenture (and, in the
case of any series of Debentures held as trust assets of a RJR Nabisco
Holdings Capital Trust and with respect to which a Security Exchange has not
theretofore occurred, such consent of the holders of the Preferred Securities
and the Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust) affected thereby. The Indenture also contains provisions permitting
the Holders of a majority in aggregate principal amount of the Debentures of
all series at the time outstanding affected thereby (subject, in the case of
any series of Debentures held as trust assets of a RJR Nabisco Holdings
Capital Trust and with respect to which a Securities Exchange has not
theretofore occurred, to such consent of holders of Preferred Securities and
Common Securities of such RJR Nabisco Holdings Capital Trust as may be
required under the Declaration of Trust of such RJR Nabisco Holdings Capital
Trust), on behalf of the Holders of the Debentures of such series, to waive
any past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such
series, and its consequences, except a default in the payment of the principal
of or premium, if any, or interest on any of the Debentures of such series.
Any such consent or waiver by the registered Holder of this Debenture (unless
revoked as provided in the Indenture) shall be conclusive and binding upon
such Holder and upon all future Holders and owners of this Debenture and of
any Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of
Holdings, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Debenture at the time and place at the
rate and in the money herein prescribed.
So long as Holdings is not in default in the payment of
interest on the Debentures, Holdings shall have the right, at any time during
the term of the Debentures, from time to time to extend the interest payment
period of such Debentures for up to 20 consecutive quarterly interest periods
(the "Extended Interest Payment Period"), at the end of which period Holdings
shall pay all interest then accrued and unpaid (together with interest thereon
at the rate of 9 1/2% per annum compounded quarterly to the extent permitted
by applicable law ("Compounded Interest")). During such Extended Interest
Payment Period Holdings shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a distribution or liquidation payment with respect
to, any of its common stock or preferred stock, or make any guarantee payments
with respect thereto, provided that Holdings may pay accrued dividends (and
cash in lieu of fractional shares) upon the conversion, other than at the
option of Holdings, of any of its preferred stock, including its ESOP
Preferred Stock, in accordance with the terms of such stock. Prior to the
termination of any such Extended Interest Payment Period, Holdings may pay all
or any portion of the interest accrued on the Debentures on any Interest
Payment Date to holders of record on the regular record date for such Interest
Payment Date or from time to time further extend such Extended Interest
Payment Period, provided that such Period together with all such further
extensions thereof shall not exceed 20 consecutive quarterly interest periods
or extend beyond the stated maturity of the Junior Subordinated Debentures. At
the termination of any such Extended Interest Payment Period and upon the
payment of all accrued and unpaid interest then due, together with Compounded
Interest, Holdings may select a new Extended Interest Payment Period, subject
to the foregoing requirements. No interest on this Debenture shall be due and
payable during an Extended Interest Payment Period, except at the end thereof.
At the end of the Extended Interest Payment Period Holdings shall pay all
interest accrued and unpaid on the Junior Subordinated Debentures including
any Compounded Interest which shall be payable to the holders of the Junior
Subordinated Debentures in whose names the Junior Subordinated Debentures are
registered in the Debenture register on the record date for the first interest
payment date occurring on or after the end of the Extended Interest Payment
Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the registered holder
hereof on the Debenture register of Holdings, upon surrender of this Debenture
for registration of transfer at the office or agency of Holdings in the
Borough of Manhattan, The City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to Holdings or the
Trustee duly executed by the registered holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures of authorized
denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but Holdings may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Debenture, Holdings, the Trustee, any paying agent and any Debenture Registrar
may deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and interest due hereon and for all other
purposes, and neither Holdings nor the Trustee nor any paying agent nor any
Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of Holdings or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Debentures of this series are issuable only in registered
form without coupons in denominations of $25 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Debentures of this Series are exchangeable for a like
aggregate principal amount of Debentures of this series of a different
authorized denomination, as requested by the Holder surrendering the same.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
ARTICLE 6
Issue of Junior Subordinated Debentures
Section 6.1. Junior Subordinated Debentures in the aggregate
principal amount equal to the sum of $325,000,000 plus a dollar amount equal
to the principal amount of Junior Subordinated Debentures purchased by the
Trust with the proceeds received by the Trust from the purchase by Holdings
of the Common Securities of the Trust, may, upon execution of this Second
Supplemental Indenture, be executed by Holdings and delivered to the Trustee
for authentication, and the Trustee shall thereupon authenticate and deliver
said Debentures to or upon the written order of Holdings, signed by its
Chairman, any Vice Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by Holdings.
Up to $50,257,750 aggregate principal amount of Junior Subordinated Debentures
may be executed by Holdings and delivered to the Trustee for authentication
and the Trustee shall thereupon authenticate and deliver such Debentures to or
upon the written order of Holdings, signed by any of the aforementioned
officers, without any further action by Holdings upon exercise of the
overallotment option set forth in the Underwriting Agreement, other than
delivery of evidence of exercise.
ARTICLE 7
Miscellaneous
Section 7.1. Except as otherwise expressly provided in this
Second Supplemental Indenture or in the form of Junior Subordinated Debenture
or otherwise clearly required by the context hereof or thereof, all terms used
herein or in said form of Junior Subordinated Debenture that are defined in the
Indenture shall have the several meanings respectively assigned to them
thereby.
Section 7.2. The Indenture, as supplemented by this Second
Supplemental Indenture, is in all respects ratified and confirmed, and this
Second Supplemental Indenture shall be deemed part of the Indenture in the
manner and to the extent herein and therein provided.
Section 7.3. The recitals herein contained are made by
Holdings and not by the Trustee, and the Trustee assumes no responsibility for
the correctness thereof. The Trustee makes no representation as to the
validity or sufficiency of this Second Supplemental Indenture.
Section 7.4. This Second Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, on the date or dates indicated in
the acknowledgments and as of the day and year first above written.
RJR NABISCO HOLDINGS CORP.
By_______________________________
Name:
Title:
Attest:
_______________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By_______________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK ) September 16, 1998
On the 16th day of September, in the year one thousand nine
hundred ninety-eight, before me personally came ________________ to me known,
who, being by me duly sworn, did depose and say that he resides at
____________________ ___________________________________; that he is
____________ ______________________ of RJR NABISCO HOLDINGS CORP., one of the
corporations described in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal affixed to the
said instrument is such corporation seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
_____________________________
NOTARY PUBLIC
My Commission Expires
Exhibit 4(b)
==============================================================================
RJR NABISCO HOLDINGS CORP.
GUARANTEE AGREEMENT
-------------------------
Dated as of September 16, 1998
-------------------------
==============================================================================
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of September 16, 1998, is
executed and delivered by RJR Nabisco Holdings Corp., a Delaware corporation
(the "Guarantor"), and The Bank of New York as the initial Guarantee Trustee
(as defined herein) for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of RJR Nabisco
Holdings Capital Trust II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of September 16, 1998 among the trustees
of the Issuer named therein, RJR Nabisco Holdings Corp., as Sponsor, and the
Holders from time to time of undivided beneficial interests in the assets of
the Issuer, the Issuer is issuing up to $373,750,000 aggregate liquidation
amount of its 9 1/2% Trust Originated Preferred Securities (the "Preferred
Securities") representing undivided beneficial interests in the assets of the
Issuer and having the terms set forth in Exhibit B to the Declaration, of which
$325,000,000 liquidation amount of Preferred Securities are being issued as of
the date hereof. Up to the remaining $48,750,000 liquidation amount of
Preferred Securities may be issued by the Issuer if and to the extent that the
over-allotment option in the Underwriting Agreement (as defined in the
Declaration) is exercised by the Underwriters named therein.
WHEREAS, the Preferred Securities will be issued by the Issuer
upon deposit of the Guarantor's Debentures (as defined herein) with the Issuer
as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the initial
purchasers thereof of Preferred Securities, which purchase the Guarantor
hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers
this Guarantee Agreement for the benefit of the Holders from time to time of
the Preferred Securities.
ARTICLE 1
Definitions
Section 1.1. Definitions. (a) Capitalized terms used in this
Guarantee Agreement but not defined in the preamble above have the respective
meanings assigned to them in this Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(c) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined in
this Guarantee Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing undivided
beneficial interests in the assets of the Issuer, having the terms set forth in
Exhibit C to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated Debentures
issued by the Guarantor under the Indenture and entitled the "9 1/2% Junior
Subordinated Debentures Due 2047".
"Distributions" means the periodic distributions and other
payments payable to Holders of Preferred Securities in accordance with the
terms of the Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee Agreement.
"Financing Entity" means any trust, partnership or other entity
affiliated with Holdings which is a financing vehicle of Holdings.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if
and to the extent that in each case the Guarantor has made a payment to the
Trust of interest or principal on the Debentures deposited in the Trust as
trust assets (to the extent allocable to the Preferred Securities) and (ii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the distribution of Debentures to
Holders or the redemption of all the Preferred Securities upon the maturity or
redemption of the Debentures as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer has funds available therefor, and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation
of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York until a Successor
Guarantee Trustee has been appointed and accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any entity directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate
of the Guarantee Trustee, and any officers, directors, shareholders, members,
partners, employees, representatives or agents of the Guarantee Trustee.
"Indenture" means the Indenture dated as of September 21, 1995
between the Guarantor and The Bank of New York, as trustee, as supplemented by
the First Supplemental Indenture thereto dated as of September 21, 1995 and
the Second Supplemental Indenture thereto dated as of September 16, 1998
pursuant to which the Debentures are to be issued.
"Majority in liquidation amount of the Preferred Securities"
means, except as otherwise required by the Trust Indenture Act, Holder(s) of
outstanding Preferred Securities voting together as a single class, who are the
record owners of Preferred Securities whose liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning set forth in the first
WHEREAS clause above.
"Redemption Price" means the amount payable on redemption of the
Preferred Securities in accordance with the terms of the Preferred Securities.
"Responsible Officer" means, with respect to the Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer
of the Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of that officer's knowledge of and familiarity with the
particular subject.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as a Guarantee Trustee under
Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such
provisions;
(b) if and to the extent that any provision of this
Guarantee Agreement limits, qualifies or conflicts with the duties imposed
by Section Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control; and
(c) the application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Preferred Securities
as equity securities representing undivided beneficial interests in the
assets of the Issuer.
Section 2.2. Lists of Holders of Preferred Securities.
(a) The Guarantor shall provide the Guarantee Trustee with
such information as is required under Section 312(a) of the Trust Indenture
Act at the times and in the manner provided in Section 312(a); and
(b) the Guarantee Trustee shall comply with its obligations
under Section Section 310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.3. Reports By The Guarantee Trustee. Within 60 days
after May 15 of each year, the Guarantee Trustee shall provide to the Holders
of the Preferred Securities such reports as are required by Section 313(a) of
the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee
shall also comply with the other requirements of Section 313 of the Trust
Indenture Act.
Section 2.4. Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Commission and the
Holders of the Preferred Securities, as applicable, such documents, reports
and information as required by Section 314(a)(1)-(3) (if any) of the Trust
Indenture Act and the compliance certificates required by Section 314(a)(4)
and (c) of the Trust Indenture Act, any such certificates to be provided in
the form, in the manner and at the times required by Section 314(a)(4) and
(c) of the Trust Indenture Act (provided that any certificate to be provided
pursuant to Section 314(a)(4) of the Trust Indenture Act shall be provided
within 120 days of the end of each fiscal year of the Issuer).
Section 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Guarantee Agreement which relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given pursuant to Section 314(c) shall comply with Section 314(e) of the
Trust Indenture Act.
Section 2.6. Events of Default; Waiver. (a) Subject to Section
2.06(b), Holders of Preferred Securities may by vote of at least a Majority in
liquidation amount of the Preferred Securities, (A) direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon by the Guarantee
Trustee or (B) on behalf of the Holders of all Preferred Securities waive any
past Event of Default and its consequences. Upon such waiver, any such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Guarantee Agreement,
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to receive
payment of the Guarantee Payments in accordance with this Guarantee Agreement,
or to institute suit for the enforcement of any such payment, shall not be
impaired without the consent of each such Holder.
Section 2.7. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Preferred
Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
Section 2.8. Conflicting Interest. The Declaration shall be
deemed to be specifically described in this Guarantee Agreement for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE 3
Powers, Duties and Rights of Guarantee Trustee
Section 3.1. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee Agreement shall be held by the Guarantee Trustee in trust for
the benefit of the Holders of the Preferred Securities. The Guarantee Trustee
shall not transfer its right, title and interest in the Guarantee Agreement to
any Person except a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee or to a
Holder of Preferred Securities exercising his or her rights pursuant to Section
5.04. The right, title and interest of the Guarantee Trustee to the Guarantee
Agreement shall vest automatically in each Person who may hereafter be
appointed as Guarantee Trustee in accordance with Article 4. Such vesting and
cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
(b) If an Event of Default occurs and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders of the Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the
Trust hereunder in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor
of, or for the benefit of that Guarantee Trustee or its agents or their
creditors.
(d) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the holders of the Preferred Securities, as their names and
addresses appear upon the register, notice of all Events of Default known
to the Guarantee Trustee, unless such defaults shall have been cured before
the giving of such notice; provided that the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors
and/or Responsible Officers, of the Guarantee Trustee in good faith
determine that the withholding of such notice is in the interests of the
Holders of the Preferred Securities. The Guarantee Trustee shall not be
deemed to have knowledge of any default except any default as to which the
Guarantee Trustee shall have received written notice or a Responsible
Officer charged with the administration of this Guarantee Agreement shall
have obtained written notice.
(e) The Guarantee Trustee shall not resign as a Trustee
unless a Successor Guarantee Trustee has been appointed and accepted such
appointment in accordance with Article 4.
Section 3.2. Certain Rights and Duties of the Guarantee
Trustee. (a) The Guarantee Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06(a)), the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, 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 his or her own affairs.
(b) No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Guarantee Agreement, and no implied covenants or obligations shall be
read into this Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the case of
any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Guarantee Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation amount
of the Preferred Securities as provided herein relating to the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Guarantee Agreement or adequate
indemnity against such risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.02(a) and (b):
(i) whenever in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon a certificate, which shall comply with the provisions of Section 314(e)
of the Trust Indenture Act, signed by any authorized officers of the
Guarantor;
(ii) the Guarantee Trustee (A) may consult with counsel (which
may be counsel to the Guarantor or any of its Affiliates and may include any
of its employees) selected by it in good faith and with due care and the
written advice or opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon and in accordance with such advice and opinion and (B) shall have the
right at any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee Agreement
at the request or direction of any Holders of Preferred Securities, unless
such Holders shall have offered to the Guarantee Trustee reasonable security
and indemnity against the costs, expenses (including its attorneys' fees and
expenses) and liabilities that might be incurred by it in complying with such
request or direction; provided that nothing contained in this clause (iv)
shall relieve the Guarantee Trustee of the obligation, upon the occurrence of
an Event of Default (which has not been cured or waived) to exercise such of
the rights and powers vested in it by this Guarantee Agreement, and to use the
same degree of care and skill in this exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the signature
of the Guarantee Trustee or its agents alone shall be sufficient and effective
to perform any such action; and no third party shall be required to inquire as
to the authority of the Guarantee Trustee to so act, or as to its compliance
with any of the terms and provisions of this Guarantee Agreement, both of
which shall be conclusively evidenced by the Guarantee Trustee's or its
agent's taking such action.
Section 3.3. Not Responsible for Recitals or Issuance. The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor and the Guarantee Trustee does not assume any responsibility for
their correctness. The Guarantee Trustee makes no representations as to the
validity or sufficiency of this Guarantee Agreement.
ARTICLE 4
Guarantee Trustee
Section 4.1. Qualifications. There shall at all times be a
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this Section
4.01(ii), the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i)-(ii) above, the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.02. If the
Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
and the Guarantor shall in all respects comply with the provisions of Section
310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of Guarantee
Trustee.
(a) Subject to Section 4.02(b), so long as no Event of
Default shall have occurred and be continuing, the Guarantee Trustee may be
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in
accordance with Section 4.02(a) until a Successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section
4.01 has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor and the Guarantee Trustee being removed.
(c) The Guarantee Trustee appointed to office shall hold
office until his successor shall have been appointed or until its removal
or resignation.
(d) The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument (a "Resignation
Request") in writing signed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that no such
resignation of the Guarantee Trustee shall be effective until a Successor
Guarantee Trustee possessing the qualifications to act as Guarantee Trustee
under Section 4.01 has been appointed and has accepted such appointment by
instrument executed by such Successor Guarantee Trustee and delivered to
Guarantor and the resigning Guarantee Trustee.
(e) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within
60 days after delivery to the Guarantor of a Resignation Request, the
resigning Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court
may thereupon after such notice, if any, as it may deem proper and
prescribe, appoint a Successor Guarantee Trustee.
ARTICLE 5
Guarantee
Section 5.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer) regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantor's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
Section 5.2. Waiver of Notice. The Guarantor hereby waives
notice of acceptance of this Guarantee Agreement and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require
a proceeding first against the Issuer or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands.
Section 5.3. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities to
be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest
payment period on the Debentures), Redemption Price, Liquidation Distribution
(as defined in the Declaration) or any other sums payable under the terms of
the Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Preferred
Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4. Enforcement of Guarantee. The Guarantor and the
Guarantee Trustee expressly acknowledge that (i) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) Holders representing not less than a
Majority in liquidation amount of the Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of this Guarantee Agreement including the giving of
directions to the Guarantee Trustee, or exercising any trust or other power
conferred upon the Guarantee Trustee under this Guarantee Agreement, and (iv)
if the Guarantee Trustee fails to enforce this Guarantee Agreement after a
period of 90 days has elapsed from such Holders' written request to the
Guarantee Trustee, any Holder of Preferred Securities may institute a legal
proceeding directly against either or both of the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Issuer, the Guarantee Trustee, or any other Person.
Section 5.5. Guarantee of Payment. This Guarantee Agreement
creates a guarantee of payment and not merely of collection. This Guarantee
Agreement will not be discharged except by payment of the Guarantee Payments in
full (without duplication of amounts theretofore paid by the Issuer).
Section 5.6. Subrogation. The Guarantor shall be subrogated to
all (if any) rights of the Holders against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee
Agreement, if, at the time of any such payment, any amounts are due and unpaid
under this Guarantee Agreement. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agree to hold such amount
in trust for the Holders and to pay over such amount to the Holders.
Section 5.7. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 5.03 hereof.
ARTICLE 6
Limitation of Transactions; Subordination
Section 6.1. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, the Guarantor will not declare or pay
any dividend on, or redeem, purchase, acquire or make a distribution or
liquidation payment with respect to, any of its common or preferred stock, or
make any guarantee payments with respect thereto, if at such time (a) the
Guarantor shall be in default with respect to its payment obligations
hereunder, (b) there shall have occurred an event of default under the
Declaration or (c) the Guarantor shall have given notice of its election of an
Extended Interest Payment Period (as defined in the Indenture) and such
period, or any extension thereof, is continuing; provided that Holdings will
be permitted to pay accrued dividends (and cash in lieu of fractional shares)
upon the conversion, other than at the option of Holdings, of any preferred
stock, including its ESOP Convertible Preferred Stock, in accordance with the
terms of such stock. In addition, so long as any Preferred Securities remain
outstanding, the Guarantor (i) will remain the sole direct or indirect owner
of all of the outstanding Common Securities and shall not cause or permit the
Common Securities to be transferred except to the extent such transfer is
permitted under Section 9.01(c) of the Declaration; provided that any
permitted successor of the Guarantor under the Indenture may succeed to the
Guarantor's direct or indirect ownership of the Common Securities and (ii)
will use reasonable efforts to cause the Issuer to continue to be treated as a
grantor trust for United States federal income tax purposes except in
connection with a distribution of Debentures as provided in the Declaration.
Section 6.2. Subordination. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank (i) pari
passu in right of payment with Holdings' obligations under any other guarantee
of preferred securities of any Financing Entity, (ii) subordinate and junior
in right of payment to all Senior Indebtedness of the Guarantor, except
obligations made pari passu or subordinate by their terms, and the Debentures
and (iii) senior to all capital stock now or hereafter issued by the Guarantor
and to any guarantee now or hereafter entered into by the Guarantor in respect
of any of its capital stock.
ARTICLE 7
Termination
Section 7.1. Termination. This Guarantee Agreement shall
terminate and be of no further force and effect upon full payment of the
Redemption Price of all Preferred Securities, upon the distribution of
Debentures to Holders of Preferred Securities and Common Securities in
exchange for all of the Preferred Securities and Common Securities, or upon
full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with
respect to the Preferred Securities or this Guarantee Agreement.
ARTICLE 8
Limitation of Liability; Indemnification
Section 8.1. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Guarantee
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon such
information, opinions, reports or statements presented to the Guarantor by
any Person as to matters the Indemnified Person reasonably believes are
within such other Person's professional or expert competence and who has
been selected with reasonable care by or on behalf of the Guarantor,
including information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits, losses or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Preferred Securities might properly be paid.
Section 8.2. Indemnification. (a) To the fullest extent
permitted by applicable law, the Guarantor shall indemnify and hold harmless
each Indemnified Person from and against any loss, damage or claim incurred by
such Indemnified Person by reason of any act or omission performed or omitted
by such Indemnified Person in good faith and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.02(a).
ARTICLE 9
Miscellaneous
Section 9.1. Successors and Assigns. All guarantees and
agreements contained in this Guarantee Agreement shall bind the successors,
assignees, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale
involving the Guarantor that is permitted under the Indenture, the Guarantor
shall not assign its obligations hereunder.
Section 9.2. Amendments. Except with respect to any changes
which do not adversely affect the rights of Holders (in which case no consent
of Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities. The provisions of Section
12.02 of the Declaration concerning meetings of Holders shall apply to the
giving of such approval.
Section 9.3. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be in writing,
duly signed by the party giving such notice, and delivered, telecopied or
mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth
below or such other address as the Guarantor may give notice of to the
Holders:
RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, New York 10019
Facsimile No: (212) 969-9198
Attention: H. Colin McBride
(b) if given to the Guarantee Trustee, to the address set forth
below or such other address as the Guarantee Trustee may give notice to the
Holders:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Facsimile No: (212) 815-5915
Attention: Corporate Trust Administration
(c) if given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
Section 9.4. Genders. The masculine, feminine and neuter
genders used herein shall include the masculine, feminine and neuter genders.
Section 9.5. Benefit. This Guarantee Agreement is solely for
the benefit of the Holders and subject to Section 3.01(a) is not separately
transferable from the Preferred Securities.
Section 9.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
Section 9.7. Counterparts. This Guarantee Agreement may be
executed in counterparts, each of which shall be an original; but such
counterparts shall together constitute one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year
first above written.
RJR NABISCO HOLDINGS CORP.
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
As Guarantee Trustee
By:____________________________
Name:
Title:
Exhibit 4(c)
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
RJR Nabisco Holdings Capital Trust II
Dated as of September 16, 1998
TABLE OF CONTENTS
-----------------
Page
ARTICLE 1
Definitions
Section 1.1. Definitions.................................................. 2
ARTICLE 2
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application............................. 8
Section 2.2. Lists of Holders of Preferred Securities..................... 9
Section 2.3. Reports by the Institutional Trustee......................... 9
Section 2.4. Periodic Reports to Institutional Trustee.................... 9
Section 2.5. Evidence of Compliance with Conditions
Precedent................................................... 9
Section 2.6. Events of Default; Waiver.................................... 9
Section 2.7. Disclosure of Information.................................... 12
ARTICLE 3
Organization
Section 3.1. Name......................................................... 12
Section 3.2. Office....................................................... 12
Section 3.3. Issuance of the Trust Securities............................. 13
Section 3.4. Purchase of Debentures....................................... 13
Section 3.5. Purpose...................................................... 14
Section 3.6. Authority.................................................... 14
Section 3.7. Title to Property of the Trust............................... 15
Section 3.8. Powers and Duties of the Regular Trustees.................... 15
Section 3.9. Prohibition of Actions by Trust and Trustees................. 17
Section 3.10. Powers and Duties of the Institutional Trustee............... 18
Section 3.11. Delaware Trustee............................................. 21
Section 3.12. Certain Rights and Duties of the Institutional
Trustee.................................................... 21
Section 3.13. Registration Statement and Related Matters................... 24
Section 3.14. Filing of Amendments to Certificate of Trust................. 25
Section 3.15. Execution of Documents by Regular Trustees................... 25
Section 3.16. Trustees Not Responsible for Recitals or Issuance of
Securities................................................. 25
Section 3.17. Duration of Trust............................................ 25
ARTICLE 4
Sponsor
Section 4.1. Purchase of Common Securities by Sponsor..................... 25
Section 4.2. Expenses..................................................... 26
ARTICLE 5
Trustees
Section 5.1. Number of Trustees; Qualifications........................... 26
Section 5.2. Appointment, Removal and Resignation of
Trustees................................................... 29
Section 5.3. Vacancies among Trustees..................................... 31
Section 5.4. Effect of Vacancies.......................................... 31
Section 5.5. Meetings..................................................... 31
Section 5.6. Delegation of Power.......................................... 32
Section 5.7. Other Activities............................................. 32
ARTICLE 6
Distributions
Section 6.1. Distributions................................................ 33
ARTICLE 7
Issuance of Securities
Section 7.1. General Provisions Regarding Securities...................... 33
ARTICLE 8
Dissolution and Termination of Trust
Section 8.1. Dissolution and Termination of Trust......................... 35
ARTICLE 9
Transfer of Interests
Section 9.1. Transfer of Securities....................................... 36
Section 9.2. Transfer of Certificates..................................... 36
Section 9.3. Deemed Security Holders...................................... 37
Section 9.4. Book Entry Interests......................................... 37
Section 9.5. Notices to Holders of Certificates........................... 38
Section 9.6. Appointment of Successor Clearing Agency..................... 38
Section 9.7. Definitive Preferred Securities Certificates................. 38
Section 9.8. Mutilated, Destroyed, Lost or Stolen Certificates............ 39
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.1. Exculpation................................................. 39
Section 10.2. Indemnification............................................. 40
ARTICLE 11
Accounting
Section 11.1. Fiscal Year................................................. 41
Section 11.2. Certain Accounting Matters.................................. 41
Section 11.3. Banking..................................................... 42
Section 11.4. Withholding................................................. 42
ARTICLE 12
Amendments and Meetings
Section 12.1. Amendments.................................................. 42
Section 12.2. Meetings of the Holders of Securities; Action by
Written Consent........................................... 43
ARTICLE 13
Representations of Institutional Trustee and Delaware Trustee
Section 13.1. Representations and Warranties of Institutional
Trustee................................................... 45
ARTICLE 14
Miscellaneous
Section 14.1. Notices..................................................... 46
Section 14.2. Undertaking for Costs....................................... 47
Section 14.3. Governing Law............................................... 48
Section 14.4. Headings.................................................... 48
Section 14.5. Partial Enforceability...................................... 48
Section 14.6. Counterparts................................................ 49
Section 14.7. Intention of the Parties.................................... 49
Section 14.8. Successors and Assigns...................................... 49
EXHIBIT A CERTIFICATE OF TRUST OF RJR NABISCO HOLDINGS CAPITAL TRUST II
EXHIBIT B TERMS OF PREFERRED SECURITIES
EXHIBIT C TERMS OF COMMON SECURITIES
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of September 16, 1998 by the undersigned trustees (together
with all other Persons from time to time duly appointed and serving as
trustees in accordance with the provisions of this Declaration, the
"Trustees"), RJR Nabisco Holdings Corp., a Delaware corporation, as trust
sponsor ("Holdings" or the "Sponsor"), and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, the Sponsor and the Trustees entered into a
Declaration of Trust dated as of August 5, 1998 (the "Original Declaration")
in order to establish a statutory business trust (the "Trust") under the
Business Trust Act (as hereinafter defined);
WHEREAS, the Certificate of Trust (the "Certificate of Trust")
of the Trust was filed with the office of the Secretary of State of the State
of Delaware on August 6, 1998; and
WHEREAS, the Trustees and the Sponsor desire to continue the
Trust pursuant to the Business Trust Act for the purpose of, as described more
fully in Section 3.03 hereof, (i) issuing and selling Preferred Securities (as
defined herein) representing undivided beneficial interests in the assets of
the Trust in exchange for cash and investing the proceeds thereof in
Debentures (as hereinafter defined) of Holdings issued under the Indenture (as
hereinafter defined) to be held as assets of the Trust and (ii) issuing and
selling Common Securities (as defined herein) representing undivided
beneficial interests in the assets of the Trust to Holdings in exchange for
cash and investing the proceeds thereof in additional Debentures of Holdings
issued under the Indenture to be held as assets of the Trust;
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act, that
the Original Declaration be amended and restated in its entirety as provided
herein and that this Declaration constitute the governing instrument of such
business trust, the Trustees declare that all assets referred to in clauses (i)
and (ii) of the previous Whereas clause purchased by the Trust will be held in
trust for the benefit of the Holders (as defined herein) from time to time, of
the Certificates (as defined herein) representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.
ARTICLE 1
Definitions
Section 1.1. Definitions.
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Amended and Restated Declaration of Trust
(including Exhibits A, B and C hereto (the "Exhibits")) as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Exhibits are to Articles and Sections of and Exhibits to this
Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder, except that the
Trust shall not be deemed an Affiliate of Holdings.
"Appointment Event" means an event defined in the terms of the
Preferred Securities set forth in Exhibit B which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Regular Trustee.
"Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Clearing Agency as described in Section 9.04.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from
time to time.
"Certificate" means a Common Security Certificate or a
Preferred Security Certificate.
"Certificate of Trust" has the meaning set forth in the second
WHEREAS clause above.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depository for the Preferred Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"Closing Date" means the Closing Date as specified in the
Underwriting Agreement which date is also the date of execution and delivery
of this Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific section
((Sec.)) of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.01(b).
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Annex I to Exhibit C.
"Covered Person" means (i) any officer, director, shareholder,
partner, member, representative, employee or agent of the Trust or its
Affiliates, (ii) any officer, director, shareholder, employees, representatives
or agents of Holdings or its Affiliates and (iii) the Holders from time to time
of the Securities.
"Debenture Trustee" means The Bank of New York, as trustee
under the Indenture until a successor is appointed thereunder and
thereafter means such successor trustee.
"Debentures" means the series of Junior Subordinated Debentures
issued by Holdings under the Indenture to the Institutional Trustee and
entitled the "9 1/2% Junior Subordinated Debentures Due 2047".
"Delaware Trustee" has the meaning set forth in Section
5.01(a)(3).
"Depositary Agreement" means the agreement among the Trust, the
Institutional Trustee and DTC dated as of the Closing Date, as the same may
be amended or supplemented from time to time.
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Expiration Date" has the meaning set forth in the Prospectus.
"Fiscal Year" has the meaning specified in Section 11.01.
"Global Certificate" has the meaning set forth in Section 9.04.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means any Trustee, any Affiliate of any
Trustee, any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of the
Trust or its Affiliates.
"Indenture" means the Indenture dated as of September 21, 1995
between Holdings and the Debenture Trustee, as supplemented by the First
Supplemental Indenture thereto dated as of September 21, 1995 and the Second
Supplemental Indenture thereto dated as of September 16, 1998 pursuant to
which the Debentures are to be issued.
"Indenture Event of Default" means any event or condition
defined as an "Event of Default" with respect to the Debentures under
Section 6.01 of the Indenture has occurred and is continuing.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 5.01(c) and having the duties
set forth for the Institutional Trustee herein.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time or any successor legislation.
"Legal Action" has the meaning specified in Section 3.08(g).
"Liquidation Distribution" has the meaning set forth in Exhibits
B and C hereto establishing the terms of the Securities.
"Majority in liquidation amount of the Securities" means,
except as otherwise required by the Trust Indenture Act and except as provided
in the penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context may
require, Holder(s) of outstanding Preferred Securities or Common Securities
voting separately as a class, who are the record owners of a relevant class of
Securities whose liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
represents more than 50% of the liquidation amount of all outstanding
Securities of such class.
"Ministerial Action" has the meaning set forth in the terms of
the Securities as set forth in Exhibits B and C hereto.
"Original Declaration" has the meaning set forth in the first
WHEREAS clause above.
"Paying Agent" has the meaning specified in Section 3.10(i).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee" means the Guarantee Agreement to be dated
as of September 16, 1998 of Holdings in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section
7.01(b).
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Preferred Security Certificate" means a definitive certificate
in fully registered form representing a Preferred Security substantially in
the form of Annex I to Exhibit B.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both such Regular Trustees.
"Regular Trustee" means any Trustee other than the Institutional
Trustee and the Delaware Trustee.
"Related Party" means any direct or indirect wholly owned
subsidiary of Holdings or any other Person which owns, directly or indirectly,
100% of the outstanding voting securities of Holdings.
"Resignation Request" has the meaning specified in Section
5.02(d).
"Responsible Officer" means, with respect to the Institutional
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Institutional Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"RJR Nabisco Holdings Capital Trust" shall mean any statutory
business trust created under the laws of the State of Delaware specified in
the applicable board resolution or supplemental indenture establishing a
particular series of Securities pursuant to Section 2.3 of the Indenture.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or
any successor rule thereunder.
"Second Closing Date" means the Second Closing Date as
specified in the Underwriting Agreement.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"Special Event" has the meaning set forth in the terms of the
Securities as set forth in Exhibits B and C hereto.
"Special Regular Trustee" means a Regular Trustee appointed by
the Holders of a Majority in liquidation amount of the Preferred Securities in
accordance with Section 5.02(a)(ii)(B).
"Sponsor" or "Holdings" means RJR Nabisco Holdings Corp., a
Delaware corporation, or any successor entity in a merger, in its capacity as
sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in
Section 5.02(b)(ii).
"Successor Institutional Trustee" means a successor Trustee
possessing the qualifications to act as Institutional Trustee under Section
5.01(c).
"10% in liquidation amount of the Securities" means, except as
otherwise required by the Trust Indenture Act and except as provided in the
penultimate paragraph of paragraph 5 of Exhibit B hereto, Holder(s) of
outstanding Securities voting together as a single class or, as the context
may require, Holder(s) of outstanding Preferred Securities or Common
Securities, voting separately as a class, who are the record owners of a
relevant class of Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting
percentages are determined) represents 10% or more of the liquidation
amount of all outstanding Securities of such class.
"Treasury Regulations" means the income tax regulations
including temporary and proposed regulations, promulgated under the Code by
the United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Underwriting Agreement" means the Underwriting Agreement dated
as of September 11, 1998 among the Trust, the Sponsor and the representative
of the several underwriters named therein.
ARTICLE 2
Trust Indenture Act
Section 2.1. Trust Indenture Act; Application. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration and shall, to the extent applicable,
be governed by such provisions;
(b) if and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Section Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control;
(c) the Institutional Trustee, to the extent permitted by
applicable law and/or the rules and regulations of the Commission, shall be
the only Trustee which is a trustee for the purposes of the Trust Indenture
Act; and
(d) the application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
Section 2.2. Lists of Holders of Preferred Securities. (a)
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide the Institutional Trustee with such information as is required under
Section 312(a) of the Trust Indenture Act at the times and in the manner
provided in Section 312(a); and
(b) the Institutional Trustee shall comply with its obligations
under Section Section 310(b), 311 and 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Institutional Trustee. Within 60
days after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Securities such reports as are required by Section 313(a) of
the Trust Indenture Act, if any, in the form, in the manner and at the times
provided by Section 313 of the Trust Indenture Act. The Institutional
Trustee shall also comply with the other requirements of Section 313 of the
Trust Indenture Act.
Section 2.4. Periodic Reports to Institutional Trustee. Each
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide
to the Institutional Trustee, the Commission and the Holders of the
Securities, as applicable, such documents, reports and information as are
required by Section 314(a)(1)-(3) (if any) of the Trust Indenture Act and
the compliance certificates required by Section 314(a)(4) and (c) of the
Trust Indenture Act, any such certificates to be provided in the form, in
the manner and at the times required by Section 314(a)(4) and (c) of the
Trust Indenture Act (provided that any certificate to be provided pursuant
to Section 314(a)(4) of the Trust Indenture Act shall be provided within
120 days of the end of each Fiscal Year).
Section 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust shall
provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given pursuant to Section 314(c)
shall comply with Section 314(e) of the Trust Indenture Act.
Section 2.6. Events of Default; Waiver. (a) Subject to Section
2.06(c), Holders of Preferred Securities may by vote of at least a Majority in
liquidation amount of the Preferred Securities (A) in accordance with the terms
of the Preferred Securities, direct the time, method and place of conducting
any proceeding for any remedy available to the Institutional Trustee (as holder
of the Debentures, and in the case of any other RJR Nabisco Holdings Capital
Trust holding Debentures issued under the Indenture, voting with the holders
of preferred securities of such other RJR Nabisco Holdings Capital Trust), or
exercising any trust or power conferred upon the Institutional Trustee by this
Declaration, or (B) on behalf of the Holders of all Preferred Securities, waive
any past Event of Default in respect of the Preferred Securities and its
consequences, provided that if the Event of Default arises out of an Indenture
Event of Default:
(i) which is not waivable under the Indenture, the Event of
Default under this Declaration shall also be not waivable; or
(ii) which requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures, or (2) each holder of Debentures, the
Event of Default under this Declaration may only be waived by, in the case of
clause (1) above, the vote of Holders of Preferred Securities representing
such specified percentage of the aggregate liquidation amount of the Preferred
Securities (as holder of the Debentures, and in the case of any other RJR
Nabisco Holdings Capital Trust holding Debentures issued under the Indenture,
voting with the holders of preferred securities of such other RJR Nabisco
Holdings Capital Trust); or, in the case of clause (2) above, each Holder of
Preferred Securities.
The foregoing provisions of this Section 2.06(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture
Act. Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Preferred Securities arising therefrom
shall be deemed to have been cured, for every purpose of this Declaration,
but no such waiver shall extend to any subsequent or other default or Event
of Default with respect to the Preferred Securities or impair any right
consequent thereon.
(b) Subject to Section 2.06(c), Holders of Common Securities
may by vote of at least a Majority in liquidation amount of the Common
Securities, (A) in accordance with the terms of the Common Securities,
direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercising any trust or
power conferred upon the Institutional Trustee by this Declaration or (B)
on behalf of the Holders of all of the Common Securities, waive any past
Event of Default with respect to the Common Securities and its
consequences, provided that, if the Event of Default arises out of an
Indenture Event of Default:
(i) which is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such Event of
Default under the Declaration as provided below, the Event of Default under
this Declaration shall also not be waivable; or
(ii) which requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, except
where the holders of the Common Securities are deemed to have waived such
Event of Default under this Declaration as provided below, the Event of
Default under this Declaration may only be waived by, in the case of clause
(1) above, the vote of Holders of Common Securities representing such
specified percentage of the aggregate liquidation amount of the Common
Securities, or, in the case of clause (2) above, each holder of Common
Securities; and
provided further that each Holder of Common Securities will be
deemed to have waived any Event of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to
the Preferred Securities have been cured, waived by the Holders of Preferred
Securities as provided in this Declaration or otherwise eliminated and until
all Events of Default with respect to the Preferred Securities have been so
cured, waived or otherwise eliminated, the Institutional Trustee will be
deemed to be acting solely on behalf of the Holders of the Preferred
Securities and only the Holders of the Preferred Securities will have the
right to direct the Institutional Trustee in accordance with the terms of this
Declaration or the Securities. In the event that any Event of Default with
respect to the Preferred Securities is waived by the Holders of Preferred
Securities as provided in this Declaration, the Holders of Common Securities
agree that such waiver shall also constitute the waiver of such Event of
Default with respect to the Common Securities for all purposes under this
Declaration without any further act, vote or consent of the Holders of the
Common Securities. The foregoing provisions of this Section 2.06(b) shall be
in lieu of Section Section 316(a)(1)(A) and 316(a)(1)(B) of the Trust
Indenture Act and such Section Section 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act are hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act. Subject to the
foregoing provisions of this Section 2.06(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the
Common Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Common
Securities or impair any right consequent thereon.
(c) The right of any Holder of Securities to receive payment
of Distributions on the Securities in accordance with this Declaration and the
terms of the Securities set forth in Exhibits B and C on or after the
respective payment dates therefor, or to institute suit for the enforcement of
any such payment on or after such payment dates, shall not be impaired without
the consent of each such Holder.
(d) As provided in the terms of the Securities set forth in
Exhibits B and C hereto, a waiver of an Indenture Event of Default by the
Institutional Trustee at the written direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default under
this Declaration in respect of the Securities. The foregoing provisions of
this Section 2.06(d) shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act
is hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.
Section 2.7. Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the
source from which such information was derived, shall not be deemed to be a
violation of any existing law, or any law hereafter enacted which does not
specifically refer to Section 312 of the Trust Indenture Act, nor shall the
Institutional Trustee be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.
ARTICLE 3
Organization
Section 3.1. Name. The Trust continued by this Declaration is
named "RJR Nabisco Holdings Capital Trust II" as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the name
of the Trust or any other name deemed advisable by the Regular Trustees.
Section 3.2. Office. The address of the principal office of
the Trust is c/o RJR Nabisco Holdings Corp., 1301 Avenue of the Americas, New
York, New York 10019. Upon ten days written notice to the Holders, the
Regular Trustees may change the location of the Trust's principal office. The
name of the registered agent of the Trust and such registered agent's office
address in the State of Delaware is CSC The United States Corporation Company,
1013 Centre Road, Wilmington, DE 19805. At any time, the Regular Trustees may
designate another registered agent and/or registered office.
Section 3.3. Issuance of the Trust Securities. On September
11, 1998 the Sponsor, on behalf of the Trust and pursuant to the Original
Declaration, executed and delivered the Underwriting Agreement. On the
Closing Date and contemporaneously with the execution and delivery of this
Declaration, the Regular Trustees, on behalf of the Trust, shall execute and
deliver to (i) the underwriters named in the Underwriting Agreement, a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.4, in an aggregate amount of 13,000,000
Preferred Securities having an aggregate liquidation amount of $325,000,000,
against receipt of the aggregate purchase price of such Preferred Securities
of $325,000,000, and (ii) the Sponsor, Common Securities Certificates,
registered in the name of the Sponsor, in an aggregate amount of 402,062 Common
Securities having an aggregate liquidation amount of $10,051,550, against
receipt of the aggregate purchase price of such Common Securities of
$10,051,550. In the event and to the extent the over allotment option granted
by the Trust pursuant to the Underwriting Agreement is exercised by such
underwriters, on the Second Closing Date the Regular Trustees, on behalf of
the Trust, shall execute and deliver to (i) such underwriters a Global
Certificate, registered in the name of the nominee of the initial Clearing
Agency as specified in Section 9.4, in an aggregate amount of up to 1,950,000
Preferred Securities having an aggregate liquidation amount of up to
$48,750,000, against receipt of the aggregate purchase price of such Preferred
Securities of up to $48,750,000, and (ii) the Sponsor, Common Securities
Certificates, registered in the name of the Sponsor, in an aggregate amount of
60,310 Common Securities having an aggregate liquidation amount of $1,507,750
against receipt of the aggregate purchase price of such Common Securities of
$1,507,750.
Section 3.4. Purchase of Debentures.
On the Closing Date and contemporaneously with the execution and
delivery of this Declaration, the Regular Trustees, on behalf of the Trust,
shall purchase from the Sponsor with the proceeds received by the Trust from
the sale of the Securities on such date pursuant to Section 3.3, at a purchase
price of 100% of the principal amount thereof, Debentures, registered in the
name of the Institutional Trustee and having an aggregate principal amount
equal to $335,051,550, and, in satisfaction of the purchase price for such
Debentures, the Regular Trustee, on behalf of the Trust, shall deliver or
cause to be delivered to the Sponsor the sum of $335,051,550. In the event
the over allotment option granted by the Trust with respect to the Preferred
Securities pursuant to the Underwriting Agreement is exercised by the
underwriters named therein, on the Second Closing Date the Regular Trustees,
on behalf of the Trust, shall purchase from the Sponsor with the proceeds
received by the Trust from the sale of the Preferred Securities and the Common
Securities on such date pursuant to Section 3.3, at a purchase price of 100%
of the principal amount thereof, additional Debentures, registered in the name
of the Institutional Trustee and having an aggregate principal amount of up to
$50,257,750, and, in satisfaction of the purchase price for such Debentures,
the Regular Trustees, on behalf of the Trust, shall deliver or cause to be
delivered to the Sponsor an amount equal to the aggregate principal amount of
the Debentures being purchased. The Regular Trustees, on behalf of the Trust,
and the Sponsor hereby agree to treat the Debentures as indebtedness for all
United States tax purposes.
Section 3.5. Purpose. The exclusive purposes and functions of
the Trust are: (a)(i) to issue and sell Preferred Securities in exchange for
cash and use the proceeds of such sales to acquire from Holdings Debentures
issued under the Indenture having an aggregate principal amount equal to the
aggregate liquidation amount of the Preferred Securities so issued and sold;
(ii) to enter into such agreements and arrangements as may be necessary in
connection with the sale of Preferred Securities to the initial purchasers
thereof (including the Underwriting Agreement) and to take all action, and
exercise such discretion, as may be necessary or desirable in connection
therewith and to file such registration statements or make such other filings
under the Securities Act, the Exchange Act or state securities or "Blue Sky"
laws as may be necessary or desirable in connection therewith and the issuance
of the Preferred Securities; and (iii) to issue and sell Common Securities to
Holdings for cash and use the proceeds of such sale to purchase as trust
assets an equal aggregate principal amount of Debentures issued under the
Indenture; and (b) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets or at any time while the Securities are outstanding, otherwise
undertake (or permit to be undertaken) any activity that would result in or
cause the Trust to be treated as anything other than a grantor trust for
United States federal income tax purposes.
Section 3.6. Authority. Subject to the limitations provided
in this Declaration and to the specific duties of the Institutional Trustee,
the Regular Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Regular Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Institutional Trustee in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing
with the Trustees acting on behalf of the Trust, no Person shall be required
to inquire into the authority of the Trustees to bind the Trust. Persons
dealing with the Trust are entitled to rely conclusively on the power and
authority of the Trustees as set forth in this Declaration.
Section 3.7. Title to Property of the Trust. Unless otherwise
provided in this Declaration, legal title to all assets of the Trust shall be
vested in the Trust. The Holders of Certificates shall not have legal title
to any part of the assets of the Trust, but shall have an individual undivided
beneficial interest in the assets of the Trust.
Section 3.8. Powers and Duties of the Regular Trustees. The
Regular Trustees shall have the exclusive power, authority and duty to cause
the Trust, and shall cause the Trust, to engage in the following activities:
(a) to issue Preferred Securities and Common Securities, in
each case in accordance with this Declaration; provided, however, that the
Trust may issue no more than one class or series of Preferred Securities
and no more than one class or series of Common Securities, and, provided
further, there shall be no interests in the Trust other than the Securities
and the issuance of Securities shall be limited to (x) a simultaneous
issuance of both Preferred Securities and Common Securities on the Second
Closing Date and (y) any subsequent issuance of Preferred Securities and
Common Securities on the Second Closing Date pursuant to an exercise of the
over-allotment option granted to the underwriters in the Underwriting
Agreement;
(b) in connection with the issuance of the Preferred
Securities, at the direction of the Sponsor, to effect or cause to be
effected the filings, and to execute or cause to be executed, the
documents, set forth in Section 3.13 and to execute, deliver and perform on
behalf of the Trust the Depositary Agreement;
(c) to acquire as trust assets Debentures with the proceeds
of the sale of Preferred Securities and Common Securities; provided,
however, that the Regular Trustees shall cause legal title to all of the
Debentures to be vested in, and the Debentures to be held of record in the
name of, the Institutional Trustee for the benefit of the Holders of the
Preferred Securities and the Common Securities;
(d) subject to Section 3.13, to cause the Trust to enter
into the Underwriting Agreement and such other agreements and arrangements
as may be necessary or desirable in connection with the sale of Preferred
Securities to the initial purchasers thereof and the consummation thereof,
and to take all action, and exercise all discretion, as may be necessary or
desirable in connection with the consummation thereof;
(e) to give the Sponsor and the Institutional Trustee prompt
written notice of the occurrence of a Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee before
taking or refraining from taking any Ministerial Action in relation to a
Special Event;
(f) to establish a record date with respect to all actions
to be taken hereunder that require a record date to be established,
including for the purposes of Section 316(c) of the Trust Indenture Act and
with respect to Distributions, voting rights, redemptions, and exchanges,
and to issue relevant notices to Holders of the Preferred Securities and
Common Securities as to such actions and applicable record dates;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against
the Trust ("Legal Action"), unless pursuant to Section 3.08(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate to the Institutional Trustee
required by Section 314(a)(4) of the Trust Indenture Act, which certificate
may be executed by any Regular Trustee;
(k) to incur expenses which are necessary or incidental to
carrying out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
registrar and transfer agent for the Securities, the Regular Trustees
hereby initially appointing the Institutional Trustee for such purposes;
(m) to take all actions and perform such duties as may be
required of the Regular Trustee pursuant to this Declaration, including,
without limitation, the terms of the Securities set forth in Exhibits B and
C hereto;
(n) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action which may be necessary or appropriate
for the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Securities or to enable the Trust to effect the purposes for which the
Trust has been created;
(p) to take all action, not inconsistent with this
Declaration or with applicable law, which the Regular Trustees determine in
their discretion to be reasonable and necessary or desirable in carrying
out the activities of the Trust as set out in this Section 3.08, in order
that:
(i) the Trust will not be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) the Trust will not be classified for United States
federal income tax purposes as an association taxable as a corporation or a
partnership and will be treated as a grantor trust for United States federal
income tax purposes; and
(iii) the Trust will comply with any requirements imposed by
any taxing authority on holders of instruments treated as indebtedness for
United States federal income tax purposes;
provided that such action does not adversely affect the
interests of Holders;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(r) subject to the requirements of Rule 3a-7 and Section 317(b)
of the Trust Indenture Act, to appoint one or more Paying Agents in addition
to the Institutional Trustee.
The Regular Trustees must exercise the powers set forth in this
Section 3.08 in a manner which is consistent with the purposes and functions
of the Trust set out in Section 3.05 and the Regular Trustees shall not take
any action which is inconsistent with the purposes and functions of the Trust
set forth in Section 3.05.
Subject to this Section 3.08, the Regular Trustees shall have
none of the powers nor any of the authority of the Institutional Trustee set
forth in Section 3.10.
Section 3.9. Prohibition of Actions by Trust and Trustees.
The Trust shall not, and the Trustees (including the Institutional Trustee)
shall cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Institutional Trustee) shall not:
(a) invest any proceeds received by the Trust from holding the
Debentures but shall promptly distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans, other than loans represented by the
Debentures;
(e) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interests in, the Trust other than the Securities;
(g) incur any indebtedness for borrowed money; or
(h) (i) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under this
Declaration or the Indenture, (iii) exercise any right to rescind or annul
any declaration that the principal of all of the Debentures shall be due
and payable or (iv) consent to any amendment, modification or termination
of this Declaration, the Indenture or the Debentures, where such consent
shall be required, unless in the case of this clause (h) the Institutional
Trustee shall have received an unqualified opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect
that such action will not cause the Trust to be classified for United
States federal income tax purposes as an association taxable as a
corporation or partnership and that the Trust will continue to be
classified as a grantor trust for United States federal income tax
purposes.
Section 3.10. Powers and Duties of the Institutional Trustee.
(a) The Institutional Trustee shall:
(i) on the receipt of payments of funds made in respect of
the Debentures held by the Trust, without any further acts of the
Institutional Trustee or the Regular Trustees, promptly make payments to the
Holders of the Preferred Securities and Common Securities in accordance with
Section 6.01. Funds held in the Trust shall remain uninvested, and without
liability for interest thereon, until disbursed in accordance with this
Declaration;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect promptly the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are redeemed
or mature;
(iii) upon notice of distribution issued by the Regular
Trustees in accordance with the terms of the Preferred Securities and the
Common Securities, engage in such ministerial activities as shall be necessary
or appropriate to effect promptly the distribution pursuant to the terms of
the Securities of Debentures to Holders of Securities upon the occurrence of a
Special Event or otherwise; and
(iv) have the legal power to exercise all of the rights,
powers and privileges of a holder of the Debentures under the Indenture and,
if an Event of Default occurs and is continuing, the Institutional Trustee,
subject to Section 2.06(b), shall for the benefit of the Holders of the
Securities, enforce its rights as holder of the Debentures under the
Indenture, subject to the rights of the Holders of the Preferred Securities
pursuant to the terms of this Declaration and the Trust Indenture Act.
(b) The Institutional Trustee shall take all actions and
perform such duties as may be specifically required of the Institutional
Trustee pursuant to the terms of this Declaration, including, without
limitation, the terms of the Securities set forth in Exhibits B and C
hereto.
(c) The Institutional Trustee may take any Legal Action which
arises out of or in connection with an Event of Default or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(d) All moneys and all Debentures held by the Institutional
Trustee for the benefit of the Holders of the Securities will not be
subject to any right, charge, security interest, lien or claim of any kind
in favor of, or for the benefit of that Institutional Trustee or its agents
or their creditors.
(e) The Institutional Trustee shall, within 90 days after the
occurrence of a default with respect to the Securities, transmit by mail,
first class postage prepaid, to the holders of the Securities, as their names
and addresses appear upon the register, notice of all defaults with respect to
the Securities known to the Institutional Trustee, unless such defaults shall
have been cured before the giving of such notice (the term "defaults" for the
purposes of this Section 3.10(e) being hereby defined to be an Indenture Event
of Default, not including any periods of grace provided for in the Indenture
and irrespective of the giving of any notice provided therein); provided,
that, except in the case of default in the payment of the principal of (or
premium, if any) or interest on any of the Debentures, the Institutional
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers, of the Institutional Trustee in good faith
determine that the withholding of such notice is in the interests of the
Holders of the Securities. The Institutional Trustee shall not be deemed to
have knowledge of any default, except (i) a default in the payment of
principal, premium or interest on the Debentures or (ii) any default as to
which the Institutional Trustee shall have received written notice or a
Responsible Officer charged with the administration of this Declaration shall
have obtained written notice.
(f) The Institutional Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and the proceeds
thereof distributed to the Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Article 5.
(g) The Institutional Trustee shall act as paying agent in
respect of the Common Securities and, if the Preferred Securities are not in
book entry only form, the Preferred Securities subject to Section 3.08(r), may
authorize one or more Persons (each, a "Paying Agent") to pay Distributions,
redemption payments or liquidation payments on behalf of the Trust with
respect to the Preferred Securities. Any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed
by the Institutional Trustee, after consultation with the Regular Trustees, at
any time and a successor Paying Agent or additional Paying Agents may be
appointed at any time by the Institutional Trustee, subject to Section
3.08(r).
(h) The Institutional Trustee shall give prompt written
notice to the Holders of the Securities of any notice received by it from
Holdings of its election to defer payments of interest on the Debentures by
extending the interest payment period with respect thereto.
(i) Subject to this Section 3.10, the Institutional Trustee
shall have none of the powers or the authority of the Regular Trustees set
forth in Section 3.08.
(j) The Institutional Trustee shall exercise the powers,
duties and rights set forth in this Section 3.10 and Section 3.12 in a
manner which is consistent with the purposes and functions of the Trust set
out in Section 3.05, and the Institutional Trustee shall not take any
action which is inconsistent with the purposes and functions of the Trust
set forth in Section 3.05.
Section 3.11. Delaware Trustee. Notwithstanding any other
provision of this Declaration other than Section 5.01(a)(3), the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the Trustees described
in this Declaration. Except as set forth in Section 5.01(a)(3), the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act. No implied covenants
or obligations shall be read into this Declaration against the Delaware
Trustee.
Section 3.12. Certain Rights and Duties of the Institutional
Trustee. (a) The Institutional Trustee, before the occurrence of an Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration, and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.06), the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, 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 his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Institutional Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct,
except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions of this
Declaration, and the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Declaration, and no implied covenants or obligations shall be read into
this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this Declaration; but in the
case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Declaration (but need
not confirm or investigate the accuracy of mathematical calculations or other
facts stated therein);
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders as provided herein relating to
the time, method and place of conducting any proceeding for any remedy
available to the Institutional Trustee hereunder or under the Indenture, or
exercising any trust or power conferred upon the Institutional Trustee under
this Declaration; and
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable ground
for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or adequate indemnity
against such risk or liability is not reasonably assured to it.
(c) Subject to the provisions of Section 3.12(a) and 3.12(b):
(i) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part and, if the Trust is
excluded from the definition of Investment Company solely by means of Rule
3a-7, subject to the requirements of Rule 3a-7, request and rely upon a
certificate, which shall comply with the provisions of Section 314(e) of the
Trust Indenture Act, signed by any two of the Regular Trustees or by an
authorized officer of the Sponsor, as the case may be;
(ii) The Institutional Trustee (A) may consult with counsel
(which may be counsel to the Sponsor or any of its Affiliates and may include
any of its employees) selected by it in good faith and with due care and the
advice or opinion of such counsel with respect to legal matters shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon and
in accordance with such advice and opinion and (B) shall have the right at any
time to seek instructions concerning the administration of this Declaration
from any court of competent jurisdiction;
(iii) The Institutional Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Institutional Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it in good faith and with due care;
(iv) The Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at the
request or direction of any Holders, unless such Holders shall have offered to
the Institutional Trustee reasonable security and indemnity against the costs,
expenses (including attorneys' fees and expenses), including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee) and
liabilities that might be incurred by it in complying with such request or
direction; provided that nothing contained in this clause (iv) shall relieve
the Institutional Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured or waived) to exercise such of the rights
and powers vested in it by this Declaration, and to use the same degree of
care and skill in this exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs; and
(v) Any action taken by the Institutional Trustee or its
agents hereunder shall bind the Holders of the Securities and the signature of
the Institutional Trustee or its agents alone shall be sufficient and
effective to perform any such action; and no third party shall be required to
inquire as to the authority of the Institutional Trustee to so act, or as to
its compliance with any of the terms and provisions of this Declaration, both
of which shall be conclusively evidenced by the Institutional Trustee's or its
agent's taking such action.
Section 3.13. Registration Statement and Related Matters. In
accordance with the Original Declaration, Holdings and the Trustees have
authorized and directed, and hereby confirm the authorization of, Holdings, as
the sponsor of the Trust, (i) to file with the Commission and execute, in each
case on behalf of the Trust, (a) the Registration Statement on Form S-3 (File
No. 333-60811) (the "1933 Act Registration Statement") and any pre-effective
or post-effective amendments to such Registration Statement, relating to the
registration under the Securities Act of the Preferred Securities of the Trust
and (b) a Registration Statement on Form 8-A or other appropriate form (the
"1934 Act Registration Statement") (including all pre-effective and
post-effective amendments thereto) relating to the registration of the
Preferred Securities of the Trust under Section 12(b) of the Exchange Act;
(ii) to prepare and file with the New York Stock Exchange ("NYSE") and execute
on behalf of the Trust a listing application and all other applications,
statements, certificates, agreements and other instruments as shall be
necessary or desirable to cause the Preferred Securities to be listed on the
NYSE; (iii) to prepare, file and execute on behalf of the Trust such
applications, reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as shall be
necessary or desirable to register the Preferred Securities under the
securities or "Blue Sky" laws of such jurisdictions as Holdings on behalf of
the Trust, may deem necessary or desirable and (iv) to negotiate the terms of
and to execute on behalf of the Trust the Underwriting Agreement. In the
event that any filing referred to in clauses (i)-(iii) above is required by
the rules and regulations of the Commission, the NYSE or state securities or
blue sky laws, to be executed on behalf of the Trust by the Trustees, the
Regular Trustees, in their capacities as Trustees of the Trust, are hereby
authorized and directed to join in any such filing and to execute on behalf of
the Trust any and all of the foregoing, it being understood that the
Institutional Trustee and the Delaware Trustee, in their capacities as
Trustees of the Trust, shall not be required to join in any such filing or
execute on behalf of the Trust any such document unless required by the rules
and regulations of the Commission, the NYSE or state securities or blue sky
laws. In connection with all of the foregoing, Holdings and each Trustee,
solely in its capacity as Trustee of the Trust, have constituted and
appointed, and hereby confirm the appointment of, John J. Delucca, H. Colin
McBride and Richard G. Russell, and each of them, as his, her or its, as the
case may be, true and lawful attorneys-in-fact, and agents, with full power of
substitution and resubstitution, for Holdings or such Trustee or in Holdings's
or such Trustee's name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite
and necessary to be done in connection therewith, as fully to all intents and
purposes as Holdings or such Trustee might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his or her substitute or substitutes, shall do or cause to
be done by virtue hereof.
Section 3.14. Filing of Amendments to Certificate of Trust.
The Certificate of Trust as filed with the Secretary of State of the State of
Delaware on August 6, 1998 is attached hereto as Exhibit A. On or after the
date of execution of this Declaration, the Trustees shall cause the filing with
the Secretary of State of the State of Delaware of such amendments to the
Certificate of Trust as the Trustees shall deem necessary or desirable.
Section 3.15. Execution of Documents by Regular Trustees.
Unless otherwise determined by the Regular Trustees and except as otherwise
required by the Business Trust Act with respect to the Certificate of Trust or
otherwise, a majority of, or if there are only two, both of, the Regular
Trustees are authorized to execute and deliver on behalf of the Trust any
documents which the Regular Trustees have the power and authority to execute
or deliver pursuant to this Declaration.
Section 3.16. Trustees Not Responsible for Recitals or
Issuance of Securities. The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor, and the Trustees
do not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or
any part thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration or the Securities.
Section 3.17. Duration of Trust. The Trust, absent termination
pursuant to the provisions of Article 8 hereof, shall have existence until
September 30, 2048.
ARTICLE 4
Sponsor
Section 4.1. Purchase of Common Securities by Sponsor. On the
Closing Date and the Second Closing Date, the Sponsor will purchase Common
Securities issued by the Trust at the same time as the Preferred Securities to
be issued on such date are issued, such purchase to be in an amount at least
equal to 3% of the total capital of the Trust.
Section 4.2. Expenses. (a) In connection with the purchase of
Debentures by the Trust, the Sponsor (not in its capacity as a Holder, if
applicable) shall be responsible for and shall pay for all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including, but not limited to, costs and expenses
relating to the organization of the Trust, the issuance of the Preferred
Securities to the initial purchasers thereof, the fees and expenses (including
reasonable counsel fees and expenses) of the Trustees (including any amounts
payable under Article 10), the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s),
registrar(s), transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the disposition of Trust assets).
(b) In connection with the purchase of the Debentures by the
Trust, the Sponsor (not in its capacity as a Holder, if applicable) will
pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.02 shall
be for the benefit of, and shall be enforceable by, any Person to whom any
such debts, obligations, costs, expenses and taxes are owed (a "Creditor")
whether or not such Creditor has received notice hereof. Any such Creditor
may enforce the Sponsor's obligations under this Section 4.02 directly
against the Sponsor and the Sponsor irrevocably waives any right or remedy
to require that any such Creditor take any action against the Trust or any
other Person before proceeding against the Sponsor. The Sponsor agrees to
execute such additional agreements as may be necessary or desirable in
order to give full effect to the provisions of this Section 4.02.
ARTICLE 5
Trustees
Section 5.1. Number of Trustees; Qualifications. (a) The
number of Trustees initially shall be five (5). At any time (i) before the
issuance of the Securities, the Sponsor may, by written instrument, increase
or decrease the number of, and appoint, remove and replace the, Trustees, and
(ii) after the issuance of the Securities and except as provided in clause (5)
below and Section 5.02(a)(ii)(B) with respect to the Special Regular Trustee,
the number of Trustees may be increased or decreased solely by, and Trustees
may be appointed, removed or replaced solely by, vote of Holders of Common
Securities representing a Majority in liquidation amount of the Common
Securities voting as a class; provided that in any case:
(1) the number of Trustees shall be at least five
(5) unless the Trustee that acts as the Institutional Trustee also acts as the
Delaware Trustee, in which cases the number of Trustees shall be at least
three (3);
(2) unless a Special Regular Trustee has been
appointed (which appointment shall not impair the right of the Holders of
Common Securities to increase or decrease the number of, or to appoint, remove
or replace, Trustees (other than the Special Regular Trustee) as provided
above), at least a majority of the Trustees shall at all times be officers,
directors or employees of Holdings;
(3) if required by the Business Trust Act, one
Trustee (the "Delaware Trustee") shall be either a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and otherwise is
permitted to act as a Trustee hereunder under the laws of the State of
Delaware, except that if the Institutional Trustee has its principal place of
business in the State of Delaware and otherwise is permitted to act as a
Trustee hereunder under the laws of the State of Delaware, then the
Institutional Trustee shall also be the Delaware Trustee and Section 3.09
shall have no application;
(4) there shall at all times be an Institutional
Trustee hereunder which shall satisfy the requirements of Section 5.01(c); and
(5) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred and is
continuing and the Holders of a Majority in liquidation amount of the
Preferred Securities appoint a Special Regular Trustee in accordance with
Section 5.02(a)(ii)(B) and the terms of the Preferred Securities.
Each Trustee shall be either a natural person at least 21 years
of age or a legal entity which shall act through one or more duly appointed
representatives.
(b) The initial Regular Trustees shall be:
John J. Delucca
H. Colin McBride
Richard G. Russell
c/o RJR Nabisco Holding Corp.
1301 Avenue of the Americas
New York, New York 10019
(c) There shall at all times be one Trustee which shall act as
Institutional Trustee. In order to act as Institutional Trustee hereunder,
such Trustee shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this Section
5.01(c)(ii), the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published.
If at any time the Institutional Trustee shall cease to satisfy
the requirements of clauses (i) and (ii) above, the Institutional Trustee shall
immediately resign in the manner and with the effect set out in Section
5.02(d). If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act,
the Institutional Trustee and the Holders of the Common Securities (as if such
Holders were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act. The Preferred Guarantee shall be deemed to be
specifically described in this Declaration for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
The initial Trustee which shall serve as the Institutional
Trustee is The Bank of New York, whose address is as set forth in Section
14.01(b).
(d) The initial Trustee which shall serve as the Delaware
Trustee is The Bank of New York (Delaware), a Delaware corporation, whose
address is as set forth in Section 14.01(c).
(e) Any action taken by (i) Holders of Common Securities
pursuant to this Article 5 or (ii) Holders of Preferred Securities
pursuant to this Article 5 to appoint or remove a Special Regular Trustee
upon the occurrence of an Appointment Event, shall be taken at a meeting of
Holders of Common Securities or Preferred Securities, as the case may be,
convened for such purpose or by written consent as provided in Section
12.02.
(f) No amendment may be made to this Section 5.01 which would
change any rights with respect to the number, existence or appointment and
removal of Trustees (other than any Special Regular Trustee), except with the
consent of each Holder of Common Securities.
(g) No amendment may be made to this Section 5.01 or Section
5.02(a)(ii)(B), which would change the rights of Holders of Preferred
Securities to appoint, remove or replace a Special Regular Trustee except with
the consent of each Holder of Preferred Securities.
Section 5.2. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.02(b), Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of the Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of the Securities,
(A) other than with respect to the Special Regular
Trustee, by vote of the Holders of a Majority in liquidation amount of the
Common Securities voting as a class; and
(B) if an Appointment Event has occurred and is
continuing, one (1) additional Regular Trustee (the "Special Regular Trustee")
may be appointed, who need not be an Affiliate of the Sponsor, by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities,
voting as a class and such Special Regular Trustee may only be removed
(otherwise than by the operation of Section 5.02(c)), by vote of the Holders
of a Majority in liquidation amount of the Preferred Securities voting as a
class.
(b) (i) The Trustee that acts as Institutional Trustee shall
not be removed in accordance with Section 5.02(a) until a Successor
Institutional Trustee possessing the qualifications to act as Institutional
Trustee under Section 5.01(c) has been appointed and has accepted such
appointment by written instrument executed by such Successor Institutional
Trustee and delivered to the Regular Trustees, the Sponsor and the
Institutional Trustee being removed; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.02(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Section
5.01(a)(3) (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees, the Sponsor and the
Delaware Trustee being removed.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or
resignation, provided that a Special Regular Trustee shall only hold office
while an Appointment Event is continuing and shall cease to hold office
immediately after the Appointment Event pursuant to which the Special Regular
Trustee was appointed and all other Appointment Events cease to be continuing.
(d) Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument (a "Resignation Request")
in writing signed by the Trustee and delivered to the Sponsor and the
Trust, which resignation shall take effect upon such delivery or upon such
later date as is specified therein; provided, however, that:
(i) no such resignation of the Trustee that acts as the
Institutional Trustee shall be effective until a Successor Institutional
Trustee possessing the qualifications to act as Institutional Trustee under
Section 5.01(c) has been appointed and has accepted such appointment by
instrument executed by such Successor Institutional Trustee and delivered to
the Trust, the Sponsor and the resigning Institutional Trustee;
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee has
been appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Sponsor and
the resigning Delaware Trustee; and
(iii) no such resignation of a Special Regular Trustee shall be
effective until the 60th day following delivery of the Resignation Request to
the Sponsor and the Trust or such later date specified in the Resignation
Request during which period the Holders of the Preferred Securities shall have
the right to appoint a successor Special Regular Trustee as provided in this
Article 5.
(e) If no Successor Institutional Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as
provided in this Section 5.02 within 30 days after delivery to the Sponsor
and the Trust of a Resignation Request, or after a notice of removal has
been delivered to the Trustee, the resigning Institutional Trustee or
Delaware Trustee may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware
Trustee. Such court may thereupon after such notice, if any, as it may
deem proper and prescribe, appoint a Successor Institutional Trustee or
Successor Delaware Trustee, as the case may be.
Section 5.3. Vacancies among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant
to Section 5.01 or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Regular Trustees shall be conclusive evidence of
the existence of such vacancy. The vacancy shall be filled with a Trustee
appointed in accordance with the requirements of this Article 5.
Section 5.4. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur until such vacancy is filled as provided in this Article
5, the Regular Trustees in office, regardless of their number, shall have all
the powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
Section 5.5. Meetings. Meetings of the Regular Trustees shall
be held from time to time upon the call of any Trustee. Regular meetings of
the Regular Trustees may be held at a time and place fixed by resolution of
the Regular Trustees. Notice of any in-person meetings of the Regular Trustees
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meetings of the Regular Trustees or
any committee thereof shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement
of the time, place and anticipated purposes of the meeting. The presence
(whether in person or by telephone) of a Regular Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Regular Trustee
attends a meeting for the express purpose of objecting to the transaction of
any activity on the ground that the meeting has not been lawfully called or
convened. Unless provided otherwise in this Declaration, any action of the
Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees.
Section 5.6. Delegation of Power. (a) Any Regular Trustee
may, by power of attorney consistent with applicable law, delegate to any
other natural person over the age of 21 his or her power for the purpose of
executing any registration statement or amendment thereto or other document or
schedule filed with the Commission or making any other governmental filing
(including, without limitation to filings referred to in Section 3.13).
(b) The Regular Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of
the Trust or the names of the Regular Trustees or otherwise as the Regular
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as
set forth herein.
Section 5.7. Other Activities. Subject to Section 5.01(c)
(with respect to the Institutional Trustee), the Sponsor and any Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. Neither the Sponsor, nor any Trustee, shall be obligated to present
any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken
by the Trust, and the Sponsor or any Trustee shall have the right to take for
its own account (individually or as a partner of fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Trustee may
engage or be interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as Sponsory for, trustee or agent
for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE 6
Distributions
Section 6.1. Distributions. Holders shall receive periodic
distributions, redemption payments and liquidation distributions in accordance
with the applicable terms of the relevant Holder's Securities
("Distributions"). Distributions shall be made to the Holders of Preferred
Securities and Common Securities in accordance with the terms of the
Securities as set forth in Exhibits B and C hereto. If and to the extent that
Holdings makes a payment of interest (including Compounded Interest (as
defined in the Indenture)), premium and principal on the Debentures held by
the Institutional Trustee (the amount of any such payment being a "Payment
Amount"), the Institutional Trustee shall and is directed to promptly make a
Distribution of the Payment Amount to Holders in accordance with the terms of
the Securities as set forth in Exhibits B and C hereto.
ARTICLE 7
Issuance of Securities
Section 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall issue on behalf of the Trust
securities in fully registered form representing undivided beneficial
interests in the assets of the Trust in accordance with Section 7.01(b) and
for the consideration specified in Section 3.03.
(b) The Regular Trustees shall issue on behalf of the Trust one
class of securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Exhibit B (the "Preferred
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein, and one class of
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Exhibit C (the "Common
Securities") which terms are incorporated by reference in, and made a part of,
this Declaration as if specifically set forth herein. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities.
(c) The Certificates shall be signed on behalf of the Trust
by the Regular Trustees (or if there are more than two Regular Trustees by
any two of the Regular Trustees). Such signatures may be the manual or
facsimile signatures of the present or any future Regular Trustee.
Typographical and other minor errors or defects in any such reproduction of
any such signature shall not affect the validity of any Security. In case
any Regular Trustee of the Trust who shall have signed any of the
Certificates shall cease to be such Regular Trustee before the Certificate
so signed shall be delivered by the Trust, such Certificate nevertheless
may be delivered as though the person who signed such Certificate had not
ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons as, at the actual date of the execution
of such Certificate, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Securities may be listed,
or to conform to usage. Pending the preparation of definitive
Certificates, the Regular Trustees on behalf of the Trust may execute
temporary Certificates (printed, lithographed or typewritten), in
substantially in the form of the definitive Certificates in lieu of which
they are issued, but with such omissions, insertions and variations as may
be appropriate for temporary Certificates all as may be determined by the
Regular Trustees. Each temporary Certificate shall be executed by the
Regular Trustees on behalf of the Trust upon the same conditions and in
substantially the same manner, and with like effect, as definitive
Certificates. Without unnecessary delay, the Regular Trustees on behalf of
the Trust will execute and furnish definitive Certificates and thereupon
any or all temporary Certificates may be surrendered to the transfer agent
and registrar in exchange therefor (without charge to the Holders). Each
Certificate whether in temporary or definitive form shall be countersigned
by the manual or facsimile signature of an authorized signatory of the
Person acting as registrar and transfer agent for the Securities, which
shall initially be the Institutional Trustee.
(d) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by this Declaration.
(g) Upon issuance of the Securities as provided in this
Declaration, the Regular Trustees on behalf of the Trust shall return to
Holdings the $10 constituting initial trust assets as set forth in the
Original Declaration.
ARTICLE 8
Dissolution and Termination of Trust
Section 8.1. Dissolution and Termination of Trust. The Trust
shall dissolve:
(i) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders of Securities in accordance with the terms of the
Securities; or
(ii) when all of the Debentures shall have been distributed
to the Holders of Securities in exchange for all of the Securities in
accordance with the terms of the Securities; or
(iii) upon the expiration of the term of the Trust as set
forth in Section 3.17; or
(iv) otherwise in accordance with the terms of this
Declaration or the Securities,
and the Trust shall terminate when a certificate of cancellation is filed
by the Trustees (each of whom is hereby authorized) with the Secretary of
State of the State of Delaware. The Trustees shall so file such a
certificate as soon as practicable after the occurrence of an event
referred to in this Section 8.01.
The provisions of Sections 3.12 and 4.02 and Article 10 shall
survive the termination of the Trust.
ARTICLE 9
Transfer of Interests
Section 9.1. Transfer of Securities. (a) Securities may only
be transferred, in whole or in part, in accordance with the terms and
conditions set forth in this Declaration. Any transfer or purported transfer
of any Security not made in accordance with this Declaration shall be null and
void.
(b) Subject to this Article 9, Preferred Securities shall be
freely transferable.
(c) Subject to this Article 9, Holdings and any Related Party
may only transfer Common Securities to Holdings or a Related Party, provided
that any such transfer shall be subject to the condition that the transferor
shall have obtained (1) either a ruling from the Internal Revenue Service or
an unqualified written opinion addressed to the Trust and delivered to the
Trustees of nationally recognized independent tax counsel experienced in such
matters to the effect that such transfer will not (i) cause the Trust to be
treated as issuing a class of interests in the Trust differing from the class
of interests represented by the Common Securities originally issued to
Holdings, (ii) result in the Trust acquiring or disposing of, or being deemed
to have acquired or disposed of, an asset, or (iii) result in or cause the
Trust to be treated as anything other than a grantor trust for United States
federal income tax purposes and (2) an unqualified written opinion addressed
to the Trust and delivered to the Trustees of a nationally recognized
independent counsel experienced in such matters that such transfer will not
cause the Trust to be an Investment Company or controlled by an Investment
Company.
Section 9.2. Transfer of Certificates. The Regular Trustees
shall provide for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon payment
(with such indemnity as the Regular Trustees may require) in respect of any
tax or other government charges which may be imposed in relation to it. Upon
surrender for registration of transfer of any Certificate, the Regular
Trustees shall cause one or more new Certificates to be issued in the name of
the designated transferee or transferees. Every Certificate surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Regular Trustees duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Certificate
surrendered for registration of transfer shall be canceled by the Regular
Trustees. A transferee of a Certificate shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Certificate. By acceptance of a Certificate, each transferee
shall be deemed to have agreed to be bound by this Declaration.
Section 9.3. Deemed Security Holders. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall
not be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part
of any Person, whether or not the Trustees shall have actual or other notice
thereof.
Section 9.4. Book Entry Interests. Unless otherwise specified
in the terms of the Preferred Securities, the Preferred Securities
Certificates, on original issuance (including Preferred Securities, if any,
issued on the Second Closing Date pursuant to the exercise of the over
allotment option set forth in the Underwriting Agreement), will be issued in
the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to DTC, the
initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the
Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security
Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 9.07. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.07:
(i) the provisions of this Section 9.04 shall be in full
force and effect;
(ii) the Trust and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving approvals,
votes or consents hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Certificates and, except as set forth herein or in
Rule 3a-7 with respect to the Institutional Trustee, shall have no obligation
to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this Section 9.04
conflict with any other provisions of this Declaration, the provisions of this
Section 9.04 shall control; and
(iv) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants; provided, that solely for the purposes of determining whether
the Holders of the requisite amount of Preferred Securities have voted on any
matter provided for in this Declaration, so long as Definitive Preferred
Security Certificates have not been issued, the Trustees may conclusively rely
on, and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by DTC setting forth the Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter to any
other Persons either in whole or in part. DTC will make book entry transfers
among Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency Participants.
Section 9.5. Notices to Holders of Certificates. Whenever a
notice or other communication to the Holders is required to be given under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued pursuant to Section 9.07, the relevant Trustees shall give
such notices and communications specified herein to be given to Preferred
Securities Holders, to the Clearing Agency and, with respect to any Preferred
Security Certificate registered in the name of a Clearing Agency or the
nominee of a Clearing Agency, the Trustees shall, except as set forth herein or
in Rule 3a-7 with respect to the Institutional Trustee, have no obligations to
the Preferred Security Beneficial Owners.
Section 9.6. Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depository
with respect to the Preferred Securities, the Regular Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to the
Preferred Securities.
Section 9.7. Definitive Preferred Securities Certificates. If
(i) a Clearing Agency elects to discontinue its services as securities
depository with respect to the Preferred Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 9.06 or (ii) the Regular Trustees elect after consultation with the
Sponsor to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then (x) Definitive Preferred Security
Certificates shall be prepared by the Regular Trustees on behalf of the Trust
with respect to such Preferred Securities and (y) upon surrender of the Global
Certificates by the Clearing Agency, accompanied by registration instructions,
the Regular Trustees shall cause definitive Preferred Security Certificates to
be delivered to Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the Trust shall
be liable for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, such instructions.
Section 9.8. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and (b)
there shall be delivered to the Regular Trustees such security or indemnity as
may be required by them to keep each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide
purchaser, any two Regular Trustees on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 9.08, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE 10
Limitation of Liability; Indemnification
Section 10.1. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Declaration or by law, except that an Indemnified Person shall
be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's gross negligence (or, in the case of the Institutional
Trustee, negligence) or willful misconduct with respect to such acts or
omissions; provided that with respect to the Institutional Trustee, such
Trustee shall be liable for any such loss, damage or claim incurred by reason
of such Trustee's negligent action or negligent failure to act with respect to
such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
Person as to matters the Indemnified Person reasonably believes are within
such other Person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts pertinent to
the existence and amount of assets from which Distributions to Holders of
Securities might properly be paid.
(c) Pursuant to Section 3803 (a) of the Business Trust Act,
the Holders of Securities, in their capacities as Holders, shall be
entitled to the same limitation of liability extended to stockholders of
private corporations for profit organized under the General Corporation Law
of the State of Delaware.
Section 10.2. Indemnification. (a) To the fullest extent
permitted by applicable law, the Sponsor shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage or claim incurred by such
Indemnified Person by reason of any act or omission performed or omitted by
such Indemnified Person in good faith on behalf of the Trust and in a manner
such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except
that no Indemnified Person shall be entitled to be indemnified in respect of
any loss, damage or claim incurred by such Indemnified Person by reason of
gross negligence (or, in the case of the Institutional Trustee, negligence) or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any
claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Sponsor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Sponsor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 10.02(a).
ARTICLE 11
Accounting
Section 11.1. Fiscal Year. The fiscal year ("Fiscal Year") of
the Trust shall be the calendar year, or such other year as is required by the
Code.
Section 11.2. Certain Accounting Matters. (a) At all times
during the existence of the Trust, the Regular Trustees shall keep, or cause
to be kept, full books of account, records and supporting documents, which
shall reflect in reasonable detail, each transaction of the Trust. The books
of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently
applied. The books and records of the Trust, together with a copy of this
Declaration and a certified copy of the Certificate of Trust, or any amendment
thereto, shall at all times be maintained at the principal office of the Trust
and shall be open for inspection for any examination by any Holder or its duly
authorized representative for any purpose reasonably related to its interest
in the Trust during normal business hours.
(b) The Regular Trustees shall, as soon as available after
the end of each Fiscal Year of the Trust, cause to be prepared and mailed to
each Holder of Securities unaudited financial statements of the Trust for such
Fiscal Year, prepared in accordance with generally accepted accounting
principles; provided that if the Trust is required to comply with the periodic
reporting requirements of Sections 13(a) or 15(d) of the Exchange Act, such
financial statements for such Fiscal Year shall be examined and reported on by
a firm of independent certified public accountants selected by the Regular
Trustees (which firm may be the firm used by the Sponsor).
(c) The Regular Trustees shall cause to be prepared and
mailed to each Holder of Securities, an annual United States federal income
tax information statement, on such form as is required by the Code and the
Treasury Regulations, containing such information with regard to the
Securities held by each Holder as is required by the Code and the Treasury
Regulations and shall comply with any other reporting requirements of the Code
and the Treasury Regulations. Notwithstanding any right under the Code and
the Treasury Regulations to deliver any such statement at a later date, the
Regular Trustees shall endeavor to deliver all such statements within 30 days
after the end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be prepared and filed
with the appropriate taxing authority, an annual United States federal
income tax return, on such form as is required by the Code and the Treasury
Regulations, and any other annual income tax returns required to be filed
by the Regular Trustees on behalf of the Trust with any state or local
taxing authority, such returns to be filed as soon as practicable after the
end of each Fiscal Year of the Trust.
Section 11.3. Banking. The Trust shall maintain one or more
bank accounts in the name and for the sole benefit of the Trust. The sole
signatories for such accounts shall be designated by the Regular Trustees.
Section 11.4. Withholding. The Trust and the Trustees shall
comply with all withholding requirements under United States federal, state
and local law. The Trust shall request, and the Holders shall provide to the
Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and
forms as shall reasonably be requested by the Trust to assist it in
determining the extent of, and in fulfilling, its withholding obligations.
The Trust shall file required forms with applicable jurisdictions and, unless
an exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To
the extent that the Trust is required to withhold and pay over any amounts to
any authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Holder. In the event of any claimed over withholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount to be withheld was not withheld from a Distribution, the Trust may
reduce subsequent Distributions by the amount of such withholding.
ARTICLE 12
Amendments and Meetings
Section 12.1. Amendments. (a) Except as otherwise provided in
this Declaration or by any applicable terms of the Securities, this
Declaration may be amended by, and only by, a written instrument executed by a
majority of the Regular Trustees; provided, however, that (i) no amendment to
this Declaration shall be made unless the Regular Trustees shall have obtained
(A) either a ruling from the Internal Revenue Service or a written unqualified
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that such amendment will not cause the Trust to be
classified for United States federal income tax purposes as an association
taxable as a corporation or a partnership and to the effect that the Trust will
continue to be treated as a grantor trust for purposes of United States federal
income taxation and (B) a written unqualified opinion of nationally recognized
independent counsel experienced in such matters to the effect that such
amendment will not cause the Trust to be an Investment Company which is
required to be registered under the Investment Company Act, (ii) at such time
after the Trust has issued any Securities which remain outstanding, any
amendment which would adversely affect the rights, privileges or preferences
of any Holder of Securities may be effected only with such additional
requirements as may be set forth in the terms of such Securities, (iii) Section
4.02, Section 9.01(c) and this Section 12.01 shall not be amended without the
consent of all of the Holders of the Securities, (iv) no amendment which
adversely affects the rights, powers and privileges of the Institutional
Trustee or the Delaware Trustee shall be made without the consent of the
Institutional Trustee or the Delaware Trustee, as the case may be, (v) Article
4 shall not be amended without the consent of the Sponsor, (vi) the rights of
Holders of Common Securities under Article 5 to increase or decrease the
number of, and to appoint, replace or remove, Trustees (other than a Special
Regular Trustee) shall not be amended without the consent of each Holder of
Common Securities and (vii) the rights of Holders of Preferred Securities to
appoint or remove a Special Regular Trustee shall not be amended without the
consent of each Holder of Preferred Securities.
(b) Notwithstanding Section 12.02(a)(ii), this Declaration
may be amended without the consent of the Holders of the Securities to (i)
cure any ambiguity, (ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other provision
of this Declaration, (iii) add to the covenants, restrictions or
obligations of the Sponsor, and (iv) conform to any changes in Rule 3a-7 or
any change in interpretation or application of Rule 3a-7 by the Commission,
which amendment does not adversely affect the rights, preferences or
privileges of the Holders.
Section 12.2. Meetings of the Holders of Securities; Action by
Written Consent. (a) Meetings of the Holders of Preferred Securities and/or
Common Securities may be called at any time by the Regular Trustees (or as
provided in the terms of the Securities) to consider and act on any matter on
which Holders of such class of Securities are entitled to act under the terms
of this Declaration, the terms of the Securities or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for trading.
The Regular Trustees shall call a meeting of Holders of Preferred Securities
or Common Securities, if directed to do so by Holders of at least 25% in
liquidation amount of such class of Securities. Such direction shall be given
by delivering to the Regular Trustees one or more directions in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing
the Certificates held by the Holders of Securities exercising the right to
call a meeting and only those specified Certificates shall be counted for
purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provision shall apply to meetings of Holders of
Securities:
(i) Notice of any such meeting shall be given by mail to all
the Holders of Securities having a right to vote thereat not less than 7 days
nor more than 60 days prior to the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or required
under this Declaration or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any action
that may be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so taken is
signed by Holders of Securities owning not less than the minimum aggregate
liquidation amount of Securities that would be necessary to authorize or take
such action at a meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities entitled to vote
who have not consented in writing. The Regular Trustees may specify that any
written ballot submitted to the Holders of Securities for the purpose of
taking any action without a meeting shall be returned to the Trust within the
time specified by the Regular Trustees.
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of a Security is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder of the Security
executing it. Except as otherwise provided herein or in the terms of the
Securities, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate.
(iv) Unless otherwise provided in the Business Trust Act,
this Declaration or the rules of any stock exchange on which the Preferred
Securities are then listed or admitted for trading, the Regular Trustees, in
their sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a meeting,
the establishment of a record date, quorum requirements, voting in person or
by proxy or any other matter with respect to the exercise of any such right to
vote.
ARTICLE 13
Representations of Institutional Trustee and Delaware Trustee
Section 13.1. Representations and Warranties of Institutional
Trustee.
(a) The Trustee which acts as initial Institutional Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Institutional
Trustee's acceptance of its appointment as Institutional Trustee that:
(i) The Institutional Trustee is a banking corporation with
trust powers, duly organized, validly existing and in good standing under the
laws of the United States, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration.
(ii) The execution, delivery and performance by the
Institutional Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Institutional Trustee. The
Declaration has been duly executed and delivered by the Institutional Trustee,
and constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles
of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at
law).
(iii) The execution, delivery and performance of this
Declaration by the Institutional Trustee does not conflict with or constitute
a breach of the Charter or By-laws of the Institutional Trustee.
(iv) No consent, approval or authorization of, or registration
with or notice to, any banking authority which supervises or regulates the
Institutional Trustee is required for the execution, delivery or performance
by the Institutional Trustee, of this Declaration.
(v) The Institutional Trustee satisfies the qualifications
set forth in Section 5.01(c).
(b) The Trustee which acts as initial Delaware Trustee
represents and warrants to the Trust and the Sponsor at the date of this
Declaration, and each Successor Delaware Trustee represents and warrants to
the Trust and the Sponsor at the time of the Successor Delaware Trustee's
acceptance of its appointment as Delaware Trustee, that it satisfies the
qualifications set forth in Section 5.01(a)(3).
ARTICLE 14
Miscellaneous
Section 14.1. Notices. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as the
Regular Trustees on behalf of the Trust may give notice of to the Holders
of the Securities):
RJR Nabisco Holdings Capital Trust II
c/o RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, NY 10019-6013
Attention: H. Colin McBride, Trustee
Facsimile No: (212) 969-9198
(b) if given to the Institutional Trustee, at the mailing
address of the Institutional Trustee set forth below (or such other address
as the Institutional Trustee may give notice of to the Holders of the
Securities):
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Administration
(c) if given to the Delaware Trustee, at the mailing address
of the Delaware Trustee set forth below (or such other address as the Delaware
Trustee may give notice of to the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
RJR Nabisco Holdings Corp.
1301 Avenue of the Americas
New York, NY 10019-6013
Attention: H. Colin McBride
Facsimile No. (212) 969-9198
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
A copy of any notice to the Institutional Trustee or the
Delaware Trustee shall also be sent to the Trust. All notices shall be deemed
to have been given, when received in person, telecopied with receipt
confirmed, or mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be delivered because of
a changed address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or
inability to deliver.
Section 14.2. Undertaking for Costs. All parties to this
Declaration agree, and each Holder of any Securities by his or her 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
Declaration, or in any suit against the Institutional Trustee for any action
taken or omitted by it as Institutional 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 14.02 shall not apply to
any suit instituted by the Institutional Trustee, to any suit instituted by
any Holder of Preferred Securities, or group of Holders of Preferred
Securities, holding more than 10% in aggregate liquidation amount of the
outstanding Preferred Securities, or to any suit instituted by any Holder of
Preferred Securities for the enforcement of the payment of the principal of
(or premium, if any) or interest on the Debentures, on or after the respective
due dates expressed in such Debentures.
Section 14.3. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance
with the laws of the State of Delaware and all rights and remedies shall be
governed by such laws without regard to principles of conflict of laws of the
State of Delaware or any other jurisdiction that would call for the
application of the law of any jurisdiction other than the State of Delaware;
provided, however, that there shall not be applicable to the parties hereunder
or this Declaration any provision of the laws (statutory or common) of the
State of Delaware pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (b) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust, (c) the necessity for obtaining
court or other governmental approval concerning the acquisition, holding or
disposition of real or personal property, (d) fees or other sums payable to
trustees, officers, agents or employees of a trust, (e) the allocation of
receipts and expenditures to income or principal, (f) restrictions or
limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner
of holding or investing trust assets or (g) the establishment of fiduciary or
other standards of responsibility or limitations on the acts or powers of
trustees that are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees hereunder as set forth or referenced in
this Declaration. Section 3540 of Title 12 of the Delaware Code shall not
apply to the Trust.
Section 14.4. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect
the interpretation of this Declaration or any provision hereof.
Section 14.5. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
Section 14.6. Counterparts. This Declaration may contain more
than one counterpart of the signature pages and this Declaration may be
executed by the affixing of the signature of the Sponsor and each of the
Trustees to one of such counterpart signature pages. All of such counterpart
signature pages shall be read as though one, and they shall have the same
force and effect as though all of the signers had signed a single signature
page.
Section 14.7. Intention of the Parties. It is the intention
of the parties hereto that the Trust not be classified for United States
federal income tax purposes an association taxable as a corporation or a
partnership but that the Trust be treated as a grantor trust for United States
federal income tax purposes. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
Section 14.8. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants
and agreements in this Declaration by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and assigns, whether
so expressed.
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
RJR Nabisco Holdings Corp.
as Sponsor
By: ___________________________________
Name:
Title:
___________________________________
John J. Delucca
as Trustee
___________________________________
H. Colin McBride
as Trustee
___________________________________
Richard G. Russell
as Trustee
The Bank of New York
as Institutional Trustee
By: _______________________________
Name:
Title:
The Bank of New York (Delaware)
as Delaware Trustee
By: _______________________________
Name:
Title:
BEFORE ME, the undersigned authority, personally appeared
_______________________ of The Bank of New York (Delaware) known to me (or
proved to me by introduction upon the oath of a person known to me) to be the
person and officer whose names are subscribed to the foregoing instrument, and
acknowledged to me that she executed the same as the act of such trust for the
purposes and consideration herein expressed and in the capacity therein
stated.
_____________________________________
NOTARY PUBLIC
Print Name:__________________________
Commission Expires:__________________
BEFORE ME, the undersigned authority, personally appeared John
Delucca, H. Colin McBride and Richard G. Russell of RJR Nabisco Holdings Corp.
known to me (or proved to me by introduction upon the oath of a person known
to me) who acknowledged the foregoing instrument to be his, her or its free
act and deed and the free act and deed of RJR Nabisco Holdings Corp and the
Regular Trustees of RJR Nabisco Holdings Capital Trust I.
_____________________________________
NOTARY PUBLIC
Print Name:__________________________
Commission Expires:__________________
BEFORE ME, the undersigned authority, personally appeared
_______________________ of The Bank of New York, as Institutional Trustee,
who acknowledged the foregoing instrument to be his, her or its free act
and deed and the free act and deed of the Bank of New York, as
Institutional Trustee.
_____________________________________
NOTARY PUBLIC
Print Name:__________________________
Commission Expires:__________________
EXHIBIT A
CERTIFICATE OF TRUST
OF
RJR NABISCO HOLDINGS CAPITAL TRUST II
THIS Certificate of Trust of RJR Nabisco Holdings Capital Trust
II (the "Trust"), dated as of August 5, 1998, is being duly executed and filed
by the undersigned, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is
RJR Nabisco Holdings Capital Trust II.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of
Delaware is The Bank of New York (Delaware), a Delaware banking corporation,
White Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective as of its filing.
4. Counterparts. This Certificate of Trust may be executed in
one or more counterparts.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
The Bank of New York (Delaware),
as Delaware Trustee
By: ___________________________________
Name:
Title:
The Bank of New York,
as Institutional Trustee
By: ___________________________________
Name:
Title:
, ________________________________________
John J. Delucca,
as Trustee
, _______________________________________
Richard G. Russell,
as Trustee
, _______________________________________
David F. Sternlieb,
as Trustee
EXHIBIT B
TERMS OF
PREFERRED SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust of RJR Nabisco Holdings Capital Trust II dated as of
September 16, 1998 (as amended from time to time, the "Declaration"), the
designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities are set forth below (each
capitalized term used but not defined herein having the meaning set forth in
the Declaration):
1. Designation and Number. Preferred Securities of the Trust
with an aggregate liquidation amount in the assets of the Trust of up to
$373,750,000 and a liquidation amount in the assets of the Trust of $25 per
Preferred Security, are hereby designated as "9 1/2% Trust Originated
Preferred Securities". The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form attached hereto as
Annex I, with such changes and additions thereto or deletions therefrom as may
be required by ordinary usage, custom or practice or to conform to the rules of
any stock exchange on which the Preferred Securities are listed. In connection
with each issuance and sale of the Preferred Securities and the Common
Securities, the Trust will purchase, respectively, as trust assets Debentures
of Holdings having an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities and Common Securities so issued
and bearing interest at an annual rate equal to the annual Distribution rate
on the Preferred Securities and Common Securities and having payment and
redemption provisions which correspond to the payment and redemption
provisions of the Preferred Securities and Common Securities.
2. Distributions. (a) Distributions payable on each Preferred
Security will be fixed at a rate per annum of 9 1/2% (the "Coupon Rate") of
the stated liquidation amount of $25 per Preferred Security. Distributions in
arrears for more than one quarter will bear interest at the rate per annum of
9 1/2% thereof (to the extent permitted by law), compounded quarterly. The
term "Distributions" as used in these terms means such periodic cash
distributions and any such interest payable unless otherwise stated. A
Distribution will be made by the Institutional Trustee only to the extent that
interest payments are made in respect of the Debentures held by the
Institutional Trustee. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any Distribution period shorter
than a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed in such a 30-day month.
(b) Distributions on the Preferred Securities
will be cumulative, will accrue from September 16, 1998 and
will be payable quarterly in arrears, on the 30th day of
March, June, September and December of each year, commencing
on December 30, 1998, except as otherwise described below,
but only if and to the extent that interest payments are
made in respect of the Debentures held by the Institutional
Trustee. So long as Holdings shall not be in default in the
payment of interest on the Debentures, Holdings has the
right under the Indenture for the Debentures to defer
payments of interest by extending the interest payment
period from time to time on the Debentures for a period not
exceeding 20 consecutive quarterly interest periods (each,
an "Extension Period") and, as a consequence, quarterly
Distributions will not be made (but will continue to
accumulate at the rate of 9 1/2% per annum, compounded
quarterly, to the extent permitted by applicable law) during
any such Extension Period. Prior to the termination of any
such Extension Period, Holdings may further extend such
Extension Period; provided that such Extension Period
together with all such previous and further extensions
thereof may not exceed 20 consecutive quarterly interest
periods and provided, further, that no Extension Period may
extend beyond the Maturity of the Debentures. Upon the
termination of any Extension Period and the payment of all
amounts then due, Holdings may commence a new Extension
Period, subject to the above requirements. Holdings may
also prepay at any time all or any portion of the interest
accrued during an Extension Period. Payments of accrued
Distributions will be payable to Holders of Preferred
Securities as they appear on the books and records of the
Trust on the first record date after the end of the
Extension Period.
(c) Distributions on the Preferred Securities
will be payable promptly by the Institutional Trustee (or
other Paying Agent) upon receipt of immediately available
funds to the Holders thereof as they appear on the books and
records of the Trust on the relevant record dates, which
will be the Business Day immediately prior to the relevant
Distribution date, which record and payment dates correspond
to the record and interest payment dates on the Debentures.
Distributions payable on any Preferred Securities that are
not punctually paid on any Distribution payment date as a
result of Holdings having failed to make the corresponding
interest payment on the Debentures will forthwith cease to
be payable to the person in whose name such Preferred
Security is registered on the relevant record date, and such
defaulted Distribution will instead be payable to the person
in whose name such Preferred Security is registered on the
special record date established by the Regular Trustees,
which record date shall correspond to the special record
date or other specified date determined in accordance with
the Indenture; provided, however, that Distributions shall
not be considered payable on any Distribution payment date
falling within an Extension Period unless Holdings has
elected to make a full or partial payment of interest
accrued on the Debentures on such Distribution payment date.
Subject to any applicable laws and regulations and the
provisions of the Declaration, each payment in respect of
the Preferred Securities will be made as described paragraph
9 hereof. If any date on which Distributions are payable on
the Preferred Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and
effect as if made on such date and the record date for such
payment shall be the immediately preceding Business Day.
(d) All Distributions paid with respect to the
Preferred Securities and the Common Securities will be paid
Pro Rata to the Holders thereof entitled thereto. If an
Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other
property held by or for the Trust that is not accounted for
under the Declaration, such money or property shall be
distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event
of any voluntary or involuntary dissolution of the Trust, the Holders of
the Preferred Securities and Common Securities at the date of dissolution
will be entitled to receive Pro Rata solely out of the assets of the Trust
available for distribution to Holders of Preferred Securities and Common
Securities after satisfaction of liabilities to creditors (including,
without limitation, after paying or making reasonable provision to pay all
claims and obligations of the Trust in accordance with Section 3808(e) of
the Business Trust Act), an amount equal to the aggregate of the stated
liquidation amount of $25 per Preferred Security and Common Security plus
accrued and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"), unless, in connection with
such dissolution and after satisfaction of liabilities to creditors
(including, without limitation, after paying or making reasonable provision
to pay all claims and obligations of the Trust in accordance with Section
3808(e) of the Business Trust Act), Debentures in an aggregate principal
amount equal to the aggregate stated liquidation amount of such Preferred
Securities and Common Securities and bearing accrued and unpaid interest in
an amount equal to the accrued and unpaid Distributions on, such Preferred
Securities and Common Securities, shall be distributed Pro Rata to the
Holders of the Preferred Securities and Common Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities shall
be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution Pro Rata with Holders of
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and Common Securities may only be redeemed if Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities are repaid, redeemed or distributed
as set forth below:
(a) Upon the repayment of the Debentures, in
whole or in part, whether at maturity, upon redemption at
any time or from time to time on or after September 30,
2003, the proceeds of such repayment will be promptly
applied to redeem Pro Rata Preferred Securities and Common
Securities having an aggregate liquidation amount equal to
the aggregate principal amount of the Debentures so repaid
or redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price of $25 per Preferred and
Common Security plus an amount equal to accrued and unpaid
Distributions thereon to the date of redemption, payable in
cash (the "Redemption Price"). The date of any such
repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the
repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred
Securities and Common Securities are to be so redeemed, the
Preferred Securities and the Common Securities will be
redeemed Pro Rata and the Preferred Securities to be
redeemed will be redeemed as described in paragraph 4(f)(ii)
below. If a partial redemption would result in the
delisting of the Preferred Securities by any national
securities exchange or other organization on which the
Preferred Securities are then listed, Holdings pursuant to
the Indenture will only redeem Debentures in whole and, as a
result, the Trust may only redeem the Preferred Securities
in whole.
(c) If, at any time, a Tax Event or an Investment
Company Event (each as hereinafter defined, and each a
"Special Event") shall occur and be continuing, the Regular
Trustees shall, unless the Debentures are redeemed in the
limited circumstances described below, dissolve the Trust
and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee having an aggregate principal
amount equal to the aggregate stated liquidation amount of,
and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for
payment as, the Preferred Securities and Common Securities,
to be distributed to the Holders of the Preferred Securities
and Common Securities on a Pro Rata basis in liquidation of
such Holders' interests in the Trust, within 90 days
following the occurrence of such Special Event ; provided,
however, that if at the time there is available to the Trust
the opportunity to eliminate, within the 90 day period, the
Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other
similar reasonable measure that has no adverse effect on the
Trust, Holdings, or the Holders of the Preferred Securities
("Ministerial Action"), Holdings or the Regular Trustees on
behalf of the Trust will pursue such measure in lieu of
dissolution and the 90 day period shall be extended by the
amount of time spent on such Ministerial Action.
In the case of a Tax Event which occurs prior to the
dissolution of the Trust (or, in the case of a Tax Event described in clause
(iii) of the definition of Tax Event, after such dissolution), Holdings shall
have the right at any time, upon not less than 30 nor more than 60 days'
notice, to redeem the Debentures in whole or in part for cash at the
Redemption Price within 90 days following the occurrence of such Tax Event,
and (if such redemption occurs prior to the dissolution of the Trust) promptly
following such redemption Preferred Securities and Common Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Trust at the Redemption Price
on a Pro Rata basis; provided, however, that, if at the time there is
available to Holdings or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90-day period, the Tax Event by taking
some Ministerial Action, Holdings or the Regular Trustees on behalf of the
Trust will pursue such measure in lieu of redemption and the 90-day period
shall be extended by the amount of time spent on such Ministerial Action; and,
provided further that Holdings shall have no right to redeem the Debentures
while Holdings or the Regular Trustees on behalf of the Trust are pursuing
such Ministerial Action. The Common Securities will be redeemed Pro Rata with
the Preferred Securities, except if an Event of Default has occurred and is
continuing, the Preferred Securities will have a priority over the Common
Securities with respect to payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained
an opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after September
16, 1998 as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation and
the publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
effective or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after September 16, 1998, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States federal income tax with
respect to income accrued or received on the Debentures, (ii) the Trust is, or
will be within 90 days of the date thereof, subject to more than a de minimis
amount of taxes, duties or other governmental charges or (iii) interest
payable by Holdings on the Debentures is not, or within 90 days of the date
thereof will not be, deductible by Holdings for United States federal income
tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in Investment Company
Act Law"), there is more than an insubstantial risk that the Trust is or will
be considered an Investment Company which is required to be registered under
the Investment Company Act, which Change in Investment Company Act Law becomes
effective on or after September 16, 1998.
Holdings shall have the right at any time at its option to
cause the Trustees, upon not less than 30 nor more than 60 days' notice, to
dissolve the Trust and, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, cause the Debentures to be distributed to
Holders of the Preferred Securities and Common Securities in exchange therefor
upon liquidation of the Trust in accordance with paragraph 3 hereof.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Preferred Securities and Common Securities
will no longer be deemed to be outstanding and (ii) certificates representing
Preferred Securities will be deemed to represent beneficial interests in the
Debentures having an aggregate principal amount equal to the stated
liquidation amount of, and bearing accrued and unpaid interest equal to
accrued and unpaid Distributions on, such Preferred Securities until such
certificates are presented to Holdings or its agent for transfer or
reissuance.
(d) The Trust may not redeem fewer than all the
outstanding Preferred Securities unless all accrued and
unpaid Distributions have been paid on all Preferred
Securities for all quarterly Distribution periods
terminating on or prior to the date of redemption.
(e) If Debentures are distributed to Holders of
the Preferred Securities, Holdings, pursuant to the terms of
the Indenture, will use its best efforts to have the
Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(f) (i) Notice of any redemption of, or notice
of distribution of Debentures in exchange for, the Preferred
Securities and Common Securities (a "Redemption/Distribution
Notice") will be given by the Regular Trustees on behalf of
the Trust by mail to each Holder of Preferred Securities and
Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph
(f)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-
class mail, postage prepaid, to Holders of Preferred
Securities and Common Securities. Each
Redemption/Distribution Notice shall be addressed to the
Holders of Preferred Securities and Common Securities at the
address of each such Holder appearing in the books and
records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the validity
of the redemption or exchange proceedings with respect to
any other Holder.
(ii) In the event that fewer than all the outstanding
Preferred Securities are to be redeemed, the Preferred
Securities to be redeemed will be redeemed Pro Rata from
each Holder of Preferred Securities, it being understood
that, in respect of Preferred Securities registered in the
name of and held of record by DTC (or successor Clearing
Agency) or any other nominee, the distribution of the
proceeds of such redemption will be made to each Clearing
Agency Participant (or person on whose behalf such nominee
holds such securities) in accordance with the procedures
applied by such agency or nominee.
(iii) Subject to paragraph 9 hereof, if the Trust
gives a Redemption/ Distribution Notice in respect of a
redemption of Preferred Securities as provided in this
paragraph 4 (which notice will be irrevocable) then (A)
while the Preferred Securities are in book-entry only form,
with respect to the Preferred Securities, by 12:00 noon, New
York City time, on the redemption date, provided that
Holdings has paid the Institutional Trustee, in immediately
available funds, a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures,
the Institutional Trustee will deposit irrevocably with DTC
(or any successor Clearing Agency) funds sufficient to pay
the applicable Redemption Price with respect to the
Preferred Securities and will give DTC (or any successor
Clearing Agency) irrevocable instructions and authority to
pay the Redemption Price to the Holders of the Preferred
Securities and (B) if the Preferred Securities are issued in
definitive form, with respect to the Preferred Securities
and provided that Holdings has paid the Trust, in
immediately available funds, a sufficient amount of cash in
connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will pay the relevant
Redemption Price to the Holders of such Preferred Securities
by check mailed to the address of the relevant Holder
appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if
applicable, then immediately prior to the close of business
on the redemption date, Distributions will cease to accrue
on the Preferred Securities called for redemption, such
Preferred Securities will no longer be deemed to be
outstanding and all rights of Holders of such Preferred
Securities so called for redemption will cease, except the
right of the Holders of such Preferred Securities to receive
the Redemption Price, but without interest on such
Redemption Price. Neither the Trustees nor the Trust shall
be required to register or cause to be registered the
transfer of any Preferred Securities which have been so
called for redemption. If any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If Holdings
fails to repay Debentures on maturity or on the date fixed
for redemption or if payment of the Redemption Price in
respect of Preferred Securities is improperly withheld or
refused and not paid either by the Trust or by Holdings
pursuant to the Preferred Securities Guarantee,
Distributions on such Preferred Securities will continue to
accrue, compounded quarterly, from the original redemption
date to the date of payment, in which case the actual
payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to DTC or its
nominee (or any successor Clearing Agency or its nominee) if
the Global Certificates have been issued or, if Definitive
Preferred Security Certificates have been issued, to the
Holders of the Preferred Securities.
(v) Upon the date of dissolution of the Trust and
distribution of Debentures, Preferred Security Certificates
shall be deemed to represent beneficial interests in the
Debentures so distributed, and the Preferred Securities will
no longer be deemed outstanding and may be canceled by the
Regular Trustees. The Debentures so distributed shall have
an aggregate principal amount equal to the aggregate
liquidation amount of the Preferred Securities so
distributed.
(vi) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), Holdings or any of its subsidiaries may at
any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by
private agreement.
5. Voting Rights. (a) Except as provided under paragraph 5(b)
below and as otherwise required by law and the Declaration, the Holders of the
Preferred Securities will have no voting rights.
(b) If (i) the Trust fails to make Distributions
in full on the Preferred Securities for 6 consecutive
regularly scheduled quarterly Distribution periods; or (ii)
an Event of Default occurs and is continuing, (each, an
"Appointment Event"), then the Holders of the Preferred
Securities, acting as a single class, will be entitled by
the vote of Holders of Preferred Securities representing a
Majority in liquidation amount of the Preferred Securities
to appoint a Special Regular Trustee in accordance with
paragraph 5.02(a)(ii)(B) of the Declaration. Any Holder of
Preferred Securities (other than the Sponsor or any
Affiliate of the Sponsor) will have the right to nominate
any Person to be appointed as Special Regular Trustee. For
purposes of determining whether the Trust has failed to pay
Distributions in full for 6 consecutive regularly scheduled
quarterly Distribution periods, Distributions shall be
deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative Distributions have
been or contemporaneously are paid with respect to all
quarterly Distribution periods terminating on or prior to
the date of payment of such cumulative Distributions. Not
later than 30 days after such right to appoint a Special
Regular Trustee arises, the Regular Trustees will convene a
meeting for the purpose of appointing a Special Regular
Trustee. If the Regular Trustees fail to convene such
meeting within such 30-day period, the Holders of Preferred
Securities representing 10% in liquidation amount of the
outstanding Preferred Securities will be entitled to convene
such meeting in accordance with Section 12.02 of the
Declaration. The record date for such meeting will be the
close of business on the Business Day next preceding the day
on which notice of the meeting is sent to Holders of
Preferred Securities. The provisions of the Declaration
relating to the convening and conduct of the meetings of the
Holders will apply with respect to any such meeting. If, at
any such meeting, Holders of less than a Majority in
liquidation amount of Preferred Securities entitled to vote
for the appointment of a Special Regular Trustee vote for
such appointment, no Special Regular Trustee shall be
appointed. Any Special Regular Trustee may be removed
without cause at any time by the Holders of Preferred
Securities representing a Majority in liquidation amount of
the Preferred Securities in accordance with Section
5.02(a)(ii)(B) of the Declaration. Any Special Regular
Trustee appointed shall cease to be a Special Regular
Trustee as provided in Section 5.02(c) of the Declaration.
Notwithstanding the appointment of any such Special Regular
Trustee, Holdings shall retain all rights under the
Indenture, including the right to extend the interest
payment period on Debentures, and any extension for a period
not exceeding 20 quarterly interest periods will not
constitute an Event of Default under the Indenture.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Institutional Trustee or in
connection with the redemption of Preferred Securities as a consequence of a
redemption of Debentures, then the Holders of outstanding Securities will be
entitled to vote on such amendment or proposal as a class and such amendment
or proposal shall not be effective except with the approval of the Holders of
Securities representing a Majority in liquidation amount of such Securities;
provided, however, that (A) if any amendment or proposal referred to in clause
(i) above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities; (B) the rights of Holders of Preferred Securities under Article 5
of the Declaration to appoint and remove a Special Regular Trustee shall not be
amended without the consent of each Holder of Preferred Securities; and (C)
amendments to the Declaration shall be subject to such further requirements as
are set forth in Sections 12.01 and 12.02 of the Declaration.
In the event the consent of the Institutional Trustee, as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Institutional Trustee shall vote with respect to such amendment, modification
or termination as directed by a Majority in liquidation amount of the
Securities voting together as a single class (and in the case of any other RJR
Nabisco Holdings Capital Trust holding Debentures issued under the Indenture,
voting with the holders of preferred securities of such other RJR Nabisco
Holdings Capital Trust); provided that where such amendment, modification or
termination of the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (2) each holder of Debentures, the
Institutional Trustee may only vote with respect to that amendment,
modification or termination as directed by, in the case of clause (1) above,
the vote of Holders of Securities representing such specified percentage of the
aggregate liquidation amount of the Securities, or, in the case of clause (2)
above, each Holder of Securities; and provided further, that the Institutional
Trustee shall be under no obligation to take any action in accordance with the
directions of the Holders of Securities unless the Institutional Trustee shall
have received, at the expense of the Sponsor, an opinion of nationally
recognized independent tax counsel recognized as expert in such matters to the
effect that the Trust will not be classified for United States federal income
tax purposes as an association taxable as a corporation or a partnership on
account of such action and will be treated as a grantor trust for United
States federal income tax purposes following such action.
Subject to Section 2.06 of the Declaration, and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Preferred Securities, voting separately as a class
shall have the right to (A) on behalf of all Holders of Preferred Securities,
waive any past default that is waivable under the Declaration (subject to, and
in accordance with the Declaration) and (B) direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as the holder of the Debentures (and in the case of any other RJR
Nabisco Holdings Capital Trust holding Debentures issued under the Indenture,
voting with the holders of preferred securities of such other RJR Nabisco
Holdings Capital Trust), to (i) enter into a supplemental indenture pursuant
to Section 8.2 of the Indenture, (ii) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (iii) waive any past default that is waivable under
Section 6.04 of the Indenture, or (iv) exercise any right to rescind or annul
a declaration that the principal of all the Debentures shall be due and
payable; provided that where the taking of any action under the Indenture
requires the consent or vote of (1) holders of Debentures representing a
specified percentage greater than a majority in principal amount of the
Debentures or (2) each holder of Debentures, the Institutional Trustee may
only take such action if directed by, in the case of clause (1) above, the
vote of Holders of Preferred Securities representing such specified percentage
of the aggregate liquidation amount of the Preferred Securities, or, in the
case of clause (2) above, each Holder of Preferred Securities. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than
with respect to directing the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall be under
no obligation to take any of the foregoing actions at the direction of the
Holders of Preferred Securities unless the Institutional Trustee shall have
received, at the expense of the Sponsor, an opinion of nationally recognized
independent tax counsel recognized as expert in such matters to the effect that
the Trust will not be classified for United States federal income tax purposes
as an association taxable as a corporation or a partnership on account of such
action and will be treated as a grantor trust for United States federal income
tax purposes following such action. If the Institutional Trustee fails to
enforce its rights under the Declaration (including, without limitation, its
rights, powers and privileges as a holder of the Debentures under the
Indenture), any Holder of Preferred Securities may, after a period of 30 days
has elapsed from such Holder's written request to the Institutional Trustee to
enforce such rights, institute a legal proceeding directly against Holdings to
enforce the Institutional Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.
A waiver of an Indenture Event of Default by the Institutional
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the
Declaration in respect of the Securities.
Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Securities of the Trust or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which Holders of Preferred Securities
are entitled to vote, or of any matter upon which action by written consent of
such Holders is to be taken, to be mailed to each Holder of record of
Preferred Securities. Each such notice will include a statement setting forth
(i) the date of such meeting or the date by which such action is to be taken,
(ii) a description of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or
distribute Debentures in accordance with the Declaration.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above,
any of the Preferred Securities at such time that are owned by Holdings or by
any entity directly or indirectly controlling or controlled by or under direct
or indirect common control with Holdings shall not be entitled to vote or
consent and shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
Except as provided in this paragraph 5, Holders of the Preferred
Securities will have no rights to increase or decrease the number of Trustees
or to appoint, remove or replace a Trustee, which voting rights are vested
solely in the Holders of the Common Securities.
6. Pro Rata Treatment. A reference in these terms of the
Preferred Securities to any payment, distribution or treatment as being "Pro
Rata" shall mean pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held
by the relevant Holder relative to the aggregate liquidation amount of all
Common Securities outstanding.
7. Ranking. The Preferred Securities rank pari passu and
payment thereon will be made Pro Rata with, the Common Securities except
that where an Event of Default occurs and is continuing, the rights of
Holders of Preferred Securities to payment in respect of Distributions and
payments upon liquidation, redemption or otherwise rank in priority to the
rights of Holders of the Common Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may
not consolidate, amalgamate, merge with or into, or be replaced by, or
convey, transfer or lease its properties and assets to, any corporation or
other body.
9. Transfer, Exchange, Method of Payments. Payment of
Distributions and payments on redemption of the Preferred Securities will be
payable, the transfer of the Preferred Securities will be registrable, and
Preferred Securities will be exchangeable for Preferred Securities of other
denominations of a like aggregate liquidation amount, at the principal
corporate trust office of the Institutional Trustee in The City of New York;
provided that payment of Distributions may be made at the option of the
Regular Trustees on behalf of the Trust by check mailed to the address of the
persons entitled thereto and that the payment on redemption of any Preferred
Security will be made only upon surrender of such Preferred Security to the
Institutional Trustee.
10. Acceptance of Indenture and Preferred Guarantee. Each Holder
of Preferred Securities, by the acceptance thereof, agrees to the provisions
of (i) the Preferred Guarantee, including the subordination provisions therein
and (ii) the Indenture and the Debentures, including the subordination
provisions of the Indenture, and agrees to treat the Debentures as
indebtedness for all United States tax purposes.
11. No Preemptive Rights. The Holders of Preferred Securities
shall have no preemptive rights to subscribe to any additional Preferred
Securities or Common Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge on written request to the Trust at its
principal place of business.
Annex I
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company ("DTC") or a nominee of DTC. This Preferred Security
is exchangeable for Preferred Securities registered in the name of a person
other than DTC or its nominee only in the limited circumstances described in
the Declaration and no transfer of this Preferred Security (other than a
transfer of this Preferred Security as a whole by DTC to a nominee of DTC or
by a nominee of DTC to DTC or another nominee of DTC) may be registered except
in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York) to
the Trust or its agent for registration of transfer, exchange or payment, and
any Preferred Security issued is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein.]
Number ___________ Preferred Securities
___________
CUSIP NO. ____________
Certificate Evidencing Preferred Securities
of
RJR Nabisco Holdings Capital Trust II
9 1/2% Preferred Trust Securities
(liquidation amount $25 per Preferred Security)
RJR Nabisco Holdings Capital Trust II, a statutory business
trust created under the laws of the State of Delaware (the "Trust"), hereby
certifies that _________ (the "Holder") is the registered owner of _____
(______) preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the 9 1/2% Trust Originated
Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are issued
and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Declaration of Trust of the Trust dated as of September
16, 1998, as the same may be amended from time to time (the "Declaration")
including the designation of the terms of Preferred Securities as set forth in
Exhibit B thereto. The Preferred Securities and the Common Securities issued
by the Trust pursuant to the Declaration represent undivided beneficial
interests in the assets of the Trust, including the Debentures (as defined in
the Declaration) issued by RJR Nabisco Holdings Corp., a Delaware corporation
("Holdings"), to the Trust pursuant to the Indenture referred to in the
Declaration. The Holder is entitled to the benefits of the Guarantee
Agreement of Holdings dated as of September 16, 1998 (the "Guarantee") to the
extent provided therein. The Trust will furnish a copy of the Declaration,
the Guarantee and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have (i) agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment
to all Senior Debt (as defined in the Indenture) as and to the extent provided
in the Indenture and (ii) agreed to the terms of the Guarantee, including that
the Guarantee ranks (a) pari passu in right of payment with Holdings'
obligations under other guarantees of preferred securities, (b) subordinate
and junior in right of payment to all other liabilities of Holdings, including
the Debentures, except those made pari passu or subordinate by their terms,
and (c) senior to all capital stock now or hereafter issued by Holdings and to
any guarantee now or hereafter entered into by Holdings in respect of any of
its capital stock.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
certificate this __ day of ____, 199_.
RJR NABISCO HOLDINGS CAPITAL TRUST II
By: _________________________, as trustee
Name:
Title:
By: _________________________, as trustee
Name:
Title:
Dated:
Countersigned and Registered:
THE BANK OF NEW YORK
______________________________
Transfer Agent and Registrar
By: ___________________________
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert assignee's social security or tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books
of the Trust. The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
EXHIBIT C
TERMS OF
COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust of RJR Nabisco Holdings Capital Trust II dated as of
September 16, 1998 (as amended from time to time, the "Declaration"), the
designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Common Securities are set forth below (each capitalized
term used but not defined herein having the meaning set forth in the
Declaration):
1. Designation and Number. Common Securities of the Trust with
an aggregate liquidation amount in the assets of the Trust of up to $11,559,300
and a liquidation amount in the assets of the Trust of $25 per Common
Security, are hereby designated as "9 1/2% Trust Originated Common
Securities". The Common Security Certificates evidencing the Common
Securities shall be substantially in the form attached hereto as Annex I, with
such changes and additions thereto or deletions therefrom as may be required
by ordinary usage, custom or practice. The Common Securities are to be issued
and sold to RJR Nabisco Holdings Corp. ("Holdings") in consideration of up to
$11,559,300 in cash. In connection with the issuance and sale of the
Preferred Securities and the Common Securities, the Trust will purchase as
trust assets Debentures of Holdings having an aggregate principal amount equal
to the aggregate liquidation amount of the Preferred Securities and Common
Securities so issued, and bearing interest at an annual rate equal to the
annual Distribution rate on the Preferred Securities and Common Securities and
having payment and redemption provisions which correspond to the payment and
redemption provisions of the Preferred Securities and Common Securities.
2. Distributions. (a) Distributions payable on each Common
Security will be fixed at a rate per annum of 9 1/2% (the "Coupon Rate") of
the stated liquidation amount of $25 per Common Security. Distributions in
arrears for more than one quarter will bear interest at the rate per annum of
9 1/2% thereof (to the extent permitted by applicable law), compounded
quarterly. The term "Distributions" as used in these terms means such
periodic cash distributions and any such interest payable unless otherwise
stated. A Distribution will be made by the Institutional Trustee only to the
extent that interest payments are made in respect of the Debentures held by the
Institutional Trustee. The amount of Distributions payable for any period will
be computed for any full quarterly Distribution period on the basis of a
360-day year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed in such a 30-day month.
(b) Distributions on the Common Securities will
be cumulative, will accrue from September 16, 1998 and will
be payable quarterly in arrears, on the 30th day of March,
June, September and December of each year, commencing on
December 30, 1998, except as otherwise described below, but
only if and to the extent that interest payments are made in
respect of the Debentures held by the Institutional Trustee.
So long as Holdings shall not be in default in the payment
of interest on the Debentures, Holdings has the right under
the Indenture for the Debentures to defer payments of
interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding 20
consecutive quarterly interest periods (each, an "Extension
Period") and, as a consequence, quarterly Distributions will
not be made (but will continue to accumulate at the rate of
9 1/2% per annum, compounded quarterly, to the extent
permitted by applicable law) during any such Extension
Period. Prior to the termination of any such Extension
Period, Holdings may further extend such Extension Period;
provided that such Extension Period together with all such
previous and further extensions thereof may not exceed 20
consecutive quarterly interest periods and provided further,
that no Extension Period may extend beyond the maturity of
the Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due, Holdings may
commence a new Extension Period, subject to the above
requirements. Holdings may also prepay at any time all or
any portion of the interest accrued during an Extension
Period. Payments of accrued Distributions will be payable
to Holders of Common Securities as they appear on the books
and records of the Trust on the record date for the first
payment occurring on or after the end of the Extension
Period.
(c) Distributions on the Common Securities will
be payable promptly by the Institutional Trustee (or other
Paying Agent) upon receipt of immediately available funds to
the Holders thereof as they appear on the books and records
of the Trust on the relevant record dates which will be one
business day prior to the relevant Distribution date which
record and payment dates correspond to the record and
interest payment dates on the Debentures. Distributions
payable on any Common Securities that are not punctually
paid on any Distribution date as a result of Holdings having
failed to make the corresponding interest payment on the
Debentures will forthwith cease to be payable to the person
in whose name such Common Security is registered on the
relevant record date, and such defaulted Distribution will
instead be payable to the person in whose name such Common
Security is registered on the special record date
established by the Regular Trustees, which record date shall
correspond to the special record date or other specified
date determined in accordance with the Indenture; provided,
however, that Distributions shall not be considered payable
on any Distribution payment date falling within an Extension
Period unless Holdings has elected to make a full or partial
payment of interest accrued on the Debentures on such
Distribution payment date. Subject to any applicable laws
and regulations and the provisions of the Declaration, each
payment in respect of the Common Securities will be made as
described in paragraph 9 hereof. If any date on which
Distributions are payable on the Common Securities is not a
Business Day, then payment of the Distribution payable on
such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date
and the record date for such payment shall be the
immediately preceding Business Day.
(d) All Distributions paid with respect to the
Common Securities and the Preferred Securities will be paid
Pro Rata to the Holders thereof entitled thereto. If an
Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common
Securities with respect to Distributions.
(e) In the event that there is any money or other
property held by or for the Trust that is not accounted for
under the Declaration, such money or property shall be
distributed Pro Rata among the Holders of the Preferred
Securities and Common Securities.
3. Liquidation Distribution Upon Dissolution. In the event
of any voluntary or involuntary dissolution of the Trust, the Holders of the
Preferred Securities and Common Securities at the date of dissolution will be
entitled to receive Pro Rata solely out of the assets of the Trust available
for distribution to Holders of Preferred Securities and Common Securities,
after satisfaction of liabilities to creditors, as provided by applicable law
(including, without limitation, after paying or making reasonable provision to
pay all claims and obligations of the Trust in accordance with Section 3808(e)
of the Business Trust Act), an amount equal to the aggregate of the stated
liquidation amount of $25 per Preferred Security and Common Security plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
dissolution, and after satisfaction of liabilities to creditors, as provided
by applicable law (including, without limitation, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act), Debentures in an
aggregate principal amount equal to the aggregate stated liquidation amount of
such Preferred Securities and Common Securities bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, such
Preferred Securities and Common Securities, shall be distributed Pro Rata to
the Holders of the Preferred Securities and Common Securities in exchange for
such Securities.
If, upon any such dissolution, the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Preferred Securities and Common Securities shall
be paid, subject to the next paragraph, on a Pro Rata basis.
Holders of Common Securities will be entitled to receive
Liquidation Distributions upon any such dissolution Pro Rata with Holders of
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to such Liquidation Distribution.
4. Redemption and Distribution of Debentures. The Preferred
Securities and Common Securities may only be redeemed if Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and Common Securities are repaid, redeemed or distributed
as set forth below:
(a) Upon the repayment of the Debentures, in
whole or in part, whether at maturity, upon redemption at
any time or from time to time on or after September 16,
2003, the proceeds of such repayment will be promptly
applied to redeem Pro Rata Preferred Securities and Common
Securities having an aggregate liquidation amount equal to
the aggregate principal amount of the Debentures so repaid
or redeemed, upon not less than 30 nor more than 60 days'
notice, at a redemption price of $25 per Preferred and
Common Security plus an amount equal to accrued and unpaid
Distributions thereon to the date of redemption, payable in
cash (the "Redemption Price"). The date of any such
repayment or redemption of Preferred Securities and Common
Securities shall be established to coincide with the
repayment or redemption date of the Debentures.
(b) If fewer than all the outstanding Preferred
Securities and Common Securities are to be so redeemed, the
Preferred Securities and the Common Securities will be
redeemed Pro Rata and the Common Securities to be redeemed
will be redeemed as described in paragraph 4(e)(ii) below.
If a partial redemption would result in the delisting of the
Preferred Securities by any national securities exchange or
other organization on which the Preferred Securities are
then listed, Holdings pursuant to the Indenture will only
redeem Debentures in whole and, as a result, the Trust may
only redeem the Common Securities in whole.
(c) If, at any time, a Tax Event or an Investment
Company Event (each as hereinafter defined, and each a
"Special Event") shall occur and be continuing, the Regular
Trustees shall, unless the Debentures are redeemed in the
limited circumstances described below, dissolve the Trust
and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee having an aggregate principal
amount equal to the aggregate stated liquidation amount of
and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for
payment as the Preferred Securities and Common Securities,
to be distributed to the Holders of the Preferred Securities
and Common Securities on a Pro Rata basis in liquidation of
such Holders' interests in the Trust, within 90 days
following the occurrence of such Special Event; provided,
however, that if at the time there is available to the Trust
the opportunity to eliminate, within the 90-day period, the
Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other
similar reasonable measure that has no adverse effect on the
Trust, Holdings, or the Holders of the Preferred Securities
("Ministerial Action"), Holdings or the Regular Trustees on
behalf of the Trust will pursue such measure in lieu of
dissolution and the 90-day period shall be extended by the
amount of time spent on such Ministerial Action.
In the case of a Tax Event which occurs prior to the
dissolution of the Trust (or, in the case of a Tax Event described in clause
(iii) of the definition of Tax Event, after such dissolution), Holdings shall
have the right at any time, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash at the
Redemption Price within 90 days following the occurrence of such Tax Event,
and (if such redemption occurs prior to the dissolution of the Trust) promptly
following such redemption Preferred Securities and Common Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed will be redeemed by the Trust at the Redemption Price
on a Pro Rata basis; provided, however, that, if at the time there is
available to Holdings or the Regular Trustees on behalf of the Trust the
opportunity to eliminate, within such 90-day period, the Tax Event by taking
some Ministerial Action, Holdings or the Holders of the Preferred Securities,
Holdings or the Regular Trustees on behalf of the Trust will pursue such
measure in lieu of redemption and the 90-day period shall be extended by the
amount of time spent on such Ministerial Action; and provided, further, that
Holdings shall have no right to redeem the Debentures while Holdings or the
Regular Trustees on behalf of the Trust are pursuing such Ministerial Action.
The Common Securities will be redeemed Pro Rata with the Preferred Securities,
except if an Event of Default has occurred and is continuing, the Preferred
Securities will have a priority over the Common Securities with respect to
payment of the Redemption Price.
"Tax Event" means that the Regular Trustees shall have obtained
an opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after September
16, 1998 as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) any amendment to, or change in, an interpretation or application
of any such laws or regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any legislation and
the publication of any judicial decision or regulatory determination), (c) any
interpretation or pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore generally accepted
position or (d) any action taken by any governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after September 16, 1998, there is
more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date thereof, subject to United States federal income tax with
respect to income accrued or received on the Debentures, (ii) the Trust is, or
will be within 90 days of the date thereof, subject to more than a de minimis
amount of taxes, duties or other governmental charges or (iii) interest
payable by Holdings to the Trust on the Debentures is not, or within 90 days
of the date thereof will not be, deductible by Holdings for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of nationally recognized independent counsel
experienced in practice under the Investment Company Act that, as a result of
the occurrence of a change in law or regulation or a change in interpretation
or application of law or regulation by any legislative body, court,
governmental agency or regulatory authority (a "Change in Investment Company
Act Law"), there is more than an insubstantial risk that the Trust is or will
be considered an Investment Company which is required to be registered under
the Investment Company Act, which Change in Investment Company Act Law becomes
effective on or after September 16, 1998.
Holdings shall have the right at any time at its option to
cause the Trustees, upon not less than 30 nor more than 60 days' notice, to
dissolve the Trust and, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, cause the Debentures to be distributed to
Holders of the Preferred Securities and Common Securities in exchange therefor
upon liquidation of the Trust.
On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Common Securities and Preferred Securities
will no longer be deemed to be outstanding and (ii) any certificates
representing Common Securities will be deemed to represent beneficial
interests in the Debentures having an aggregate principal amount equal to the
stated liquidation amount of, and bearing accrued and unpaid interest equal to
accrued and unpaid Distributions on, such Common Securities until such
certificates are presented to Holdings or its agent for transfer or
reissuance.
(d) The Trust may not redeem fewer than all the
outstanding Common Securities unless all accrued and unpaid
Distributions have been paid on all Common Securities for
all quarterly Distribution periods terminating on or prior
to the date of redemption.
(e) (i) Notice of any redemption of, or notice
of distribution of Debentures in exchange for, the Preferred
Securities and Common Securities (a "Redemption/Distribution
Notice") will be given by the Regular Trustees on behalf of
the Trust by mail to each Holder of Preferred Securities and
Common Securities to be redeemed or exchanged not less than
30 nor more than 60 days prior to the date fixed for
redemption or exchange thereof. For purposes of the
calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph
(e)(i), a Redemption/Distribution Notice shall be deemed to
be given on the day such notice is first mailed by first-class
mail, postage prepaid, to Holders of Preferred Securities
and Common Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Preferred Securities
and Common Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect
in the Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with
respect to any other Holder.
(ii) In the event that fewer than all the
outstanding Common Securities are to be redeemed, the Common
Securities to be redeemed will be redeemed Pro Rata from
each Holder of Common Securities (subject to adjustment to
eliminate fractional Common Securities).
(iii) If the Trust gives a Redemption/
Distribution Notice in respect of a redemption of Common
Securities as provided in this paragraph 4 (which notice
will be irrevocable) then immediately prior to the close of
business on the redemption date, provided that Holdings has
paid to the Trust in immediately available funds a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, Distributions will
cease to accrue on the Common Securities called for redemption,
such Common Securities will no longer be deemed to be
outstanding and all rights of Holders of such Common Securities
so called for redemption will cease, except the right of the
Holders of such Common Securities to receive the Redemption
Price, but without interest on such Redemption Price.
Neither the Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any
Common Securities which have been so called for redemption.
If any date fixed for redemption of Common Securities is not
a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is
a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made
on the immediately preceding Business Day, in each case with
the same force and effect as if made on such date fixed for
redemption. If payment of the Redemption Price in respect
of Common Securities is improperly withheld or refused and
not paid by the Institutional Trustee, Distributions on such
Common Securities will continue to accrue, from the original
redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be
sent by the Regular Trustees on behalf of the Trust to the
Holders of the Common Securities.
(v) Upon the date of dissolution of the Trust
and distribution of Debentures as a result of the occurrence
of a Special Event, Common Security Certificates shall be
deemed to represent beneficial interests in the Debentures
so distributed, and the Common Securities will no longer be
deemed outstanding and may be canceled by the Regular
Trustees. The Debentures so distributed shall have an
aggregate principal amount equal to the aggregate
liquidation amount of the Common Securities so distributed.
5. Voting Rights. (a) Except as provided under paragraph 5(b)
below and as otherwise required by law and the Declaration, the Holders of the
Common Securities will have no voting rights.
(b) Except as provided in the Declaration with
respect to a Special Regular Trustee, Holders of Common
Securities have the sole right under the Declaration to
increase or decrease the number of Trustees, and to appoint,
remove or replace a Trustee, any such increase, decrease,
appointment, removal or replacement to be approved by
Holders of Common Securities representing a Majority in
liquidation amount of the Common Securities.
If any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than in connection
with the distribution of Debentures held by the Institutional Trustee or in
connection with the redemption of Common Securities as a consequence of a
redemption of Debentures, then the Holders of outstanding Securities will be
entitled to vote on such amendment or proposal as a class and such amendment
or proposal shall not be effective except with the approval of the Holders of
Securities representing a Majority in liquidation amount of such Securities;
provided, however, (A) if any amendment or proposal referred to in clause (i)
above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities, (B) the rights of Holders of Common Securities under Article 5 of
the Declaration to increase or decrease the number of, and to appoint, replace
or remove, Trustees (other than a Special Regular Trustee) shall not be
amended without the consent of each Holder of Common Securities, and (C)
amendments to the Declaration shall be subject to such further requirements as
are set forth in Sections 12.1 and 12.2 of the Declaration.
In the event the consent of the Institutional Trustee as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination. The
Institutional Trustee shall vote with respect to such amendment, modification
or termination as directed by a Majority in liquidation amount of the
Securities voting together as a single class; provided that where such
amendment, modification or termination of the Indenture requires the consent
or vote of (1) holders of Debentures representing a specified percentage
greater than a majority in principal amount of the Debentures or (2) each
holder of Debentures, the Institutional Trustee may only vote with respect to
that amendment, modification or termination as directed by, in the case of
clause (1) above, the vote of Holders of Securities representing such specified
percentage of the aggregate liquidation amount of the Securities, or, in the
case of clause (2) above, each Holder of Securities; and provided, further,
that the Institutional Trustee shall be under no obligation to take any action
in accordance with the directions of the Holders of the Securities unless the
Institutional Trustee shall have received, at the expense of the Sponsor, an
opinion of nationally recognized independent tax counsel recognized as an
expert in such matters to the effect that the Trust will not be classified for
United States federal income tax purposes as an association taxable as a
corporation or a partnership on account of such action and will be treated as
a grantor trust for United States federal income tax purposes following such
action.
Subject to Section 2.06 of the Declaration, and the provisions
of this and the next succeeding paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class
shall have the right to (A) on behalf of all Holders of Common Securities,
waive any past default that is waivable under the Declaration (subject to, and
in accordance with the Declaration) and (B) direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) direct the time, method and place
of conducting any proceeding for any remedy available to the Debenture
Trustee, or exercising any trust or power conferred on the Debenture Trustee
with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 6.4 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable; provided that where the taking of any
action under the Indenture requires the consent or vote of (1) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures or (e) each holder of Debentures, the
Institutional Trustee may only take such action if directed by, in the case of
clause (1) above, the vote of Holders of Common Securities representing such
specified percentage of the aggregate liquidation amount of the Common
Securities, or, in the case of clause (2) above, each Holder of Common
Securities. Pursuant to this paragraph, the Institutional Trustee shall not
revoke, or take any action inconsistent with, any action previously authorized
or approved by a vote of the Holders of the Preferred Securities, and shall
not take any action in accordance with the direction of the Holders of the
Common Securities under this paragraph if the action is prejudicial to the
Holders of Preferred Securities. Other than with respect to directing the
time, method and place of conducting any proceeding for any remedy available
to the Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall be under no obligation to take any of the
foregoing actions at the direction of the Holders of Common Securities unless
the Institutional Trustee shall have received, at the expense of the Sponsor,
an opinion of nationally recognized independent tax counsel recognized as
expert in such matters to the effect that the Trust will not be classified for
United States federal income tax purposes as an association taxable as a
corporation or a partnership on account of such action and will be treated as
a grantor trust for United States income tax purposes following such action.
Notwithstanding any other provision of these terms, each Holder
of Common Securities will be deemed to have waived any Event of Default with
respect to the Common Securities and its consequences until all Events of
Default with respect to the Preferred Securities have been cured, waived by
the Holders of Preferred Securities as provided in the Declaration or otherwise
eliminated, and until all Events of Default with respect to the Preferred
Securities have been so cured, waived by the Holders of Preferred Securities
or otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of Preferred Securities and only the Holders
of the Preferred Securities will have the right to direct the Institutional
Trustee in accordance with the terms of the Declaration or of the Securities.
In the event that any Event of Default with respect to the Preferred
Securities is waived by the Holders of Preferred Securities as provided in the
Declaration, the Holders of Common Securities agree that such waiver shall
also constitute the waiver of such Event of Default with respect to the Common
Securities for all purposes under the Declaration without any further act,
vote or consent of the Holders of the Common Securities.
A waiver of an Indenture Event of Default by the Institutional
Trustee at the direction of the Holders of the Preferred Securities will
constitute a waiver of the corresponding Event of Default under the
Declaration in respect of the Securities.
Any required approval of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities of the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and (iii)
instructions for the delivery of proxies or consents.
No vote or consent of the Holders of Common Securities will be
required for the Trust to redeem and cancel Common Securities in accordance
with the Declaration.
6. Pro Rata Treatment. A reference in these terms of the
Common Securities to any payment, distribution or treatment as being "Pro
Rata" shall mean pro rata to each Holder of Securities according to the
aggregate liquidation amount of the Securities held by the relevant Holder in
relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default has occurred and is
continuing, in which case any funds available to make such payment shall be
paid first to each Holder of the Preferred Securities pro rata according to
the aggregate liquidation amount of Preferred Securities held by the relevant
Holder relative to the aggregate liquidation amount of all Preferred
Securities outstanding, and only after satisfaction of all amounts owed to
the Holders of the Preferred Securities, to each Holder of Common Securities
pro rata according to the aggregate liquidation amount of Common Securities
held by the relevant Holder relative to the aggregate liquidation amount of
all Common Securities outstanding.
7. Ranking. The Common Securities rank pari passu with the
Preferred Securities except that where an Event of Default occurs and is
continuing, the rights of Holders of Common Securities to payment in respect
of Distributions and payments upon liquidation, redemption or otherwise are
subordinate to the rights of Holders the Preferred Securities.
8. Mergers, Consolidations or Amalgamations. The Trust may not
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets to, any corporation or other body.
9. Transfers, Exchanges, Method of Payments. Payment of
Distributions and payments on redemption of the Common Securities will be
payable, the transfer of the Common Securities will be registrable, and Common
Securities will be exchangeable for Common Securities of other denominations
of a like aggregate liquidation amount, at the principal corporate trust
office of the Institutional Trustee in The City of New York; provided that
payment of Distributions may be made at the option of the Regular Trustees on
behalf of the Trust by check mailed to the address of the persons entitled
thereto and that the payment on redemption of any Common Security will be made
only upon surrender of such Common Security to the Institutional Trustee.
Notwithstanding the foregoing, transfers of Common Securities are subject to
conditions set forth in Section 9.01(c) of the Declaration.
10. Acceptance of Indenture. Each Holder of Common Securities,
by the acceptance thereof, agrees to the provisions of the Indenture and the
Debentures, including the subordination provisions thereof, and agrees to treat
the Debentures as indebtedness for all United States tax purposes.
11. No Preemptive Rights. The Holders of Common Securities
shall have no preemptive rights to subscribe to any additional Common
Securities or Preferred Securities.
12. Miscellaneous. These terms shall constitute a part of the
Declaration. The Trust will provide a copy of the Declaration and the
Indenture to a Holder without charge on written request to the Trust at its
principal place of business.
Annex I
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
C-1 ______
Certificate Evidencing Common Securities
of
RJR Nabisco Holdings Capital Trust II
9 1/2% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
RJR Nabisco Holdings Capital Trust II, a statutory business
trust formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that RJR Nabisco Holdings Corp. (the "Holder") is the registered
owner of _____________________________ (______) common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 9 1/2% Trust Originated Common Securities (liquidation amount
$25 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer and satisfaction of the other conditions set forth in
the Declaration (as defined below) including, without limitation Section
9.01(c) thereof. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions
of, the Amended and Restated Declaration of Trust of the Trust dated as of
September 16, 1998, as the same may be amended from time to time (the
"Declaration") including the designation of the terms of Common Securities as
set forth in Exhibit C thereto. The Common Securities and the Preferred
Securities issued by the Trust pursuant to the Declaration represent undivided
beneficial interests in the assets of the Trust, including the Debentures (as
defined in the Declaration) issued by RJR Nabisco Holdings Corp., a Delaware
corporation, to the Trust pursuant to the Indenture referred to in the
Declaration. The Trust will furnish a copy of the Declaration and the
Indenture to the Holder without charge upon written request to the Trust at
its principal place of business or registered office.
The Holder of this Certificate, by accepting this Certificate,
is deemed to have agreed to the terms of the Indenture and the Debentures,
including that the Debentures are subordinate and junior in right of payment
to all Senior Indebtedness (as defined in the Indenture) as and to the extent
provided in the Indenture.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trustees of the Trust have executed
this certificate this __th day of ____, 199_.
RJR NABISCO HOLDINGS CAPITAL TRUST II
By ________________________, as trustee
Name:
Title:
By ________________________, as trustee
Name:
Title: Trustee
Dated:
Countersigned and Registered:
_____________________________
Transfer Agent and Registrar
By: ___________________________________
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfer this
Common Security Certificate to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert assignee's social security or tax identification number)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books
of the Trust. The agent may substitute another to act for him or her.
Date: _________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Exhibit 23
DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, NY 10017
212-450-4000
September 16, 1998
Re: Registration Statement on Form S-3
Registration No. 333-60811
RJR Nabisco Holdings Corp.
RJR Nabisco Holdings Capital Trust II
1301 Avenue of the Americas
New York, NY 10019
Ladies and Gentlemen:
We have acted as special counsel for RJR Nabisco Holdings Corp.,
a Delaware corporation ("Holdings"), and RJR Nabisco Holdings Capital Trust II,
a statutory business trust created under the Business Trust Act of the State of
Delaware (the "Trust"), in connection with the Trust's offer (the "Offer") and
issuance of 9 1/2% Trust Originated Preferred Securities (the "Preferred
Securities"). In connection therewith, we have prepared the discussion set
forth under the caption "Certain Federal Income Tax Consequences" (the
"Discussion") in the Prospectus Supplement dated September 11, 1998 (the
"Prospectus Supplement") to the Prospectus dated August 31, 1998 that is part
of the Registration Statement on Form S-3 (Registration No. 333-60811) filed
with the Securities and Exchange Commission (the "Commission").
In rendering our opinion, we have examined the Amended and
Restated Declaration of Trust of the Trust dated as of September 16, 1998 (the
"Declaration"), which is to be filed by Holdings and the Trust with the
Commission on September 16, 1998 pursuant to a report on Form 8-K, and have
assumed that the Trustees will conduct the affairs of the Trust in accordance
with the Declaration. We hereby confirm our opinion as set forth in the
Discussion, which is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the Preferred
Securities.
We hereby consent to the filing with the Commission of this
opinion and to the use of our name under the caption "Certain Federal Income
Tax Consequences" in the Prospectus Supplement. The issuance of such consent
does not concede that we are an "expert" for the purposes of the Securities Act
of 1933.
Very truly yours,
/s/ DAVIS POLK & WARDWELL
