Exhibit 4(b)
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RJR NABISCO HOLDINGS CORP.
GUARANTEE AGREEMENT
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Dated as of September 16, 1998
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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.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: H. ▇▇▇▇▇ ▇▇▇▇▇▇▇
(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
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
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: