British American Tobacco p.l.c F-3ASR, filed Jul 1, 2022
British American Tobacco p.l.c. (BTI)
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As filed with the Securities and Exchange Commission on July 1, 2022.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
British American Tobacco p.l.c.
| England and Wales | 98-0207762 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Globe House
4 Temple Place
London WC2R 2PG
United Kingdom
+44 (0)20 7845 1000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Puglisi & Associates
850 Library Avenue
Suite 204
Newark, DE 19711
(302) 738-6680
(Name, address, including zip code, and telephone number, including area code, of agent for service)
(FOR CO-REGISTRANTS, PLEASE SEE “TABLE OF CO-REGISTRANTS” ON THE FOLLOWING PAGE)
Copies to:
| Alyssa K. Caples Cravath, Swaine & Moore LLP CityPoint One Ropemaker Street London EC2Y 9HR United Kingdom +44 (0)20 7453 1000 |
Reuven B. Young Davis Polk & Wardwell London LLP 5 Aldermanbury Square London EC2V 7HR United Kingdom +44 (0)20 7418 1300 |
Paul McCrory Company Secretary Globe House 4 Temple Place London WC2R 2PG United Kingdom +44 (0)20 7845 1000 |
Approximate date of commencement of proposed offer to the public:
From time to time after this registration statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☒
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
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TABLE OF CO-REGISTRANTS
| Exact Name of Registrant as |
State or Other Jurisdiction of Incorporation or Organization |
I.R.S. Employer Identification Number |
Address, including Zip Code, | |||
| B.A.T Capital Corporation* |
Delaware | 61-0986865 | 103 Foulk Road Suite 120 Wilmington, Delaware 19803 U.S.A. +1 (302) 691 6323 | |||
| B.A.T. International Finance p.l.c.* |
England and Wales | 98-0402606 | Globe House 4 Temple Place London WC2R 2PG United Kingdom +44 (0)20 7845 1000 | |||
| B.A.T. Netherlands Finance B.V. |
The Netherlands | Not Applicable | Handelsweg 53A 1181 ZA Amstelveen The Netherlands +31 (0)20 540 6911 | |||
| Reynolds American Inc. |
North Carolina | 20-0546644 | 401 North Main Street Winston-Salem, North Carolina 27101 U.S.A. +1 (336) 741-2000 | |||
| British American Tobacco Holdings (The Netherlands) B.V. |
The Netherlands | Not Applicable | Handelsweg 53A 1181 ZA Amstelveen The Netherlands +31 (0)20 540 6911 | |||
| * | One of British American Tobacco p.l.c., B.A.T Capital Corporation or B.A.T. International Finance p.l.c. will be the issuer of the debt securities that may be offered hereunder. In the case of debt securities that may be issued by British American Tobacco p.l.c., one or more of the other listed registrants may guarantee such debt securities to the extent specified in the applicable prospectus supplement. In the case of debt securities that may be issued by either B.A.T Capital Corporation or B.A.T. International Finance p.l.c., British American Tobacco p.l.c. will, and, to the extent specified in the applicable prospectus supplement, one or more of the other listed registrants (including B.A.T. International Finance p.l.c., in the case of debt securities that may be issued by B.A.T Capital Corporation, and B.A.T Capital Corporation, in the case of debt securities that may be issued by B.A.T. International Finance p.l.c.) may, guarantee such debt securities. |
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PROSPECTUS
British American Tobacco p.l.c.
B.A.T Capital Corporation
B.A.T. International Finance p.l.c.
Debt Securities (guaranteed to the extent provided herein)
Each of British American Tobacco p.l.c. (“BAT” or the “Parent” and, together with its subsidiaries, the “BAT Group”) and its wholly owned subsidiaries B.A.T Capital Corporation (“BATCAP”) and B.A.T. International Finance p.l.c. (“BATIF” and, together with BAT and BATCAP, each an “Issuer” and, together, the “Issuers”) may offer and sell from time to time debt securities as separate series in amounts, at prices and on terms to be determined at the relevant time of sale. The debt securities may consist of debentures, notes or other types of debt. For each offering of debt securities, a prospectus supplement will accompany this prospectus and will contain the specific terms of the series of debt securities for which this prospectus is being delivered. Payment of principal, premium and interest in respect of any debt securities issued by BAT may be guaranteed by one of more of its subsidiaries BATCAP, BATIF, B.A.T. Netherlands Finance B.V. (“BATNF”) and Reynolds American Inc. (“RAI”), as set forth in the applicable prospectus supplement. Payment of principal, premium and interest, if any, in respect of any debt securities issued by BATCAP or BATIF will be guaranteed by BAT and may also be guaranteed by one or more of BATNF, RAI, (in the case of debt securities issued by BATCAP) BATIF, and (in the case of debt securities issued by BATIF) BATCAP and (in the case of debt securities issued by BATCAP under the 2017 Indenture (as defined herein)) British American Tobacco Holdings (The Netherlands) B.V. (“BATHTN”), as set forth in the applicable prospectus supplement.
Each Issuer may sell debt securities to or through one or more underwriters or dealers, and also may sell debt securities directly to other purchasers or through agents. The applicable prospectus supplement will set forth information regarding the underwriters or agents involved in the relevant sale of the debt securities for which this prospectus is being delivered. See “Plan of Distribution” for possible indemnification arrangements for underwriters, agents and their respective controlling persons.
The applicable prospectus supplement will contain information, where applicable, as to any listing of the series of debt securities for which this prospectus is being delivered on any securities exchange.
This prospectus may not be used for sales of securities unless it is accompanied by a prospectus supplement.
Investing in the debt securities to be offered by this prospectus and any applicable prospectus supplement involves risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors” starting on page 2 of this prospectus, any risk factors included in any accompanying prospectus supplement and in the reports filed with the Securities and Exchange Commission (the “SEC”) that are incorporated by reference in this prospectus, before you make an investment in our debt securities.
Neither the SEC nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is July 1, 2022.
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Rather than repeat certain information in this prospectus that we have already included in reports filed with the SEC, we are incorporating this information by reference, which means that we can disclose important business, financial and other information to you by referring to those publicly filed documents that contain the information. See “Where You Can Find More Information; Incorporation by Reference”.
References in this document to information on the web address of BAT have been included as inactive textual references only. These websites and the information contained therein or connected thereto are not intended to be incorporated into or to form part of the Registration Statement and Form F-3.
We will provide without charge to each person to whom a prospectus is delivered, including each beneficial owner of debt securities, a copy of any or all documents that are incorporated into this prospectus by reference, other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into the documents that this prospectus incorporates. Copies of the documents incorporated by reference herein may be obtained at no cost by written or oral request to Company Secretary, British American Tobacco p.l.c., Globe House, 4 Temple Place, London WC2R 2PG, United Kingdom, +44 (0)20 7845 1000.
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This prospectus is part of a registration statement that we have filed with the SEC on Form F-3, utilizing a “shelf” registration process, relating to the debt securities and guarantees described in this prospectus. Under this shelf registration process, each Issuer may, from time to time, sell the debt securities described in this prospectus and any applicable prospectus supplement in one or more offerings. Each time an Issuer sells debt securities, it will provide a prospectus supplement that will contain specific information about the terms of that specific offering, including the offering price of the debt securities. The prospectus supplement may also add, update or change information contained in this prospectus. You should carefully read both this prospectus and the applicable prospectus supplement relating to any specific offering of debt securities, together with additional information described below under the heading “Where You Can Find More Information; Incorporation by Reference” before you decide to invest in any of the debt securities.
This prospectus and any accompanying prospectus supplements, or any free writing prospectus, do not contain all of the information included in the registration statement. We have omitted parts of the registration statement in accordance with the rules and regulations of the SEC. For further information, we refer you to the registration statement on Form F-3, including its exhibits, of which this prospectus is a part. Statements contained in this prospectus and any accompanying prospectus supplements about the provisions or contents of any agreement or other document are not necessarily complete. If the SEC rules and regulations require that an agreement or document be filed as an exhibit to the registration statement, please see that agreement or document for a complete description of those matters. You should not assume that the information in this prospectus, any prospectus supplements, any free writing prospectus or any documents incorporated herein or therein by reference is accurate as of any date other than the date on the front of each of such documents.
Unless indicated otherwise or the context otherwise requires, references in this prospectus to the terms “BAT Group”, “we”, “us”, “our” or the “combined company” refer to BAT and its subsidiaries. References in this prospectus to “Guarantor” refer to one or more of BAT, BATCAP, BATIF, RAI, BATNF or BATHTN, as the context requires. Unless indicated otherwise or the context otherwise requires, references in this prospectus to the “Notes” refer to the debt securities issued by BAT under the 2022 Indenture, debt securities issued by BATIF under the 2022 Indenture and the 2020 Indenture and debt securities issued by BATCAP under the 2022 Indenture, the 2019 Indenture and the 2017 Indenture, collectively or individually, as the context may require. References in this prospectus to “New Categories” refer to the Group’s vapor, modern oral and tobacco heating products.
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Investing in the securities to be offered by this prospectus and any applicable prospectus supplement involves risk. Before you make a decision to buy such securities, you should read and carefully consider the risks and uncertainties discussed below, in the sections captioned “Group Principal Risks” and “Group Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2021, filed with the SEC on March 8, 2022, incorporated by reference herein, as well as any risks described in any applicable prospectus supplement and any related free writing prospectus or in other documents that are subsequently incorporated by reference. Additional risks not currently known to us or that are currently deemed immaterial may also have a material adverse effect on us. You should carefully consider the aforementioned risks together with the other information in this prospectus and incorporated by reference herein before deciding to invest in the debt securities. If any of those risks actually occurs, our business, financial condition and results of operations could be materially and adversely affected. In that case, the applicable members of the BAT Group may be unable to make required payments of principal of, or premiums, if any, and interest on, the debt securities.
Risk Factors Relating to the Issuers, the Guarantors and the Debt Securities
BAT, RAI and BATHTN are holding companies, and BATCAP, BATIF and BATNF are financing companies with no revenue-generating operations.
BAT, RAI and BATHTN are holding companies and BATCAP, BATIF and BATNF are financing companies, each with no revenue-generating operations of its own. The business of BAT is carried out through a number of operating subsidiaries and associated companies. Consequently, the Issuers, RAI, BATHTN and BATNF depend upon dividend and other payments from operating subsidiaries to provide the funds necessary to pay the principal of, and the interest on, the debt securities or (to the extent applicable) make payments under the guarantees (the “Guarantees”) provided by the applicable Guarantors, as the case may be. These operating subsidiaries and associated companies will not guarantee the debt securities, and have no obligation, contingent or otherwise, to pay amounts due under the debt securities or the Guarantees or to make funds available for these payments, whether in the form of loans, dividends or otherwise. The ability of the operating subsidiaries to make dividend or other payments to the Issuers, RAI, BATHTN or BATNF will depend on their cash flows and earnings which, in turn, will be affected by all of the factors discussed herein. In addition, under the corporate laws of many jurisdictions, including the United Kingdom, the ability of some subsidiaries and associates to pay dividends is limited to the amount of distributable reserves of such companies.
The holders of debt securities will have a direct claim based on the debt securities against the applicable Issuer and (to the extent applicable) based on the Guarantees against the applicable Guarantors, but will not have a direct claim based on the debt securities or (to the extent applicable) the Guarantees against any operating subsidiaries. The right of the holders to receive payments under the debt securities and (to the extent applicable) the Guarantees will be structurally subordinated to all liabilities of the operating subsidiaries and associated companies. These liabilities include debt that some of our subsidiaries have incurred under bank facilities or debt securities. In the event of a bankruptcy, liquidation, reorganization or similar proceeding relating to a subsidiary, the right of holders to participate in a distribution of the assets of such subsidiary will rank behind such subsidiary’s and associated companies’ creditors (including trade creditors) and preferred stockholders (if any), except to the extent that the applicable Issuer or Guarantor has direct claims against such subsidiary.
A holder’s rights may be inferior to the rights of holders of debt securities of a different series issued pursuant to the applicable Indenture or under the terms of the documents governing the BAT Group’s other indebtedness.
The debt securities are governed by indentures (each, an “Indenture”, and together, the “Indentures”), which will be described in the applicable prospectus supplement and, to the extent applicable, are
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described below under the headings “Description of Debt Securities and Guarantees Issued Under the 2022 Indenture”, “Description of Debt Securities and Guarantees Issued Under the 2019 and 2020 Indentures” and “Description of Debt Securities and Guarantees Issued Under the 2017 Indenture”. The Issuers may issue as many distinct series of debt securities under the Indentures (other than the 2017 Indenture) as they wish. The Issuers may also issue one or more series of other debt under other indentures or agreements that may be entered into from time to time. The Issuers may also issue series of debt securities under the 2019, 2020 and 2022 Indentures that provide holders of those debt securities with rights superior to the rights already granted or that may be granted in the future to holders of another series. You should read carefully the specific terms of any particular series of debt securities contained in the prospectus supplement relating to such debt securities.
Any Guarantees provided by certain Subsidiary Guarantors will be automatically released in certain circumstances.
The 2017 Indenture, the 2019 Indenture, the 2020 Indenture and the 2022 Indenture provide that, without the consent of the Trustee or the holders, a Guarantor that is a subsidiary of BAT (a “Subsidiary Guarantor”), other than BATIF (when acting as Guarantor), BATCAP (when acting as Guarantor), BATHTN (in the case of the 2017 Indenture) and BATNF, will automatically and unconditionally be released from all obligations under its Guarantee, and such Guarantee shall thereupon terminate and be discharged and of no further force or effect, in the event that (1) its guarantee of all then outstanding notes issued under the EMTN Programme is released or (2) at substantially the same time its Guarantee of the debt securities is terminated, the Subsidiary Guarantor is released from all obligations in respect of indebtedness for borrowed money for which such Subsidiary Guarantor is an obligor (as a guarantor or borrower). Under the EMTN Programme, RAI’s guarantee is released if at any time the aggregate amount of indebtedness for borrowed money for which RAI is an obligor does not exceed 10% of the outstanding long-term debt of BAT as reflected in the balance sheet included in BAT’s most recent publicly released interim or annual consolidated financial statements. For purposes of this clause, the amount of a Subsidiary Guarantor’s indebtedness for borrowed money shall not include (A) the debt securities issued pursuant to the applicable Indenture, (B) any other debt the terms of which permit the termination of such Subsidiary Guarantor’s guarantee of such debt under similar circumstances, as long as such Subsidiary Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the debt securities, (C) any debt that is being refinanced at substantially the same time that the guarantee of the debt securities is being released, provided that any obligations of the relevant Subsidiary Guarantor in respect of the debt that is incurred in the refinancing shall be included in the calculation of the relevant Subsidiary Guarantor’s indebtedness for borrowed money and (D) for the avoidance of doubt, any debt in respect of which such Subsidiary Guarantor is an obligor (as a guarantor or borrower) (i) between or among BAT and any subsidiary or subsidiaries thereof or (ii) between or among any subsidiaries of BAT. See “Description of Debt Securities and Guarantees Issued Under the 2022 Indenture—Status of the Notes and Guarantees—Release”, “Description of Debt Securities and Guarantees Issued Under the 2019 and 2020 Indentures—Guarantees—Release” and “Description of Debt Securities and Guarantees Issued Under the 2017 Indenture—Guarantees—Release”.
RAI is the only Subsidiary Guarantor as of the date hereof whose Guarantee may be released by this provision. RAI’s Guarantee may be released notwithstanding RAI’s guarantee of other indebtedness, provided RAI’s guarantee of outstanding notes issued under the EMTN Programme is released. If the Guarantee by a Subsidiary Guarantor is released, BAT and any other applicable Issuer are not required to replace such Guarantee, and the debt securities will have the benefit of fewer subsidiary guarantees for the remaining maturity of the debt securities.
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A holder’s right to receive payments may be adversely affected by the debt securities and the Guarantees being unsecured obligations of the applicable Issuer and the applicable Guarantors, respectively, and subordinated to secured obligations on insolvency.
The debt securities will be unsecured. Holders of secured obligations of an Issuer will have claims that are prior to the claims of holders of the debt securities to the extent of the value of the assets securing those other obligations. The debt securities issued by an Issuer will rank equally with all its other unsecured and unsubordinated indebtedness, and will be effectively subordinated to any secured indebtedness to the extent of the value of the assets securing those other obligations. Similarly, any Guarantees provided by a Guarantor will rank equally with all its other unsecured and unsubordinated indebtedness, and will be effectively subordinated to any secured indebtedness to the extent of the value of the assets securing those obligations. If an Issuer defaults on the debt securities or the applicable Guarantors default on the Guarantees, or after any distribution of assets or payment in any foreclosure, dissolution, insolvency, winding-up, liquidation, reorganization or other bankruptcy proceeding (other than on a solvent basis), then, to the extent that such Issuer or the applicable Guarantors have granted security over their assets, the assets that secure their debts will be used to satisfy the obligations under that secured debt before such Issuer or the applicable Guarantors can make payment on the debt securities or the Guarantees. There may only be limited assets available to make payments on the debt securities or the Guarantees in the event of an acceleration of the debt securities. If there is not enough collateral to satisfy the obligations of the secured debt, then the remaining amounts on the secured debt would share equally with all unsubordinated unsecured indebtedness and holders of the debt securities may receive less, ratably, than holders of secured obligations.
A holder’s actual yield on the debt securities may be reduced from the stated yield by transaction costs.
When debt securities are purchased or sold, several types of incidental costs (including transaction fees and commissions) are incurred in addition to the then current prices of the security. These incidental costs may significantly reduce or even exclude the profit potential of the debt securities. For instance, credit institutions as a rule charge their clients for their own commissions which are either fixed minimum commissions or pro rata commissions depending on the order value. To the extent that additional domestic or foreign parties are involved in the execution of an order, including but not limited to domestic dealers or brokers in foreign markets, holders must take into account that they may also be charged for the brokerage fees, commissions and other fees and expenses of such parties.
A holder’s effective yield on the debt securities may be diminished by the tax impact on that holder of its investment in the debt securities.
Payments of interest on the debt securities, or profits realized by the holder upon the sale or repayment of the debt securities, may be subject to taxation in its home jurisdiction or in other jurisdictions in which it is required to pay taxes. However, the tax impact on a particular holder may differ from the situation described for holders generally. Certain tax consequences of the United Kingdom, the United States and The Netherlands relating to the purchase and ownership of the debt securities are described below under the heading “Certain Tax Considerations”.
The debt securities lack a developed trading market, and such a market may never develop or be sustained.
Each of BAT, BATCAP or BATIF may issue an indeterminate principal amount of debt securities in different series with different terms. Although any such debt securities issued may be listed on a securities exchange in the United States or Europe, there can be no assurance that an active trading market will develop for any series of debt securities or, if a trading market develops, that the trading market will be sustained. There can also be no assurance regarding the ability of holders to sell their debt securities or the price at which such holders may be able to sell their debt securities. If a trading
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market were to develop, the debt securities could trade at prices that may be higher or lower than the initial offering price, which may result in a return that is greater or less than the interest rate on the debt securities, in each case depending on many factors, including, among other things, prevailing interest rates, the BAT Group’s financial results, any change in the BAT Group’s credit-worthiness and the market for similar securities.
Any underwriters, broker-dealers or agents that participate in the distribution of the debt securities may make a market in the debt securities as permitted by applicable laws and regulations, but will have no obligation to do so, and any such market-making activities may be discontinued at any time. Therefore, there can be no assurance as to the liquidity of any trading market for the debt securities or that an active public market for the debt securities will develop, in which case you may be unable to sell the securities at opportune times, at opportune prices or at all.
An investment in debt securities denominated in a non-U.S. dollar currency involves currency-related risks.
An investment in debt securities denominated in a non-U.S. dollar currency entails significant risks that are not associated with a similar investment in debt securities that are payable solely in U.S. dollars and where settlement value is not otherwise based on a non-U.S. dollar currency. These risks include the possibility of significant changes in rates of exchange between the U.S. dollar and the various non-U.S. dollar currencies or composite currencies and the possibility of the imposition or modification of foreign exchange controls or other conditions by either the United States or non-U.S. governments. These risks generally depend on factors over which the BAT Group has no control, such as economic and political events and the supply of and demand for the relevant currencies in the global markets.
Rates of exchange between the U.S. dollar and many other currencies have been highly volatile, and this volatility may continue and perhaps spread to other currencies in the future. Fluctuations in currency exchange rates could adversely affect an investment in debt securities denominated in, or whose value is otherwise linked to, a specified currency other than U.S. dollars. Depreciation of the specified currency against the U.S. dollar could result in a decrease in the U.S. dollar-equivalent value of payments on the debt securities, including the principal payable at maturity or settlement value payable upon exercise. That in turn could cause the market value of the debt securities to fall. Deprecation of the specified currency against the U.S. dollar could result in a loss to the investor on a U.S. dollar basis.
Credit ratings may not reflect all risks, are not recommendations to buy or hold securities and may be subject to revision, suspension or withdrawal at any time.
One or more independent credit rating agencies may assign credit ratings to the debt securities. The ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above and other factors that may affect the value of the debt securities. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.
As a foreign private issuer in the United States, BAT is exempt from a number of rules under the U.S. securities laws and is permitted to file less information with the SEC.
As a foreign private issuer, BAT is exempt from certain rules under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, BAT is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. Accordingly, there may be less publicly available information concerning us than there is for U.S. public companies.
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The BAT Group may be able to incur substantially more debt in the future.
The BAT Group may be able to incur substantial additional indebtedness in the future, including in connection with future acquisitions, some of which may be secured by some or all of the BAT Group’s assets. The terms of the debt securities will not limit the amount of indebtedness the BAT Group may incur. Any such incurrence of additional indebtedness could exacerbate the related risks that the BAT Group now faces.
The Dutch conditional withholding tax may increase the amounts BATNF and/or BATHTN may become obligated to pay under the Guarantees with respect to the Notes that are issued under the 2017 Indenture and, to a certain extent, the 2019 Indenture
With respect to Notes that are issued under the 2017 Indenture and/or any of the supplemental indentures no. 1, 2, 3 and 4 to the 2019 Indenture, BATNF and/or BATHTN, as the case may be, may be required to pay Additional Amounts to the holders of Notes if the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021) (“WTA”) would apply to the Guarantee payments to be made by BATNF and/or BATHTN. Reference is made to ‘Material Netherlands Income Tax Considerations’ – ‘Withholding Tax’ for a brief summary of the applicability of the WTA. Such payment of Additional Amounts would increase the payment obligations of BATNF and/or BATHTN under the Guarantees and there may only be limited assets or funds available to fulfill such payment obligations. If such assets or funds are insufficient, the payments under the Guarantees by BATNF and/or BATHTN, as the case may be, may have to be reduced ratably.
Additional risks, if any, specific to particular debt securities issued under this prospectus will be detailed in the applicable prospectus supplement.
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FORWARD-LOOKING STATEMENTS
Statements included in this prospectus and the documents incorporated by reference into this prospectus regarding the BAT Group’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are forward-looking statements, including “forward-looking” statements made within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “could,” “may,” “would,” “should,” “intend,” “plan,” “potential,” “predict,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “outlook,” “target” and similar expressions. These include statements regarding our intentions, beliefs or current expectations concerning, amongst other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the economic and business circumstances occurring from time to time in the countries and markets in which the BAT Group operates.
All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual future financial condition, performance and results to differ materially from the plans, goals, expectations and results expressed in the forward-looking statements and other financial and/or statistical data within this prospectus or incorporated by reference herein. The BAT Group believes that the expectations reflected in this document are reasonable but they may be affected by a wide range of variables that could cause actual results to differ materially from those currently anticipated. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are uncertainties related to the following:
| · | the impact of competition from illicit trade; |
| · | the impact of adverse domestic or international legislation and regulation; |
| · | the inability to develop, commercialise and deliver the Group’s New Categories strategy; |
| · | adverse litigation and dispute outcomes and the effect of such outcomes on the Group’s financial condition; |
| · | the impact of significant increases or structural changes in tobacco, nicotine and New Categories related taxes; |
| · | translational and transactional foreign exchange rate exposure; |
| · | changes or differences in domestic or international economic or political conditions; the ability to maintain credit ratings and to fund the business under the current capital structure; |
| · | the impact of serious injury, illness or death in the workplace; |
| · | adverse decisions by domestic or international regulatory bodies; and |
| · | changes in the market position, businesses, financial condition, results of operations or prospects of the Group. |
For a further discussion of these and other risks, contingencies and uncertainties applicable to us, see “Risk Factors”.
Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. The forward-looking statements reflect knowledge and information available at the date of preparation of this document and BAT undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent written or oral forward-looking statements attributable to BAT or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section of the prospectus.
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The Issuers
Each of the following entities may act as Issuer. BAT will act as a Guarantor of any debt securities issued by BATCAP or BATIF. Each of BATCAP and BATIF may act as a Guarantor of any debt securities issued by BAT, BATIF (in the case of BATCAP) or BATCAP (in the case of BATIF).
British American Tobacco p.l.c.
BAT was incorporated as a public limited liability company under the laws of England and Wales on July 23, 1997, with registration no. 03407696 and is registered as an external company in the Republic of South Africa, with registration no. 2008/023963/10. BAT is the BAT Group’s parent holding company and its principal and registered offices are located at Globe House, 4 Temple Place, London WC2R 2PG, United Kingdom and its phone number is +44 (0)20 7845 1000. BAT maintains a website at http://www.bat.com.
B.A.T Capital Corporation
BATCAP was incorporated under the laws of the State of Delaware, United States of America on April 6, 1981, under file no. 911777. BATCAP is domiciled in the State of Delaware. BATCAP’s principal function is to operate as a financing company for the BAT Group. The principal and registered offices of BATCAP are located at 103 Foulk Road, Suite 120, Wilmington, Delaware 19803, United States of America and its phone number is +1 302 691 6323.
B.A.T. International Finance p.l.c.
BATIF was incorporated as a private limited company under the laws of England and Wales on July 10, 1972, with registration no. 1060930 and was re-registered as a public limited company on September 8, 1981. BATIF’s principal function is to operate as a financing company for the BAT Group. BATIF’s principal and registered offices are located at Globe House, 4 Temple Place, London WC2R 2PG, United Kingdom and its phone number is +44 (0)20 7845 1000.
The Guarantors
The following entities may also act as Guarantors with respect to the debt securities.
B.A.T. Netherlands Finance B.V.
BATNF was incorporated as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under the laws of The Netherlands on April 23, 2014. BATNF’s principal function is to operate as a financing company for the BAT Group. It has its statutory seat (statutaire zetel) in Amstelveen, The Netherlands and is registered with the Trade Register (Handelsregister) of the Chamber of Commerce under no. 60533536. The principal and registered offices of BATNF are located at Handelsweg 53A, 1181 ZA Amstelveen, The Netherlands and its phone number is +31 (0)20 540 6911.
Reynolds American Inc.
RAI was incorporated in the State of North Carolina on January 2, 2004. RAI’s principal office is located at 401 North Main Street, Winston-Salem, North Carolina 27101, United States and its telephone number is +1 336 741 2000.
RAI is a holding company whose wholly-owned operating subsidiaries include: (i) R.J. Reynolds Tobacco Company, whose brand portfolio includes the premium brands Newport and Camel and the traditional value brand Pall Mall; (ii) Santa Fe Natural Tobacco Company, Inc., the manufacturer and marketer of the premium cigarette brand Natural American Spirit in the United States; (iii) American Snuff Company, LLC, the second largest smokeless tobacco products manufacturer in the United
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States; (iv) R. J. Reynolds Vapor Company, referred to as RJR Vapor, a marketer of digital vapor cigarettes in the United States; and (v) Modoral Brands Inc., a marketer of modern oral products in the United States.
The Additional Guarantor
The following entity will act as Guarantor with respect to the debt securities issued under the 2017 Indenture.
British American Tobacco Holdings (The Netherlands) B.V.
BATHTN was incorporated as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) under the laws of The Netherlands on February 24, 1992. BATHTN is an investment holding company. It has its statutory seat (statutaire zetel) in Amstelveen, the Netherlands and is registered with the Trade Register (Handelsregister) of the Chamber of Commerce under no. 33236251. The principal and registered offices of BATHTN are located at Handelsweg 53A, 1181 ZA Amstelveen, The Netherlands and its phone number is +31 (0)20 540 6911.
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WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
We have filed a registration statement on Form F-3, including the exhibits and schedules thereto, with the SEC under the Securities Act, and the rules and regulations thereunder, for the registration of the debt securities that are being offered by this prospectus. This prospectus does not include all of the information contained in the registration statement. You should refer to the registration statement and its exhibits for additional information. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreements or other documents.
As of the date of this prospectus, BAT is subject to the periodic reporting requirements of the Exchange Act, as applicable to foreign private issuers. As a “foreign private issuer”, we are exempt from the rules under the Exchange Act prescribing certain disclosure and procedural requirements for proxy solicitations. In accordance with the requirements applicable to foreign private issuers, BAT files its Annual Reports on Form 20-F and other documents with the SEC. BAT’s SEC filings are available to the public, together with the public filings of other issuers, at the SEC’s website, http://www.sec.gov.
The following documents filed with or furnished to the SEC are incorporated herein by reference:
| · | BAT’s Annual Report on Form 20-F for the year ended December 31, 2021 (the “2021 Form 20-F”), as filed with the SEC on March 8, 2022; and |
| · | BAT’s reports on Form 6-K, furnished with the SEC on February 11, 2022, March 11, 2022 (at 3.55 p.m. Eastern Standard Time), March 21, 2022 (at 6.18 a.m. Eastern Daylight Time), April 28, 2022 (at 3.19 p.m. Eastern Daylight Time) and June 9, 2022 (at 6.00 a.m. Eastern Daylight Time). |
All documents subsequently filed by us with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and, solely to the extent designated therein, reports made on Form 6-K that we furnish to the SEC, prior to the filing of a post-effective amendment to the registration statement of which this prospectus forms a part that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold, shall be incorporated by reference into this prospectus and be a part hereof from the date of filing or furnishing of such documents.
Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Copies of documents incorporated by reference are not required to be filed with this prospectus but will be provided to each person, including any beneficial owner, to whom a prospectus is delivered.
Copies of the documents incorporated by reference herein may be obtained at no cost by written or oral request to the Company Secretary, British American Tobacco p.l.c., Globe House, 4 Temple Place, London WC2R 2PG, United Kingdom, +44 (0)20 7845 1000.
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DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
ISSUED UNDER THE 2022 INDENTURE
The following is a summary of the material provisions of the 2022 Indenture (as described below). We urge you to read the 2022 Indenture and any applicable supplemental indenture in their entirety because the 2022 Indenture and applicable supplemental indenture, not this summary, define your rights as a holder of any debt securities issued thereunder. A copy of the form of 2022 Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part and a copy of the 2022 Indenture and any supplemental indentures will be made available upon request to BAT at the address indicated under the section entitled “Where You Can Find More Information; Incorporation by Reference” of this prospectus. Any capitalized term used herein but not defined shall have the meaning assigned to such term in the 2022 Indenture, the applicable supplemental indenture or under “—Certain Definitions”.
The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the 2022 Indenture, any applicable supplemental indenture and/or an officer’s certificate delivered under an indenture and those terms made a part of the 2022 Indenture and/ or applicable supplemental indenture and/or an officer’s certificate delivered under an indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of the closing of the offering of the applicable debt securities.
General
The debt securities issued under the 2022 Indenture will be issued by British American Tobacco p.l.c. (“BAT”), B.A.T Capital Corporation (“BATCAP”) or B.A.T. International Finance p.l.c. (“BATIF”, and, together with BAT, BATCAP, the “Issuers”). In this “Description of Debt Securities and Guarantees Issued Under the 2022 Indenture” the term “Issuer” refers to one of BAT, BATCAP or BATIF and “Notes” refers to any series of debt securities issued under the 2022 Indenture.
Any series of Notes will mature on the date specified in the applicable prospectus supplement. The Notes will be issued in registered form and treated as a separate series of debt securities under the indenture (the “2022 Indenture”) to be entered into by and among BAT, BATCAP and BATIF, as Issuers, the Guarantors (as defined below) party thereto from time to time, Citibank, N.A., as trustee (in such capacity, the “Trustee”), and Citibank, N.A., as registrar, transfer agent, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the Notes are first issued (in such several capacities, the “Registrar”, “Transfer Agent”, “Calculation Agent” and “Paying Agent”, respectively).
The obligations of BATCAP and BATIF as Issuer under any series of Notes and the 2022 Indenture will be fully and unconditionally guaranteed by BAT. In addition, as set forth in the relevant supplemental indenture, one or more of BATCAP (if it is not the Issuer), BATIF (if it is not the Issuer), B.A.T. Netherlands Finance B.V. (“BATNF”), and, unless its guarantee is released in accordance with the 2022 Indenture, Reynolds American Inc. (“RAI”) may guarantee the relevant series of Notes on a joint, several and unsecured basis (in such capacity, each, a “Guarantor” and together, the “Guarantors”).
Unless otherwise set forth in the applicable prospectus supplement, the Notes will be denominated in U.S. dollars and payment of principal and interest thereon will be paid in U.S. dollars. If any Notes denominated in a Non-Dollar Currency are sold, the applicable prospectus supplement will describe whether payments on the Notes are payable in any Non-Dollar Currency.
In this “Description of Debt Securities and Guarantees Issued Under the 2022 Indenture”, the terms “holder”, “Noteholder” and other similar terms refer to a “registered holder” of Notes, and not to a beneficial owner of a book-entry interest in any Notes.
The Notes may be issued in one or more series for original issue. The specific financial, legal and other terms particular to a series of Notes are described in the prospectus supplement and the pricing term
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sheet relating to a series of Notes. Those terms may vary from the terms described here. Accordingly, this summary is also subject to and qualified by reference to the description of the terms of the series described in the prospectus supplement. The prospectus supplement will indicate for each series of Notes:
| · | the title of the Notes of that series; |
| · | any limit upon the aggregate principal amount of the Notes of that series; |
| · | the dates on which or periods during which the Notes of that series may be issued and the maturity date for the Notes of that series (or manner of determining the same); |
| · | if the principal amount payable at the stated maturity date of Notes of that series will not be determinable as of any one or more dates prior to such stated maturity date, the amount that will be deemed to be such principal amount as of any such date for any purpose, including the principal amount thereof which will be due and payable upon any maturity date other than the stated maturity date and which will be deemed to be outstanding as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined), and if necessary, the manner of determining the equivalent thereof in U.S. dollars; |
| · | the rate or rates (or the manner of calculation thereof) at which the Notes of that series shall bear interest (if any), the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable (or manner of determining the same) and the regular record date for the interest payable on any Notes on any interest payment date and the extent to which, or the manner in which, any interest is payable on a temporary global note on an interest payment date; |
| · | the right of the Issuer, if any, to, and the terms upon which the Issuer may, forgo or defer payment of interest on the Notes of that series, including any maximum duration of any such deferral or deferrals and the additional interest, if any, payable on the Notes of that series during any deferral of the interest payment period; |
| · | the place or places where, subject to the provisions of the 2022 Indenture, the principal of, and premium, if any, and interest, if any, and Additional Amounts, if any, on Notes of that series shall be payable, any Notes of that series may be surrendered for registration of transfer, any Notes of that series may be surrendered for exchange, and notices and demands to or upon the Issuer in respect of the Notes of that series and the 2022 Indenture may be served; |
| · | the period or periods within which (or manner of determining the same), the price or prices at which (or manner of determining the same), the currency or currency unit in which, and the terms and conditions upon which Notes of that series may be redeemed, in whole or in part, at the option of the Issuer, and any remarketing arrangements with respect to the Notes of that series; |
| · | the denominations in which any Notes of that series shall be issuable, if other than denominations of $2,000 and any integral multiple of $1,000 in excess thereof (or in the case of Notes denominated in a Non-Dollar Currency, the equivalent thereof in each case (rounded to an integral multiple of 1,000 units of such Non-Dollar Currency)); |
| · | if Non-Dollar Currency, the currency, currencies or currency units in which the principal of or any premium or interest or Additional Amounts on any Notes of that series shall be payable; |
| · | if other than the entire principal amount thereof, the portion of the principal amount of Notes of that series which shall be payable upon a declaration of acceleration of the maturity date thereof pursuant to the 2022 Indenture; |
| · | any acceleration provisions, events of default and covenants of the Issuer with respect to the Notes of that series, whether or not such acceleration provisions, events of default or covenants are consistent with the events of default or covenants set forth in the 2022 Indenture; |
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| · | if a Person other than Citibank, N.A. is to act as trustee, registrar, transfer agent, paying agent or calculation agent for the Notes of that series, the name and location of the corporate trust office of such trustee, registrar, transfer agent, paying agent or calculation agent, as applicable; |
| · | if other than as set forth herein, provisions for the defeasance, satisfaction and discharge of the 2022 Indenture with respect to the Notes of that series; |
| · | the date as of which any global note representing outstanding Notes of that series shall be dated if other than the date of original issuance of the first Note of that series to be issued; |
| · | the application, if any, of the provisions described under “—Additional Amounts” to the Notes of that series; |
| · | whether the Notes of that series shall be issued in whole or in part in the form of a global note or Notes and, in such case, the initial Depositary, if any, for such global note or Notes, whether such global form shall be permanent or temporary and the form of any legend or legends to be borne by any such global note; |
| · | if Notes of that series are to be issuable initially in the form of a temporary global note, the circumstances under which the temporary global note can be exchanged for definitive Notes and whether the definitive Notes will be in global form; |
| · | whether the Notes of that series will be convertible or exchangeable into other securities of the Issuer or another Person (including any ordinary shares, preferred shares, other debt securities or warrants for ordinary shares, preferred shares or other securities of any kind), and if so, the terms and conditions upon which such Notes will be so convertible or exchangeable, including the conversion price or exchange rate and the conversion or exchange period, and any additions or changes to the 2022 Indenture with respect to the Notes of such series to permit or facilitate such conversion or exchange; |
| · | whether the Notes of that series are to be issued as Original Issue Discount Notes and the amount of discount with which the Notes of that series may be issued and the rate or rates at which original issue discount will accrue; |
| · | the obligation, if any, of the Issuer to redeem, purchase or repay the Notes of that series pursuant to any sinking fund or analogous provisions or at the option of a holder thereof and the price or prices at which, the period or periods within which, and the terms and conditions upon which, Notes of that series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligations; |
| · | if the amount of principal, premium or interest with respect to the Notes of that series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts will be determined; |
| · | with regard to Notes of that series that do not bear interest, the dates for certain required reports to the Trustee; |
| · | the intended United States Federal income tax consequences of the Notes of that series; |
| · | the subordination, if any, of the Notes of that series and any related change or addition to the provisions of the 2022 Indenture as then in effect; |
| · | the Guarantees, if any, to be provided in respect of any series of Notes and the terms thereof, including, among other things, the method for determining the identity of the Guarantors and the conditions under which Guarantees will be added or released; |
| · | the form of the Notes of that series and the Guarantees to be endorsed thereon; and |
| · | any other terms of that series (which terms shall not be inconsistent with the provisions of the 2022 Indenture). |
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All Notes of any particular series will be substantially identical except as to issue date, issue price, denomination, rate of interest, maturity date and the date from which interest, if any, shall accrue, and except as may otherwise be provided in or pursuant to an officer’s certificate or any supplemental indenture relating thereto. All Notes of any one series need not be issued at the same time, and unless otherwise provided, a series may be reopened for issuance of additional notes of such series.
Principal, Maturity and Interest
The Notes may be issued in an unlimited aggregate principal amount and will bear interest per annum and have maturity dates, in each case as specified in the applicable prospectus supplement.
Form and Denomination
The Notes may have notations, legends or endorsements required by law, rule or usage to which the Issuer is subject. Unless otherwise set forth in the applicable prospectus supplement, the Notes will be issued in fully registered form and only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof (or in the case of Notes denominated in a Non-Dollar Currency, the equivalent thereof (rounded to an integral multiple of 1,000 units of such Non-Dollar Currency)), and will be issued initially as Global Notes.
Further Issues
The aggregate principal amount of Notes issuable under the 2022 Indenture is unlimited. The Issuer may, from time to time, without notice to or the consent of the holders of the Notes, “reopen” any series of the Notes and create and issue additional notes having substantially identical terms and conditions as the then-outstanding Notes of a series (or in all respects except as described in the last paragraph under “—General” above) so that the additional notes are consolidated and form a single series of Notes with the Notes, as the case may be, provided that if the additional notes are not fungible with the Notes for United States Federal income tax purposes, the additional notes will have separate CUSIPs, ISINs, or other identifying numbers.
Status of the Notes and Guarantees
The Notes will be unsecured obligations of the Issuer. The applicable prospectus supplement will describe the ranking of the Notes and any Guarantees and the terms thereof, including, among other things, the method for determining the identity of the Guarantors and the conditions under which Guarantees will be added or released.
Release
Notwithstanding the foregoing, the 2022 Indenture provides, and any applicable supplemental indentures will provide, that, without the consent of the Trustee or the relevant Noteholders, any Guarantor that is a subsidiary of the Parent (a “Subsidiary Guarantor”), other than BATIF, BATCAP and BATNF, will automatically and unconditionally be released from all obligations under its Guarantee, and such Guarantee shall thereupon terminate and be discharged and of no further force or effect, in the event that (1) its guarantee of all then outstanding notes issued under the EMTN Programme is released or (2) at substantially the same time its Guarantee of the Notes is terminated, the Subsidiary Guarantor is released from all obligations in respect of indebtedness for borrowed money for which such Subsidiary Guarantor is an obligor (as a guarantor or borrower). For purposes of this paragraph, the amount of a Subsidiary Guarantor’s indebtedness for borrowed money shall not include (A) the Notes issued pursuant to the 2022 Indenture, (B) any other debt the terms of which permit the termination of such Subsidiary Guarantor’s guarantee of such debt under similar circumstances, as long as such Subsidiary Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the Notes, (C) any debt that is being refinanced at substantially the same time that the guarantee of the Notes is being released, provided that any obligations of the relevant Subsidiary Guarantor in respect of the debt that is incurred in the refinancing
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shall be included in the calculation of the relevant Subsidiary Guarantor’s indebtedness for borrowed money and (D) for the avoidance of doubt, any debt in respect of which such Subsidiary Guarantor is an obligor (as a guarantor or borrower) (i) between or among the Parent and any subsidiary or subsidiaries thereof or (ii) between or among any subsidiaries of the Parent.
As of the date of this prospectus, RAI is the only Subsidiary Guarantor to which the above provision is relevant. Under the EMTN Programme, a Subsidiary Guarantor’s guarantee is released if at any time the aggregate amount of indebtedness for borrowed money for which the Subsidiary Guarantor is an obligor does not exceed 10% of the outstanding long-term debt of BAT as reflected in the balance sheet included in BAT’s most recent publicly released interim or annual consolidated financial statements, as evidenced by a certificate to such effect addressed to the trustee under the EMTN Programme and signed by a director of BAT.
Additional Amounts
In the case of Notes issued by BAT or BATIF, unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture establishing such series of Notes or in the form of note for such series, the applicable Issuer or, if applicable, each Guarantor of such Notes will make payments of, or in respect of, principal, premium (if any) and interest on the Notes, or any payment pursuant to the applicable Guarantee, as the case may be, without withholding or deduction for or on account of any present or future tax, levy, impost or other similar governmental charge (“Taxes”) imposed, assessed, levied or collected by or for the account of the United Kingdom, The Netherlands (in the case of a payment by BATNF) or the United States (in the case of a payment by BATCAP or RAI), including in each case any political subdivision thereof or any authority thereof having the power to tax (a “Relevant Taxing Jurisdiction”), unless such withholding or deduction is required by law.
If such Issuer or, if applicable, any such Guarantor is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, such Issuer or, if applicable, such Guarantor will pay to the Holder such additional amounts (“Additional Amounts”) as will result in the receipt by the Holder of such amounts as would have been received by it if no such withholding or deduction of Taxes had been required; provided, however, that Additional Amounts with respect to any United States Tax shall be payable only to Holders that are not United States persons (within the meaning of the Code) and provided further, that neither the applicable Issuer nor such Guarantor shall be required to pay any Additional Amounts for or on account of:
| (a) | any Taxes that would not have been so imposed, assessed, levied or collected but for the Holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) being or having been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business, maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Note or Guarantee, as the case may be; |
| (b) | any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the Holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period; |
| (c) | any estate, inheritance, gift, sales, transfer, personal property or similar Taxes; |
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| (d) | any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee; |
| (e) | any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the Holder or the beneficial owner of the applicable Note or Guarantee to (i) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or the beneficial owner or its connection with a Relevant Taxing Jurisdiction; or (ii) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in either case, compliance is required by statute, regulation, relevant income tax treaty or administrative practice of a Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes; |
| (f) | any Taxes imposed by reason of the Holder or the beneficial owner of the applicable Note or Guarantee being or having been considered a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code (or any amended or successor provisions); |
| (g) | any Taxes imposed, assessed, levied or collected by or for the account of the United States (or any political subdivision thereof or any authority thereof having the power to tax) on interest received by a 10-percent shareholder of the applicable Issuer or any applicable Guarantor within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Code (or any amended or successor provisions); |
| (h) | any backup withholding imposed pursuant to Section 3406 of the Code (or any amended or successor provisions); |
| (i) | any Taxes imposed pursuant to Section 871(h)(6) or Section 881(c)(6) of the Code (or any amended or successor provisions); |
| (j) | any Taxes imposed by reason of the Holder or the beneficial owner of the applicable Note or Guarantee being or having been a personal holding company, passive foreign investment company or controlled foreign corporation for U.S. Federal income tax purposes or a corporation that has accumulated earnings to avoid U.S. Federal income tax; |
| (k) | any Taxes imposed or withheld pursuant to Sections 1471 through 1474 of the Code (or any amended or successor provisions), any U.S. Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements entered into in connection with the implementation thereof (“FATCA Withholding”); |
| (l) | any Taxes imposed or to be withheld pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021); or |
| (m) | any combination of the Taxes described in clauses (a) through (l) above. |
In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or premium (if any) or interest on, any Note or, if applicable, any payment pursuant to the applicable Guarantee to any Holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such partnership, an interest holder in such limited liability company or a beneficial owner would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the Holder of the applicable Note or Guarantee.
Unless otherwise stated, references in any context to the payment of principal of, and premium (if any) or interest on, any Note, or any payment pursuant to a Guarantee, will be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
In the case of Notes issued by BATCAP, unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture
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establishing such series of Notes or in the form of note for such series, if applicable, each Guarantor of such Notes will make payments pursuant to the applicable Guarantee without withholding or deduction for or on account of any present or future Taxes imposed, assessed, levied or collected by or for the account of a Relevant Taxing Jurisdiction (for the purposes of Notes issued by BATCAP, a Relevant Taxing Jurisdiction means the United Kingdom (in the case of a payment by BAT or BATIF) or the Netherlands (in the case of a payment by BATNF), including in each case any political subdivision thereof or any authority thereof having the power to tax), unless such withholding or deduction is required by law.
If any such Guarantor is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, such Guarantor will pay to the holder such Additional Amounts as will result in the receipt by the holder of such amounts as would have been received by it if no such withholding or deduction of Taxes had been required; provided, however, that no Guarantor shall be required to pay any Additional Amounts for or on account of:
| (a) | any Taxes that would not have been so imposed, assessed, levied or collected but for the Holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) being or having been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Note or Guarantee, as the case may be; |
| (b) | any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the Holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period; |
| (c) | any estate, inheritance, gift, sales, transfer, personal property or similar Taxes; |
| (d) | any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee; |
| (e) | any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the Holder or the beneficial owner of the applicable Note or Guarantee to (i) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or the beneficial owner or its connection with a Relevant Taxing Jurisdiction; or (ii) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in either case, compliance is required by statute, regulation, relevant income tax treaty or administrative practice of a Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes; |
| (f) | any FATCA Withholding; |
| (g) | any Taxes imposed or to be withheld pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021); or |
| (h) | any combination of the Taxes described in clauses (a) through (g) above. |
In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or premium (if any) or interest on, any Note or any payment pursuant to the applicable Guarantee to any Holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole
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beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such partnership, an interest holder in such limited liability company or a beneficial owner would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the Holder of the applicable Note or Guarantee.
Unless otherwise stated, references in any context to the payment of principal of, and premium (if any) or interest on, any Note, or to any payment pursuant to a Guarantee will be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
Redemption
Unless otherwise set forth in the applicable prospectus supplement, the Notes will be subject to optional redemption by the Issuer as described below under “—Optional Redemption”. The Notes will be subject to optional redemption by the Issuer in the event of certain changes in tax laws applicable to payments in respect of the Notes as described below under “—Redemption for Tax Reasons”.
Optional Redemption
The Issuer may redeem the Notes as specified in the applicable prospectus supplement.
Redemption for Tax Reasons
Each series of Notes is also redeemable by the Issuer of such series, in whole but not in part, at 100% of the principal amount of such Notes plus any accrued and unpaid interest (including any Additional Amounts) to the applicable date fixed for such redemption pursuant to the terms of the 2022 Indenture or Notes (the “Redemption Date”) at the Issuer’s option at any time prior to their maturity if, due to a Change in Tax Law (as defined below): (i) the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof, in accordance with the terms of such Notes or, if applicable, any Guarantee, has, or would, become obligated to pay any Additional Amounts to the Holders of the Notes of that series; (ii) in the case of any Guarantor, (A) the Parent would be unable, for reasons outside its control, to procure payment by the Issuer of the relevant series of Notes (if other than the Parent) or any other Guarantor thereof or (B) the procuring of such payment by such Issuer and each such other Guarantor would be subject to withholding Taxes imposed by a Relevant Taxing Jurisdiction; and (iii) such obligation cannot otherwise be avoided by such Guarantor, the Parent or the Issuer, taking reasonable measures available to it. In such case, such Issuer may redeem the applicable Notes upon not less than 30 nor more than 60 days’ notice as provided in “—Notice” below, at 100% of the principal amount of such Notes plus accrued and unpaid interest to the Redemption Date (including Additional Amounts); provided that (a) no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which such Issuer or such Guarantor, as the case may be, would be obligated to pay any such Additional Amounts in respect of the applicable Notes or applicable Guarantee, as applicable, then due; and (b) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. The right of the Issuer of the relevant series of Notes to redeem the applicable Notes shall continue as long as such Issuer or, if applicable, any Guarantor thereof is obligated to pay such Additional Amounts, notwithstanding that such Issuer or any such Guarantor, as the case may be, shall have made payments of Additional Amounts. Prior to the giving of any such notice of redemption, the relevant Issuer must deliver to the Trustee: (i) an officer’s certificate stating that such Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of such Issuer to so redeem have occurred; and (ii) an opinion of independent counsel or an independent accountant of recognized standing with respect to tax matters of the Relevant Taxing Jurisdiction, selected by the relevant Issuer or the relevant Guarantor, as applicable, to the effect that such Issuer or such Guarantor has, or would, become obligated to pay such Additional Amounts as a result of such Change in Tax Law.
For the purposes hereof, “Change in Tax Law” shall mean: (i) any changes in, or amendment to, any law of a Relevant Taxing Jurisdiction (including any regulations or rulings promulgated thereunder and
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including, for this purpose, any treaty entered into by the Relevant Taxing Jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the first date of issuance of Notes of such series; or (ii) if the Issuer or any Guarantor consolidates, merges, amalgamates or combines with, or transfers or leases its assets substantially as an entirety to, any person that is incorporated or tax resident under the laws of any jurisdiction other than a Relevant Taxing Jurisdiction (a “successor”) and as a consequence thereof such person becomes the successor obligor to such Issuer or such Guarantor in respect of Additional Amounts that may become payable (in which case, for purposes of this redemption provision, all references to such Issuer or such Guarantor shall be deemed to be and include references to such person), any change in, or amendment to, any law of the jurisdiction of organization or tax residence of such successor, or the jurisdiction through which payments will be made by the successor, or any political subdivision or taxing authority thereof or thereon for purposes of taxation (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by such jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the date of such consolidation, merger, amalgamation, combination or other transaction.
General
As set forth in the applicable prospectus supplement, upon presentation of any Note redeemed in part only, the Issuer will execute and the Paying Agent will authenticate and deliver (or cause to be transferred by book-entry) to the holder thereof, at the expense of the Issuer, a new Note of authorized denominations in principal amount equal to the unredeemed portion of the Note so presented.
On or before any Redemption Date (as defined above), the Issuer shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on the Notes to be redeemed on such date. The redemption price shall be calculated by the Independent Investment Banker and the Issuer, and the Trustee and any agent shall be entitled to rely on such calculation.
On and after any Redemption Date, interest will cease to accrue on the Notes or any portion thereof called for redemption.
Maturity
Unless previously purchased or redeemed by the Issuer, and cancelled, the principal amount of each respective series of Notes shall mature on the date set forth in the applicable prospectus supplement in an amount equal, in each case, to their principal amount, with accrued and unpaid interest to such date.
Reacquisition
There is no restriction on the ability of the Issuer to purchase or repurchase Notes, provided, that any Notes so repurchased shall be cancelled and not reissued.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Notes, the 2022 Indenture and any prospectus supplement. You should refer to the Notes, the 2022 Indenture and applicable prospectus supplement for the full definition of all defined terms as well as any other terms used herein for which no definition is provided.
“Board of Directors” means the board of directors of the relevant Issuer or any duly authorized committee thereof.
“Board Resolution” means a copy of a resolution or appropriate record of action taken pursuant to such resolution, certified by a member of the Board of Directors, the Secretary, Assistant Secretary or
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Deputy Secretary (or equivalent of any of the foregoing) of the Issuer to have been duly adopted by the Board of Directors of the Issuer and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Dollar” or “$” means United States dollars, or such other money of the United States that at the time of payment is legal tender for payment of public and private debts.
“EMTN Programme” means the Euro Medium Term Note Programme to which BATCAP, BATIF and BATNF are parties as the issuers under the programme and notes issued thereunder are guaranteed by the Parent, each of the issuers thereunder (except when it is the relevant issuer) and RAI, as amended from time to time.
“Non-Dollar Currency” means any currency other than Dollars.
“Original Issue Discount” means “original issue discount” within the meaning of Section 1273(a) of the Code and Treasury Regulations promulgated thereunder or original issue discount for United States federal income tax purposes, as the context requires.
“Original Issue Discount Note” means any Note that is issued with Original Issue Discount.
“Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Quoted Borrowing” means any indebtedness which: (i) is represented by notes, debentures or other securities issued otherwise than to constitute or represent advances made by banks and/or other lending institutions; (ii) is denominated, or confers any right to payment of principal and/or interest, in or by reference to any currency other than the currency of the country in which the issuer of the indebtedness has its principal place of business or is denominated, or confers any right to payment of principal and/or interest, in or by reference to the currency of such country but is sold or subscribed by or on behalf of, or by agreement with, the issuer of such indebtedness as to over 20% outside such country; and (iii) at its date of issue is, or is intended by the issuer of such indebtedness to become, quoted, listed, traded or dealt in on any stock exchange or other organized and regulated securities market in any part of the world.
Covenants of the Issuer and the Guarantors
Negative Pledge
The 2022 Indenture provides that so long as any of the Notes remain outstanding, neither the Issuers nor any Guarantor will secure or allow to be secured any Quoted Borrowing issued by the Issuers or any Guarantor or any payment under any guarantee by any of them of any such Quoted Borrowing by any mortgage, charge, pledge or lien (other than arising by operation of law) upon any of its undertaking or assets, whether present or future, unless at the same time the same mortgage, charge, pledge or lien is extended, or security which is not materially less beneficial to the holders of the Notes than the security given as aforesaid or which shall be approved by consent of the holders of not less than 75% in aggregate principal amount of each relevant series of Notes at the time outstanding is extended or created (as the case may be), to secure equally and ratably the principal of, and interest on, and all other payments (if any) in respect of such series of Notes.
Limitation on Mergers, Consolidations, Amalgamations and Combinations
Under the 2022 Indenture, so long as any of the Notes of a particular series remain outstanding, neither the Issuers of such series of Notes nor any Guarantor thereof (if applicable) may consolidate with or merge into any other person or sell, convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any person (other than any sale or conveyance by way of a lease in the ordinary course of business), unless: (i) in the case of an Issuer, any successor person assumes such Issuer’s obligations on the relevant Notes and under the 2022 Indenture and, in the case of any Guarantor, if applicable, any successor person assumes such Guarantor’s obligations on
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the Guarantee and under the 2022 Indenture; (ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; (iii) such successor person is organized under the laws of the United States or any State thereof, the United Kingdom, The Netherlands or any other country that is a member of the Organization for Economic Cooperation and Development as of the date of such succession; (iv) such successor person agrees to pay any Additional Amounts with respect to any withholding or deduction of Taxes or any payment on the Notes or Guarantees (as applicable) imposed by the jurisdiction (in the case of Notes issued by BATCAP, other than the United States, unless otherwise required by clause (i) of this paragraph) in which such successor person is incorporated or otherwise a resident for tax purposes subject to the exceptions described under “—Additional Amounts” (for the avoidance of doubt, solely to the extent such successor person is the Issuer of any Notes originally issued by BATCAP, changes will be made to the 2022 Indenture as are necessary to obligate such Issuer to pay such Additional Amount); and (v) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of such Issuer or any such Guarantor which would not be permitted by the applicable Notes of such series or under the 2022 Indenture, such Issuer or any such Guarantor or such successor person, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes of such series equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
The limitation on mergers, consolidations, amalgamations and combinations contained in this section “—Limitation on Mergers, Consolidations, Amalgamations and Combinations” shall not apply to any consolidation, merger, amalgamation or combination in which any Issuer or any Guarantor is the surviving corporation except that, in such case, the provisions of (ii) and (v) above shall apply such that: (x) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (y) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of any Issuer or any Guarantor would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of any such Issuer or any such Guarantor which would not be permitted by the Notes or under the 2022 Indenture, such Issuer or such Guarantor, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes of such series equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
The 2022 Indenture does not contain covenants or other provisions to afford protection to holders of the Notes in the event of a highly leveraged transaction or a change in control of an Issuer or any Guarantor except as provided above.
Upon certain mergers or consolidations involving an Issuer or any Guarantor, or upon certain sales or conveyances of all or substantially all of the assets of an Issuer or any Guarantor, the obligations of such Issuer or Guarantor, under the applicable Notes or the applicable Guarantee, shall be assumed by the person formed by such merger or consolidation or which shall have acquired such assets and upon such assumptions such person shall succeed to and be substituted for such Issuer or such Guarantor, as the case may be, and then such Issuer or such Guarantor will (except in the case of a lease) be relieved of all obligations and covenants under the 2022 Indenture, the Notes and the applicable Guarantee, as the case may be. The terms “Issuer” and “Guarantor”, as used in the Notes and the 2022 Indenture, also refer to any such successors or assigns so substituted.
Although there is a limited body of case law interpreting the phrase “entirety or substantially as an entirety”, there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances, there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “entirety or substantially as an entirety” of an Issuer’s assets and its subsidiaries taken as a whole.
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Events of Default
Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture establishing such series of Notes or in the form of note for such series and as may be described in the applicable prospectus supplement, each of the following events shall be an “Event of Default” with respect to any series of Notes:
| (a) | Non-Payment: default is made in the payment of: (a) any installment of interest (excluding Additional Amounts) upon any applicable Note as and when the same shall become due and payable, and there is a continuance of such default for a period of 14 days or more; (b) applicable Additional Amounts as and when the same shall become due and payable, and there is a continuance of such default for a period of 14 days; or (c) all or any part of the principal or premium, if any, of any applicable Note as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise, and there is a continuance of such default for a period of three days; |
| (b) | Breach of Other Obligations: the applicable Issuer or any Guarantor does not perform or comply with any one or more of its other obligations under the applicable Notes or the 2022 Indenture (other than those described in paragraph (i) above) which is not remedied within 30 days (unless a longer period is specified in the 2022 Indenture) after written notice of such default shall have been given to applicable Issuer by the Trustee or to the Issuer and the Trustee by the holders of at least 25% of the outstanding principal amount of the Notes; |
| (c) | Cross-Default: (a) any other present or future indebtedness for borrowed money of the applicable Issuer or any Guarantor, other than the Notes issued by the applicable Issuer, becomes due and payable prior to its stated maturity by reason of any default or event of default in respect thereof by the applicable Issuer or any Guarantor and remains unpaid; or (b) any such indebtedness for borrowed money is not paid when due or, as the case may be, within any applicable grace period; or (c) the applicable Issuer or any Guarantor fails to pay when due and called upon (after the expiry of any applicable grace period) any amount payable by it under any present or future guarantee for, or indemnity in respect of, any indebtedness for borrowed money and which remains unpaid; provided that (x) payment of the indebtedness for borrowed money is not being contested in good faith and in accordance with legal advice or (y) the aggregate amount of the indebtedness for borrowed money, guarantees and indemnities in respect of which one or more of the events mentioned above in clauses (a), (b) and (c) of this paragraph (iii) has or have occurred and is or are continuing, equals or exceeds £750 million or its equivalent in any other currency of the indebtedness for borrowed money or, if greater, 1.25% of the Total Equity of BAT, as set out in the “Total Equity” line item in the most recent consolidated group balance sheet of BAT and its subsidiaries in BAT’s most recent annual report; |
| (d) | Cessation of Guarantees: any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the 2022 Indenture or any Guarantor denies or disaffirms in writing its obligations under the 2022 Indenture or Guarantee; |
| (e) | Enforcement Proceedings: a distress or execution or other legal process is levied or enforced against or an encumbrancer takes possession of or a receiver, administrative receiver or other similar officer is appointed of the whole or a part of the assets of the applicable Issuer or any Guarantor which is substantial in relation to the BAT Group taken as a whole and is not discharged, stayed, removed or paid out within 45 days after such execution or appointment; |
| (f) | Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the applicable Issuer or any Guarantor becomes enforceable against all or substantially all of the assets of the applicable Issuer or any Guarantor, and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, administrative receiver, manager or other similar person) and is not discharged within 45 days; |
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| (g) | Insolvency: the applicable Issuer or any Guarantor is insolvent or bankrupt or unable to pay its debts (in respect of companies incorporated in England and Wales, within the meaning of Section 123(1)(b) or (e) or Section 123(2) of the UK Insolvency Act 1986), stops, suspends or threatens to stop or suspend payment of all or a material part of its debts, proposes or makes a general assignment or an arrangement or composition (otherwise than for the purposes of reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement) with or for the benefit of its creditors in respect of any of such debts or a moratorium is agreed or declared in respect of or affecting all or a material part of the debts of the applicable Issuer; |
| (h) | Winding-up: an order is made or an effective resolution passed for the winding-up or dissolution or administration of the applicable Issuer or any Guarantor, or the applicable Issuer or any Guarantor shall apply or petition for a winding-up or administration order in respect of itself or ceases or threatens to cease to carry on all or substantially all of its business or operations, in each case except for the purpose of and followed by a reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement; or |
| (i) | Analogous Events: any event occurs that under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in any of the foregoing paragraphs (g) and (h). |
The 2022 Indenture provides that if an Event of Default occurs and is continuing with respect to the Notes of any series then outstanding, then and in each and every such case (other than certain Events of Default specified in paragraphs (g), (h) and (i) above with respect to the applicable Issuer or any Guarantor), unless the principal of all the Notes of such series shall have already become due and payable, the holders of not less than 25% in aggregate principal amount of the Notes of such affected series then outstanding, by notice in writing to the applicable Issuer, each Guarantor and the Trustee, may declare the entire principal amount of all Notes of such series and interest accrued and unpaid thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, without any further declaration or other act on the part of any holder. If certain Events of Default described in paragraph (g), (h) or (i) above occur with respect to the applicable Issuer or any Guarantor and are continuing with respect to a series of Notes, the principal amount of and accrued and unpaid interest on all the Notes of such series issued pursuant to the 2022 Indenture shall become immediately due and payable, without any declaration or other act on the part of the Trustee or any holder. Under certain circumstances, the holders of a majority in aggregate principal amount of the then outstanding Notes of such series, by written notice to the applicable Issuer, each Guarantor and the Trustee, may waive defaults and rescind and annul declarations of acceleration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impart any right consequent thereon.
The holders of a majority in aggregate principal amount of any series of Notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Notes of such series, subject to certain limitations to be specified in the 2022 Indenture, including providing to the Trustee indemnity satisfactory to it.
An Event of Default with respect to any series of Notes would not necessarily constitute an event of default with respect to the other series of Notes.
The 2022 Indenture provides that notwithstanding the foregoing provisions described in this section, if the principal of, premium (if any) or interest on or Additional Amounts with respect to any Note is payable in a currency or currencies other than Dollars and such currency or currencies are not available to the applicable Issuer or any Guarantor for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the applicable Issuer or such Guarantor (a “Conversion Event”), the applicable Issuer and the Guarantor will be entitled to satisfy its obligations to holders of the Notes by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the applicable Issuer or the
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Guarantor making such payment, as the case may be, based on the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under the 2022 Indenture.
Promptly after the occurrence of a Conversion Event, the applicable Issuer or the relevant Guarantor shall give written notice thereof to the Trustee and to the Paying Agent; and the Trustee, promptly after receipt of such notice, shall give notice thereof in the manner provided in the 2022 Indenture to the holders of the relevant series of Notes. Promptly after the making of any payment in Dollars as a result of a Conversion Event, the applicable Issuer or the Guarantor making such payment, as the case may be, shall give notice in the manner provided in the 2022 Indenture to the Holders, setting forth the applicable Exchange Rate and describing the calculation of such payments.
No holder of the Notes of a series will have any right to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to the 2022 Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy under the 2022 Indenture (except suits for the enforcement of payment of overdue principal or interest) unless (1) the holder of a Note gives to the Trustee written notice of a continuing Event of Default, (2) the holders of at least 25% in principal amount of the outstanding Notes of such series have made a written request to the Trustee to institute such proceeding as Trustee, (3) the holder or holders of Notes offer, and if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense, (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity and (5) during such 60-day period the holders of a majority in aggregate principal amount of the outstanding Notes of such series have not given the Trustee a direction inconsistent with the request. The holder of a Note may not use the 2022 Indenture to prejudice the rights of another holder of a Note or to obtain a preference or priority over another holder of a Note (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders).
Satisfaction and Discharge
The 2022 Indenture provides that the applicable Issuer may, subject to satisfying certain conditions, discharge certain obligations to the holders of Notes of any series of Notes that have not already been delivered to the Trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the Trustee or Paying Agent, in trust, funds in an amount sufficient to pay the entire indebtedness on such series of Notes in respect of principal and premium, if any, and interest, if any, to the date of such deposit (if such Notes have become due and payable) or to the maturity thereof or redemption date, as the case may be, along with an officer’s certificate and an opinion of counsel stating that all conditions precedent relating to the satisfaction and discharge of the 2022 Indenture have been complied with.
Legal Defeasance and Covenant Defeasance
The 2022 Indenture provides that the applicable Issuer will have the option either (a) to be deemed (together with each Guarantor) to have paid and discharged the entire indebtedness represented by, and obligations under, a series of Notes and the applicable Guarantees and to have satisfied all the obligations under the 2022 Indenture relating to the series of Notes (except for certain obligations, including those relating to the defeasance trust and obligations to register the transfer or exchange of Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain paying agencies) on the 91st day after the applicable conditions described below have been satisfied or (b) to cease (together with each Guarantor) to be under any obligation to comply with the covenants described above under “ —Covenants of the Issuer and the Guarantors—Negative Pledge”, “—Covenants of the Issuer and the Guarantors—Limitation on Mergers, Consolidations, Amalgamations and Combinations”, and
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non-compliance with such covenants and the occurrence of all events described above under “ —Events of Default” will not give rise to any Event of Default under the 2022 Indenture, at any time after the applicable conditions described below have been satisfied.
In order to exercise either defeasance option, the applicable Issuer must (i) deposit with the Trustee, irrevocably in money or Government Obligations (as defined in the 2022 Indenture), funds sufficient in the opinion of a certified public accounting firm of national reputation for the payment of principal of and interest on the applicable outstanding Notes of any series to and including the Redemption Date irrevocably designated by the Issuer on or prior to the date of deposit of such money or Government Obligations, and must (ii) comply with certain other conditions, including delivering to the Trustee an opinion of U.S. counsel to the effect that beneficial owners of the applicable Notes will not recognize income, gain or loss for United States Federal income tax purposes as a result of the exercise of such option and will be subject to United States Federal income tax on the same amount and in the same manner and at the same time as would have been the case if such option had not been exercised and, in the case of clause (a) in the previous paragraph, which opinion must state that such opinion is based on a ruling received from or published by the United States Internal Revenue Service or on a change in the applicable U.S. Federal income tax laws after the date of issuance of the relevant Notes.
Modification and Waiver
Without Consent of Noteholders
The 2022 Indenture contains provisions permitting the Issuers, the Guarantors and the Trustee, without the consent of the holders of any of the applicable Notes at any time outstanding, from time to time and at any time, to enter into a supplemental indenture amending or supplementing the Indenture, the Notes or the Guarantees in order to:
| · | convey, transfer, assign, mortgage or pledge to the holders of the applicable Notes or any person acting on their behalf as security for the applicable Notes any property or assets; |
| · | evidence the succession of another person to the applicable Issuer or any Guarantor, as the case may be, or successive successions, and the assumption by the successor person(s) of the covenants, agreements and obligations of such Issuer or Guarantor, as the case may be, pursuant to the 2022 Indenture; |
| · | evidence and provide for the acceptance of appointment of a successor or successors to the Trustee and/or the Paying Agent, Transfer Agent, Calculation Agent and Registrar, as applicable; |
| · | add to the covenants of, or the restrictions, conditions or provisions applicable to, the applicable Issuer and any Guarantor, as the case may be, such further covenants, restrictions, conditions or provisions as the applicable Issuer and any Guarantor, as the case may be, shall consider to be for the protection of the holders of the applicable Notes issued pursuant to the 2022 Indenture, including to eliminate one or both prongs of the release provision under “—Release”, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default under the 2022 Indenture permitting the enforcement of all or any of the several remedies provided in the 2022 Indenture; provided that, in respect of any such additional covenant, restriction, condition or provision, such supplemental indenture may provide for a particular period of grace after default (which may be shorter or longer than that allowed in the case of other defaults) or may limit the remedies available to the Trustee upon such an Event of Default; |
| · | modify the restrictions on, and procedures for, resale and other transfers of the applicable Notes pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally; |
| · | cure any ambiguity or to correct or supplement any provision contained in the 2022 Indenture, the Notes, or the Guarantees which may be defective or inconsistent with any other provision |
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| contained therein or to make such other provision in regard to matters or questions arising under the 2022 Indenture, the Notes or the Guarantees as the applicable Issuer, any Guarantor or the Trustee may deem necessary or desirable and which will not, in the opinion of the applicable Issuer, adversely affect the interests of the holders of the applicable Notes in any material respect; |
| · | issue an unlimited aggregate principal amount of Notes under the 2022 Indenture or to “reopen” the applicable series of Notes and create and issue additional notes having substantially identical terms and conditions as the applicable Notes (or in all respects except as to issue price, denomination, rate of interest, Maturity Date and the date from which interest, if any, shall accrue, and except as may otherwise be provided in or pursuant to such officer’s certificate or supplemental indenture relating thereto) so that the additional notes are consolidated and form a single series with the outstanding applicable Notes; and |
| · | evidence the addition of any new Guarantor of the Notes of a series and/or the 2022 Indenture, or the release of any Guarantor from its obligations with respect to the Notes of a series and/or the 2022 Indenture, pursuant to the terms of the 2022 Indenture. |
With Consent of Noteholders
The 2022 Indenture contains provisions permitting the Issuers, each Guarantor and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of all series of the Notes affected by such supplemental indenture (voting as one class) at the time outstanding under the 2022 Indenture (including consents obtained in connection with a tender offer or exchange offer for the applicable Notes), from time to time and at any time, to enter into a supplemental indenture for the purpose of amending, waiving or otherwise modifying the provisions of the 2022 Indenture, the applicable Notes and the applicable Guarantees, or adding any provisions to or changing in any manner or eliminating any of the provisions of the applicable Notes or of modifying in any manner the rights of the holders of the applicable Notes; provided, that no such supplemental indenture may, without the consent of the holder of each of the Notes so affected:
| · | change the stated maturity of the applicable Note of, or the date for payment of any principal of, or installment of interest on, any applicable Note, or reduce the amount of principal of an Original Issue Discount Note that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the provisions of the 2022 Indenture; or |
| · | reduce the principal amount of or the rate or amount of interest on any applicable Note or Additional Amounts payable with respect thereto or reduce the amount payable thereon in the event of redemption or default or change the method for determining the interest rate thereon; or |
| · | change the currency of payment of principal of or interest on any applicable Note or Additional Amounts payable with respect thereto; or change the obligation of the Issuer or any Guarantor, as the case may be, to pay Additional Amounts (except as otherwise permitted by such applicable Note); or |
| · | impair the right to institute suit for the enforcement of any such payment on or with respect to any applicable Note; or |
| · | reduce the percentage of the aggregate principal amount of the applicable Notes outstanding the consent of whose holders is required for any such supplemental indenture; or |
| · | reduce the aggregate principal amount of any applicable Note outstanding necessary to modify or amend the 2022 Indenture or any such Note or to waive any future compliance or past default or reduce the quorum requirements or the percentage of aggregate principal amount of any applicable Notes outstanding required for the adoption of any action at any meeting of holders of such Notes or to reduce the percentage of the aggregate principal amount of such Notes outstanding necessary to rescind or annul any declaration of the principal of, or all accrued and unpaid interest on, any Note to be due and payable, |
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provided that no consent of any holder of any applicable Note shall be necessary to permit the Trustee, the Issuer and each Guarantor to execute supplemental indentures as described under “—Without Consent of Noteholders” above.
Any modifications, amendments or waivers to the 2022 Indenture or to the conditions of the applicable Notes will be conclusive and binding on all holders of the applicable Notes, whether or not they have consented to such action or were present at the meeting at which such action was taken, and on all future holders of the applicable Notes, whether or not notation of such modifications, amendments or waivers is made upon such Notes. Any instrument given by or on behalf of any holder of such a Note in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent registered holders of such Note.
Prescription
Under New York’s statute of limitations, any legal action upon the Notes in respect of interest or principal must be commenced within six years after the payment thereof is due.
Notice
Notices to holders of Notes will be given by first-class mail postage prepaid to the last addresses of such holders as they appear in the Notes register; provided, no such mailing will be required so long as any Global Notes representing the Notes are held in their entirety on behalf of the Depositary or a clearing system, or any of its participants, as there may be substituted for the mailing of notice to holders of Notes described above the delivery of the relevant. Such notices will be deemed to have been given on the date of such mailing; notices to the Depositary or a clearing system, and (if applicable) its participants, for communication by them to the entitled accountholders. Any such notice shall be deemed to have been given on the day on which the said notice was given to the Depositary or a clearing system, and (if applicable) its participants.
Listing
The relevant Issuer may apply to list any particular issue of debt securities on a securities exchange. If the relevant Issuer chooses to do so, it would disclose the listing of such debt securities in the applicable prospectus supplement. The Issuers are under no obligation to list any issued debt securities and may in fact not list any.
Consent to Service
Each of BAT, BATIF and BATNF has initially designated BATCAP as their authorized agent for service of process in any related proceeding arising out of or relating to the performance of its obligations under the 2022 Indenture and the Notes brought in any state or federal court in the Borough of Manhattan, the City of New York, and will irrevocably submit (but for those purposes only) to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding.
Governing Law
The 2022 Indenture, any applicable supplemental indentures, the Notes and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws thereof.
Regarding the Trustee and Agents
Citibank, N.A. is the trustee under the 2022 Indenture. Citibank, N.A. is appointed by the Issuers to act as registrar, transfer agent, calculation agent and initial paying agent for the Notes, unless another paying agent is appointed prior to the time the Notes are first issued. The address of Citibank, N.A., as trustee, is 388 Greenwich Street, New York, New York 10013. The address of Citibank, N.A., as paying agent, is Citibank, N.A., Agency & Trust, 388 Greenwich Street, New York, New York 10013. From
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time to time, Citibank, N.A. and its respective affiliates perform various other services for the BAT Group and its affiliates (including acting as a lender under one or more of the BAT Group’s lending facilities from time to time). An affiliate of Citibank, N.A., Citibank, N.A., London Branch, is the issuing and principal paying agent under both the BAT Group’s EMTN Programme and the BAT Group’s euro commercial paper program. Citibank, N.A. is the issuing and principal paying agent under the BAT Group’s U.S. commercial paper program. Citibank, N.A. is paying agent and registrar for BATIF, RAI and R.J. Reynolds Tobacco Company (RJRT) notes issued pursuant to Rule 144A under the Securities Act, BATIF, RAI and RJRT notes issued pursuant to Regulation S under the Securities Act and BATCAP, BATIF, RAI and RJRT notes registered with the SEC.
The 2022 Indenture contains limitations on the rights of the Trustee, if it becomes a creditor of any Issuer or any Guarantor, to obtain payment of claims in some cases, or to realize on property received in respect of any of these claims as security or otherwise. The Trustee is permitted to engage in other transactions. However, if the Trustee acquires any conflicting interest (as defined in the TIA), it must either eliminate its conflict within 90 days or resign.
The 2022 Indenture provides that except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in the 2022 Indenture. During the continuance of an Event of Default of which the Trustee has received written notice, the Trustee will exercise such of the rights and powers vested in it under the 2022 Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
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DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
ISSUED UNDER THE 2019 AND 2020 INDENTURES
The following is a summary of the material provisions of the 2019 and 2020 Indentures (as described below). We urge you to read the relevant Indenture and any applicable supplemental indenture in their entirety because such Indenture and applicable supplemental indenture, not this summary, define your rights as a holder of any debt securities. Copies of the 2019 and 2020 Indentures have been filed with the SEC as exhibits to the registration statement of which this prospectus is a part and copies of the 2019 and 2020 Indentures and any supplemental indentures will be made available upon request to BAT at the address indicated under the section entitled “Where You Can Find More Information; Incorporation by Reference” of this prospectus. Any capitalized term used herein but not defined shall have the meaning assigned to such term in the 2019 and 2020 Indentures, the applicable supplemental indenture or under “—Certain Definitions”.
The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the 2019 and 2020 Indentures, any applicable supplemental indenture and/or an officer’s certificate delivered under an indenture and those terms made a part of the 2019 and 2020 Indentures and/ or applicable supplemental indenture and/or an officer’s certificate delivered under an indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of the closing of the offering of the applicable debt securities.
General
The debt securities issued under the 2019 and 2020 Indentures will be issued by B.A.T Capital Corporation (“BATCAP”) or B.A.T. International Finance p.l.c. (“BATIF”, and, together with BATCAP, the “Issuers”), respectively. In this “Description of Debt Securities and Guarantees Issued Under the 2019 and 2020 Indentures” the term “Issuer” refers to either BATCAP or BATIF, “Indenture” refers in this section to the 2019 Indenture or 2020 Indenture (each, as defined below) and “Notes” refers to any series of debt securities issued under the applicable Indenture.
Any series of Notes will mature on the date specified in the applicable prospectus supplement. The Notes issued by BATCAP will be issued in registered form and treated as a separate series of debt securities under the indenture (the “2019 Indenture”) entered into on September 6, 2019, by and among BATCAP, as Issuer, the Guarantors (as defined below) party thereto from time to time, Citibank, N.A., as trustee, and Citibank, N.A., as registrar, transfer agent, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the Notes are first issued. The Notes issued by BATIF will be issued in registered form and treated as a separate series of debt securities under an indenture (the “2020 Indenture”, and, together with the 2019 Indenture, each an “Indenture” in this section and together, the “2019 and 2020 Indentures”) entered into on September 25, 2020, by and among BATIF, as Issuer, the Guarantors party thereto from time to time, Citibank N.A., as trustee (in such capacity under either Indenture, the “Trustee”), registrar, transfer agent, calculation agent and paying agent, unless another paying agent is appointed prior to the time the Notes are first issued (in such several capacities under either Indenture, the “Registrar”, “Transfer Agent”, “Calculation Agent” and “Paying Agent”, respectively).
The obligations of an Issuer under any series of Notes and each Indenture will be fully and unconditionally guaranteed on a joint and several and senior and unsecured basis by British American Tobacco p.l.c. (“BAT” or the “Parent”), BATCAP (in case of the 2020 Indenture), BATIF (in case of the 2019 Indenture), B.A.T. Netherlands Finance B.V. (“BATNF”), and, unless its guarantee is released in accordance with the applicable Indenture, Reynolds American Inc. (“RAI”) (in such capacity, each, a “Guarantor” and together, the “Guarantors”).
Unless otherwise set forth in the applicable prospectus supplement, the Notes will be denominated in U.S. dollars and payment of principal and interest thereon will be paid in U.S. dollars. If any Notes denominated in a Non-Dollar Currency are sold, the applicable prospectus supplement will describe whether payments on the Notes are payable in any Non-Dollar Currency.
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In this “Description of Debt Securities and Guarantees Issued Under the 2019 and 2020 Indentures”, the terms “holder”, “Noteholder” and other similar terms refer to a “registered holder” of Notes, and not to a beneficial owner of a book-entry interest in any Notes.
The Notes may be issued in one or more series for original issue. The specific financial, legal and other terms particular to a series of Notes are described in the prospectus supplement and the pricing term sheet relating to a series of Notes. Those terms may vary from the terms described here. Accordingly, this summary is also subject to and qualified by reference to the description of the terms of the series described in the prospectus supplement. The prospectus supplement will indicate for each series of Notes:
| · | the title of the Notes of that series; |
| · | any limit upon the aggregate principal amount of the Notes of that series; |
| · | the dates on which or periods during which the Notes of that series may be issued and the maturity date for the Notes of that series (or manner of determining the same); |
| · | the rate or rates (or the manner of calculation thereof) at which the Notes of that series shall bear interest (if any), the date or dates from which such interest shall accrue, the interest payment dates on which such interest shall be payable (or manner of determining the same) and the regular record date for the interest payable on any Notes on any interest payment date and the extent to which, or the manner in which, any interest is payable on a temporary global note on an interest payment date; |
| · | the place or places where, subject to the provisions of the applicable Indenture, the principal of, and premium, if any, and interest, if any, and Additional Amounts, if any, on Notes of that series shall be payable, any Notes of that series may be surrendered for registration of transfer, any Notes of that series may be surrendered for exchange, and notices and demands to or upon the Issuer in respect of the Notes of that series and the applicable Indenture may be served; |
| · | the period or periods within which (or manner of determining the same), the price or prices at which (or manner of determining the same), the currency or currency unit in which, and the terms and conditions upon which Notes of that series may be redeemed, in whole or in part, at the option of the Issuer, and any remarketing arrangements with respect to the Notes of that series; |
| · | the denominations in which any Notes of that series shall be issuable, if other than denominations of $2,000 and any integral multiple of $1,000 in excess thereof (or in the case of Notes denominated in a Non-Dollar Currency, the equivalent thereof in each case (rounded to an integral multiple of 1,000 units of such Non-Dollar Currency)); |
| · | if Non-Dollar Currency, the currency, currencies or currency units in which the principal of or any premium or interest or Additional Amounts on any Notes of that series shall be payable; |
| · | if other than the entire principal amount thereof, the portion of the principal amount of Notes of that series which shall be payable upon a declaration of acceleration of the maturity date thereof pursuant to the applicable Indenture; |
| · | any events of default and covenants of the Issuer with respect to the Notes of that series, whether or not such events of default or covenants are consistent with the events of default or covenants set forth in the applicable Indenture; |
| · | if a Person other than Citibank, N.A. is to act as trustee for the Notes of that series, the name and location of the corporate trust office of such trustee; |
| · | if other than as set forth herein, provisions for the satisfaction and discharge of the applicable Indenture with respect to the Notes of that series; |
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| · | the date as of which any global note representing outstanding Notes of that series shall be dated if other than the date of original issuance of the first Note of that series to be issued; |
| · | the application, if any, of the provisions described under “—Additional Amounts” to the Notes of that series; |
| · | whether the Notes of that series shall be issued in whole or in part in the form of a global note or Notes and, in such case, the initial Depositary, if any, for such global note or Notes, whether such global form shall be permanent or temporary; |
| · | if Notes of that series are to be issuable initially in the form of a temporary global note, the circumstances under which the temporary global note can be exchanged for definitive Notes and whether the definitive Notes will be in global form; |
| · | whether the Notes of that series will be convertible or exchangeable into other securities of the Issuer or another Person, and if so, the terms and conditions upon which such Notes will be so convertible or exchangeable, including the conversion price or exchange rate and the conversion or exchange period, and any additions or changes to the applicable Indenture with respect to the Notes of such series to permit or facilitate such conversion or exchange; |
| · | whether the Notes of that series are to be issued as Original Issue Discount Notes and the amount of discount with which the Notes of that series may be issued; |
| · | the form of the Notes of that series; and |
| · | any other terms of that series (which terms shall not be inconsistent with the provisions of the applicable Indenture). |
All Notes of any particular series will be substantially identical except as to issue date, issue price, denomination, rate of interest, maturity date and the date from which interest, if any, shall accrue, and except as may otherwise be provided in or pursuant to an officer’s certificate or any supplemental indenture relating thereto. All Notes of any one series need not be issued at the same time, and unless otherwise provided, a series may be reopened for issuance of additional notes of such series.
Principal, Maturity and Interest
The Notes may be issued in an unlimited aggregate principal amount and will bear interest per annum and have maturity dates, in each case as specified in the applicable prospectus supplement.
Form and Denomination
The Notes may have notations, legends or endorsements required by law, rule or usage to which the Issuer is subject. Unless otherwise set forth in the applicable prospectus supplement, the Notes will be issued in fully registered form and only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof (or in the case of Notes denominated in a Non-Dollar Currency, the equivalent thereof (rounded to an integral multiple of 1,000 units of such Non-Dollar Currency)), and will be issued initially as Global Notes.
Further Issues
The aggregate principal amount of Notes issuable under each Indenture is unlimited. The Issuer may, from time to time, without notice to or the consent of the holders of the Notes, “reopen” any series of the Notes and create and issue additional notes having substantially identical terms and conditions as the then-outstanding Notes of a series (or in all respects except as described in the last paragraph under “—General” above) so that the additional notes are consolidated and form a single series of Notes with the Notes, as the case may be, provided that if the additional notes are not fungible with the Notes for United States Federal income tax purposes, the additional notes will have separate CUSIPs, ISINs, or other identifying numbers.
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Status of the Notes and Guarantees
The Notes will be unsecured and unsubordinated obligations of the Issuer and will rank pari passu in right of payment among themselves and with all other direct, unsecured and unsubordinated obligations of the Issuer (except those obligations preferred by statute or operation of law). Each Guarantor will fully and unconditionally guarantee, on a senior, unsecured basis, the due and punctual payment (and not collectability) of the principal of and interest on the Notes (and the payment of additional amounts described under “—Additional Amounts” below) and other obligations under the 2019 and 2020 Indentures when and as the same shall become due and payable, whether at stated maturity, by declaration of acceleration, call for redemption or otherwise. Each Guarantee will be an unsecured and unsubordinated obligation of the respective Guarantor and will rank pari passu in right of payment with all other direct, unsecured and unsubordinated obligations of such Guarantor (except those obligations preferred by statute or operation of law). The Issuer and each Guarantor will be subject to a negative pledge with respect to certain types of indebtedness, which are discussed in “—Covenants of the Issuer and the Guarantors—Negative Pledge” below.
Guarantees
Release
The 2019 and 2020 Indentures provide, and any applicable supplemental indentures will provide, that, without the consent of the Trustee or the Noteholders, any Guarantor that is a subsidiary of the Parent (a “Subsidiary Guarantor”), other than BATIF (in case of the 2019 Indenture), BATCAP (in case of the 2020 Indenture) and BATNF, will automatically and unconditionally be released from all obligations under its Guarantee, and such Guarantee shall thereupon terminate and be discharged and of no further force or effect, in the event that (1) its guarantee of all then outstanding notes issued under the EMTN Programme is released or (2) at substantially the same time its Guarantee of the Notes is terminated, the Subsidiary Guarantor is released from all obligations in respect of indebtedness for borrowed money for which such Subsidiary Guarantor is an obligor (as a guarantor or borrower). For purposes of this paragraph, the amount of a Subsidiary Guarantor’s indebtedness for borrowed money shall not include (A) the Notes issued pursuant to the applicable Indenture, (B) any other debt the terms of which permit the termination of such Subsidiary Guarantor’s guarantee of such debt under similar circumstances, as long as such Subsidiary Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the Notes, (C) any debt that is being refinanced at substantially the same time that the guarantee of the Notes is being released, provided that any obligations of the relevant Subsidiary Guarantor in respect of the debt that is incurred in the refinancing shall be included in the calculation of the relevant Subsidiary Guarantor’s indebtedness for borrowed money and (D) for the avoidance of doubt, any debt in respect of which such Subsidiary Guarantor is an obligor (as a guarantor or borrower) (i) between or among the Parent and any subsidiary or subsidiaries thereof or (ii) between or among any subsidiaries of the Parent.
As of the date of this prospectus, RAI is the only Subsidiary Guarantor to which the above provision is relevant. Under the EMTN Programme, a Subsidiary Guarantor’s guarantee is released if at any time the aggregate amount of indebtedness for borrowed money for which the Subsidiary Guarantor is an obligor does not exceed 10% of the outstanding long-term debt of BAT as reflected in the balance sheet included in BAT’s most recent publicly released interim or annual consolidated financial statements, as evidenced by a certificate to such effect addressed to the trustee under the EMTN Programme and signed by a director of BAT.
Additional Amounts
In the case of the 2019 Indenture, unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture establishing such series of Notes or in the form of note for such series, each of the Parent, BATIF and BATNF will make payments pursuant to the applicable Guarantee without withholding or deduction for or on
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account of any present or future tax, levy, impost or other similar governmental charge (“Taxes”) imposed, assessed, levied or collected by or for the account of the United Kingdom (in the case of a payment by the Parent or BATIF) or The Netherlands (in the case of a payment by BATNF), including in each case any political subdivision thereof or any authority thereof having the power to tax (a “Relevant Taxing Jurisdiction”), unless such withholding or deduction is required by law.
If any such Guarantor is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, such Guarantor will pay to the holder such additional amounts (“Additional Amounts”) as will result in the receipt by the holder of such amounts as would have been received by it if no such withholding or deduction of Taxes had been required; provided, however, that no Guarantor shall be required to pay any Additional Amounts for or on account of:
| (a) | any Taxes that would not have been so imposed, assessed, levied or collected but for the Holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) being or having been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Note or Guarantee, as the case may be; |
| (b) | any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the Holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period; |
| (c) | any estate, inheritance, gift, sales, transfer, personal property or similar Taxes; |
| (d) | any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee; |
| (e) | any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the Holder or the beneficial owner of the applicable Guarantee to (i) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or the beneficial owner or its connection with a Relevant Taxing Jurisdiction; or (ii) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in either case, compliance is required by statute, regulation, relevant income tax treaty or administrative practice of a Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes; |
| (f) | any Taxes imposed or withheld pursuant to Sections 1471 through 1474 of the Code (or any amended or successor provisions), any U.S. Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements entered into in connection with the implementation thereof (“FATCA Withholding”); or |
| (g) | any combination of the Taxes described in clauses (a) through (f) above. |
In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or premium (if any) or interest on, any Note or any payment pursuant to the applicable Guarantee to any Holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such partnership, an interest holder in such limited liability company or a beneficial owner that would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the Holder of the applicable Note or Guarantee.
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Furthermore, no Guarantor shall be required to pay any Additional Amounts for or on account of any Taxes imposed or to be withheld pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021) with respect to the Notes that are issued under any of the supplemental indentures no. 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 to the 2019 Indenture.
Unless otherwise stated, references in any context to the payment of principal of, and premium (if any) or interest on, any Note, or to any payment pursuant to a Guarantee will be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
In the case of the 2020 Indenture, the Issuer or, if applicable, each Guarantor will make payments of, or in respect of, principal, premium (if any) and interest on the Notes, or any payment pursuant to the applicable Guarantee, as the case may be, without withholding or deduction for or on account of any present or future tax, levy, impost or other similar governmental charge (“Taxes”) imposed, assessed, levied or collected by or for the account of the United Kingdom, The Netherlands (in the case of a payment by BATNF) or the United States (in the case of a payment by BATCAP or RAI), including in each case any political subdivision thereof or any authority thereof having the power to tax (a “Relevant Taxing Jurisdiction”), unless such withholding or deduction is required by law.
If the Issuer or, if applicable, any such Guarantor is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, the Issuer or, if applicable, such Guarantor will pay to the Holder such additional amounts (“Additional Amounts”) as will result in the receipt by the Holder of such amounts as would have been received by it if no such withholding or deduction of Taxes had been required; provided, however, that amounts with respect to any United States Tax shall be payable only to Holders that are not United States persons (within the meaning of the Code) and provided further, that neither the Issuer nor such Guarantor shall be required to pay any Additional Amounts for or on account of:
| (a) | any Taxes that would not have been so imposed, assessed, levied or collected but for the Holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) being or having been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business, maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Guarantee, as the case may be; |
| (b) | any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the Holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period; |
| (c) | any estate, inheritance, gift, sales, transfer, personal property or similar Taxes; |
| (d) | any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee; |
| (e) | any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the Holder or the beneficial owner of the applicable Note or Guarantee to (i) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or the beneficial owner or its connection with a Relevant Taxing Jurisdiction; or (ii) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in either case, compliance is |
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| required by statute, regulation, relevant income tax treaty or administrative practice of a Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes; |
| (f) | any Taxes imposed by reason of the Holder or the beneficial owner of the applicable Note or Guarantee being or having been considered a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code (or any amended or successor provisions); |
| (g) | any Taxes imposed on interest received by a 10-percent shareholder of the Issuer or any Guarantor within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Code (or any amended or successor provisions); |
| (h) | any backup withholding imposed pursuant to Section 3406 of the Code (or any amended or successor provisions); |
| (i) | any Taxes imposed pursuant to Section 871(h)(6) or Section 881(c)(6) of the Code (or any amended or successor provisions); |
| (j) | any Taxes imposed by reason of the Holder or the beneficial owner of the applicable Note or Guarantee being or having been a personal holding company, passive foreign investment company or controlled foreign corporation for U.S. Federal income tax purposes or a corporation that has accumulated earnings to avoid U.S. Federal income tax; |
| (k) | any Taxes imposed or withheld pursuant to Sections 1471 through 1474 of the Code (or any amended or successor provisions), any U.S. Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements entered into in connection with the implementation thereof (“FATCA Withholding”); |
| (l) | any Taxes imposed or to be withheld pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021); or |
| (m) | any combination of the Taxes described in clauses (a) through (l) above. |
In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or premium (if any) or interest on, any Note or any payment pursuant to the applicable Guarantee to any Holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such partnership, an interest holder in such limited liability company or a beneficial owner that would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the Holder of the applicable Note or Guarantee.
Unless otherwise stated, references in any context to the payment of principal of, and premium (if any) or interest on, any Note, or any payment pursuant to a Guarantee, will be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
Redemption
Unless otherwise set forth in the applicable prospectus supplement, the Notes will be subject to optional redemption by the Issuer as described below under “—Optional Redemption”. The Notes will be subject to optional redemption by the Issuer in the event of certain changes in tax laws applicable to payments in respect of the Notes as described below under “—Redemption for Tax Reasons”.
Optional Redemption
The Issuer may redeem the Notes as specified in the applicable prospectus supplement.
Redemption for Tax Reasons
Each series of Notes is also redeemable by the Issuer, in whole but not in part, at 100% of the principal amount of such Notes plus any accrued and unpaid interest (including any Additional Amounts) to the
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applicable date fixed for such redemption pursuant to the terms of the applicable Indenture or Notes (the “Redemption Date”) at the Issuer’s option at any time prior to their maturity if, due to a Change in Tax Law (as defined below): (i) the Issuer or any Guarantor, in accordance with the terms of the applicable Notes or applicable Guarantee, has, or would, become obligated to pay any Additional Amounts to the Holders of the Notes of that series; (ii) in the case of any Guarantor, (A) the Parent would be unable, for reasons outside its control, to procure payment by the Issuer or any other Guarantor or (B) the procuring of such payment by the Issuer and each such other Guarantor would be subject to withholding Taxes imposed by a Relevant Taxing Jurisdiction; and (iii) such obligation cannot otherwise be avoided by such Guarantor, the Parent or the Issuer, taking reasonable measures available to it. In such case, the Issuer may redeem the applicable Notes upon not less than 30 nor more than 60 days’ notice as provided in “—Notice” below, at 100% of the principal amount of such Notes plus accrued and unpaid interest to the Redemption Date (including Additional Amounts); provided that (a) no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or such Guarantor, as the case may be, would be obligated to pay any such Additional Amounts in respect of the applicable Notes or applicable Guarantee, as applicable, then due; and (b) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. The Issuer’s right to redeem the applicable Notes shall continue as long as the Issuer or any Guarantor is obligated to pay such Additional Amounts, notwithstanding that the Issuer or such Guarantor, as the case may be, shall have made payments of Additional Amounts. Prior to the giving of any such notice of redemption, the Issuer must deliver to the Trustee: (i) an officer’s certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer to so redeem have occurred; and (ii) an opinion of independent counsel or an independent accountant of recognized standing, selected by the Issuer or any Guarantor, as applicable, with respect to tax matters of the Relevant Taxing Jurisdiction to the effect that the Issuer or such Guarantor has, or would, become obligated to pay such Additional Amounts as a result of such Change in Tax Law.
For the purposes hereof, “Change in Tax Law” shall mean: (i) any changes in, or amendment to, any law of a Relevant Taxing Jurisdiction (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by the Relevant Taxing Jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the first date of issuance of Notes of such series; or (ii) if the Issuer or any Guarantor consolidates, merges, amalgamates or combines with, or transfers or leases its assets substantially as an entirety to, any person that is incorporated or tax resident under the laws of any jurisdiction other than a Relevant Taxing Jurisdiction (a “successor”) and as a consequence thereof such person becomes the successor obligor to the Issuer or such Guarantor in respect of Additional Amounts that may become payable (in which case, for purposes of this redemption provision, all references to the Issuer or such Guarantor shall be deemed to be and include references to such person), any change in, or amendment to, any law of the jurisdiction of organization or tax residence of such successor, or the jurisdiction through which payments will be made by the successor, or any political subdivision or taxing authority thereof or thereon for purposes of taxation (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by such jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the date of such consolidation, merger, amalgamation, combination or other transaction.
General
As set forth in the applicable prospectus supplement, upon presentation of any Note redeemed in part only, the Issuer will execute and the Paying Agent will authenticate and deliver (or cause to be transferred by book-entry) to the holder thereof, at the expense of the Issuer, a new Note of authorized denominations in principal amount equal to the unredeemed portion of the Note so presented.
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On or before any Redemption Date (as defined above), the Issuer shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on the Notes to be redeemed on such date. The redemption price shall be calculated by the Independent Investment Banker and the Issuer, and the Trustee and any agent shall be entitled to rely on such calculation.
On and after any Redemption Date, interest will cease to accrue on the Notes or any portion thereof called for redemption.
Maturity
Unless previously purchased or redeemed by the Issuer, and cancelled, the principal amount of each respective series of Notes shall mature on the date set forth in the applicable prospectus supplement in an amount equal, in each case, to their principal amount, with accrued and unpaid interest to such date.
Reacquisition
There is no restriction on the ability of the Issuer to purchase or repurchase Notes, provided, that any Notes so repurchased shall be cancelled and not reissued.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Notes, the 2019 and 2020 Indentures and any prospectus supplement. You should refer to the Notes, the 2019 and 2020 Indentures and applicable prospectus supplement for the full definition of all defined terms as well as any other terms used herein for which no definition is provided.
“Board of Directors” means the board of directors of BATCAP (in case of the 2019 Indenture) or BATIF (in case of the 2020 Indenture) or any duly authorized committee thereof.
“Board Resolution” means a copy of a resolution or appropriate record of action taken pursuant to such resolution, certified by a member of the Board of Directors, the Secretary, Assistant Secretary or Deputy Secretary (or equivalent of any of the foregoing) of the Issuer to have been duly adopted by the Board of Directors of the Issuer and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Dollar” or “$” means United States dollars, or such other money of the United States that at the time of payment is legal tender for payment of public and private debts.
“EMTN Programme” means the Euro Medium Term Note Programme to which BATCAP, BATIF and BATNF are parties as the issuers under the programme and notes issued thereunder are guaranteed by the Parent, each of the issuers thereunder (except when it is the relevant issuer) and RAI, as amended from time to time.
“Non-Dollar Currency” means any currency other than Dollars.
“Original Issue Discount Note” means any Note that is issued with “original issue discount” within the meaning of Section 1273(a) of the Code and Treasury Regulations promulgated thereunder and any other Note designated by the Company as issued with original issue discount for United States federal income tax purposes.
“Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Quoted Borrowing” means any indebtedness which: (i) is represented by notes, debentures or other securities issued otherwise than to constitute or represent advances made by banks and/or other lending institutions; (ii) is denominated, or confers any right to payment of principal and/or interest, in or by reference to any currency other than the currency of the country in which the issuer of the indebtedness has its principal place of business or is denominated, or confers any right to payment of
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principal and/or interest, in or by reference to the currency of such country but is sold or subscribed by or on behalf of, or by agreement with, the issuer of such indebtedness as to over 20% outside such country; and (iii) at its date of issue is, or is intended by the issuer of such indebtedness to become, quoted, listed, traded or dealt in on any stock exchange or other organized and regulated securities market in any part of the world.
Covenants of the Issuer and the Guarantors
Negative Pledge
Each Indenture provides that so long as any of the Notes remain outstanding, neither the Issuer nor any Guarantor will secure or allow to be secured any Quoted Borrowing issued by the Issuer or any Guarantor or any payment under any guarantee by any of them of any such Quoted Borrowing by any mortgage, charge, pledge or lien (other than arising by operation of law) upon any of its undertaking or assets, whether present or future, unless at the same time the same mortgage, charge, pledge or lien is extended, or security which is not materially less beneficial to the holders of the Notes than the security given as aforesaid or which shall be approved by consent of the holders of not less than 75% in aggregate principal amount of the Notes at the time outstanding is extended or created (as the case may be), to secure equally and ratably the principal of, and interest on, and all other payments (if any) in respect of the Notes.
Limitation on Mergers, Consolidations, Amalgamations and Combinations
Under each Indenture, so long as any of the Notes remain outstanding thereunder, neither the Issuer nor any Guarantor may consolidate with or merge into any other person or sell, convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any person (other than any sale or conveyance by way of a lease in the ordinary course of business), unless: (i) in the case of the Issuer, any successor person assumes the Issuer’s obligations on the Notes and under the applicable Indenture and, in the case of any Guarantor, any successor person assumes such Guarantor’s obligations on the Guarantee and under the applicable Indenture; (ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; (iii) such successor person is organized under the laws of the United States or any State thereof, the United Kingdom, The Netherlands or any other country that is a member of the Organization for Economic Cooperation and Development as of the date of such succession; (iv) such successor person agrees to pay any Additional Amounts with respect to any withholding or deduction of Taxes or any payment on the Notes or Guarantees (as applicable) imposed by the jurisdiction (in the case of the 2019 Indenture, other than the United States, unless otherwise required by clause (i) of this paragraph) in which such successor person is incorporated or otherwise a resident for tax purposes subject to the exceptions described under “—Additional Amounts” (for the avoidance of doubt, solely to the extent such successor person is the Issuer, changes will be made to the 2019 Indenture as are necessary to obligate the Issuer to pay such Additional Amount); and (v) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer or any Guarantor would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of the Issuer or any Guarantor which would not be permitted by the applicable Notes of such series or under the applicable Indenture, the Issuer or any Guarantor or such successor person, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes of such series equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
The limitation on mergers, consolidations, amalgamations and combinations contained in this section “—Limitation on Mergers, Consolidations, Amalgamations and Combinations” shall not apply to any consolidation, merger, amalgamation or combination in which the Issuer or any Guarantor is the surviving corporation except that, in such case, the provisions of (ii) and (v) above shall apply such that: (x) immediately after giving effect to such transaction, no Event of Default, and no event which,
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after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (y) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer or any Guarantor would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of the Issuer or any Guarantor which would not be permitted by the Notes or under the applicable Indenture, the Issuer or any Guarantor, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
The 2019 and 2020 Indentures do not contain covenants or other provisions to afford protection to holders of the Notes in the event of a highly leveraged transaction or a change in control of the Issuer or any Guarantor except as provided above.
Upon certain mergers or consolidations involving the Issuer or any Guarantor, or upon certain sales or conveyances of all or substantially all of the assets of the Issuer or any Guarantor, the obligations of the Issuer or such Guarantor, under the applicable Notes or the applicable Guarantee, shall be assumed by the person formed by such merger or consolidation or which shall have acquired such assets and upon such assumptions such person shall succeed to and be substituted for the Issuer or such Guarantor, as the case may be, and then the Issuer or such Guarantor will (except in the case of a lease) be relieved of all obligations and covenants under the 2019 and 2020 Indentures, the Notes and the applicable Guarantee, as the case may be. The terms “Issuer” and “Guarantor”, as used in the Notes and the 2019 and 2020 Indentures, also refer to any such successors or assigns so substituted.
Although there is a limited body of case law interpreting the phrase “entirety or substantially as an entirety”, there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances, there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “entirety or substantially as an entirety” of the Issuer’s assets and its subsidiaries taken as a whole.
Events of Default
Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture establishing such series of Notes or in the form of note for such series and as may be described in the applicable prospectus supplement, each of the following events shall be an “Event of Default” with respect to any series of Notes:
| (a) | Non-Payment: default is made in the payment of: (a) any installment of interest (excluding Additional Amounts) upon any applicable Note as and when the same shall become due and payable, and there is a continuance of such default for a period of 14 days or more; (b) applicable Additional Amounts as and when the same shall become due and payable, and there is a continuance of such default for a period of 14 days; or (c) all or any part of the principal or premium, if any, of any applicable Note as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise, and there is a continuance of such default for a period of three days; |
| (b) | Breach of Other Obligations: the Issuer or any Guarantor does not perform or comply with any one or more of its other obligations under the applicable Notes or the applicable Indenture (other than those described in paragraph (i) above) which is not remedied within 30 days (unless a longer period is specified in the applicable Indenture) after written notice of such default shall have been given to the Issuer by the Trustee or to the Issuer and the Trustee by the holders of at least 25% of the outstanding principal amount of the Notes; |
| (c) | Cross-Default: (a) any other present or future indebtedness for borrowed money of the Issuer or any Guarantor, other than the Notes issued by the Issuer, becomes due and payable prior to its stated maturity by reason of any default or event of default in respect thereof by the Issuer or any Guarantor and remains unpaid; or (b) any such indebtedness for borrowed money is not paid when due or, as the case may be, within any applicable grace period; or (c) the Issuer or any |
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| Guarantor fails to pay when due and called upon (after the expiry of any applicable grace period) any amount payable by it under any present or future guarantee for, or indemnity in respect of, any indebtedness for borrowed money and which remains unpaid; provided that (x) payment of the indebtedness for borrowed money is not being contested in good faith and in accordance with legal advice or (y) the aggregate amount of the indebtedness for borrowed money, guarantees and indemnities in respect of which one or more of the events mentioned above in clauses (a), (b) and (c) of this paragraph (iii) has or have occurred and is or are continuing, equals or exceeds £750 million or its equivalent in any other currency of the indebtedness for borrowed money or, if greater, 1.25% of the Total Equity of the Parent, as set out in the “Total Equity” line item in the most recent consolidated group balance sheet of the Parent and its subsidiaries in the Parent’s most recent annual report; |
| (d) | Cessation of Guarantees: any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the 2019 and 2020 Indentures, including as described under “Description of Debt Securities and Guarantees Issued Under the 2019 and 2020 Indentures—Guarantees—Release”) or any Guarantor denies or disaffirms in writing its obligations under the 2019 and 2020 Indentures or Guarantee; |
| (e) | Enforcement Proceedings: a distress or execution or other legal process is levied or enforced against or an encumbrancer takes possession of or a receiver, administrative receiver or other similar officer is appointed of the whole or a part of the assets of the Issuer or any Guarantor which is substantial in relation to the BAT Group taken as a whole and is not discharged, stayed, removed or paid out within 45 days after such execution or appointment; |
| (f) | Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the Issuer or any Guarantor becomes enforceable against all or substantially all of the assets of the Issuer or any Guarantor, and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, administrative receiver, manager or other similar person) and is not discharged within 45 days; |
| (g) | Insolvency: the Issuer or any Guarantor is insolvent or bankrupt or unable to pay its debts (in respect of companies incorporated in England and Wales, within the meaning of Section 123(1)(b) or (e) or Section 123(2) of the UK Insolvency Act 1986), stops, suspends or threatens to stop or suspend payment of all or a material part of its debts, proposes or makes a general assignment or an arrangement or composition (otherwise than for the purposes of reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement) with or for the benefit of its creditors in respect of any of such debts or a moratorium is agreed or declared in respect of or affecting all or a material part of the debts of the Issuer; |
| (h) | Winding-up: an order is made or an effective resolution passed for the winding-up or dissolution or administration of the Issuer or any Guarantor, or the Issuer or any Guarantor shall apply or petition for a winding-up or administration order in respect of itself or ceases or threatens to cease to carry on all or substantially all of its business or operations, in each case except for the purpose of and followed by a reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement; or |
| (i) | Analogous Events: any event occurs that under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in any of the foregoing paragraphs (g) and (h). |
Each Indenture provides that if an Event of Default occurs and is continuing with respect to the Notes of any series then outstanding, then and in each and every such case (other than certain Events of Default specified in paragraphs (g), (h) and (i) above with respect to the Issuer or any Guarantor), unless the principal of all the Notes of such series shall have already become due and payable, the holders of not less than 25% in aggregate principal amount of the Notes of such affected series then outstanding, by notice in writing to the Issuer, each Guarantor and the Trustee, may declare the entire principal amount of all Notes of such series and interest accrued and unpaid thereon, if any, to be due
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and payable immediately, and upon any such declaration the same shall become immediately due and payable, without any further declaration or other act on the part of any holder. If certain Events of Default described in paragraph (g), (h) or (i) above occur with respect to the Issuer or any Guarantor and are continuing with respect to a series of Notes, the principal amount of and accrued and unpaid interest on all the Notes of such series issued pursuant to the applicable Indenture shall become immediately due and payable, without any declaration or other act on the part of the Trustee or any holder. Under certain circumstances, the holders of a majority in aggregate principal amount of the then outstanding Notes of such series, by written notice to the Issuer, each Guarantor and the Trustee, may waive defaults and rescind and annul declarations of acceleration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impart any right consequent thereon.
The holders of a majority in aggregate principal amount of any series of Notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Notes of such series, subject to certain limitations to be specified in the applicable Indenture, including providing to the Trustee indemnity satisfactory to it.
An Event of Default with respect to any series of Notes would not necessarily constitute an event of default with respect to the other series of Notes.
Each Indenture provides that notwithstanding the foregoing provisions of this Section, if the principal of, premium (if any) or interest on or Additional Amounts with respect to any Note is payable in a currency or currencies other than Dollars and such currency or currencies are not available to the Issuer or any Guarantor for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of the Issuer or such Guarantor (a “Conversion Event”), the Issuer and the Guarantor will be entitled to satisfy its obligations to Holders of the Notes by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by the Issuer or the Guarantor making such payment, as the case may be, based on the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under the 2019 and 2020 Indentures.
Promptly after the occurrence of a Conversion Event, the Issuer or the relevant Guarantor shall give written notice thereof to the Trustee and to the Paying Agent; and the Trustee, promptly after receipt of such notice, shall give notice thereof in the manner provided in the applicable Indenture to the Holders of the relevant series of Notes. Promptly after the making of any payment in Dollars as a result of a Conversion Event, the Issuer or the Guarantor making such payment, as the case may be, shall give notice in the manner provided in the applicable Indenture to the Holders, setting forth the applicable Exchange Rate and describing the calculation of such payments.
No holder of the Notes of a series will have any right to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to the 2019 and 2020 Indentures, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy under the 2019 and 2020 Indentures (except suits for the enforcement of payment of overdue principal or interest) unless (1) the holder of a Note gives to the Trustee written notice of a continuing Event of Default, (2) the holders of at least 25% in principal amount of the outstanding Notes of such series have made a written request to the Trustee to institute such proceeding as Trustee, (3) the holder or holders of Notes offer, and if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense, (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity and (5) during such 60-day period the holders of a majority in aggregate principal amount of the outstanding Notes of such series have not given the Trustee a direction inconsistent with the request. The holder of a Note may not use the
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applicable Indenture to prejudice the rights of another holder of a Note or to obtain a preference or priority over another holder of a Note (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders).
Satisfaction and Discharge
Each Indenture provides that BAT may, subject to satisfying certain conditions, discharge certain obligations to the holders of Notes of any series of Notes that have not already been delivered to the Trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the Trustee or Paying Agent, in trust, funds in an amount sufficient to pay the entire indebtedness on such series of Notes in respect of principal and premium, if any, and interest, if any, to the date of such deposit (if such Notes have become due and payable) or to the maturity thereof or redemption date, as the case may be, along with an officer’s certificate and an opinion of counsel stating that all conditions precedent relating to the satisfaction and discharge of the applicable Indenture have been complied with.
Legal Defeasance and Covenant Defeasance
Each Indenture provides that the Issuer will have the option either (a) to be deemed (together with each Guarantor) to have paid and discharged the entire indebtedness represented by, and obligations under, a series of Notes and the applicable Guarantees and to have satisfied all the obligations under the applicable Indenture relating to the series of Notes (except for certain obligations, including those relating to the defeasance trust and obligations to register the transfer or exchange of Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain paying agencies) on the 91st day after the applicable conditions described below have been satisfied or (b) to cease (together with each Guarantor) to be under any obligation to comply with the covenants described above under “—Covenants of the Issuer and the Guarantors—Negative Pledge”, “—Covenants of the Issuer and the Guarantors—Limitation on Mergers, Consolidations, Amalgamations and Combinations”, and non-compliance with such covenants and the occurrence of all events described above under “—Events of Default” will not give rise to any Event of Default under the applicable Indenture, at any time after the applicable conditions described below have been satisfied.
In order to exercise either defeasance option, the Issuer must (i) deposit with the Trustee, irrevocably in money or Government Obligations (as defined in the 2019 and 2020 Indentures), funds sufficient in the opinion of a certified public accounting firm of national reputation for the payment of principal of and interest on the applicable outstanding Notes of any series to and including the Redemption Date irrevocably designated by the Issuer on or prior to the date of deposit of such money or Government Obligations, and must (ii) comply with certain other conditions, including delivering to the Trustee an opinion of U.S. counsel to the effect that beneficial owners of the applicable Notes will not recognize income, gain or loss for United States Federal income tax purposes as a result of the exercise of such option and will be subject to United States Federal income tax on the same amount and in the same manner and at the same time as would have been the case if such option had not been exercised and, in the case of clause (a) in the previous paragraph, which opinion must state that such opinion is based on a ruling received from or published by the United States Internal Revenue Service or on a change in the applicable U.S. Federal income tax laws after the date of issuance of the relevant Notes.
Modification and Waiver
Without Consent of Noteholders
Each Indenture contains provisions permitting the Issuer, the Guarantors and the Trustee, without the consent of the holders of any of the applicable Notes at any time outstanding, from time to time and at any time, to enter into a supplemental indenture amending or supplementing such Indenture, the Notes or the Guarantees in order to:
| · | convey, transfer, assign, mortgage or pledge to the holders of the applicable Notes or any person acting on their behalf as security for the applicable Notes any property or assets; |
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| · | evidence the succession of another person to the Issuer or any Guarantor, as the case may be, or successive successions, and the assumption by the successor person(s) of the covenants, agreements and obligations of the Issuer or any Guarantor, as the case may be, pursuant to the applicable Indenture; |
| · | evidence and provide for the acceptance of appointment of a successor or successors to the Trustee and/or the Paying Agent, Transfer Agent, Calculation Agent and Registrar, as applicable; |
| · | add to the covenants of, or the restrictions, conditions or provisions applicable to, the Issuer and any Guarantor, as the case may be, such further covenants, restrictions, conditions or provisions as the Issuer and any Guarantor, as the case may be, shall consider to be for the protection of the holders of the applicable Notes issued pursuant to the applicable Indenture, including to eliminate one or both prongs of the release provision under “—Release”, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default under such Indenture permitting the enforcement of all or any of the several remedies provided in such Indenture; provided that, in respect of any such additional covenant, restriction, condition or provision, such supplemental indenture may provide for a particular period of grace after default (which may be shorter or longer than that allowed in the case of other defaults) or may limit the remedies available to the Trustee upon such an Event of Default; |
| · | modify the restrictions on, and procedures for, resale and other transfers of the applicable Notes pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally; |
| · | cure any ambiguity or to correct or supplement any provision contained in the applicable Indenture, the Notes, or the Guarantees which may be defective or inconsistent with any other provision contained therein or to make such other provision in regard to matters or questions arising under such Indenture, the Notes or the Guarantees as the Issuer, any Guarantor or the Trustee may deem necessary or desirable and which will not, in the opinion of the Issuer, adversely affect the interests of the holders of the applicable Notes in any material respect; |
| · | issue an unlimited aggregate principal amount of Notes under the applicable Indenture or to “reopen” the applicable series of Notes and create and issue additional notes having substantially identical terms and conditions as the applicable Notes (or in all respects except as to issue price, denomination, rate of interest, Maturity Date and the date from which interest, if any, shall accrue, and except as may otherwise be provided in or pursuant to such officer’s certificate or supplemental indenture relating thereto) so that the additional notes are consolidated and form a single series with the outstanding applicable Notes; and |
| · | evidence the addition of any new Guarantor of the Notes and the applicable Indenture, or the release of any Guarantor from its obligations with respect to the Notes and such Indenture, pursuant to the terms of such Indenture. |
With Consent of Noteholders
Each Indenture contains provisions permitting the Issuer, each Guarantor and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of all series of the Notes affected by such supplemental indenture (voting as one class) at the time outstanding under the applicable Indenture (including consents obtained in connection with a tender offer or exchange offer for the applicable Notes), from time to time and at any time, to enter into a supplemental indenture for the purpose of amending, waiving or otherwise modifying the provisions of such Indenture, the Notes and the Guarantees, or adding any provisions to or changing in any manner or eliminating any of the provisions of the applicable Notes or of modifying in any manner the rights of the holders of the
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applicable Notes; provided, that no such supplemental indenture may, without the consent of the holder of each of the Notes so affected:
| · | change the stated maturity of the applicable Note of, or the date for payment of any principal of, or installment of interest on, any applicable Note, or reduce the amount of principal of an Original Issue Discount Note that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to the provisions of the applicable Indenture; or |
| · | reduce the principal amount of or the rate or amount of interest on any applicable Note or Additional Amounts payable with respect thereto or reduce the amount payable thereon in the event of redemption or default or change the method for determining the interest rate thereon; or |
| · | change the currency of payment of principal of or interest on any applicable Note or Additional Amounts payable with respect thereto; or change the obligation of the Issuer or any Guarantor, as the case may be, to pay Additional Amounts (except as otherwise permitted by such applicable Note); or |
| · | impair the right to institute suit for the enforcement of any such payment on or with respect to any applicable Note; or |
| · | reduce the percentage of the aggregate principal amount of the applicable Notes outstanding the consent of whose holders is required for any such supplemental indenture; or |
| · | reduce the aggregate principal amount of any applicable Note outstanding necessary to modify or amend the applicable Indenture or any such Note or to waive any future compliance or past default or reduce the quorum requirements or the percentage of aggregate principal amount of any applicable Notes outstanding required for the adoption of any action at any meeting of holders of such Notes or to reduce the percentage of the aggregate principal amount of such Notes outstanding necessary to rescind or annul any declaration of the principal of, or all accrued and unpaid interest on, any Note to be due and payable, |
provided that no consent of any holder of any applicable Note shall be necessary to permit the Trustee, the Issuer and each Guarantor to execute supplemental indentures as described under “—Without Consent of Noteholders” above.
Any modifications, amendments or waivers to the 2019 and 2020 Indentures or to the conditions of the applicable Notes will be conclusive and binding on all holders of the applicable Notes, whether or not they have consented to such action or were present at the meeting at which such action was taken, and on all future holders of the applicable Notes, whether or not notation of such modifications, amendments or waivers is made upon such Notes. Any instrument given by or on behalf of any holder of such a Note in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent registered holders of such Note.
Prescription
Under New York’s statute of limitations, any legal action upon the Notes in respect of interest or principal must be commenced within six years after the payment thereof is due.
Notice
Notices to holders of Notes will be given by first-class mail postage prepaid to the last addresses of such holders as they appear in the Notes register; provided, no such mailing will be required so long as any Global Notes representing the Notes are held in their entirety on behalf of the Depositary or a clearing system, or any of its participants, as there may be substituted for the mailing of notice to holders of Notes described above the delivery of the relevant. Such notices will be deemed to have
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been given on the date of such mailing; notices to the Depositary or a clearing system, and (if applicable) its participants, for communication by them to the entitled accountholders. Any such notice shall be deemed to have been given on the day on which the said notice was given to the Depositary or a clearing system, and (if applicable) its participants.
Listing
The Issuer may apply to list any particular issue of debt securities on a securities exchange. If the Issuer chooses to do so, the Issuer would disclose the listing of such debt securities in the applicable prospectus supplement. The Issuer is under no obligation to list any issued debt securities and may in fact not list any.
Consent to Service
Each of the non-U.S. Guarantors and BATIF has initially designated BATCAP as their authorized agent for service of process in any related proceeding arising out of or relating to the performance of its obligations under the 2019 and 2020 Indentures and the Notes brought in any state or federal court in the Borough of Manhattan, the City of New York, and will irrevocably submit (but for those purposes only) to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding.
Governing Law
Each Indenture, any applicable supplemental indentures, the Notes and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws thereof.
Regarding the Trustee and Agents
Citibank, N.A. is the trustee under the 2019 and 2020 Indentures. Citibank, N.A. is appointed by the Issuer to act as registrar, transfer agent, calculation agent and initial paying agent for the Notes, unless another paying agent is appointed prior to the time the Notes are first issued. The address of Citibank, N.A., as paying agent, is Citibank, N.A., Agency & Trust, 388 Greenwich Street, New York, NY 10013. From time to time, Citibank, N.A. and its respective affiliates perform various other services for the BAT Group and its affiliates (including acting as a lender under one or more of the BAT Group’s lending facilities from time to time). An affiliate of Citibank, N.A., Citibank, N.A., London Branch, is the issuing and principal paying agent under both the BAT Group’s EMTN Programme and the BAT Group’s euro commercial paper program. Citibank, N.A. is the issuing and principal paying agent under the BAT Group’s U.S. commercial paper program. Citibank, N.A. is paying agent and registrar for BATIF, RAI and R.J. Reynolds Tobacco Company (RJRT) notes issued pursuant to Rule 144A under the Securities Act, BATIF, RAI and RJRT notes issued pursuant to Regulation S under the Securities Act and BATCAP, BATIF, RAI and RJRT notes registered with the SEC.
Each Indenture contains limitations on the rights of the Trustee, if it becomes a creditor of either Issuer or any Guarantor, to obtain payment of claims in some cases, or to realize on property received in respect of any of these claims as security or otherwise. The Trustee is permitted to engage in other transactions. However, if the Trustee acquires any conflicting interest (as defined in the TIA), it must either eliminate its conflict within 90 days or resign.
Each Indenture provides that except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in such Indenture. During the continuance of an Event of Default of which the Trustee has received written notice, the Trustee will exercise such of the rights and powers vested in it under the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
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DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
ISSUED UNDER THE 2017 INDENTURE
The following is a summary of the material provisions of the 2017 Indenture (as described below). We urge you to read the 2017 Indenture and any applicable supplemental indenture in their entirety because such Indenture and applicable supplemental indenture, not this summary, define your rights as a holder of the debt securities. A copy of the 2017 Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part and copies of the 2017 Indenture and any supplemental indenture will be available upon request to BAT at the address indicated under the section entitled “Where You Can Find More Information; Incorporation By Reference” of this prospectus. Any capitalized term used herein but not defined shall have the meaning assigned to such term in the 2017 Indenture or under “—Certain Definitions”.
The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the 2017 Indenture, any applicable supplemental indenture, and those terms made a part of the 2017 Indenture and/or any applicable supplemental indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”), as in effect on the date of the closing of the offering of the applicable debt securities.
General
The debt securities issued under the 2017 Indenture will be issued by B.A.T Capital Corporation (“BATCAP” or the “Issuer”). The aggregate principal amount of Notes (as defined below) issuable under the 2017 Indenture is unlimited. The Issuer may, from time to time, without notice to or the consent of the holders of the Notes, “reopen” any series of the Notes and create and issue additional notes (the “Additional Notes”) having identical terms and conditions as the 2.764% Notes, the 3.222% Notes, the 3.557% Notes, the 4.390% Notes, the 4.540% Notes and the Floating Rate Notes (each as defined below), as the case may be (in all respects except for the issue date, issue price, the payment of interest accruing prior to the issue date of such Additional Notes and/or the first payment of interest following the issue date of such Additional Notes) so that the Additional Notes are consolidated and form a single series of notes with the Notes, as the case may be (a “Further Issue”), provided that if the Additional Notes are not fungible with the Notes of the relevant series for United States federal income tax purposes, the Additional Notes will have separate CUSIPs, ISINs, or other identifying numbers. The applicable prospectus supplement will indicate for each Further Issue of Notes, which series of Notes is being re-opened, the aggregate principal amount of Notes to be issued, the issue date, the issue price, payment of interest accruing prior to the issue date and/or the first payment of interest following the issue date of such Further Issue of Notes.
On August 15, 2017, BATCAP issued, among other debt securities, $2,250,000,000 aggregate principal amount of unregistered 2.764% Notes due 2022 (the “Unregistered 2.764% Notes”), $2,500,000,000 aggregate principal amount of unregistered 3.222% Notes due 2024 (the “Unregistered 3.222% Notes”), $3,500,000,000 aggregate principal amount of unregistered 3.557% Notes due 2027 (the “Unregistered 3.557% Notes”), $2,500,000,000 aggregate principal amount of unregistered 4.390% Notes due 2037 (the “Unregistered 4.390% Notes”), $2,500,000,000 aggregate principal amount of unregistered 4.540% Notes due 2047 (the “Unregistered 4.540% Notes”) and $750,000,000 aggregate principal amount of unregistered floating rate notes due 2022 (the “Unregistered Floating Rate Notes”).
On October 22, 2018, BATCAP filed with the Securities and Exchange Commission a registration statement on Form F-4 relating to an offer by BATCAP (the “Exchange Offer”) to exchange, among other debt securities, (1) new 2.764% Notes due 2022 (the “2.764% Notes”), which are registered under the Securities Act, for any of its outstanding Unregistered 2.764% Notes; (2) new 3.222% Notes due 2024 (the “3.222% Notes”), which are registered under the Securities Act, for any of its outstanding Unregistered 3.222% Notes; (3) new 3.557% Notes due 2027 (the “3.557% Notes”), which are registered under the Securities Act, for any of its outstanding Unregistered 3.557% Notes; (4) new
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4.390% Notes due 2037 (the “4.390% Notes”), which are registered under the Securities Act, for any of its outstanding Unregistered 4.390% Notes; (5) new 4.540% Notes due 2047 (the “4.540% Notes” and, together with the 2.764% Notes, the 3.222% Notes, the 3.557% Notes and the 4.390% Notes, the “Fixed Rate Notes”), which are registered under the Securities Act, for any of its outstanding Unregistered 4.540% Notes and (6) new Floating Rate Notes due 2022 (the “Floating Rate Notes”), which are registered under the Securities Act, for any of its outstanding Unregistered Floating Rate Notes.
The Exchange Offer expired on November 21, 2018 and, among other debt securities, (1) $2,249,525,000 in aggregate principal amount of the Unregistered 2.764% Notes; (2) $2,477,391,000 in aggregate principal amount of the Unregistered 3.222% Notes; (3) $3,493,054,000 in aggregate principal amount of the Unregistered 3.557% Notes; (4) $2,499,700,000 in aggregate principal amount of the Unregistered 4.390% Notes; (5) $2,498,262,000 in aggregate principal amount of the Unregistered 4.540% Notes and (6) $743,066,000 in aggregate principal amount of the Unregistered Floating Rate Notes were validly tendered and not validly withdrawn prior to the expiration of the Exchange Offer. Settlement of the Exchange Offer occurred on November 23, 2018.
Together, the Fixed Rate Notes and the Floating Rate Notes are referred to as the “Notes”, and each series of the Fixed Rate Notes and Floating Rate Notes is referred to as a “series” of Notes. Unless the context otherwise requires, in this “Description of Debt Securities and Guarantees Related to the 2017 Indenture” references to the “Notes” or a specific series of Notes includes previously issued and outstanding Notes or Notes of such series, as applicable, as well as any Additional Notes or Notes of such series, as applicable, issued from time to time.
The 2.764% Notes and the Floating Rate Notes will mature on August 15, 2022. The 3.222% Notes will mature on August 15, 2024. The 3.557% Notes will mature on August 15, 2027. The 4.390% Notes will mature on August 15, 2037. The 4.540% Notes will mature on August 15, 2047.
The previously issued and outstanding Notes were issued in registered form and are treated as six separate series of debt securities under an indenture dated as of August 15, 2017 (as supplemented by the supplemental indenture no. 1, dated as of September 28, 2018, and as further amended or supplemented from time to time, the “2017 Indenture”). Any Additional Notes issued under the Indenture will be issued in registered form and will be issued as part of one of the six series of Notes originally issued and outstanding under the Indenture. The Indenture is by and among BATCAP, as Issuer, British American Tobacco p.l.c. (“BAT” or the “Parent Guarantor”), B.A.T. International Finance p.l.c. (“BATIF”), British American Tobacco Holdings (The Netherlands) B.V. (“BATHTN”), B.A.T. Netherlands Finance B.V. (“BATNF” and, together with BATHTN, the “Dutch Guarantors”), and, unless its guarantee is released in accordance with the Indenture, Reynolds American Inc. (“RAI”), each as a guarantor, Wilmington Trust, National Association, as trustee (the “Trustee”), and Citibank, N.A., London Branch as paying agent, registrar, transfer agent and calculation agent. Citibank, N.A., New York Branch replaced Citibank, N.A., London Branch as paying agent, registrar, transfer agent and calculation agent on October 16, 2018 (Citibank, N.A., New York Branch, in such capacity, “Paying Agent”, “Registrar”, “Transfer Agent” or “Calculation Agent”, respectively).
Each entity that provided a guarantee in respect of the Notes, and that will provide a guarantee of future issuances of Notes, is referred to herein as a “Guarantor”. In this “Description of the Notes and the Guarantees Issued Under the 2017 Indenture”, the terms “holder”, “Noteholder” and other similar terms refer to a “registered holder” of Notes, and not to a beneficial owner of a book-entry interest in any Notes.
Principal, Maturity and Interest
The obligations of the Issuer under the Notes and Indenture are, or will be in the case of additional issuances of Notes, fully and unconditionally guaranteed on a senior and unsecured basis by each of the Parent Guarantor, the Dutch Guarantors, BATIF and RAI.
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Unless previously purchased or redeemed by the Issuer, and cancelled, the principal amount of each respective series of Notes shall mature on:
| Series of Notes |
Maturity date | |||
| 2.764% Notes |
August 15, 2022 | |||
| 3.222% Notes |
August 15, 2024 | |||
| 3.557% Notes |
August 15, 2027 | |||
| 4.390% Notes |
August 15, 2037 | |||
| 4.540% Notes |
August 15, 2047 | |||
| Floating Rate Notes |
August 15, 2022 | |||
In an amount equal, in each case, to their outstanding principal amount, with accrued and unpaid interest to such date.
Interest
Fixed Rate Notes
The previously issued and outstanding Fixed Rate Notes bear, or will bear in the case of additional Fixed Rate Notes, interest per annum as follows:
| Series of Fixed Rate Notes |
Interest rate per annum |
|||
| 2.764% Notes |
2.764 | % | ||
| 3.222% Notes |
3.222 | % | ||
| 3.557% Notes |
3.557 | % | ||
| 4.390% Notes |
4.390 | % | ||
| 4.540% Notes |
4.540 | % | ||
The 2.764% Notes, the 3.222% Notes, the 3.557% Notes, the 4.390% Notes and the 4.540% Notes bear, and any additional 2.764% Notes, 3.222% Notes, 3.557% Notes, 4.390% Notes and 4.540% Notes will bear, interest payable semi-annually in arrear on February 15 and August 15 of each year (an “Interest Payment Date”) until their respective maturity date, unless previously purchased or redeemed by BATCAP, to the person in whose name any 2.764% Note, 3.222% Note, 3.557% Note, 4.390% Note or 4.540% Note, as applicable, is registered at the close of business on the 15th calendar day preceding each Interest Payment Date, whether or not such day is a Business Day (each, a “Record Date”) notwithstanding any transfer or exchange of such Notes subsequent to the Record Date and prior to such Interest Payment Date, except that, if and to the extent BATCAP shall default in the payment of the interest due on such Interest Payment Date, and the applicable grace period shall have expired, such defaulted interest may at the option of BATCAP be paid to the persons in whose names the outstanding Notes are registered at the close of business on a subsequent Record Date (which shall not be less than five Business Days prior to the date of payment of such defaulted interest) established by notice sent by or on behalf of the Issuer to the holders (which term means registered holders) of the 2.764% Notes, 3.222% Notes, 3.557% Notes, 4.390% Notes or 4.540% Notes, as applicable, not less than 15 days preceding such subsequent Record Date. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months, or in the case of an incomplete month, the number of days elapsed. If the date on which any interest payment or principal payment is to be made is not a Business Day, such payment will be made on the next day which is a Business Day, without any further interest or other amounts being paid or payable in connection therewith. A “Business Day” refers to any day which is not, in London or New York City, or any other place of payment, a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized or obligated by law or regulation to close.
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Floating Rate Notes
Interest on the Floating Rate Notes is payable quarterly in arrear on February 15, May 15, August 15 and November 15 of each year. Interest is, or will be in the case of additional issuances, paid to the person in whose name such Note is registered at the close of business on the second Business Day that precedes the related interest payment date. The Floating Rate Notes bear interest at a rate per annum equal to LIBOR plus 0.88% which will be reset as described below.
If any interest payment date (other than a redemption date or other maturity date) for the Floating Rate Notes would fall on a day that is not a Business Day, the interest payment date will be postponed to the next succeeding business day, except that if that Business Day falls in the next succeeding calendar month, the interest payment date will be the immediately preceding Business Day, in each case with interest accruing to but excluding the date of payment. If a redemption date or other maturity date for the Floating Rate Notes or the Floating Rate Notes would fall on a day that is not a Business Day, the payment of interest and principal will be made on the next succeeding Business Day, and no interest will accrue or be payable unless the Issuer fails to make payment on such next succeeding Business Day.
The rate of interest on the Floating Rate Notes will be reset quarterly on February 15, May 15, August 15 and November 15 of each year (collectively, the “Interest Reset Dates” and each, an “Interest Reset Date”). If any Interest Reset Date would fall on a day that is not a Business Day, the Interest Reset Date will be postponed to the next succeeding Business Day, except that if that Business Day falls in the next succeeding calendar month, the Interest Reset Date will be the immediately preceding Business Day.
The Calculation Agent for the Floating Rate Notes is the Paying Agent, or its successor appointed by the Issuer. The Calculation Agent will determine the interest rate for each Interest Reset Date by reference to LIBOR on the second London banking day preceding the applicable Interest Reset Date, which is referred to herein as an “Interest Determination Date”.
Promptly upon such determination, the Calculation Agent will notify the Issuer and the Trustee of the new interest rate. Upon the request of the holder of any Floating Rate Note, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date.
“London banking day” means any day on which dealings in U.S. dollars are transacted in the London interbank market. “LIBOR” will be determined by the Calculation Agent in accordance with the following provisions:
| · | With respect to any Interest Determination Date, LIBOR will be the rate (expressed as a percentage per annum) for deposits in U.S. dollars having a maturity of three months commencing on the related Interest Reset Date that appears on Reuters Page LIBOR01 as of 11:00 a.m. (London time) on that Interest Determination Date. If no such rate appears, then LIBOR, in respect of that Interest Determination Date will be determined in accordance with the following provisions. |
| · | With respect to an Interest Determination Date on which no rate appears on Reuters Page LIBOR01, the Calculation Agent will request the principal London offices of each of four major reference banks in the London interbank market (which may include affiliates of the initial purchasers of the Unregistered Notes), as selected by the Issuer, to provide its offered quotation (expressed as a percentage per annum) for deposits in U.S. dollars for the period of three months, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 a.m. (London time) on that Interest Determination Date and in a principal amount that is representative for a single transaction in U.S. dollars in that market at that time. If at least two quotations are provided, then LIBOR on that Interest Determination Date will be the arithmetic mean of those quotations. |
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| · | If fewer than two quotations are provided, then LIBOR on the Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. (New York City time) on the Interest Determination Date by three major banks in New York City (which may include affiliates of the initial purchasers of the Unregistered Notes) selected by the Issuer for loans in U.S. dollars to leading European banks, for a period of three months, commencing on the related Interest Reset Date, and in a principal amount that is representative for a single transaction in U.S. dollars in that market at that time. If at least two such rates are so provided, LIBOR on the Interest Determination Date will be the arithmetic mean of such rates. |
| · | If fewer than two such rates are so provided, LIBOR on the Interest Determination Date will be LIBOR in effect with respect to the immediately preceding Interest Determination Date. “Reuters Page LIBOR01” means the display that appears on Reuters (or any successor service) on page LIBOR01 (or any page as may replace such page on such service) for the purpose of displaying London interbank offered rates of major banks for U.S. dollars. |
Interest on Floating Rate Notes will be calculated on the basis of a 360-day year and the actual number of days elapsed.
All percentages resulting from any calculation of any interest rate for the Floating Rate Notes will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upward (e.g., 5.876545% (or ..05876545) would be rounded to 5.87655% (or .0587655)), and all dollar amounts would be rounded to the nearest cent with one-half cent being rounded upward.
The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by applicable law and in no event be less than 0.00%.
All calculations made by the Calculation Agent for the purposes of calculating interest on the Floating Rate Notes will be conclusive and binding on the holders and the Issuer, absent manifest error.
Form and Denomination
The previously issued and outstanding Notes were, and any Additional Notes will be, issued in fully registered form and only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. The previously issued and outstanding Notes were, and any Additional Notes will be, issued initially as Global Notes.
Status of the Notes and Guarantees
The previously issued and outstanding Notes are, and any Additional Notes will be, unsecured and unsubordinated obligations of the Issuer and rank, and any Additional Notes will rank, pari passu in right of payment among themselves and with all other direct, unsecured and unsubordinated obligations of the Issuer (except those obligations preferred by statute or operation of law). Each Guarantor has fully and unconditionally guaranteed, or with respect to any Additional Notes will fully and unconditionally guarantee, on a senior, unsecured basis, the due and punctual payment (and not collectability) of the principal of and interest on the Notes (and the payment of additional amounts described under “—Additional Amounts” below) and other obligations under the Indenture when and as the same shall become due and payable, whether at stated maturity, by declaration of acceleration, call for redemption or otherwise. Each Guarantee is, or with respect to any Additional Notes will be, an unsecured and unsubordinated obligation of the respective Guarantor and ranks, or with respect to any Additional Notes will rank, pari passu in right of payment with all other direct, unsecured and unsubordinated obligations of such Guarantor (except those obligations preferred by statute or operation of law). The Issuer and each Guarantor are, or with respect to any Additional Notes will be, subject to a negative pledge with respect to certain types of indebtedness, which are discussed in “—Covenants of the Issuer and the Guarantors—Negative Pledge” below.
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Guarantees
Release
The Indenture provides that, without the consent of the Trustee or the Noteholders, a Guarantor that is a subsidiary of the Parent Guarantor (a “Subsidiary Guarantor”), other than BATIF and the Dutch Guarantors, will automatically and unconditionally be released from all obligations under its Guarantee, and such Guarantee shall thereupon terminate and be discharged and of no further force or effect, in the event that (1) its guarantee of all then outstanding notes issued under the EMTN Programme is released or (2) at substantially the same time its Guarantee of the Notes is terminated, the Subsidiary Guarantor is released from all obligations in respect of indebtedness for borrowed money for which such Subsidiary Guarantor is an obligor (as a guarantor or borrower). For purposes of this paragraph, the amount of a Subsidiary Guarantor’s indebtedness for borrowed money shall not include (A) the Notes issued pursuant to the Indenture, (B) any other debt the terms of which permit the termination of such Subsidiary Guarantor’s guarantee of such debt under similar circumstances, as long as such Subsidiary Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the Notes, (C) any debt that is being refinanced at substantially the same time that the guarantee of the Notes is being released, provided that any obligations of the relevant Subsidiary Guarantor in respect of the debt that is incurred in the refinancing shall be included in the calculation of the relevant Subsidiary Guarantor’s indebtedness for borrowed money and (D) for the avoidance of doubt, any debt in respect of which such Subsidiary Guarantor is an obligor (as a guarantor or borrower) (i) between or among the Parent Guarantor and any subsidiary or subsidiaries thereof or (ii) between or among any subsidiaries of the Parent Guarantor.
As of the date of this prospectus, RAI is the only Subsidiary Guarantor to which the above provision is relevant. Under the EMTN Programme, a Subsidiary Guarantor’s guarantee is released if at any time the aggregate amount of indebtedness for borrowed money for which the Subsidiary Guarantor is an obligor does not exceed 10% of the outstanding long term debt of BAT as reflected in the balance sheet included in BAT’s most recent publicly released interim or annual consolidated financial statements, as evidenced by a certificate to such effect addressed to the trustee under the EMTN Programme and signed by a director of BAT.
Additional Amounts
The Issuer or, if applicable, each Guarantor will make payments of, or in respect of, principal, premium (if any) and interest on the Notes, or any payment pursuant to the applicable Guarantee, as the case may be, without withholding or deduction for or on account of any present or future tax, levy, impost or other similar governmental charge whatsoever imposed, assessed, levied or collected (“Taxes”) by or for the account of the United States, the United Kingdom (in the case of a payment by the Parent Guarantor or BATIF), The Netherlands (in the case of a payment by a Dutch Guarantor) or any other jurisdiction through which payment is made by or on behalf of the Issuer or, if applicable, such Guarantor (or any political subdivision thereof or any authority thereof having the power to tax) (a “Relevant Taxing Jurisdiction”), unless such withholding or deduction is required by law.
If the Issuer or, if applicable, any Guarantor, is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, the Issuer or, if applicable, such Guarantor, will pay to the holder of a Note such additional amounts (“Additional Amounts”) as may be necessary so that the net amount received by such holder will not be less than the amount such holder would have received if such Taxes had not been withheld or deducted; provided, however, that amounts with respect to any United States Tax shall be payable only to holders that are not United States persons (within the meaning of the Code); and provided further, that neither the Issuer nor such Guarantor shall be required to pay any Additional Amounts for or on account of:
| (a) | any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that the holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such holder, if such holder is |
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| an estate, trust, partnership or corporation) is or has been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Guarantee, as the case may be; |
| (b) | any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period; |
| (c) | any estate, inheritance, gift, sales, transfer, personal property or similar Taxes; |
| (d) | any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee; |
| (e) | any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the holder or the beneficial owner of the applicable Note or Guarantee to (A) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the holder or the beneficial owner or its connection with the Relevant Taxing Jurisdiction or (B) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in either case, compliance is required by statute, regulation, relevant income tax treaty or administrative practice of the Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes; |
| (f) | any Taxes imposed by reason of the holder or the beneficial owner of the applicable Note or Guarantee being or having been considered a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code (or any amended or successor provisions); |
| (g) | any Taxes imposed on interest received by a 10-percent shareholder of the Issuer within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Code (or any amended or successor provisions); |
| (h) | any backup withholding imposed pursuant to Section 3406 of the Code (or any amended or successor provisions); |
| (i) | any Taxes imposed pursuant to Section 871(h)(6) or Section 881(c)(6) of the Code (or any amended or successor provisions); |
| (j) | any Taxes imposed by reason of the holder or the beneficial owner of the applicable Note or Guarantee being or having been a personal holding company, passive foreign investment company or controlled foreign corporation for U.S. federal income tax purposes or a corporation that has accumulated earnings to avoid U.S. federal income tax; |
| (k) | any Taxes imposed or withheld pursuant to Sections 1471 through 1474 of the Code (or any amended or successor provisions), any Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements entered into in connection with the implementation thereof; or |
| (l) | any combination of the Taxes described in (a) through (k) above. |
In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or any premium or interest on, any of the applicable Notes or Guarantees to any holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such
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partnership, an interest holder in such limited liability company or a beneficial owner that would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the holder of the applicable Notes or Guarantees.
Unless otherwise stated, references in any context to the payment of principal of, and any premium or interest on, any Note, or any payment pursuant to the Guarantees, will be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
Redemption
The Fixed Rate Notes will be subject to optional redemption by the Issuer as described below under “—Optional Redemption”.
The Fixed Rate Notes and the Floating Rate Notes will be subject to optional redemption by the Issuer in the event of certain changes in tax laws applicable to payments in respect of the Notes as described below under “—Redemption for Tax Reasons”.
Optional Redemption
The Issuer may redeem the Fixed Rate Notes, in whole or in part, at the Issuer’s option, at any time and from time to time before the applicable Par Call Date, for all series of Fixed Rate Notes at a redemption price equal to the greater of (x) 100% of the principal amount of the Fixed Rate Notes to be redeemed and (y) as determined by the Independent Investment Banker (as defined below), the sum of the present values of the applicable Remaining Scheduled Payments (as defined below) discounted to the date of redemption (the “Redemption Date”) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed) at the Treasury Rate (as defined below) plus, in the case of each respective series of Fixed Rate Notes as follows:
| 2.764% Notes |
15 basis points | |||
| 3.222% Notes |
20 basis points | |||
| 3.557% Notes |
20 basis points | |||
| 4.390% Notes |
25 basis points | |||
| 4.540% Notes |
30 basis points |
together with, in each case, accrued and unpaid interest on the principal amount of the Fixed Rate Notes to be redeemed to, but excluding, the Redemption Date.
If the Issuer elects to redeem the 2.764% Notes, 3.222% Notes, 3.557% Notes, 4.390% Notes or the 4.540% Notes on or after the applicable Par Call Date (as defined below), the Issuer will pay an amount equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption.
In connection with such optional redemption the following defined terms apply:
| · | Comparable Treasury Issue means the United States Treasury security selected by the Independent Investment Banker that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to, the remaining term of the 2.764% Notes, 3.222% Notes, 3.557% Notes, 4.390% Notes or the 4.540% Notes, as the case may be, to the relevant Par Call Date. |
| · | Comparable Treasury Price means, with respect to any Redemption Date, (A) the average of the Reference Treasury Dealer Quotations for that Redemption Date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations or (B) if the Independent Investment Banker for the Fixed Rate Notes obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations. |
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| · | Independent Investment Banker means one of the Reference Treasury Dealers (as defined below) appointed by the Issuer to act as the “Independent Investment Banker”. |
| · | Par Call Date means (i) July 15, 2022 with respect to any 2.764% Notes (one month prior to the maturity date of the 2.764% Notes), (ii) June 15, 2024 with respect to any 3.222% Notes (two months prior to the maturity date of the 3.222% Notes), (iii) May 15, 2027 with respect to any 3.557% Notes (three months prior to the maturity date of the 3.557% Notes), (iv) February 15, 2037 with respect to any 4.390% Notes (six months prior to the maturity date of the 4.390% Notes) and (v) February 15, 2047 with respect to any 4.540% Notes (six months prior to the maturity date of the 4.540% Notes). |
| · | Reference Treasury Dealer means each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and HSBC Securities (USA) Inc. and their respective successors and two other nationally recognized investment banking firms that are Primary Treasury Dealers specified from time to time by the Issuer; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), the Issuer shall substitute therefor another nationally recognized investment banking firm that is a Primary Treasury Dealer. |
| · | Reference Treasury Dealer Quotation means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third Business Day immediately preceding that Redemption Date. |
| · | Remaining Scheduled Payments means, with respect to each Fixed Rate Note to be redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would be due from and including the related Redemption Date, but for such redemption, to but excluding the relevant Par Call Date; provided, however, that if that Redemption Date is not an Interest Payment Date with respect to such Fixed Rate Notes, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to that Redemption Date. |
| · | Treasury Rate means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity (computed as of the third Business Day immediately preceding that Redemption Date) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that Redemption Date. |
Notice of any optional redemption will be given in accordance with “—Notice” below at least 10 days but not more than 30 days before the Redemption Date to each holder of the Fixed Rate Notes to be redeemed.
If less than all the Fixed Rate Notes are to be redeemed, in the case of a redemption at the Issuer’s option as discussed in this section, the Fixed Rate Notes to be redeemed shall be selected in accordance with applicable procedures of DTC.
Redemption for Tax Reasons
Each series of Notes is also redeemable by the Issuer, in whole but not in part, at 100% of the principal amount of such Notes plus any accrued and unpaid interest to the applicable Redemption Date (including any Additional Amounts) at the Issuer’s option at any time prior to their maturity if, due to a Change in Tax Law (as defined below): (i) the Issuer or a Guarantor, in accordance with the terms of the applicable Notes or applicable Guarantee, has, or would, become obligated to pay any Additional Amounts to the holders or beneficial owners of the Notes of that series; (ii) in the case of a Guarantor,
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(A) the Parent Guarantor would be unable, for reasons outside its control, to procure payment by the Issuer or any other Guarantor or (B) the procuring of such payment by the Issuer and each such other Guarantor would be subject to withholding taxes imposed by a Relevant Taxing Jurisdiction; and (iii) such obligation cannot otherwise be avoided by such Guarantor, the Parent Guarantor or the Issuer, taking reasonable measures available to it. In such case, the Issuer may redeem the applicable Notes upon not less than 30 nor more than 60 days’ notice as provided in “—Notice” below, at 100% of the principal amount of such Notes plus accrued and unpaid interest to the Redemption Date (including Additional Amounts); provided, that, (a) no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or such Guarantor, as the case may be, would be obligated to pay any such Additional Amounts in respect of the applicable Notes or applicable Guarantee, as applicable, then due and (b) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. The Issuer’s right to redeem the applicable Notes shall continue as long as the Issuer or a Guarantor is obligated to pay such Additional Amounts, notwithstanding that the Issuer or such Guarantor, as the case may be, shall have made payments of Additional Amounts. Prior to the giving of any such notice of redemption, the Issuer must deliver to the Trustee: (i) an officer’s certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred; and (ii) an opinion of independent counsel or an independent accountant of recognized standing, selected by the Issuer or any Guarantor, as applicable, with respect to tax matters of the Relevant Taxing Jurisdiction to the effect that the Issuer or such Guarantor has, or would, become obligated to pay such Additional Amounts as a result of such Change in Tax Law.
For the purposes hereof, “Change in Tax Law” shall mean: (i) any changes in, or amendment to, any law of a Relevant Taxing Jurisdiction (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by the Relevant Taxing Jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after August 15, 2017; or (ii) if the Issuer or a Guarantor consolidates, merges, amalgamates or combines with, or transfers or leases its assets substantially as an entirety to, any person that is incorporated or tax resident under the laws of any jurisdiction other than a Relevant Taxing Jurisdiction (a “successor”) and as a consequence thereof such person becomes the successor obligor to the Issuer or such Guarantor in respect of Additional Amounts that may become payable (in which case, for purposes of this redemption provision, all references to the Issuer or such Guarantor shall be deemed to be and include references to such person), any change in, or amendment to, any law of the jurisdiction of organization or tax residence of such successor, or the jurisdiction through which payments will be made by the successor, or any political subdivision or taxing authority thereof or thereon for purposes of taxation (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by such jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the date of such consolidation, merger, amalgamation, combination or other transaction.
General
Upon presentation of any Fixed Rate Note redeemed in part only, the Issuer will execute and the Paying Agent will authenticate and deliver (or cause to be transferred by book-entry) to the holder thereof, at the expense of the Issuer, a new Fixed Rate Note or Fixed Rate Notes, of authorized denominations, in principal amount equal to the unredeemed portion of the Note so presented.
On or before any Redemption Date (as defined above), the Issuer shall deposit with the Paying Agent money sufficient to pay the redemption price of and accrued and unpaid interest on the Notes to be redeemed on such date. The redemption price shall be calculated by the Independent Investment Banker and the Issuer, and the Trustee and any agent shall be entitled to rely on such calculation.
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On and after any Redemption Date, interest will cease to accrue on the Notes or any portion thereof called for redemption.
Reacquisition
There is no restriction on the ability of the Issuer to purchase or repurchase Notes, provided, that any Notes so repurchased shall be cancelled and not reissued.
Sinking Fund
There is no provision for a sinking fund for any of the Notes.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the Notes and the Indenture. You should refer to the Notes and the Indenture for the full definition of all defined terms as well as any other terms used herein for which no definition is provided.
“EMTN Programme” means the Euro Medium Term Note Programme to which BATIF, BATCAP and BATNF are parties as the issuers under the programme and notes issued thereunder are guaranteed by the Parent Guarantor, each of the issuers thereunder (except when it is the relevant issuer) and RAI, as amended from time to time.
“Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Quoted Borrowing” means any indebtedness which: (a) is represented by notes, debentures or other securities issued otherwise than to constitute or represent advances made by banks and/or other lending institutions; (b) is denominated, or confers any right to payment of principal and/or interest, in or by reference to any currency other than the currency of the country in which the issuer of the indebtedness has its principal place of business or is denominated, or confers any right to payment of principal and/or interest, in or by reference to the currency of such country but is placed or offered for subscription or sale by or on behalf of, or by agreement with, the issuer of such indebtedness as to over 20% outside such country; and (c) at its date of issue is, or is intended by the issuer of such indebtedness to become, quoted, listed, traded or dealt in on any stock exchange or other organized and regulated securities market in any part of the world.
Covenants of the Issuer and the Guarantors
Negative Pledge
The Indenture provides that so long as any of the applicable Notes remains outstanding, neither the Issuer nor any Guarantor will secure or allow to be secured any Quoted Borrowing or any payment under any guarantee by any of them of any Quoted Borrowing by any mortgage, charge, pledge or lien (other than arising by operation of law) upon any of its undertaking or assets, whether present or future, unless at the same time the same mortgage, charge, pledge or lien is extended, or security which is not materially less beneficial to the holders of the applicable Notes than the security given as aforesaid or which shall be approved by consent of the holders of not less than 75% in aggregate principal amount of the applicable Notes at the time outstanding is extended or created (as the case may be), to secure equally and ratably the principal of, and interest on, and all other payments (if any) in respect of the applicable Notes.
Limitation on Mergers, Consolidations, Amalgamations and Combinations
So long as any of the applicable Notes remain outstanding, neither the Issuer nor any Guarantor may consolidate with or merge into any other person or sell, convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any person (other than any sale or conveyance
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by way of a lease in the ordinary course of business), unless: (i) in the case of the Issuer, any successor person assumes the Issuer’s obligations on the applicable Notes and under the Indenture and, in the case of any Guarantor, any successor person assumes such Guarantor’s obligations on the applicable Guarantee and under the Indenture; (ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; (iii) such successor person is organized under the laws of the United States, the United Kingdom, The Netherlands or any other country that is a member of the Organization for Economic Cooperation and Development as of the date of such succession; (iv) such successor person agrees to pay any Additional Amounts imposed by the jurisdiction in which such successor person is incorporated or otherwise a resident for tax purposes or through which payments are made and resulting therefrom or otherwise; and (v) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer or any Guarantor would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of the Issuer or a Guarantor which would not be permitted by the applicable Notes or under the Indenture, the Issuer or any Guarantor or such successor person, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
The limitation on mergers, consolidations, amalgamations and combinations contained in this section “—Limitation on Mergers, Consolidations, Amalgamations and Combinations” shall not apply to any consolidation, merger, amalgamation or combination in which the Issuer or applicable Guarantor is the surviving corporation except that, in such case, the provisions of (ii) and (v) above shall apply such that: (x) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (y) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer or any Guarantor would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of the Issuer or a Guarantor which would not be permitted by the applicable Notes or under the Indenture, the Issuer or any Guarantor, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
The Indenture does not contain covenants or other provisions to afford protection to holders of the Notes in the event of a highly leveraged transaction or a change in control of the Issuer or any Guarantor except as provided above.
Upon certain mergers or consolidations involving the Issuer or a Guarantor, or upon certain sales or conveyances of the properties of the Issuer or a Guarantor, the obligations of the Issuer or such Guarantor, under the applicable Notes or the applicable Guarantee, shall be assumed by the person formed by such merger or consolidation or which shall have acquired such property and upon such assumptions such person shall succeed to and be substituted for the Issuer or such Guarantor, as the case may be, and then the Issuer or such Guarantor will be relieved from all obligations under the Notes and the applicable Guarantee, as the case may be. The terms “Issuer” and “Guarantor”, as used in the Notes and the Indenture, also refer to any such successors or assigns so substituted.
Although there is a limited body of case law interpreting the phrase “entirety or substantially as an entirety”, there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances, there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of “entirety or substantially as an entirety” of the Issuer’s assets and its subsidiaries taken as a whole.
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Events of Default
The following will be Events of Default (each an “Event of Default”) with respect to the applicable Notes:
| (a) | Non-Payment: default is made in the payment of: (a) any installment of interest (excluding Additional Amounts) upon any applicable Note as and when the same shall become due and payable, and continuance of such default for a period of 14 days or more; (b) applicable Additional Amounts as and when the same shall become due and payable, and continuance of such default for a period of 14 days; or (c) all or any part of the principal or premium, if any, of any applicable Note as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise, and continuance of such default for three days; |
| (b) | Breach of Other Obligations: the Issuer or any Guarantor does not perform or comply with any one or more of its other obligations under the applicable Notes or the Indenture (other than those described in paragraph (i) above) which is not remedied within 30 days after written notice of such default shall have been given to the Issuer by the Trustee or to the Issuer and the Trustee by the holders of at least 25% of the outstanding principal amount of the Notes; |
| (c) | Cross-Default: (a) any other present or future indebtedness for borrowed money of the Issuer or any Guarantor, other than the Notes issued by the Issuer, becomes due and payable prior to its stated maturity by reason of any default or event of default in respect thereof by the Issuer or any Guarantor and remains unpaid; or (b) any such indebtedness for borrowed money is not paid when due or, as the case may be, within any applicable grace period; or (c) the Issuer or any Guarantor fails to pay when due and called upon (after the expiry of any applicable grace period) any amount payable by it under any present or future guarantee for, or indemnity in respect of, any indebtedness for borrowed money and which remains unpaid; provided that (x) payment of the indebtedness for borrowed money is not being contested in good faith and in accordance with legal advice or (y) the aggregate amount of the indebtedness for borrowed money, guarantees and indemnities in respect of which one or more of the events mentioned above in (a), (b) and (c) has or have occurred and is or are continuing, equals or exceeds £750 million or its equivalent in any other currency of the indebtedness for borrowed money or, if greater, 1.25% of the Total Equity of the Parent Guarantor, as set out in the “Total Equity” line item in the most recent consolidated group balance sheet of the Parent Guarantor and its subsidiaries in the Parent Guarantor’s most recent Annual Report; |
| (d) | Cessation of Guarantees: any Guarantee ceases to be in full force and effect (except as contemplated by the terms of the Indenture) or any Guarantor denies or disaffirms in writing its obligations under the Indenture or Guarantee; |
| (e) | Enforcement Proceedings: a distress or execution or other legal process is levied or enforced against or an encumbrancer takes possession of or a receiver, administrative receiver or other similar officer is appointed of the whole or a part of the assets of the Issuer or any Guarantor which is substantial in relation to the BAT Group taken as a whole and is not discharged, stayed, removed or paid out within 45 days after such execution or appointment; |
| (f) | Security Enforced: any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the Issuer or any Guarantor becomes enforceable and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, administrative receiver, manager or other similar person) against all or substantially all of the assets of the Issuer or any Guarantor and is not discharged within 45 days; |
| (g) | Insolvency: the Issuer or any Guarantor is insolvent or bankrupt or unable to pay its debts (in respect of companies incorporated in England and Wales, within the meaning of Sections 123(1)(b) or (e) or Section 123(2) of the UK Insolvency Act 1986), stops, suspends or threatens to stop or suspend payment of all or a material part of its debts, proposes or makes a general assignment or an arrangement or composition (otherwise than for the purposes of reconstruction, |
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| amalgamation, reorganization, merger or consolidation or other similar arrangement) with or for the benefit of its creditors in respect of any of such debts or a moratorium is agreed or declared in respect of or affecting all or a material part of the debts of the Issuer; |
| (h) | Winding-up: an order is made or an effective resolution passed for the winding-up or dissolution or administration of the Issuer or any Guarantor, or the Issuer or any Guarantor shall apply or petition for a winding-up or administration order in respect of itself or ceases or threatens to cease to carry on all or substantially all of its business or operations, in each case except for the purpose of and followed by a reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement; or |
| (i) | Analogous Events: any event occurs that under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in any of the foregoing paragraphs (g) and (h). |
The Indenture provides that if an Event of Default occurs and is continuing with respect to the Notes of a series, then and in each and every such case (other than certain Events of Default specified in paragraphs (g), (h) and (i) above with respect to the Issuer or any Guarantor), unless the principal of all the applicable Notes shall have already become due and payable, the holders of not less than 25% in aggregate principal amount of the applicable Notes then outstanding, by notice in writing to the Issuer, each Guarantor and the Trustee, may declare the entire principal amount of all applicable Notes issued pursuant to the Indenture and interest accrued and unpaid thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, without any further declaration or other act on the part of any holder. If certain Events of Default described in paragraph (g), (h) or (i) above occur with respect to the Issuer and are continuing, the principal amount of and accrued and unpaid interest on all the applicable Notes issued pursuant to the Indenture shall become immediately due and payable, without any declaration or other act on the part of the Trustee or any holder. Under certain circumstances, the holders of a majority in aggregate principal amount of the applicable Notes then outstanding, by written notice to the Issuer, each Guarantor and the Trustee, may waive defaults and rescind and annul declarations of acceleration and its consequences, but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default or shall impart any right consequent thereon.
The holders of a majority in aggregate principal amount of the applicable Notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, subject to certain limitations to be specified in the Indenture, including providing to the Trustee indemnity or security satisfactory to it.
An Event of Default with respect to any series of Notes would not necessarily constitute an event of default with respect to the other series of Notes.
The Indenture also provides that no holder of any Notes governed by the Indenture may institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to the Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy under the Indenture (except suits for the enforcement of payment of overdue principal or interest) unless (1) the holder of a Note gives to the Trustee written notice of a continuing Event of Default, (2) the holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy, (3) the holder or holders of Notes offer, and if requested, provide to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or expense, (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity and (5) during such 60-day period the holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. The holder of a Note may not use the Indenture to prejudice the rights of another holder of a Note or to obtain a preference or priority over another holder of a Note (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such holders).
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Satisfaction and Discharge
The Indenture provides that BAT may, subject to satisfying certain conditions, discharge certain obligations to the holders of Notes of any series of Notes that have not already been delivered to the Trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the Trustee or Paying Agent, in trust, funds in an amount sufficient to pay the entire indebtedness on such series of Notes in respect of principal and premium, if any, and interest, if any, to the date of such deposit (if such Notes have become due and payable) or to the maturity thereof or redemption date, as the case may be, along with an officer’s certificate and an opinion of counsel stating that all conditions precedent relating to the satisfaction and discharge of the Indenture have been complied with.
Legal Defeasance and Covenant Defeasance
The Indenture provides that the Issuer will have the option either (a) to be deemed (together with each Guarantor) to have paid and discharged the entire indebtedness represented by, and obligations under, a series of Notes and the applicable Guarantees and to have satisfied all the obligations under the Indenture relating to the series of Notes (except for certain obligations, including those relating to the defeasance trust and obligations to register the transfer or exchange of Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain paying agencies) on the 91st day after the applicable conditions described below have been satisfied or (b) to cease (together with each Guarantor) to be under any obligation to comply with the covenant described above under “—Covenants of the Issuer and the Guarantors—Negative Pledge” and the condition relating to the absence of any events of default under “—Covenants of the Issuer and the Guarantors—Limitation on Mergers, Consolidations, Amalgamations and Combinations” under the Indenture, and non-compliance with such covenants and the occurrence of all events described above under “—Events of Default” will not give rise to any Event of Default under the Indenture, at any time after the applicable conditions described below have been satisfied.
In order to exercise either defeasance option, the Issuer must (i) deposit with the Trustee or Paying Agent, irrevocably in money or Government Obligations (as defined in the Indenture) funds sufficient in the opinion of a certified public accounting firm of national reputation for the payment of principal of and interest on the applicable outstanding Notes of any series to and including the Redemption Date irrevocably designated by the Issuer on or prior to the date of deposit of such money or Government Obligations, and must (ii) comply with certain other conditions, including delivering to the Trustee an opinion of U.S. counsel to the effect that beneficial owners of the applicable Notes will not recognize income, gain or loss for United States federal income tax purposes as a result of the exercise of such option and will be subject to United States federal income tax on the same amount and in the same manner and at the same time as would have been the case if such option had not been exercised and, in the case of clause (a) in the previous paragraph, which opinion must state that such opinion is based on a ruling received from or published by the United States Internal Revenue Service or on a change of law after August 15, 2017.
Modification and Waiver
Without Consent of Noteholders
The Indenture contains provisions permitting the Issuer, each Guarantor and the Trustee, without the consent of the holders of any of the applicable Notes at any time outstanding under such Indenture, from time to time and at any time, to enter into a supplemental indenture amending or supplementing such Indenture, the Notes or the Guarantees in order to:
| · | convey, transfer, assign, mortgage or pledge to the holders of the applicable Notes or any person acting on their behalf as security for the applicable Notes any property or assets; |
| · | evidence the succession of another person to the Issuer or any Guarantor, as the case may be, or successive successions, and the assumption by the successor person(s) of the |
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| covenants, agreements and obligations of the Issuer or any Guarantor, as the case may be, pursuant to the Indenture; |
| · | evidence and provide for the acceptance of appointment of a successor or successors to the Trustee and/or the Paying Agent, Transfer Agent, Calculation Agent and Registrar, as applicable; |
| · | add to the covenants of, or the restrictions, conditions or provisions applicable to, the Issuer and any Guarantor, as the case may be, such further covenants, restrictions, conditions or provisions as the Issuer and any Guarantor, as the case may be, shall consider to be for the protection of the holders of the applicable Notes issued pursuant to the Indenture, including to eliminate one or both prongs of the release provision under “—Release”, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default under the Indenture permitting the enforcement of all or any of the several remedies provided in the Indenture; provided that, in respect of any such additional covenant, restriction, condition or provision, such supplemental indenture may provide for a particular period of grace after default (which may be shorter or longer than that allowed in the case of other defaults) or may limit the remedies available to the Trustee upon such an Event of Default; |
| · | if required by the requirements of the SEC, comply with any requirements of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act of 1939, as amended (the “TIA”); |
| · | modify the restrictions on, and procedures for, resale and other transfers of the applicable Notes pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally; |
| · | cure any ambiguity or to correct or supplement any provision contained in the Indenture, the Notes, or the Guarantees which may be defective or inconsistent with any other provision contained therein or to make such other provision in regard to matters or questions arising under the Indenture, the Notes or the Guarantees as the Issuer, any Guarantor or the Trustee may deem necessary or desirable and which will not, in the opinion of the Issuer or any Guarantor, adversely affect the interests of the holders of the applicable Notes in any material respect; |
| · | issue an unlimited aggregate principal amount of Notes under the Indenture or to “reopen” the applicable series of Notes and create and issue Additional Notes having identical terms and conditions as the applicable Notes (or in all respects except for the issue date, issue price, payment of interest accruing prior to the issue date of such Additional Notes and/or the first payment of interest following the issue date of such Additional Notes) so that the Additional Notes are consolidated and form a single series with the outstanding applicable Notes; and |
| · | evidence the addition of any new Guarantor of the Notes and the Indenture, or the release of any Guarantor from its obligations with respect to the Notes and the Indenture, in either case pursuant to the terms of the Indenture. |
With Consent of Noteholders
The Indenture contains provisions permitting the Issuer, each Guarantor and the Trustee, with the consent of the holders of not less than a majority in aggregate principal amount of all series of the Notes affected by such supplemental indenture (voting as one class) at the time outstanding under the Indenture (including consents obtained in connection with a tender offer or exchange offer for the applicable Notes), from time to time and at any time, to enter into a supplemental indenture for the purpose of amending, waiving or otherwise modifying the provisions of the Indenture, the Notes and the Guarantees, or adding any provisions to or changing in any manner or eliminating any of the
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provisions of the applicable Notes or of modifying in any manner the rights of the holders of the applicable Notes; provided, that no such supplemental indenture may, without the consent of the holder of each of the Notes so affected:
| · | change the stated maturity of the applicable Note of, or the date for payment of any principal of, or installment of interest on, any applicable Note; or |
| · | reduce the principal amount of or the rate or amount of interest on any applicable Note or Additional Amounts payable with respect thereto or reduce the amount payable thereon in the event of redemption or default or change the method for determining the interest rate thereon; or |
| · | change the currency of payment of principal of or interest on any applicable Note or Additional Amounts payable with respect thereto; or change the obligation of the Issuer or any Guarantor, as the case may be, to pay Additional Amounts (except as otherwise permitted by such applicable Note); or |
| · | impair the right to institute suit for the enforcement of any such payment on or with respect to any applicable Note; or |
| · | reduce the percentage of the aggregate principal amount of the applicable Notes outstanding the consent of whose holders is required for any such supplemental indenture; or |
| · | reduce the aggregate principal amount of any applicable Note outstanding necessary to modify or amend the Indenture or any such Note or to waive any future compliance or past default or reduce the quorum requirements or the percentage of aggregate principal amount of any applicable Notes outstanding required for the adoption of any action at any meeting of holders of such Notes or to reduce the percentage of the aggregate principal amount of such Notes outstanding necessary to rescind or annul any declaration of the principal of all accrued and unpaid interest on any Note to be due and payable, |
provided, that no consent of any holder of any applicable Note shall be necessary to permit the Trustee, the Issuer and each of the Guarantors to execute supplemental indenture as described under “—Without Consent of Noteholders” above.
Any modifications, amendments or waivers to the Indenture or to the conditions of the applicable Notes will be conclusive and binding on all holders of the applicable Notes, whether or not they have consented to such action or were present at the meeting at which such action was taken, and on all future holders of the applicable Notes, whether or not notation of such modifications, amendments or waivers is made upon such Notes. Any instrument given by or on behalf of any holder of such a Note in connection with any consent to any such modification, amendment or waiver will be irrevocable once given and will be conclusive and binding on all subsequent registered holders of such Note.
Prescription
Under New York’s statute of limitations, any legal action upon the Notes in respect of interest or principal must be commenced within six years after the payment thereof is due.
Notice
Notices to holders of Notes will be given by first-class mail postage prepaid to the last addresses of such holders as they appear in the Notes register; provided, no such mailing shall be required if Notes are held through DTC, as such notice shall be given in accordance with applicable procedures of DTC. Such notices will be deemed to have been given on the date of such publication or mailing.
So long as any Global Notes representing the Notes are held in their entirety on behalf of a clearing system, or any of its participants, there may be substituted for the publication and mailing of notice to holders of Notes described above the delivery of the relevant notices to the clearing system, and its
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participants, for communication by them to the entitled accountholders. Any such notice shall be deemed to have been given on the day on which the said notice was given to the clearing system, and its participants.
Listing
Although we expect to obtain and maintain a listing for any Additional Notes on the New York Stock Exchange, we cannot assure you that our application will be approved or that any Additional Notes will be listed and, if listed, that such Notes will remain listed for the entire term of such Notes. We may obtain and maintain listing for the Notes on another exchange in our sole discretion.
Consent to Service
Each of the non-U.S. Guarantors has initially designated BATCAP as their authorized agent for service of process in any legal suit, action or proceeding arising out of or relating to the performance of its obligations under the Indenture and the Notes brought in any state or federal court in the Borough of Manhattan, the City of New York, and will irrevocably submit (but for those purposes only) to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding.
Governing Law
The Indenture, Notes and Guarantees shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws thereof.
Regarding the Trustee and Agents
Wilmington Trust, National Association is the trustee under the Indenture. Citibank, N.A., New York Branch has been appointed by the Issuer to act as registrar, transfer agent, calculation agent and paying agent for the Notes. Citibank, N.A., New York Branch replaced Citibank, N.A., London Branch as paying agent, registrar, transfer agent and calculation agent on October 16, 2018. From time to time, Citibank, N.A., London Branch, Citibank, N.A., New York Branch and their respective affiliates perform various other services for BAT and its affiliates. Citibank, N.A., London Branch is also the fiscal and paying agent under the fiscal and paying agency agreements for BAT’s outstanding 144A notes and the issuing and principal paying agent under BAT’s EMTN Programme.
The Indenture contains limitations on the rights of the trustee, if it becomes a creditor of either Issuer or any Guarantor, to obtain payment of claims in some cases, or to realize on property received in respect of any of these claims as security or otherwise. The Trustee is permitted to engage in other transactions. However, if the Trustee acquires any conflicting interest (as defined in the TIA), it must either eliminate its conflict within 90 days, apply to the SEC for permission to continue or resign.
The Indenture provides that except during the continuance of an Event of Default, the Trustee will perform only such duties as are specifically set forth in such Indenture. During the continuance of an Event of Default of which the Trustee has received written notice, the Trustee will exercise such of the rights and powers vested in it under the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
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We may sell the debt securities offered by this prospectus:
| · | through underwriters; |
| · | through dealers; |
| · | through agents; or |
| · | directly to other purchasers. |
The prospectus supplement relating to any offering will identify or describe:
| · | any underwriters, dealers or agents; |
| · | compensation of any underwriters, dealers or agents; |
| · | the net proceeds to us; |
| · | the purchase price of the debt securities; |
| · | the initial public offering price of the debt securities; and |
| · | any exchange on which the securities will be listed. |
Underwriters
If we use underwriters in the sale, they will acquire the debt securities for their own account and may resell the debt securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Unless we otherwise state in the applicable prospectus supplement, various conditions to the underwriters’ obligation to purchase the debt securities apply, and the underwriters will be obligated to purchase all of the debt securities contemplated in an offering if they purchase any of the debt securities. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
Dealers
If we use dealers in the sale, unless we otherwise indicate in the applicable prospectus supplement, we will sell debt securities to the dealers as principals. The dealers may then resell the debt securities to the public at varying prices that the dealers may determine at the time of resale.
Agents and direct sales
We may sell debt securities directly or through agents that we designate, at a fixed price or prices which may be changed, or at varying prices determined at the time of sale. Any such agent may be deemed to be an underwriter as that term is defined in the Securities Act. The applicable prospectus supplement will name any agent involved in the offering and sale and will state any commissions we will pay to that agent. Unless we indicate otherwise in the applicable prospectus supplement, any agent is acting on a best efforts basis for the period of its appointment.
Contracts with institutional investors and delayed delivery
If we indicate in the applicable prospectus supplement, we will authorize underwriters, dealers or agents to solicit offers from various institutional investors to purchase debt securities from it pursuant to contracts providing for payment and delivery on a future date that the applicable prospectus supplement specifies. The underwriters, dealers or agents may impose limitations on the minimum amount that the institutional investor can purchase. They may also impose limitations on the portion of the aggregate amount of the debt securities that they may sell. These institutional investors include:
| · | commercial and savings banks; |
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| · | insurance companies; |
| · | pension funds; |
| · | investment companies; |
| · | educational and charitable institutions; and |
| · | other similar institutions as we may approve. |
The obligations of any of these purchasers pursuant to delayed delivery and payment arrangements will not be subject to any conditions. However, one exception applies. An institution’s purchase of the particular debt securities cannot at the time of delivery be prohibited under the laws of any jurisdiction that governs the validity of the arrangements or the performance by us or the institutional investor.
Indemnification
Agreements that we enter into with underwriters, dealers or agents may entitle them to indemnification by us against various civil liabilities. These include liabilities under the Securities Act. The agreements may also entitle them to contribution for payments that they may be required to make as a result of these liabilities. Underwriters, dealers and agents may be customers of, engage in transactions with, or perform services for, us in the ordinary course of business.
Market making
Unless otherwise noted in the applicable prospectus supplement, each series of debt securities will be a new issue of securities without an established trading market. Various broker-dealers may make a market in the debt securities, but will have no obligation to do so, and may discontinue any market making at any time without notice. Consequently, it may be the case that no broker-dealer will make a market in debt securities of any series or that the liquidity of the trading market for the debt securities will be limited.
Expenses
The expenses of any offering of debt securities will be detailed in the applicable prospectus supplement.
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General
Apart as set out below and in any relevant prospectus supplement, the Issuers have not performed any due diligence about the tax consequences associated with the purchase, ownership and disposition of the debt securities. Prospective purchasers of the debt securities are advised to consult their own tax advisors about such tax consequences, including the effect of any state or local taxes, in the light of their particular circumstances.
Material United Kingdom Income Tax Considerations
The comments below are based on current United Kingdom tax law as applied in England and Wales and HM Revenue & Customs practice (which may not be binding on HM Revenue & Customs), in each case as at the latest practicable date before the date of this registration statement. The comments in this part are of a general nature and are not intended to be exhaustive. They assume that there will be no substitution of either BAT, BATCAP or BATIF as Issuer under the relevant Indentures and do not address the consequences of any such substitution (notwithstanding that such substitution may be permitted by the terms of the relevant Indentures or this registration statement). Any Noteholders who are in doubt as to their personal tax position should consult their professional advisers.
Interest on the Notes
In the case of Notes issued by BATCAP, payments of interest on the Notes by the Issuer may be made without withholding or deduction for or on account of United Kingdom income tax provided such interest is not treated as arising in the United Kingdom for the purposes of Section 874 of the Income Tax Act 2007 (“ITA”).
In the case of Notes issued by either BAT or BATIF, payments of interest on the Notes by the Issuer will be treated as arising in the United Kingdom for the purposes of Section 874 of the ITA.
In the case of Notes issued by any of BAT, BATIF or BATCAP, the Notes issued will constitute “quoted Eurobonds” within the meaning of Section 987 of the ITA, provided they are and continue to be listed on a “recognised stock exchange” within the meaning of Section 1005 of the ITA, and they continue to carry a right to interest. The New York Stock Exchange is a recognised stock exchange for these purposes.
While the Notes are and continue to be quoted Eurobonds, payments of interest on the Notes may be made without withholding or deduction for or on account of United Kingdom tax even if such interest is treated as arising in the United Kingdom for the purposes of Section 874 of the ITA.
In all other cases, interest will generally be paid by the Issuers under deduction of United Kingdom income tax at the basic rate (currently 20%), subject to the availability of other reliefs under domestic law or to any direction to the contrary from HM Revenue & Customs in respect of such relief as may be available pursuant to the provisions of any applicable double taxation treaty.
Payments in respect of the Guarantees
The United Kingdom withholding tax treatment of payments under the terms of the Guarantees in respect of interest on the Notes (or other amounts due under the Notes other than the repayment of amounts subscribed for the Notes) is uncertain. If a Guarantor is required to make a payment under their applicable Guarantee and any such payment can be characterized as interest or an annual payment, in either case, with a United Kingdom source, it may have to be paid under deduction of United Kingdom income tax (currently at the rate of 20%), subject to the availability of exemptions including a direction to the Guarantor by HMRC pursuant to the provisions of an applicable double tax treaty. Such payments by a Guarantor may not be eligible for the exemption in respect of securities listed on a recognised stock exchange described above in relation to payments of interest by the
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Issuers. No Additional Amounts will be paid with respect to any UK withholding or deduction or payments by a non-UK Guarantor with respect to Notes issued by BATCAP.
United States Taxation
It is the opinion of counsel, Cravath, Swaine & Moore LLP, that the conclusions reached in this section describe the material U.S. Federal income tax consequences to holders of a debt security. However, the discussion is limited in the following ways:
| · | The discussion covers holders only if the holder buys its debt securities in the initial offering at the initial offering price to the public and the holder holds its debt securities as a capital asset (that is, for investment purposes). |
| · | The discussion does not describe all U.S. Federal income tax consequences applicable to a holder if the holder is a U.S. holder (as defined below) and the holder’s functional currency is not the U.S. dollar, or if the holder has a special tax status. |
| · | The discussion does not cover tax consequences that apply because a holder is an accrual- method taxpayer who is required to recognize income for U.S. Federal income tax purposes no later than when such income is taken into account in applicable financial statements. |
| · | The discussion does not cover tax consequences that depend upon a holder’s particular tax situation in addition to the holder’s ownership of the debt securities. The BAT Group suggests that holders consult their own tax advisors about the consequences of holding debt securities in a holder’s particular situation. |
| · | The discussion does not cover holders if a holder is a partner in a partnership (or entity or arrangement taxed as a partnership for U.S. Federal income tax purposes). If a partnership holds debt securities, the tax treatment of a partner will generally depend upon the status of the partners and upon the activities of the partnership. |
| · | The discussion does not cover non-U.S. holders (as defined below) that (i) own, actually or constructively, 10% or more of the voting stock of BAT or BATCAP, (ii) are a “controlled foreign corporation” related, directly or indirectly, to BAT or BATCAP through stock ownership or (iii) are a bank making a loan in the ordinary course of its business. |
| · | The discussion is based on provisions of the Internal Revenue Code of 1986, as amended, (the “Code”), U.S. Treasury regulations issued thereunder and IRS rulings and pronouncements, all as of the date hereof. Changes in the law may change the tax treatment of the debt securities. |
| · | The discussion does not cover state, local or non-U.S. law. |
| · | The discussion does not cover every type of debt security that the BAT Group might issue. If the BAT Group issues a debt security of a type not described in this discussion, additional tax information will be provided in the applicable prospectus supplement for the debt security. |
| · | The BAT Group has not requested a ruling from the Internal Revenue Service (“IRS”) on the tax consequences of owning the debt securities. As a result, the IRS could disagree with portions of this discussion. |
If prospective holders are considering buying debt securities, the BAT Group suggests that the prospective holders consult their own tax advisors about the tax consequences of the purchase, ownership and disposition of the securities in each holder’s particular situation. In addition, with respect to each issue of debt securities, the following discussion may be supplemented or replaced by the description of the material U.S. Federal income tax consequences set forth in the applicable prospectus supplement.
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Tax Consequences to U.S. Holders of BAT, BATCAP or BATIF Debt Securities
This section applies to holders if a holder is a “U.S. holder” of debt securities issued by BAT, BATCAP or BATIF. A “U.S. holder” is:
| · | an individual U.S. citizen or resident alien; |
| · | a corporation (or entity taxable as a corporation for U.S. Federal income tax purposes) that was created under U.S. law (Federal or state); or |
| · | an estate or trust whose worldwide income is subject to U.S. Federal income tax. |
U.S. Dollar Denominated Debt Securities
This subsection deals only with debt securities that are denominated in U.S. dollars, issued in registered form (for U.S. Federal income tax purposes), provide for qualified interest payments to be paid at least annually at a fixed rate in U.S. dollars, have no original issue discount or contingent payments (other than premium payable upon a change in control of the Issuer), have a maturity of more than one year and are due a fixed principal payment on a specified maturity date. The tax consequences of all other debt securities that are denominated in U.S. dollars will be discussed in an applicable prospectus supplement.
Interest
| · | If the U.S. holder is a cash-method taxpayer (including most individual holders), the U.S. holder must report interest (including Additional Amounts, if any) in the U.S. holder’s income as the U.S. holder receives it. |
| · | If the U.S. holder is an accrual-method taxpayer, the U.S. holder must report interest (including Additional Amounts, if any) in the U.S. holder’s income as it accrues. |
| · | In the case of debt securities issued by either BAT or BATIF, amounts treated as interest will be income from sources outside the United States for foreign tax credit limitation purposes. Under the foreign tax credit rules, interest paid will, depending on the U.S. holder’s circumstances, be “passive category” or “general category” income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit. |
Sale or Retirement of Debt Securities
| · | The U.S. holder will have taxable gain or loss equal to the difference between the amount received by the U.S. holder (other than amounts described in the third bullet below) and the U.S. holder’s tax basis in the debt security. The U.S. holder’s tax basis in the debt security is generally the U.S. holder’s cost, subject to certain adjustments. |
| · | The U.S. holder’s gain or loss will generally be capital gain or loss, and will be long-term capital gain or loss if the U.S. holder held the debt security for more than one year. For an individual, long-term capital gain generally will be subject to reduced rates of taxation. The deductibility of capital losses is subject to certain limitations. |
| · | If the U.S. holder sells the debt security between interest payment dates, a portion of the amount the U.S. holder receives reflects interest that has accrued on the debt security but has not yet been paid by the sale date. That amount is treated as ordinary interest income and not as sale proceeds. |
Foreign Currency Debt Securities
A “Foreign Currency Debt Security” is a debt security denominated in a currency other than the U.S. dollar. Special tax rules apply to these debt securities.
This subsection deals only with Foreign Currency Debt Securities that are issued in registered form (for U.S. Federal income tax purposes), provide for qualified interest payments to be paid at least annually
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at a fixed rate, have no original issue discount or contingent payments (other than premium payable upon a change in control of the Issuer), have a maturity of more than one year and are due a fixed principal payment on a specified maturity date. The tax consequences of all other Foreign Currency Debt Securities will be discussed in an applicable prospectus supplement.
Interest
All holders of Foreign Currency Debt Securities will be taxable on the U.S. dollar value of the foreign currency payable as interest (including Additional Amounts, if any) on the debt securities, whether or not they elect to receive payments in foreign currency. If the U.S. holder receives interest in the form of U.S. dollars, the U.S. holder will be considered to have received interest in the foreign currency and to have sold that foreign currency for U.S. dollars. For purposes of this discussion, “spot rate” generally means a currency exchange rate that reflects a market exchange rate available to the public for a foreign currency.
| · | If the U.S. holder is a cash-method taxpayer (including most individual holders), the U.S. holder will be taxed on the value of the foreign currency when the U.S. holder receives it (if the U.S. holder receives the foreign currency) or when the U.S. holder is deemed to receive it (if the U.S. holder receives U.S. dollars). The value of the foreign currency will be determined using the spot rate in effect at such time. |
| · | If the U.S. holder is an accrual-method taxpayer, the U.S. holder will be taxed on the value of the foreign currency as the interest accrues on the Foreign Currency Debt Securities. In determining the value of the foreign currency for this purpose, the U.S. holder may use the average exchange rate during the relevant interest accrual period (or, if that period spans two taxable years, during the portion of the interest accrual period in the relevant taxable year). The average exchange rate for an accrual period (or partial period) is the simple average of the spot rates for each business day of such period, or other average exchange rate for the period reasonably derived and consistently applied by the U.S. holder. If the U.S. holder is an accrual-method taxpayer and does not wish to accrue interest income using the average exchange rate, certain alternative elections may be available. |
| · | When interest is actually paid, the U.S. holder will generally also recognize currency exchange gain or loss, taxable as ordinary income or loss from sources within the United States, equal to the difference between (i) the value of the foreign currency received as interest, as translated into U.S. dollars using the spot rate on the date of receipt, and (ii) the U.S. dollar amount previously included in income with respect to such payment. If the U.S. holder receives interest in the form of U.S. dollars, clause (i) will be calculated on the basis of the value of the foreign currency the U.S. holder would have received instead of the U.S. dollars. |
| · | In the case of debt securities issued by either BAT or BATIF, amounts treated as interest will be income from sources outside the United States for foreign tax credit limitation purposes. Under the foreign tax credit rules, interest paid will, depending on the U.S. holder’s circumstances, be “passive category” or “general category” income which, in either case, is treated separately from other types of income for purposes of computing the foreign tax credit. |
| · | The U.S. holder’s tax basis in the foreign currency the U.S. holder receives (or is considered to receive) as interest will be the aggregate amount reported by the U.S. holder as income with respect to the receipt of the foreign currency. If the U.S. holder receives interest in the form of foreign currency and subsequently sells that foreign currency, or if the U.S. holder is considered to receive foreign currency and that foreign currency is considered to be sold for U.S. dollars on the U.S. holder’s behalf, additional tax consequences will apply as described in “Sale of Foreign Currency” below. |
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Sale or Retirement of Foreign Currency Debt Securities
On the sale or retirement of the U.S. holder’s Foreign Currency Debt Securities:
| · | If the U.S. holder receives the principal payment on the U.S. holder’s Foreign Currency Debt Securities in the form of U.S. dollars, the U.S. holder will be considered to have received the principal in the form of foreign currency and to have sold that foreign currency for U.S. dollars. |
| · | The U.S. holder will have taxable gain or loss equal to the difference between the amount received or deemed received by the U.S. holder (other than amounts attributable to accrued and unpaid interest, which will be taxable as ordinary interest income) and the U.S. holder’s tax basis in the Foreign Currency Debt Securities. If the U.S. holder receives (or is considered to receive) foreign currency, that foreign currency is valued for this purpose at the spot rate of the foreign currency on the date of disposition, or the settlement date if the Foreign Currency Debt Securities are traded on an established securities market and the U.S. holder is a cash- basis taxpayer (or the U.S. holder is an accrual-basis taxpayer and makes the applicable election). The U.S. holder’s tax basis in the Foreign Currency Debt Securities generally is the U.S. dollar value of the foreign currency amount paid for the debt securities, determined on the date of purchase or the settlement date if the Foreign Currency Debt Securities are traded on an established securities market and the U.S. holder is a cash-basis taxpayer (or the U.S. holder is an accrual-basis taxpayer and makes the applicable election). |
| · | Any such gain or loss (except to the extent attributable to foreign currency gain or loss) will generally be capital gain or loss, and will be long-term capital gain or loss if the U.S. holder held the Foreign Currency Debt Securities for more than one year. For an individual, long-term capital gain generally will be subject to reduced rates of taxation. The deductibility of capital losses is subject to certain limitations. |
| · | The U.S. holder will realize foreign currency gain or loss to the extent the U.S. dollar value of the foreign currency paid for the Foreign Currency Debt Securities, based on the spot rate at the time the U.S. holder disposes of the debt securities, is greater or less than the U.S. dollar value of the foreign currency paid for the debt securities, based on the spot rate at the time the U.S. holder acquired the debt securities. Any currency gain or loss will be ordinary income or loss from sources within the United States. The U.S. holder will recognize such foreign currency gain or loss (including foreign currency gain or loss with respect to accrued and unpaid interest) only to the extent the U.S. holder has gained or lost, respectively, on the overall sale or retirement of the Foreign Currency Debt Securities. |
| · | If the Foreign Currency Debt Securities are traded on an established securities market and the U.S. holder is a cash-basis taxpayer (or the U.S. holder is an accrual-basis taxpayer and makes the applicable election), the U.S. holder’s tax basis in the foreign currency the U.S. holder receives (or is considered to receive) on sale or retirement of the Foreign Currency Debt Securities will be the value of the foreign currency on the settlement date of the sale or retirement of the debt securities. In all other cases, (i) the U.S. holder will realize foreign exchange gain or loss to the extent the value of the foreign currency the U.S. holder receives (or is considered to receive) on the settlement date differs from the value of the foreign currency on the date of the sale or retirement of the debt securities and (ii) the U.S. holder’s basis in the foreign currency received on the settlement date will equal the U.S. dollar value of the foreign currency received at the spot rate in effect on that date. If the U.S. holder receives foreign currency on sale or retirement of the debt securities and subsequently sells that foreign currency, or if the U.S. holder is considered to receive foreign currency on sale or retirement of the debt securities and that foreign currency is considered to be sold for U.S. dollars on the U.S. holder’s behalf, additional tax consequences will apply as described in “Sale of Foreign Currency” below. |
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Sale of Foreign Currency
If the U.S. holder receives (or is considered to receive) foreign currency as principal or interest on a Foreign Currency Debt Security, and the U.S. holder later sells (or is considered to sell) that foreign currency for U.S. dollars, the U.S. holder will have taxable gain or loss equal to the difference between the amount of U.S. dollars received and the U.S. holder’s tax basis in the foreign currency. In addition, when the U.S. holder purchases a Foreign Currency Debt Security in a foreign currency, the U.S. holder will have taxable gain or loss if the U.S. holder’s tax basis in the foreign currency is different from the U.S. dollar value of the foreign currency on the date of purchase. Any such gain or loss is foreign currency gain or loss taxable as ordinary income or loss, generally from sources within the United States.
Information Reporting and Backup Withholding
Under the tax rules concerning information reporting to the IRS:
| · | Assuming the U.S. holder holds the U.S. holder’s debt securities through a broker or other securities intermediary, the intermediary may (and in the case of debt securities issued by BATCAP, generally will) be required to provide information to the IRS and to the U.S. holder on IRS Form 1099 concerning interest, gross sale and retirement proceeds on the U.S. holder’s debt securities, unless an exemption applies. |
| · | Unless an exemption applies, the U.S. holder must provide the intermediary with the U.S. holder’s Taxpayer Identification Number for its use in reporting information to the IRS. If the U.S. holder is an individual, this is the U.S. holder’s social security number. The U.S. holder is also required to comply with other IRS requirements concerning information reporting. |
| · | If the U.S. holder is subject to these requirements but does not comply, the intermediary must withhold a percentage of all amounts payable to the U.S. holder on the debt securities (including principal payments). This is called “backup withholding.” If the intermediary withholds payments, the U.S. holder may use the withheld amount as a credit against the U.S. holder’s U.S. Federal income tax liability and may be entitled to a refund. |
| · | Individuals are subject to these requirements. Some holders, including corporations, tax-exempt organizations and individual retirement accounts, are exempt from these requirements but could be required to establish their entitlement to an exemption. |
U.S. Return Disclosure Requirements
If the U.S. holder holds certain “specified foreign financial assets”, which may include the debt securities issued by either BAT or BATIF, the U.S. holder may be required to report information relating to such assets, subject to certain exceptions (including an exception for assets held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938 (Statement of Specified Foreign Financial Assets) with the U.S. holder’s tax return for each year in which the U.S. holder holds an interest in such assets. Penalties may apply for failure to properly complete and file IRS Form 8938.
Under applicable U.S. Treasury regulations, certain “reportable transactions” are required to be reported to the IRS in certain circumstances, including a sale, exchange, retirement or other taxable disposition of a Foreign Currency Debt Security or any foreign currency received in respect of a Foreign Currency Debt Security to the extent that such disposition results in a tax loss in excess of a threshold amount. U.S. holders should consult their own tax advisors to determine the tax return obligations, if any, with respect to their acquisition, holding or disposition of a Foreign Currency Debt Security, including any requirement to file IRS Form 8886 (Reportable Transaction Disclosure Statement).
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FATCA
Under Sections 1471 through 1474 of the Code (commonly referred to as “FATCA”), U.S. Federal withholding tax, currently at a rate of 30%, may apply to any interest income paid on the debt securities issued by BATCAP (including Additional Amounts, if any) to (i) a “foreign financial institution” (as specifically defined in the Code) (including a financial intermediary) that does not provide sufficient documentation evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental agreement with the United States) in a manner that avoids withholding, or (ii) a “non-financial foreign entity” (as specifically defined in the Code) that does not provide sufficient documentation evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial United States beneficial owners of such entity (if any). If the holder holds the debt securities through a foreign financial institution or a non-financial foreign entity in a jurisdiction that has entered into an intergovernmental agreement with the United States, the holder’s financial intermediary may be subject to different rules. In the event any withholding under FATCA is imposed with respect to any payments under the debt securities, there will be no Additional Amounts payable to compensate for the withheld amount. Holders should consult their own tax advisors regarding these rules and whether they may be relevant to their ownership and disposition of debt securities.
Additional Tax Consequences to U.S. Holders of Newly Issued BATCAP Debt Securities Issued Under the 2017 Indenture
Qualified Reopening
Unless the applicable prospectus supplement states otherwise, newly issued debt securities issued under the 2017 Indenture will be treated for U.S. Federal income tax purposes as having been issued in a “qualified reopening” of an existing series of debt securities previously issued under the 2017 Indenture. If such treatment applies, then the newly issued debt securities will be deemed to have the same issue date and the same issue price as the corresponding existing series of debt securities regardless of the initial offering price of the newly issued debt securities, and the rules set forth below will be relevant.
Pre-issuance Accrued Interest
A portion of the price paid for a newly issued debt security issued under the 2017 Indenture may be allocable to interest that accrued prior to the date the newly issued debt security was purchased (“pre-issuance accrued interest”). On the first interest payment date, a portion of the interest received in an amount equal to the pre-issuance accrued interest may be treated as a return of pre-issuance accrued interest and not as a payment of interest on the debt security. The amount treated as a return of pre-issuance accrued interest is not taxable when received but reduces the U.S. holder’s tax basis in the debt security by a corresponding amount (in the same manner as would a payment of principal).
Amortizable Bond Premium
If the initial offering price for a newly issued debt security issued under the 2017 Indenture (excluding the portion of the initial offering price attributable to pre-issuance accrued interest and excluded from income) exceeds the stated principal amount of the debt security, the U.S. holder will be considered to have amortizable bond premium equal to such excess. A U.S. holder generally may elect to amortize such premium as an offset to interest income in respect of the debt security, using a constant-yield method prescribed under applicable U.S. Treasury regulations, over the remaining term of the debt security. However, because certain series of debt securities issued under the 2017 Indenture may be redeemed by BATCAP prior to maturity at a premium, special rules may apply to reduce, eliminate or defer the amount of premium that a U.S. holder may amortize with respect to the debt security. If a U.S. holder elects to amortize the premium, the U.S. holder must reduce the basis in the debt security by the amount of the premium amortized for the applicable period. If a U.S. holder does not elect to
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amortize the premium, that premium will decrease the gain or increase the loss that would otherwise be recognized on disposition of the debt security.
The rules relating to amortizable bond premium, the determination of the accrual period for any such premium and the effect of an election to amortize premium are complex, and U.S. holders should consult their own tax advisors regarding the application of these rules in their particular circumstances.
Tax Consequences to Non-U.S. Holders of BATCAP Debt Securities
This section applies to holders if a holder is a non-U.S. holder of debt securities issued by BATCAP. A “non-U.S. holder” is:
| · | an individual that is a non-resident alien for U.S. Federal income tax purposes; |
| · | a corporation (or an entity taxable as a corporation for U.S. Federal income tax purposes) organized or created under non-U.S. law; or |
| · | an estate or trust that is not taxable in the United States on its worldwide income. |
Withholding Taxes
Subject to the discussion below under “FATCA”, payments of principal and interest (including Additional Amounts, if any) on the debt securities generally will not be subject to U.S. Federal withholding taxes. However, for the exemption from withholding taxes on interest to apply to non-U.S. holders, a non-U.S. holder must meet one of the following requirements:
| · | The non-U.S. holder provide a completed IRS Form W-8BEN or Form W-8BEN-E (or substitute form), as applicable, to the bank, broker or other intermediary through which the non-U.S. holder holds the debt securities. The Form W-8BEN or Form W-8BEN-E, as applicable, contains the non-U.S. holder’s name, address and a statement that the holder is the beneficial owner of the debt securities and is not a U.S. holder. |
| · | The non-U.S. holder holds the debt securities directly through a “qualified intermediary”, and the qualified intermediary has sufficient information in its files indicating that the holder is not a U.S. holder. A qualified intermediary is a bank, broker or other intermediary that (i) is either a U.S. or non-U.S. entity (ii) is acting out of a non-U.S. branch or office and (iii) has signed an agreement with the IRS providing that it will administer all or part of the U.S. tax withholding rules under specified procedures. |
| · | The non-U.S. holder is entitled to an exemption from withholding tax on interest under a tax treaty between the United States and the non-U.S. holder’s country of residence. To claim this exemption, the non-U.S. holder generally must complete Form W-8BEN or Form W-8BEN-E, as applicable, and fill out Part II or Part III, respectively, of the form to state the non-U.S. holder’s claim for treaty benefits. In some cases, the non-U.S. holder may instead be permitted to provide documentary evidence of the non-U.S. holder’s claim to the intermediary, or a qualified intermediary may already have some or all of the necessary evidence in its files. |
| · | The interest income on the debt securities is effectively connected with the conduct of the non-U.S. holder’s trade or business in the Unites States, and is not exempt from U.S. tax under a tax treaty. To claim this exemption, the non-U.S. holder must complete IRS Form W-8ECI. |
Even if non-U.S. holders meet one of the above requirements, interest paid to non-U.S. holders will be subject to withholding tax under any of the following circumstances:
| · | The withholding agent or an intermediary knows or has reason to know that the non-U.S. holder is not entitled to an exemption from withholding tax. Specific rules apply for this test. |
| · | The IRS notifies the withholding agent that information that the non-U.S. holder or an intermediary provided concerning the non-U.S. holder’s status is false. |
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| · | An intermediary through which the non-U.S. holder holds the debt securities fails to comply with the procedures necessary to avoid withholding taxes on the debt securities. In particular, an intermediary is generally required to forward a copy of the non-U.S. holder’s Form W-8BEN or Form W-8BEN-E (or other documentary information concerning the non-U.S. holder’s status), as applicable, to the withholding agent for the debt securities. However, if the non-U.S. holder holds its debt securities through a qualified intermediary—or if there is a qualified intermediary in the chain of title between the non-U.S. holder and the withholding agent for the debt securities—the qualified intermediary will not generally forward this information to the withholding agent. |
Sales or Retirement of Debt Securities
If the non-U.S. holder sells a debt security or it is redeemed, the non-U.S. holder will not be subject to U.S. Federal income tax on any gain unless one of the following applies:
| · | The gain is connected with a trade or business that the non-U.S. holder conducts in the United States. |
| · | The non-U.S. holder is an individual present in the United States for at least 183 days during the year in which the non-U.S. holder disposes of the debt security and certain other conditions are satisfied. |
| · | Any gain represents accrued interest, in which case the rules for interest would apply to the portion that represents interest. |
U.S. Trade or Business
Unless an applicable income tax treaty provides otherwise, if the non-U.S. holder holds a debt security in connection with a trade or business that the non-U.S. holder is conducting in the United States:
| · | Any interest (including Additional Amounts, if any) on the debt security, and any gain from disposing of the debt security, generally will be subject to income tax as if the holder were a U.S. holder. |
| · | If the non-U.S. holder is a corporation, the non-U.S. holder may be subject to an additional “branch profits tax” on the non-U.S. holder’s earnings that are connected with its U.S. trade or business, including earnings from the debt security. This tax is currently 30% but may be reduced or eliminated by an applicable income tax treaty. |
Information Reporting and Backup Withholding
U.S. Federal income tax rules concerning information reporting and backup withholding for non-U.S. holders are as follows:
| · | Principal and interest payments that the non-U.S. holder receives will be automatically exempt from the backup withholding if the non-U.S. holder provides the tax certifications needed to avoid withholding tax on interest, as described above. The exemption does not apply if the recipient of the applicable form knows or has reason to know that the non-U.S. holder should be subject to the usual information reporting or backup withholding rules. In addition, interest payments made to the non-U.S. holder may be reported to the IRS on Form 1042-S. |
| · | Sale proceeds that the non-U.S. holder receives on a sale of the non-U.S. holder’s debt securities through a broker may be subject to information reporting and/or backup withholding if the non-U.S. holder is not eligible for an exemption. In particular, information reporting and backup reporting may apply if the non-U.S. holder uses the U.S. office of a broker, and information reporting (but not generally backup withholding) may apply if the non-U.S. holder uses the foreign office of a broker that has certain connections to the United States. |
In general, the non-U.S. holder may file Form W-8BEN or Form W-8BEN-E (or substitute form), as applicable, to claim an exemption from information reporting and backup withholding. The BAT Group
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suggests that non-U.S. holders consult their own tax advisors concerning information reporting and backup withholding on a sale of their debt securities.
FATCA
Under Sections 1471 through 1474 of the Code (commonly referred to as “FATCA”), U.S. Federal withholding tax, currently at a rate of 30%, may apply to any interest income paid on the debt securities (including Additional Amounts, if any) to (i) a “foreign financial institution” (as specifically defined in the Code) that does not provide sufficient documentation evidencing either (x) an exemption from FATCA, or (y) its compliance (or deemed compliance) with FATCA (which may alternatively be in the form of compliance with an intergovernmental agreement with the United States) in a manner that avoids withholding, or (ii) a “non-financial foreign entity” (as specifically defined in the Code) that does not provide sufficient documentation evidencing either (x) an exemption from FATCA, or (y) adequate information regarding certain substantial United States beneficial owners of such entity (if any). If an interest payment is both subject to withholding under FATCA and subject to the withholding tax discussed above under “Withholding Taxes,” the withholding under FATCA may be credited against, and therefore reduce, such other withholding tax. If the holder is a foreign financial institution or a non-financial foreign entity (or hold debt securities through a foreign financial institution) in a jurisdiction that has entered into an intergovernmental agreement with the United States, the holder (or the financial intermediary) may be subject to different rules. In the event any withholding under FATCA is imposed with respect to any payments under the debt securities, there will be no Additional Amounts payable to compensate for the withheld amount. Holders should consult their own tax advisors regarding these rules and whether they may be relevant to their ownership and disposition of debt securities.
Tax Consequences to Non-U.S. Holders of BAT or BATIF Debt Securities
This section applies to holders if a holder is a non-U.S. holder (as defined above) of debt securities issued by either BAT or BATIF.
Payments of principal and interest (including Additional Amounts, if any) on the debt securities generally will be exempt from U.S. Federal income tax.
Interest
Subject to the discussion of backup withholding below, interest on the debt securities is exempt from U.S. Federal income tax, including withholding tax, if paid to non-U.S. holders whether or not a non-U.S. holder is engaged in a trade or business in the United States unless one of the following applies (and no exemption is available and established under any applicable income tax treaty):
| · | The non-U.S. holder is an insurance company carrying on a U.S. insurance business to which the interest is attributable, within the meaning of the Code. |
| · | The non-U.S. holder has an office or other fixed place of business in the United States to which the interest is attributable, and the interest is derived in the active conduct of a banking, financing or similar business within the United States. |
Sale or Retirement of Debt Securities
Subject to the discussion of backup withholding below, non-U.S. holders will not be subject to U.S. Federal income tax on any gain realized on the sale or exchange of a debt security unless one of the following applies (and no exemption is available and established under any applicable income tax treaty):
| · | The non-U.S. holder is an individual present in the United States for at least 183 days during the year in which the non-U.S. holder disposes of the debt security and certain other conditions are satisfied. |
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| · | Any gain represents accrued interest, in which case the rules for interest would apply to the portion that represents interest. |
| · | The gain is effectively connected with a trade or business that the non-U.S. holder conducts in the United States. |
Information Reporting and Backup Withholding
| · | A “backup withholding” tax and certain information reporting requirements may apply to payments of principal and interest on the debt securities made to certain non-corporate holders if such payments are made or are considered made in the United States (including payments on debt securities made by wire transfer from outside the United States to an account maintained by the holder with the fiscal agent or any paying agent in the United States). |
| · | If the conditions relating to place of payment are satisfied, non-U.S. holders are generally exempt from these withholding and information reporting requirements (assuming that the gain or income is otherwise exempt from U.S. Federal income tax) but may be required to comply with certification and identification procedures in order to prove their exemption from the requirements. |
| · | Similar rules requiring backup withholding and information reporting with respect to gross sale proceeds will apply to a non-U.S. holder who sells a debt security through a U.S. branch of a broker. Information reporting (but not backup withholding) will apply to a non-U.S. holder who sells a debt security through a broker with certain connections to the United States. |
Material Netherlands Income Tax Considerations
This section provides a general description of certain Dutch tax consequences of the acquisition, ownership and transfer of the Notes issued by (i) BAT, BATCAP or BATIF under the 2022 Indenture and guaranteed by BATNF under a supplemental indenture, (ii) BATIF under the 2020 Indenture and guaranteed by the Guarantors, including BATNF, (iii) BATCAP under the 2019 Indenture and guaranteed by the Guarantors, including BATNF and (iv) BATCAP under the 2017 Indenture and guaranteed by the Guarantors, including BATNF and BATHTN.
This summary provides general information only and is restricted to the matters of Dutch taxation stated herein. It is intended neither as tax advice nor as a comprehensive description of all Dutch tax considerations that may be relevant to a decision to acquire, to hold, or to transfer the Notes. This summary does not purport to deal with the tax consequences applicable to all categories of investors, some of which (such as investment institutions, pension funds and dealers in securities) may be subject to special rules.
The summary provided below is based on the tax laws of The Netherlands as in effect on the date of this prospectus, and as applied and interpreted in case law of the courts of The Netherlands and in administrative guidance of the relevant authorities of The Netherlands, in each case available in printed form on or before such date, without prejudice to any developments or amendments introduced at a later date and implemented with or without retroactive effect. All references in this section to The Netherlands and Dutch tax, taxation or law are to the European part of the Kingdom of The Netherlands and its tax, taxation or law, respectively, only.
For Dutch tax purposes, a holder of Notes may include an individual who, or an entity that, does not have the legal title to the Notes, but to whom nevertheless the Notes are attributed based either on such individual or entity holding a beneficial interest in the Notes or based on specific statutory provisions, including statutory provisions pursuant to which the Notes are attributed to an individual who is, or who has directly or indirectly inherited from a person who was, the settlor, grantor or similar originator of a trust, foundation or similar entity that holds the Notes.
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Holders of Notes (and prospective holders of Notes) should consult their own tax advisors as to the Dutch or other tax consequences of the acquisition, ownership and transfer of Notes, including, in particular, the application to their particular situations of the tax considerations discussed below.
Each of the Issuers and the Guarantors have been advised that the following Dutch tax treatment will apply to the Notes, provided that:
| · | in each and every respect the terms and conditions of this prospectus, any prospectus supplement, the Notes, the 2017 Indenture, the 2019 Indenture, the 2020 Indenture, the 2022 Indenture, any supplemental indenture and any other documents relating to the Notes, the performance by the parties thereto of their respective obligations and the exercise of their rights thereunder and the transactions contemplated therein, including, without limitation all payments made thereunder, are at arm’s length as this term is understood under Netherlands tax law; and |
| · | no Notes will be issued under such terms and conditions that they actually function as equity of an Issuer or a Guarantor within the meaning of article 10, paragraph 1, under d, of the Dutch Corporate Income Tax Act 1969 (Wet op de vennootschapsbelasting 1969). |
Withholding Tax
All payments made by the Issuers or, as the case may be, the Guarantors of interest and principal under the Notes may be made free of withholding or deduction of any taxes of whatever nature imposed, levied, withheld or assessed by The Netherlands or any political subdivision or taxing authority thereof or therein, except that Dutch withholding tax (at a rate equal to the highest Dutch corporate income tax rate applicable in the relevant year) may be due on (deemed) payments of interest and principal (including guarantee payments) under the Notes (“Payment”) by BATNF and/or BATHTN (each a “Dutch Guarantor”) pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021) in the following situations:
| (i) | in case the relevant Dutch Guarantor is related (gelieerd) (within the meaning set out below) to the entity entitled to such Payment (voordeelgerechtigde) and such related recipient entity (i) is (deemed) resident in a low tax jurisdiction (laagbelastende jurisdictie) (within the meaning set out below) or (ii) has a permanent establishment in such low tax jurisdiction to which the Payment is allocated (worden toegerekend); |
| (ii) | in case the related recipient entity is not (deemed) resident in a low tax jurisdiction (a) such entity is entitled to the Payment with the main purpose or one of the main purposes of avoiding the levy of tax (belasting) in the hands of another person or entity and (b) there is an artificial arrangement or transaction, or a series of artificial arrangements or transactions. An arrangement or transaction, or series of arrangements or transactions, shall be regarded as artificial to the extent that it is not put into place for valid commercial reasons, which reflect economic reality; and/or |
| (iii) | in case a related entity is from a Dutch tax perspective regarded the recipient of the Payment, whereas such related recipient entity is not regarded as the recipient (gerechtigde) thereof pursuant to the laws of the country in which such entity is (deemed) resident or pursuant to the laws of which such entity is established (opgericht). |
Interest payments
The term ‘interest’ refers to any remuneration, payment or benefit of whatever nature for moneys advanced pursuant to a loan (geldlening) or equivalent agreement such as, for instance, financial lease. This includes interest accrual and the compensation of costs.
Related entities
Entities (lichamen) are related to a Dutch Guarantor for purposes of the application of the Dutch Withholding Tax Act 2021 if (i) the recipient entity (alone or together with other entities forming a
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cooperating group) has a qualifying interest in the relevant Dutch Guarantor, (ii) the relevant Dutch Guarantor (alone or together with other entities forming a cooperating group) has a qualifying interest in the recipient entity, or (iii) a third party (alone or together with other entities forming a cooperating group) has a qualifying interest in both the recipient entity as well as the relevant Dutch Guarantor. An interest in an entity is considered a ‘qualifying interest’ if directly or indirectly the influence in the decision making is such that the decisions of an entity and thus its activities can be determined. In any case, an interest is qualifying if it represents more than 50% of the statutory voting rights in an entity.
Low tax jurisdictions
A jurisdiction qualifies as a low tax jurisdiction for purposes of the Dutch Withholding Tax Act 2021 if it is listed in an annually updated ministerial decree published by the Dutch government which includes jurisdictions (i) with a profit tax applying a statutory rate of less than 9% (updated annually based on an assessment as per 1 October of the preceding year) or (ii) included on the EU list of non-cooperative jurisdictions in the preceding year.
Taxes on Income and Capital Gains
A holder of Notes who derives income from a Note or who realizes a gain from the transfer or redemption of a Note will not be subject to Dutch personal income tax or Dutch corporate income tax (as applicable) on such income or gain, provided that such holder of Notes:
| · | is neither resident nor deemed to be resident in The Netherlands for Dutch tax purposes; |
| · | does not have an enterprise or deemed enterprise (as defined in Dutch tax law) or an interest in or a co-entitlement to the net worth of an enterprise or deemed enterprise (as defined in Dutch tax law) that is, in whole or in part, carried on through a permanent establishment (vaste inrichting) or a permanent representative (vaste vertegenwoordiger) in The Netherlands and to which enterprise or part of that enterprise, as the case may be, the Notes are attributable; |
| · | in the event such person is not an individual, is neither entitled to a share in the profits of an enterprise effectively managed in The Netherlands nor co-entitled to the net worth of such enterprise, other than by way of the holding of securities, to which enterprise the Notes or payments in respect of the Notes are attributable; |
| · | in the event such person is an individual, is not entitled to a share in the profits of an enterprise effectively managed in The Netherlands, other than by way of the holding of securities or through an employment contract, to which enterprise the Notes or payments in respect of the Notes are attributable; |
| · | in the event such person is an individual, is a holder of Notes for whom neither the acquisition of the Notes nor income or capital gains derived from the Notes are attributable to a membership of a management board or a supervisory board, an employment relationship, a deemed employment relationship or a management role, the income of which is taxable in The Netherlands; |
| · | in the event such person is not an individual, is a holder of Notes for whom neither the acquisition of the Notes nor income or capital gains derived from the Notes are attributable to a membership of a management board or a supervisory board, the income of which is taxable in The Netherlands; |
| · | in the event such person is an individual, does not have, and certain persons related or deemed related to that holder of Notes do not have, directly or indirectly, a substantial interest (aanmerkelijk belang) as defined in the Dutch Income Tax Act 2001 (Wet inkomstenbelasting 2001), in an Issuer or a Guarantor, or in any company that has, or that is part of a co-operation (samenwerkingsverband) that has, legally or in fact, directly or indirectly, the disposition of any part of the proceeds of the Notes within the meaning of article 3.92 of the Dutch Income Tax Act 2001; |
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| · | in the event such person is not an individual, does not have, directly or indirectly, a substantial interest as defined in the Dutch Income Tax Act 2001, in an Issuer or a Guarantor, or, in the event that the holder of Notes does have such interest, either (a) the holder of Notes does not hold such interest with the main purpose or one of the main purposes to avoid the levy of income tax (inkomstenbelasting) of another person or entity, or (b) there is no artificial arrangement or transaction or a series of artificial arrangements or transactions. An arrangement or transaction or series of arrangements or transactions shall be regarded as artificial to the extent that it is not put into place for valid commercial reasons which reflect economic reality; and |
| · | does not derive benefits from the Notes that are taxable as benefits from miscellaneous activities in The Netherlands (resultaat uit overige werkzaamheden in Nederland) as defined in the Dutch Income Tax Act 2001, which include, but are not limited to, activities in respect of the Notes which are beyond the scope of “regular active portfolio management” (normaal, actief vermogensbeheer). |
Gift and Inheritance Taxes
No Dutch gift or inheritance taxes will arise in The Netherlands with respect to the acquisition of the Notes by way of gift by, or on the death of, a holder of Notes who is neither resident nor deemed to be resident in The Netherlands for the purpose of the relevant provisions, unless:
| · | such acquisition is construed as an inheritance, a bequest or a gift by or on behalf of a person who, at the time of the gift or his death, is or was a resident or a deemed resident of The Netherlands for the purpose of the relevant provisions; |
| · | in the case of a gift of the Notes by an individual who at the date of the gift was neither resident nor deemed to be resident in The Netherlands, such individual dies within 180 days after the date of the gift, while being resident or deemed to be resident in The Netherlands; or |
| · | the gift is made under a condition precedent and such holder is or is deemed to be a resident of The Netherlands at the time the condition is fulfilled. |
For the purpose of Dutch gift and inheritance tax, an individual who has the Dutch nationality will be deemed to be a resident of The Netherlands at the date of the gift or the date of his death if he has been a resident of The Netherlands at any time during the ten years preceding the date of the gift or the date of his death.
For the purposes of Dutch gift tax, an individual will, irrespective of his nationality, be deemed to be a resident of The Netherlands at the date of the gift if he has been a resident of The Netherlands at any time during the 12 months preceding the date of the gift.
Value added Tax
No Dutch value added tax (omzetbelasting) will be payable by a holder of Notes in consideration for the issue of the Notes (other than value added taxes on fees payable in respect of services not exempt from Dutch value added tax).
Other taxes and duties
No Dutch registration tax, stamp duty or any other similar tax or duty will be payable in The Netherlands by a holder of Notes in respect of or in connection with the acquisition, ownership or transfer of the Notes.
Residence
A holder of Notes will not become or be deemed to become a resident of The Netherlands for tax purposes by reason only of the acquisition, ownership or transfer of the Notes.
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The following is a summary of certain considerations associated with the purchase of the Notes by employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended (“ERISA”), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any other federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of ERISA or the Code (collectively, “Similar Laws”), and entities whose underlying assets are considered to include “plan assets” of any such employee benefit plan, plan, account or arrangement (each, a “Plan”).
General Fiduciary Matters
ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan.
In considering an investment in the Notes of a portion of the assets of any Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the Plan and the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan, including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws. In addition, a fiduciary of a Plan should consult with its counsel in order to determine if the investment satisfies the fiduciary’s duties to the Plan, including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.
Prohibited Transaction Issues
Section 406 of ERISA and Section 4975 of the Code prohibit ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are “parties in interest,” within the meaning of ERISA, or “disqualified persons” within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engaged in a non-exempt prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the ERISA Plan that engaged in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. The acquisition and/or holding of the Notes by an ERISA Plan with respect to which any of the Issuers, Guarantors, underwriters, dealers or agents, or any of their respective affiliates is considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired and is held in accordance with an applicable statutory, class or individual prohibited transaction exemption. Each of these exemptions contains conditions and limitations on its application, and there can be no assurance that any of these exemptions will be available, or that all of the conditions of an exemption will be satisfied with respect to a transaction involving the Notes. Therefore, each person that is considering acquiring or holding the Notes in reliance on an exemption should carefully review and consult with its legal advisors to confirm that it is applicable to the purchase and holding of the Notes.
In light of the above, the Notes may not be purchased or held by any person investing “plan assets” of any Plan, unless such purchase and holding will not constitute or result in a non-exempt prohibited transaction under ERISA or the Code or violate any applicable Similar Laws.
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Representation
Accordingly, by acceptance of a Note, each purchaser, holder and subsequent transferee of a Note will be deemed to have represented and warranted that either (i) no portion of the assets used by such purchaser, holder or transferee to acquire or hold the Notes, or any interest therein, constitutes assets of any Plan or (ii) the purchase, holding and subsequent disposition of the Notes by such purchaser, holder or transferee will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or violate any applicable Similar Laws.
The foregoing discussion is general in nature and is not intended to be all inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing the Notes on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase, holding and subsequent disposition of the Notes.
Purchasers of the Notes have the exclusive responsibility for ensuring that their purchase and holding of the Notes complies with the fiduciary responsibility rules of ERISA or of applicable Similar Laws and does not violate the prohibited transaction rules of ERISA, the Code or applicable Similar Laws. The BAT Group, as well as the underwriters, dealers and agents, make no representation as to whether an investment in the Notes is appropriate for any Plan in general or whether such investment is appropriate for any particular Plan or other arrangement. Neither this discussion nor anything provided in this prospectus is or is intended to be investment advice directed at any potential Plan purchaser or at Plan purchasers generally and such purchasers of the Notes should consult and rely on their own counsel and advisers as to whether an investment in the Notes is suitable.
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The validity of the debt securities and the guarantees offered by this prospectus and certain legal matters will be passed upon for the Issuers and the Guarantors by Cravath, Swaine & Moore LLP, U.S. counsel for the Issuers and the Guarantors. Certain English law matters will be passed upon for the Issuers and the Guarantors by Linklaters LLP. Certain Dutch legal matters will be passed upon for the Issuers and the Guarantors by Stibbe N.V. Certain North Carolina legal matters will be passed upon for the Issuers and the Guarantors by Womble Bond Dickinson (US) LLP.
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The consolidated financial statements of British American Tobacco p.l.c. as of December 31, 2021 and 2020, and for each of the years in the three-year period ended December 31, 2021, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2021, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
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PART II—INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 8. | Indemnification of Directors and Officers |
Insurance
British American Tobacco p.l.c. (“BAT”) has a directors and officers liability insurance policy which, subject to policy terms and limitations, includes coverage to reimburse directors and officers of BAT and its subsidiaries (including B.A.T Capital Corporation (“BATCAP”), British American Tobacco Holdings (The Netherlands) B.V. (“BATHTN”), B.A.T. International Finance p.l.c. (“BATIF”), B.A.T. Netherlands Finance B.V. (“BATNF”) and Reynolds American Inc. (“RAI”)) for the costs of defense, settlement or payment of claims and judgments under certain circumstances.
Indemnification
British American Tobacco p.l.c.
Except as hereinafter set forth, there is no charter provision, by-law, contract, arrangement or statute under which any director or officer of BAT is insured or indemnified in any manner against any liability which he or she may incur in his or her capacity as such.
Under English law, any provision that purports to exempt a director of a company (to any extent) from any liability that would otherwise attach to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
Subject to certain exceptions, English law does not permit BAT to indemnify a director against any liability attaching to him or her in connection with any negligence, default, breach of duty or breach of trust in relation to BAT. The exceptions allow BAT to: (1) purchase and maintain director and officer insurance insuring its directors or the directors of an “associated company” (i.e., a company that is a parent, subsidiary or sister company of BAT) against any liability attaching in connection with any negligence, default, breach of duty or breach of trust owed to the company of which he or she is a director; (2) provide a qualifying third party indemnity provision which permits BAT to indemnify its directors and directors of an associated company in respect of proceedings brought by third parties (covering both legal costs and the amount of any adverse judgment), except for (a) the legal costs of an unsuccessful defense of criminal proceedings or civil proceedings brought by the company or an associated company, or the legal costs incurred in connection with certain specified applications by the director for relief where the court refuses to grant the relief, (b) fines imposed in criminal proceedings, and (c) penalties imposed by regulatory bodies; (3) loan funds to a director to meet expenditure incurred defending civil and criminal proceedings against him or her (even if the action is brought by the company itself), or expenditure incurred applying for certain specified relief, subject to the requirement that the loan must be on terms that it is repaid if the defense or application for relief is unsuccessful; and (4) provide a qualifying pension scheme indemnity provision, which allows the company to indemnify a director of a company that is a trustee of an occupational pension scheme against liability incurred in connection with such director’s activities as a trustee of the scheme (subject to certain exceptions).
Under the BAT articles of association, subject to the UK Companies Act 2006, BAT may do any or all of the following:
| · | indemnify to any extent any person who is or was a director, or a director of any associated company, directly or indirectly (including by funding any expenditure incurred or to be incurred by him or her) against any loss or liability, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him or her or otherwise, in relation to BAT or any associated company; |
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| · | indemnify to any extent any person who is or was a director of an associated company that is a trustee of an occupational pension scheme, directly or indirectly (including by funding any expenditure incurred or to be incurred by him or her) against any liability incurred by him or her in connection with the company’s activities as trustee of an occupational pension scheme; |
| · | purchase and maintain insurance for any person who is or was a director, or a director of any associated company, against any loss or liability or any expenditure he or she may incur, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him or her or otherwise, in relation to BAT or any associated company. |
B.A.T Capital Corporation
Section 145 of the DGCL empowers a Delaware corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of such corporation or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. A Delaware corporation may indemnify directors, officers, employees and other agents of such corporation in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the person to be indemnified has been adjudged to be liable to the corporation. Where a present or former director or officer of the corporation is successful on the merits or otherwise in the defense of any action, suit or proceeding referred to above or in defense of any claim, issue or matter therein, the corporation must indemnify such person against the expenses (including attorneys’ fees) which he or she actually and reasonably incurred in connection therewith.
The BATCAP Amended and Restated Certificate of Incorporation, as amended, contains provisions that provide for indemnification of officers and directors to the fullest extent permitted by, and in the manner permissible under, applicable state and federal law, including the DGCL.
BATCAP has also entered into indemnification agreements with its directors and officers. Generally, these agreements attempt to provide the maximum protection permitted by Delaware law with respect to indemnification. The indemnification agreements provide that BATCAP will pay certain amounts incurred by its directors in connection with any threatened, pending, or completed action, suit or other proceeding, whether civil, criminal, administrative, investigative or any other type whatsoever. Such amounts include any expenses, including all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, other out-of-pocket costs and reasonable compensation for time spent by the indemnified person for which he or she is not otherwise compensated by BATCAP or any third party) actually and reasonably incurred by the indemnified person in connection with either the investigation, defense or appeal of a proceeding. Timothy Derr, a director and the Secretary of BATCAP, is employed by the Corporation Service Company, and the agreement for Mr. Derr’s services to BATCAP also includes similar indemnification provisions.
B.A.T. International Finance p.l.c.
Article 142 of the articles of association of BATIF provides that:
Subject to and so far as permitted by the provisions of the Companies Act 2006, BATIF may:
| (a) | indemnify any person who is or was a director, or a director of any associated company, directly or indirectly (including by funding any expenditure incurred or to be incurred by him/her), against any |
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| loss or liability, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him/her or otherwise, in relation to BATIF or any associated company, and/or |
| (b) | indemnify to any extent any person who is or was a director, or a director of any associated company, at any time during which BATIF, or any such associated company, was that is a trustee of an occupational pension scheme, directly or indirectly (including by funding any expenditure incurred or to be incurred by him/her) against any liability incurred by him/her in connection with such company’s activities as a trustee of an occupational pension scheme, and/or |
| (c) | purchase and maintain insurance for any person who is or was a director, or a director of an associated company, against any loss or liability or any expenditure he/she may incur, whether in connection with any proven or alleged negligence, default, breach of duty or breach of trust by him or otherwise, in relation to BATIF or any associated company. |
BATIF also enters into deeds of indemnity with its directors. These deeds set out the terms of the indemnity BATIF will provide to the current and past directors of BATIF. The deeds of indemnity provide that BATIF will, to the extent permitted by law, indemnify the directors against, and pay to him or her an amount equal to any cost, charge, expense or liability other than an excluded liability as set out in the deed of indemnity, which the director may sustain or incur in or about the execution of his or her duties to BATIF or as a result of any contract, deed, matter or thing done, entered into, or executed himself on behalf of BATIF or in relation to the business of BATIF.
British American Tobacco Holdings (The Netherlands) B.V. and B.A.T. Netherlands Finance B.V.
The provisions of Dutch law governing the liability of the members of BATHTN’s and BATNF’s board of directors are mandatory in nature. Although Dutch law does not provide for any provisions with respect to the indemnification of officers and directors, the concept of indemnification of directors of a company for liabilities arising from their actions as members of the executive or supervisory boards is, in principle, accepted in The Netherlands.
British American Tobacco Holdings (The Netherlands) B.V.
The current articles of association of BATHTN do not provide for an indemnification of members of its board of directors and/or representatives (“procuratiehouders”). However, BATHTN has the option to include an indemnity to the members of the BATHTN board of directors and/or representatives in specific contracts between BATHTN and individual managing directors and/or representatives. BATHTN has not entered into any such contracts.
B.A.T. Netherlands Finance B.V.
The current articles of association of BATNF do not provide for an indemnification of members of its board of directors and/or representatives (“procuratiehouders”). However, BATNF has the option to include an indemnity to the members of the BATNF board of directors and/or representatives in specific contracts between BATNF and individual managing directors and/or representatives. BATNF has not entered into any such contracts.
Reynolds American Inc.
Section 55-8-51 of the North Carolina Business Corporation Act, referred to as the NCBCA, authorizes a corporation to indemnify an individual made a party to a proceeding because he is or was a director against liability incurred in the proceeding if: (1) the director conducted himself or herself in good faith; and (2) the director reasonably believed (a) in the case of conduct in his or her official capacity with the corporation, that his or her conduct was in the corporation’s best interests; and (b) in all other cases, that his or her conduct was at least not opposed to the corporation’s best interests; and (3) in the case of any criminal proceeding, the director had no reasonable cause to believe his or her conduct was unlawful.
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The articles of incorporation of RAI provide that RAI will indemnify, to the fullest extent permitted by the NCBCA, any person who was or is a director or officer of RAI who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative, because such person was or is a director or officer of RAI or, while a director or officer of RAI, was or is serving at the request of RAI as a director, officer, partner, trustee, employee or agent of any other enterprise, plan or trust. The RAI articles of incorporation also provide that RAI shall pay expenses incurred in connection with any such action, suit or proceeding in advance provided the director or officer agrees in writing to repay such amount if such person is ultimately determined not entitled to be indemnified against such expenses. The indemnification rights pursuant to the RAI articles of incorporation are not exclusive.
Sections 55-8-52 and 55-8-56 of the NCBCA require a corporation, unless its articles of incorporation provide otherwise, to indemnify a director or officer who has been wholly successful, on the merits or otherwise, in the defense of any proceeding to which such director or officer was made a party because he was or is a director or officer of the corporation against reasonable expenses actually incurred by the director or officer in connection with the proceeding. Unless prohibited by the articles of incorporation, a director or officer also may make application and obtain court-ordered indemnification if the court determines that such director or officer is fairly and reasonably entitled to such indemnification as provided in Sections 55-8-54 and 55-8-56 of the NCBCA.
Section 55-8-57 of the NCBCA permits a corporation, in its articles of incorporation or bylaws or by contract or resolution, to indemnify, or agree to indemnify, its directors, officers, employees or agents against liability and expenses (including attorneys’ fees) in any proceeding (including proceedings brought by or on behalf of the corporation) arising out of their status as such or their activities in such capacities, except for any liabilities or expenses incurred on account of activities that were, at the time taken, known or believed by the person to be clearly in conflict with the best interests of the corporation.
RAI has entered into separate indemnification agreements with its directors and executive officers. Pursuant to these agreements, RAI will generally indemnify, defend and hold harmless an indemnitee to the fullest extent permitted or required by the laws of North Carolina in effect on the date such agreement is signed, or as such laws may thereafter be amended to increase the scope of permitted or required indemnification, against all losses based upon, arising out of or resulting from any actual, alleged or suspected act or failure to act by an indemnitee in his or her capacity as a current or former, director, officer, employee or agent of RAI or as a director, officer, employee, member, manager, trustee or agent of any other entity or enterprise as to which an indemnitee is or was serving at the request of RAI, or in respect of any action or failure to act by an indemnitee in any business or other activity of RAI.
The agreements provide that an indemnitee will not be entitled to indemnification if prohibited by applicable law, and an indemnitee generally is not entitled to indemnification pursuant to the NCBCA to the extent that any loss is determined to have resulted from the indemnitee’s knowing misconduct from which he or she derived a direct improper personal benefit. In the event an indemnitee is not wholly successful on the merits in a proceeding, the indemnitee generally only is entitled to indemnification if it is determined that at the time of the indemnitee’s conduct, the indemnitee did not know or believe such conduct to be clearly in conflict with the best interests of RAI.
The indemnification agreements entitle an indemnitee to obtain advances of expenses from RAI, subject to conditions such as the indemnitee undertaking to repay RAI any advances he or she is not ultimately entitled to.
The agreements also generally require RAI to use commercially reasonably efforts to maintain, for as long as an indemnitee is a director or officer of RAI and thereafter for as long as a director or officer is subject to any potential indemnifiable claim, directors’ and officers’ liability insurance covering the indemnitee that is at least substantially comparable in scope and amount to that provided by RAI’s directors’ and officers’ coverage in effect at the time of execution of the indemnitee’s agreement.
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Section 55-8-57 of the NCBCA also authorizes a corporation to purchase and maintain insurance on behalf of an individual who was or is a director, officer, employee or agent of the corporation, or who, while a director, officer, employee or agent of the corporation, is or was serving at the request of the corporation as a director, officer, partner, trustee, employee or agent of any other enterprise, plan or trust, against certain liabilities incurred by such a person, whether or not the corporation is otherwise authorized by the NCBCA to indemnify that person.
Section 55-2-02 of the NCBCA enables a corporation in its articles of incorporation to eliminate or limit, with certain exceptions, the personal liability of directors for monetary damages for breach of their duties as directors. No such provision is effective to eliminate or limit a director’s liability for: (1) acts or omissions that the director at the time of the breach knew or believed to be clearly in conflict with the best interests of the corporation; (2) improper distributions as described in Section 55-8-33 of the NCBCA; (3) any transaction from which the director derived an improper personal benefit; or (4) acts or omissions occurring prior to the date the exculpatory provision became effective.
The RAI articles of incorporation provide that, to the fullest extent permitted by the NCBCA, no person who is serving or who has served as a director of the corporation shall be personally liable to the corporation or any of its shareholders for monetary damages for breach of duty as a director.
The indemnification provided above is not exclusive of any rights to which any of the indemnitees of BAT, BATCAP, BATIF, BATNF, BATHTN or RAI may be entitled. Certain directors and officers benefit from indemnification arrangements or agreements provided by other members of the BAT Group. The general effect of the foregoing provisions may be to reduce the circumstances in which such indemnitee may be required to bear the economic burdens of the foregoing liabilities and expenses.
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| Item 9. | Exhibits and Financial Statement Schedules |
The following is a list of exhibits to this registration statement:
| Exhibit |
Description of Exhibits | |||
| 1.1 | Form of Underwriting Agreement for debt securities issued by B.A.T. International Finance p.l.c. | |||
| 1.2 | Form of Underwriting Agreement for debt securities issued by B.A.T Capital Corporation. | |||
| 1.3 | Form of Underwriting Agreement for debt securities issued by British American Tobacco p.l.c. | |||
| 4.1 | Thirty-fourth Supplemental Trust Deed, dated March 17, 2022, by and among B.A.T. International Finance p.l.c., B.A.T Capital Corporation, B.A.T. Netherlands Finance B.V., British American Tobacco p.l.c. and the Law Debenture Trust Corporation p.l.c., further modifying and restating the Trust Deed, dated July 6, 1998 (as previously modified and restated) relating to the US$3,000,000,000 (now £25,000,000,000) Euro Medium Term Note Programme. | |||
| 4.2 | Form of Indenture by and among B.A.T. International Finance p.l.c., B.A.T Capital Corporation and British American Tobacco p.l.c., and Citibank, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent. | |||
| 4.3 | Indenture, dated September 25, 2020, by and among B.A.T. International Finance p.l.c., the Guarantors party thereto and Citibank, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent.1 | |||
| 4.4 | Supplemental Indenture No. 1, dated September 25, 2020, by and among B.A.T. International Finance p.l.c., the Guarantors party thereto and Citibank, N.A., as Trustee.2 | |||
| 4.5 | Supplemental Indenture No. 2, dated March 16, 2022, by and among B.A.T. International Finance p.l.c., the Guarantors party thereto and Citibank, N.A., as Trustee.3 | |||
| 4.6 | Indenture, dated September 6, 2019, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent.4 | |||
| 4.7 | Supplemental Indenture No. 1, dated September 6, 2019, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.5 | |||
| 4.8 | Supplemental Indenture No. 2, dated September 6, 2019, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.6 | |||
| 4.9 | Supplemental Indenture No. 3, dated September 6, 2019, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.7 | |||
| 4.10 | Supplemental Indenture No. 4, dated September 6, 2019, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.8 | |||
| 4.11 | Supplemental Indenture No. 5, dated April 2, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.9 | |||
| 4.12 | Supplemental Indenture No. 6, dated April 2, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.10 | |||
| 4.13 | Supplemental Indenture No. 7, dated April 2, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.11 | |||
| 4.14 | Supplemental Indenture No. 8, dated September 25, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.12 | |||
| 4.15 | Supplemental Indenture No. 9, dated September 25, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.13 | |||
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| Exhibit |
Description of Exhibits | |||
| 4.16 | Supplemental Indenture No. 10, dated September 25, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.14 | |||
| 4.17 | Supplemental Indenture No. 11, dated September 25, 2020, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.15 | |||
| 4.18 | Supplemental Indenture No. 12, dated March 16, 2022, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.16 | |||
| 4.19 | Supplemental Indenture No. 13, dated March 16, 2022, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.17 | |||
| 4.20 | Supplemental Indenture No. 14, dated March 24, 2022, by and among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A., as Trustee.18 | |||
| 4.21 | Indenture, dated August 15, 2017, by and among B.A.T Capital Corporation, the Guarantors party thereto, Wilmington Trust, National Association as trustee and Citibank, N.A., London Branch, as authentication agent, paying agent, transfer agent, registrar and calculation agent.19 | |||
| Pursuant to Item 601(b)(4)(iii) of Regulation S-K, British American Tobacco p.l.c. agrees to furnish a copy of any instrument with respect to other long-term debt to the U.S. Securities and Exchange Commission upon request. | ||||
| 5.1 | Opinion of Cravath, Swaine & Moore LLP. | |||
| 5.2 | Opinion of Linklaters LLP (London). | |||
| 5.3 | Opinion of Stibbe N.V. | |||
| 5.4 | Opinion of Womble Bond Dickinson (US) LLP. | |||
| 23.1 | Consent of KPMG LLP (United Kingdom). | |||
| 23.2 | Consent of Cravath, Swaine & Moore LLP (included in Exhibit 5.1). | |||
| 23.3 | Consent of Linklaters LLP (London) (included in Exhibit 5.2). | |||
| 23.4 | Consent of Stibbe N.V (included in Exhibit 5.3). | |||
| 23.5 | Consent of Womble Bond Dickinson (US) LLP (included in Exhibit 5.4). | |||
| 24.1 | Power of Attorney relating to BAT (included on the signature pages hereto). | |||
| 24.2 | Power of Attorney relating to BATCAP (included on the signature pages hereto). | |||
| 24.3 | Power of Attorney relating to BATIF (included on the signature pages hereto). | |||
| 24.4 | Power of Attorney relating to BATNF (included on the signature pages hereto). | |||
| 24.5 | Power of Attorney relating to RAI (included on the signature pages hereto). | |||
| 24.6 | Power of Attorney relating to BATHTN (included on the signature pages hereto). | |||
| 25.1 | Statement of Eligibility on Form T-1 of Citibank, N.A. relating to the proposed Form of Indenture by and among B.A.T. International Finance p.l.c., B.A.T Capital Corporation and British American Tobacco p.l.c., and Citibank, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent. | |||
| 25.2 | Statement of Eligibility on Form T-1 of Citibank, N.A. relating to the Indenture, dated September 25, 2020, by and among B.A.T. International Finance p.l.c., the Guarantors party thereto and Citibank, N.A.20 | |||
| 25.3 | Statement of Eligibility on Form T-1 of Citibank, N.A. relating to the Indenture, dated September 6, 2019, by among B.A.T Capital Corporation, the Guarantors party thereto and Citibank, N.A.21 | |||
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| Exhibit |
Description of Exhibits | |||
| 25.4 | Statement of Eligibility on Form T-1 of Wilmington Trust, National Association, relating to the Indenture, dated August 15, 2017, by and among B.A.T Capital Corporation, the Guarantors party thereto, Wilmington Trust, National Association and Citibank, N.A.22 | |||
| 107 | Filing fee table.23 | |||
| (1) | Incorporated by reference to Exhibit 4.1 to British American Tobacco p.l.c.’s Form 6-K filed on September 25, 2020. |
| (2) | Incorporated by reference to Exhibit 4.6 to British American Tobacco p.l.c.’s Form 6-K filed on September 25, 2020. |
| (3) | Incorporated by reference to Exhibit 4.3 to British American Tobacco p.l.c.’s Form 6-K filed on March 16, 2022. |
| (4) | Incorporated by reference to Exhibit 4.1 to British American Tobacco p.l.c.’s Form 6-K filed on September 6, 2019. |
| (5) | Incorporated by reference to Exhibit 4.2 to British American Tobacco p.l.c.’s Form 6-K filed on September 6, 2019. |
| (6) | Incorporated by reference to Exhibit 4.3 to British American Tobacco p.l.c.’s Form 6-K filed on September 6, 2019. |
| (7) | Incorporated by reference to Exhibit 4.4 to British American Tobacco p.l.c.’s Form 6-K filed on September 6, 2019. |
| (8) | Incorporated by reference to Exhibit 4.5 to British American Tobacco p.l.c.’s Form 6-K filed on September 6, 2019. |
| (9) | Incorporated by reference to Exhibit 4.1 to British American Tobacco p.l.c.’s Form 6-K filed on April 2, 2020. |
| (10) | Incorporated by reference to Exhibit 4.2 to British American Tobacco p.l.c.’s Form 6-K filed on April 2, 2020. |
| (11) | Incorporated by reference to Exhibit 4.3 to British American Tobacco p.l.c.’s Form 6-K filed on April 2, 2020. |
| (12) | Incorporated by reference to Exhibit 4.2 to British American Tobacco p.l.c.’s Form 6-K filed on September 25, 2020. |
| (13) | Incorporated by reference to Exhibit 4.3 to British American Tobacco p.l.c.’s Form 6-K filed on September 25, 2020. |
| (14) | Incorporated by reference to Exhibit 4.4 to British American Tobacco p.l.c.’s Form 6-K filed on September 25, 2020. |
| (15) | Incorporated by reference to Exhibit 4.5 to British American Tobacco p.l.c.’s Form 6-K filed on September 25, 2020. |
| (16) | Incorporated by reference to Exhibit 4.1 to British American Tobacco p.l.c.’s Form 6-K filed on March 16, 2022. |
| (17) | Incorporated by reference to Exhibit 4.2 to British American Tobacco p.l.c.’s Form 6-K filed on March 16, 2022. |
| (18) | Incorporated by reference to Exhibit 4.1 to British American Tobacco p.l.c.’s Form 6-K filed on March 24, 2022. |
| (19) | Incorporated by reference to Exhibit 2.4 to British American Tobacco p.l.c.’s Annual Report on Form 20-F filed on March 15, 2018. |
| (20) | Incorporated by reference to Exhibit 25.2 to British American Tobacco p.l.c.’s Form F-3 filed on July 17, 2019. |
| (21) | Incorporated by reference to Exhibit 25.1 to British American Tobacco p.l.c.’s Form F-3 filed on July 17, 2019. |
| (22) | Incorporated by reference to Exhibit 25.1 to British American Tobacco p.l.c.’s Form F-4 filed on October 2, 2018. |
| (23) | Filed herewith. |
| Item 10. | Undertakings |
| (a) | The undersigned registrants hereby undertake: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end |
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| of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrants pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement or is contained in a form of prospectus filed pursuant to Rule 424(b) under the Securities Act that is part of the registration statement.
| (2) | That, for the purpose of determining any liability under the Securities Act, each such post- effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided, that the registrants include in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act or Item 8.A of Form 20-F if such financial statements and information are contained in periodic reports filed with or furnished to the SEC by the registrants pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this Form F-3. |
| (5) | That, for the purpose of determining liability under the Securities Act to any purchaser: |
| (i) | Each prospectus filed by the registrants pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as |
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| to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
| (6) | That, for the purpose of determining liability of the registrants under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrants undertake that in a primary offering of securities of the undersigned registrants pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrants will be sellers to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | Any preliminary prospectus or prospectus of the undersigned registrants relating to the offering required to be filed pursuant to Rule 424 under the Securities Act; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrants or used or referred to by the undersigned registrants; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrants or their securities provided by or on behalf of the undersigned registrants; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrants to the purchaser. |
| (b) | The undersigned registrants hereby undertake that, for purposes of determining any liability under the Securities Act, each filing of BAT’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by directors, officers or controlling persons of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
| (d) | The undersigned registrants hereby undertake that: |
| (1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A under the Securities Act and contained in a form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of the registration statement as of the time it was declared effective. |
| (2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
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SIGNATURES
Pursuant to the requirements of the Securities Act, the co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in London, England, on July 1, 2022.
| BRITISH AMERICAN TOBACCO P.L.C. | ||
| By: | /s/ Tadeu Marroco | |
| Name: Tadeu Marroco | ||
| Title: Finance and Transformation Director | ||
We, the undersigned officers and directors of British American Tobacco p.l.c., hereby severally constitute and appoint Luc Jobin, Jack Bowles, Tadeu Marroco and Paul McCrory and each of them acting without the other, as our true and lawful attorneys-in-fact, with full power of substitution, for them, together or individually, in any and all capacities, to sign for us and in our names, the registration statement on Form F-3 filed with the SEC, and any and all amendments to said registration statement (including post-effective amendments), and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys, and each of them 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 each of them might or could do in person, and hereby ratifying and confirming all that said attorneys, or their substitute, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act this registration statement has been signed by the following persons in the capacities indicated below on July 1, 2022.
| Signature |
Title | |
| /s/ Luc Jobin |
Chairman | |
| Luc Jobin | ||
| /s/ Jack Bowles Jack Bowles |
Executive Director—Chief Executive (Principal Executive Officer) | |
| /s/ Tadeu Marroco Tadeu Marroco |
Executive Director—Finance and Transformation Director (Principal Financial and Accounting Officer) | |
| /s/ Sue Farr |
Non-Executive Director | |
| Sue Farr | ||
| /s/ Karen Guerra |
Non-Executive Director | |
| Karen Guerra | ||
| /s/ Holly Keller Koeppel |
Non-Executive Director | |
| Holly Keller Koeppel | ||
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| Signature |
Title | |
|
/s/ Savio Kwan Savio Kwan |
Non-Executive Director | |
| /s/ Darrell Thomas Darrell Thomas |
Non-Executive Director | |
| /s/ Krishnan Anand Krishnan Anand |
Non-Executive Director | |
| /s/ Dimitri Panayotopoulos Dimitri Panayotopoulos |
Senior Independent Director | |
| /s/ Donald J. Puglisi Donald J. Puglisi Managing Director, Puglisi & Associates |
Authorized Representative in the United States | |
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SIGNATURES
Pursuant to the requirements of the Securities Act, the co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Wilmington, Delaware, on July 1, 2022.
| B.A.T CAPITAL CORPORATION | ||
| By: | /s/ Anthony B. Petitt | |
| Name: Anthony B. Petitt | ||
| Title: President | ||
We, the undersigned officers and directors of B.A.T Capital Corporation, hereby severally constitute and appoint Anthony B. Petitt, Neil Wadey, Timothy Derr and Steven Coppock and each of them acting without the other, as our true and lawful attorneys-in-fact, with full power of substitution, for them, together or individually, in any and all capacities, to sign for us and in our names, the registration statement on Form F-3 filed with the SEC, and any and all amendments to said registration statement (including post-effective amendments), and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys, and each of them 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 each of them might or could do in person, and hereby ratifying and confirming all that said attorneys, or their substitute, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated below on July 1, 2022.
| Signature |
Title | |
| /s/ Anthony B. Petitt Anthony B. Petitt |
Director and President (Principal Executive Officer and Principal Financial Officer) | |
| /s/ Timothy Derr Timothy Derr |
Director | |
| /s/ Paul McCrory Paul McCrory |
Director | |
| /s/ Adin Trbonja |
Director | |
| Adin Trbonja | ||
| /s/ Neil A. Wadey |
Director | |
| Neil A. Wadey | ||
| /s/ Steven Coppock |
Treasurer (Principal Accounting Officer) | |
| Steven Coppock | ||
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SIGNATURES
Pursuant to the requirements of the Securities Act, the co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in London, England, on July 1, 2022.
| B.A.T. INTERNATIONAL FINANCE P.L.C. | ||
| By: |
/s/ Neil Wadey | |
| Name: Neil Wadey | ||
| Title: Director | ||
We, the undersigned officers and directors of B.A.T. International Finance p.l.c., hereby severally constitute and appoint Paul McCrory, Steven Dale, Tadeu Marroco and Neil Wadey and each of them acting without the other, as our true and lawful attorneys-in-fact, with full power of substitution, for them, together or individually, in any and all capacities, to sign for us and in our names, the registration statement on Form F-3 filed with the SEC, and any and all amendments to said registration statement (including post-effective amendments), and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys, and each of them 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 each of them might or could do in person, and hereby ratifying and confirming all that said attorneys, or their substitute, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated below on July 1, 2022.
| Signature |
Title | |
| /s/ Steven Dale |
Director | |
| Steven Dale | ||
| /s/ Paul McCrory Paul McCrory |
Director | |
| /s/ Tadeu Marroco Tadeu Marroco |
Director and Principal Executive Officer | |
| /s/ Neil Wadey |
Director and Principal Financial Officer | |
| Neil Wadey | ||
| /s/ Pablo Sconfianza |
Director | |
| Pablo Sconfianza | ||
| /s/ David Booth |
Principal Accounting Officer | |
| David Booth | ||
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| Signature |
Title | |
|
/s/ Donald J. Puglisi |
Authorized Representative in the United States | |
| Donald J. Puglisi Managing Director, Puglisi & Associates |
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SIGNATURES
Pursuant to the requirements of the Securities Act, the co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Amsterdam, The Netherlands, July 1, 2022.
| B.A.T. NETHERLANDS FINANCE B.V. | ||
| By: |
/s/ Hendrik Lina | |
| Name: Hendrik Lina | ||
| Title: Director | ||
| By: |
/s/ Judith Bollen | |
| Name: Judith Bollen | ||
| Title: Director | ||
We, the undersigned officers and directors of B.A.T. Netherlands Finance B.V., hereby severally constitute and appoint Hendrik Lina and Judith Bollen, and each acting with at least one other, as our true and lawful attorneys-in-fact, with full power of substitution, for any two or more of them, together, in any and all capacities, to sign for us and in our names, the registration statement on Form F-3 filed with the SEC, and any and all amendments to said registration statement (including post-effective amendments), and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys, each of them full acting with at least one other, 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 each of them acting with at least one other might or could do in person, and hereby ratifying and confirming all that said attorneys, or their substitute, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated below on July 1, 2022.
| Signature |
Title | |
| /s/ Judith Bollen |
Director, Principal Executive Officer and Principal Financial Officer | |
| Judith Bollen | ||
| /s/ Hendrik Lina Hendrik Lina |
Director | |
| /s/ David Booth David Booth |
Director | |
| /s/ Neil Wadey Neil Wadey |
Director | |
| /s/ Claudia Schutte Claudia Schutte |
Principal Accounting Officer | |
| /s/ Donald J. Puglisi |
Authorized Representative in the United States | |
| Donald J. Puglisi Managing Director, Puglisi & Associates | ||
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SIGNATURES
Pursuant to the requirements of the Securities Act, the co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Amsterdam, The Netherlands, on July 1, 2022.
| British American Tobacco Holdings (The Netherlands) B.V. | ||
| By: |
/s/ Judith Bollen | |
| Name: Judith Bollen | ||
| Title: Director | ||
| By: |
/s/ Hendrik Lina | |
| Name: Hendrik Lina | ||
| Title: Director | ||
We, the undersigned officers and directors of British American Tobacco Holdings (The Netherlands) B.V., hereby severally constitute and appoint Hendrik Lina and Judith Bollen, and each acting with at least one other, as our true and lawful attorneys-in-fact, with full power of substitution, for any two or more of them, together, in any and all capacities, to sign for us and in our names, the registration statement on Form F-3 filed with the SEC, and any and all amendments to said registration statement (including post-effective amendments), and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys, each of them full acting with at least one other, 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 each of them acting with at least one other might or could do in person, and hereby ratifying and confirming all that said attorneys, or their substitute, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated below on July 1, 2022.
| Signature |
Title | |
| /s/ Judith Bollen |
Director, Principal Executive Officer and Principal Financial Officer | |
| Judith Bollen | ||
| /s/ Hendrik Lina Hendrik Lina |
Director | |
| /s/ Claudia Schutte Claudia Schutte |
Principal Accounting Officer | |
| /s/ Donald J. Puglisi |
Authorized Representative in the United States | |
| Donald J. Puglisi Managing Director, Puglisi & Associates | ||
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SIGNATURES
Pursuant to the requirements of the Securities Act, the co-registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Winston-Salem, North Carolina, on July 1, 2022.
| REYNOLDS AMERICAN INC. | ||
| By: |
/s/ Guy Meldrum | |
| Name: Guy Meldrum | ||
| Title: President and Chief Executive Officer | ||
| Title: Director | ||
We, the undersigned officers and directors of Reynolds American Inc., hereby severally constitute and appoint appoint Luc Jobin, Jack Bowles, Paul McCrory, Tadeu Marroco and Alden Smith, and each of them acting without the other, as our true and lawful attorneys-in-fact, with full power of substitution, for them, together or individually, in any and all capacities, to sign for us and in our names, the registration statement on Form F-3 filed with the SEC, and any and all amendments to said registration statement (including post-effective amendments), and to file or cause to be filed the same, with all exhibits thereto and other documents in connection therewith, with the SEC, granting unto said attorneys, and each of them 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 each of them might or could do in person, and hereby ratifying and confirming all that said attorneys, or their substitute, shall do or cause to be done by virtue of this Power of Attorney.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated below on July 1, 2022.
| Signature |
Title | |
| /s/ Guy Meldrum |
President, Chief Executive Officer and Director (principal executive officer) | |
| Guy Meldrum | ||
| /s/ Richard R. Bakker Richard R. Bakker |
Executive Vice President, Chief Financial Officer and Director (principal financial officer) | |
| /s/ J. Jeffery Raborn J. Jeffery Raborn |
Director | |
| /s/ Anthony B. Petitt |
Vice President – Controller Finance & Accounting and Treasurer (principal accounting officer) | |
| Anthony B. Petitt | ||
II-21
Exhibit 1.1
UNDERWRITING AGREEMENT
B.A.T. INTERNATIONAL FINANCE P.L.C.
[$][ ]
[Title of Debt Securities]
Fully and Unconditionally Guaranteed on a [Senior Unsecured] Basis
by
BRITISH AMERICAN TOBACCO P.L.C.
[and
B.A.T CAPITAL CORPORATION
and
B.A.T. NETHERLANDS FINANCE B.V.
and
REYNOLDS AMERICAN INC.]
[Date]
[NAME OF REPRESENTATIVES]
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
Ladies and Gentlemen:
B.A.T. International Finance p.l.c., a public limited company incorporated under the laws of England and Wales (the “Issuer”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), [$][ ] aggregate principal amount of the Issuer’s [[ ]% / floating rate] notes due [ ] (the “Notes”) in the respective amounts set forth in Schedule 1 hereto. The Notes will be entitled to the benefit of full and unconditional guarantees (the “Guarantees”), on a [senior unsecured and] joint and several basis, of the payment of all amounts owing with respect to the Notes by the Issuer, by British American Tobacco p.l.c., a public limited company incorporated under the laws of England and Wales (the “Parent”)[, B.A.T Capital Corporation, a Delaware corporation (“BATCAP”), B.A.T. Netherlands Finance B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of The Netherlands (“BATNF”) and, unless its guarantee is released in accordance with the Indenture referred to below, Reynolds American Inc., a North Carolina corporation (“RAI”), each] as a guarantor ([together,] the “Guarantor[s]”).
The Notes will be issued pursuant to an indenture [to be] dated as of [[ ]/September 25, 2020] (the “Base Indenture”), among the Issuer, the Guarantor[s] and Citibank, N.A., as trustee (the “Trustee”), and Citibank, N.A., as authenticating agent, paying agent, transfer agent, registrar and calculation agent. Certain terms of the Notes will be established pursuant to [a] supplemental indenture[s] (the “Supplemental Indenture[s]”; together with the Base Indenture, the “Indenture”) to the Base Indenture or an officer’s certificate.
The Issuer and [the/each] Guarantor hereby confirms its agreement with the several Underwriters concerning the purchase and resale of the Notes, as follows:
1. Registration Statement. The Issuer meets the requirements for use of Form F-3 under the Securities Act of 1933, as amended (the “Securities Act”) and has prepared and filed with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement” (as defined under Rule 405 under the Securities Act), on Form F-3 (File No. 333-[ ]) in respect of the Issuer’s debt securities and guarantees thereof. Such registration statement, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration statement at the time of its effectiveness (together, “Rule 430 Information”), is referred to herein as the “Registration Statement”. As used herein, the term “Base Prospectus” means the prospectus included in such Registration Statement (and any amendments thereto) at the time of its effectiveness that omits Rule 430 Information. The term “Preliminary Prospectus” means the Base Prospectus and any preliminary
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prospectus supplement specifically relating to the Notes and the offering thereof used prior to filing of the Prospectus (as defined below). The term “Prospectus” means the Base Prospectus and the final prospectus supplement that amends or supplements the Base Prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Notes. Any reference in this underwriting agreement (this “Agreement”) to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 6 of Form F-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be, any reference to “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder that are deemed to be incorporated by reference therein, and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Parent filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement and any filings by the Parent on Form 6-K the Parent deems incorporated by reference into the Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.
At or prior to the time when sales of the Notes were first made (the “Time of Sale”), the Issuer prepared the following information (collectively, the “Time of Sale Information”): a Preliminary Prospectus and each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex A hereto.
2. Purchase and Sale of the Notes. (a) The Issuer agrees to issue and sell the Notes to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Issuer the respective principal amount of Notes set forth opposite such Underwriter’s name in Schedule 1 hereto at a price equal to [ ]% of the principal amount of the Notes, plus accrued interest, if any, from [ ], [ ], to the Closing Date (as defined below).
(b) The Issuer acknowledges and agrees that the Underwriters may offer and sell Notes to or through any affiliate of an Underwriter and that any such affiliate may offer and sell Notes purchased by it to or through any Underwriter.
(c) The Issuer understands that the Underwriters intend to make a public offering of the Notes as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Notes on the terms set forth in the Time of Sale Information.
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(d) The Issuer and [the/each] Guarantor acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s-length contractual counterparty to the Issuer and [the/each] Guarantor with respect to the offering of the Notes contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or agents of, the Issuer, [the/any] Guarantor or any other person. Additionally, neither the Representatives nor any other Underwriter are advising the Issuer, [the/any] Guarantor or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Issuer and [the/each] Guarantor shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representatives nor any other Underwriter shall have any responsibility or liability to the Issuer or [the/any] Guarantor with respect thereto. Any review by the Representatives or any Underwriter of the Issuer, [the/any] Guarantor, and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representatives or such Underwriter, as the case may be, and shall not be on behalf of the Issuer, [the/any] Guarantor or any other person. The Issuer agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Issuer, in connection with such transactions or the process leading thereto.
3. Payment and Delivery. (a) Payment for and delivery of the Notes will be made at the offices of Davis Polk & Wardwell London LLP, 5 Aldermanbury Square, London EC2V 7HR, at [ ] A.M., New York City time, on [ ], [ ], or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Issuer may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Closing Date”.
(b) The Notes will be represented by one or more global notes (collectively, the “Global Notes”) in book-entry form. Payment for the Notes shall be made by wire transfer in immediately available funds to the account(s) specified by the Issuer to the Representatives against delivery of the Global Notes to the [nominee of The Depository Trust Company (“DTC”)] [common depositary for Euroclear Bank SA/NV or Clearstream Banking, S.A.], for the account of the Underwriters, with any transfer taxes payable in connection with the initial sale of the Notes duly paid by the Issuer. The Global Notes will be made available for inspection by the Representatives not later than [ ] P.M., New York City time, on the business day prior to the Closing Date.
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4. Representations and Warranties of the Issuer and the Guarantor[s]. The Issuer and [the/each] Guarantor jointly and severally represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the Securities Act and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer and the Guarantor[s] make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale, did not, and at the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer and the Guarantor[s] make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in the Preliminary Prospectus, the Time of Sale Information or the Prospectus.
(c) Issuer Free Writing Prospectus. Neither the Issuer nor [the/any] Guarantor (including their respective agents and representatives, other than the Underwriters in their capacity as such) has prepared, made, used, authorized, approved or referred to, nor will it prepare, make, use, authorize, approve or refer to, any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Notes (each such communication by the Issuer, the Guarantor[s] or their respective agents and representatives (other than a communication referred to in any of clauses (i), (ii) and (iii) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act, (ii) the Preliminary Prospectus, (iii) the Prospectus, (iv) the documents listed on Annex A hereto, including the pricing term sheet[s] substantially in the form of Annex B hereto, which constitute part of the Time of Sale Information, and (v) any electronic road show or other written communications, in each case approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complies in all material respects with the Securities Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and, when taken together with the Preliminary Prospectus filed prior to the first use of such Issuer Free Writing Prospectus, at the Time of Sale, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and the information contained in each written communication under clause (v) does not conflict with the information either in the Time of Sale Information or the Prospectus; provided that the Issuer
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and the Guarantor[s] make no representation or warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof; and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Issuer. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Issuer or related to the offering has been initiated or threatened by the Commission; as of the applicable effective date of the Registration Statement and any amendment thereto, the Registration Statement complied and will comply in all material respects with the Securities Act and the Trust Indenture Act of 1939 (the “Trust Indenture Act”), as amended, and the rules and regulations of the Commission thereunder, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer makes no representation or warranty with respect to (i) that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) of the Trustee under the Trust Indenture Act or (ii) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in each of the Registration Statement, the Prospectus and the Time of Sale Information, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the Time of Sale Information, when such documents become effective or are filed with the Commission, as the case
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may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Financial Statements. The consolidated financial statements and the related notes thereto of the Parent included or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus comply with applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder, and present a true and fair view of the consolidated financial position of the Parent and its subsidiaries, as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such consolidated financial statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS-IASB”), and the International Financial Reporting Standards as adopted by the United Kingdom (“IFRS-UK”) applied on a consistent basis throughout the periods covered thereby.
(g) No Material Adverse Change. Since the date of the most recent consolidated financial statements of the Parent included in each of the Registration Statement, the Time of Sale Information and the Prospectus, there has not been any material adverse change in or affecting the business, consolidated financial position, consolidated results of operations or prospects of the Parent and its subsidiaries taken as a whole, as applicable, except in each case as otherwise disclosed in the Registration Statement, the Time of Sale Information or the Prospectus.
(h) Organization and Good Standing. The Issuer and [the/each] Guarantor have been duly organized, are validly existing and are in good standing under the laws of each of their respective jurisdictions of organization (to the extent that a legal concept of “good standing” is provided for under the laws of such jurisdictions of organization), except where the failure to be so qualified, in good standing or have such power or authority would not reasonably be expected to, individually or in the aggregate, have a material adverse effect on the business, financial position, results of operations or prospects of the Parent and its subsidiaries taken as a whole or on the performance by the Issuer and the Guarantor[s] of their respective obligations under the Notes and the applicable Guarantees, whether or not arising from transactions in the ordinary course of business (a “Material Adverse Effect”).
(i) Due Authorization. The Issuer and [the/each] Guarantor have full right, power and authority to execute and deliver this Agreement, the Notes, the Guarantees and the Indenture (collectively, the “Transaction Documents”), as applicable, and to perform their respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of each transaction contemplated thereby has been duly and validly taken.
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(j) The Indenture. The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized[, executed and delivered] by the Issuer and [the/each] Guarantor party thereto and [when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute] [constitutes] a valid and legally binding agreement of the Issuer and [the/each] Guarantor party thereto enforceable against the Issuer and [the/each] Guarantor party thereto in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally from time to time in effect or by general principles of equity, regardless of whether considered in a proceeding in equity or at law (collectively, the “Enforceability Exceptions”).
(k) The Notes and the Guarantees. The Notes have been duly authorized by the Issuer and, when duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the Guarantees have been duly authorized by [the/each] Guarantor and, when executed and delivered by [the/each] Guarantor and when the Notes have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of [the/each] Guarantor, enforceable against [the/such] Guarantor in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.
(l) No Violation or Default. No event has occurred nor, so far as the Issuer and the Guarantor[s] are aware, have any circumstances arisen since [date of annual report] which constitute or result in, or would with the giving of notice or lapse of time or the fulfillment of any condition or the making of any determination constitute or result in default or the acceleration or breach of any payment obligation under any debt agreement, instrument or arrangement to which the Issuer and [the/any] Guarantor is a party, other than as would not reasonably be expected to have a Material Adverse Effect.
(m) No Conflicts. The execution, delivery and performance by the Issuer and [the/each] Guarantor of each of the Transaction Documents to which each is a party, the issuance and sale of the Notes (including the Guarantees) and compliance by the Issuer and [the/each] Guarantor with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Issuer or
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[the/any] Guarantor, pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Issuer or [the/any] Guarantor is a party, or by which the Issuer or [the/any] Guarantor is bound, or to which any of the property or assets of the Issuer or [the/any] Guarantor is subject, or (ii) result in any violation of the provisions of the memorandum and articles of association or comparable constitutional documents of the Issuer or [the/any] Guarantor, or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation applicable to the Issuer or [the/any] Guarantor of any court or arbitrator or governmental or regulatory authority, having jurisdiction over the Issuer or [the/each such] Guarantor, except, in the case of (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect upon the consummation of any transaction contemplated in any of the Transaction Documents.
(n) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority in the United States, the United Kingdom or the Netherlands is required for the execution, delivery and performance by the Issuer and [the/each] Guarantor of any of the Transaction Documents to which any is a party, the issuance and sale of the Notes (including each Guarantee) and compliance by the Issuer and [the/each] Guarantor with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, orders and registrations or qualifications as (i) have been obtained or made under the Securities Act, the Exchange Act and the Trust Indenture Act, (ii) may be required under applicable state securities laws or foreign securities laws or (iii) may be required in connection with the admission of the Notes to trading on any exchange.
(o) Legal Proceedings. Except as disclosed in each of the Time of Sale Information and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Issuer or [the/any] Guarantor is or may be a party or to which any property of the Issuer or [the/any] Guarantor is or may be the subject that, individually or in the aggregate, if determined adversely to the Issuer or [the/any] Guarantor, could reasonably be expected to have a Material Adverse Effect or a material adverse effect upon the consummation of any transaction contemplated in any of the Transaction Documents; and no such investigations, actions, suits or proceedings are threatened or, to the best knowledge of the Issuer and [the/each] Guarantor, contemplated by any governmental or regulatory authority or by others.
(p) Auditors. KPMG LLP (UK), which has audited the consolidated historical financial statements for the years ended [December 31, [ ]] of the Parent and its subsidiaries and delivered their reports with respect to such financial statements, were, on the date of such audit reports, independent auditors with respect to the Parent in accordance with audit regulation and guidance issued by the Institute of Chartered Accountants in England and Wales.
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(q) Investment Company Act. None of the Issuer or the Guarantor[s] is, and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as disclosed in each of the Time of Sale Information and the Prospectus, none of them will be, required to register as an “investment company” as such term is defined in the U.S. Investment Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder.
(r) Disclosure Controls. The Parent maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Parent in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Parent’s management as appropriate to allow timely decisions regarding required disclosure. The Parent’s management has carried out evaluations of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(s) Accounting Controls. The Parent maintains a system of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS-UK, IFRS-IASB or applicable local generally accepted accounting principles (“GAAP”), including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS-UK, IFRS-IASB or applicable local GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (A) There were no (i) material weaknesses or (ii) significant deficiencies (which, in the case of (ii), would be material in the context of the offering of the Notes) in the internal controls of the Parent in respect of the fiscal years ended December 31, [ ] and (B) to the best knowledge of the Parent, as of the date hereof, there are no (i) material weaknesses or (ii) significant deficiencies (which, in the case of (ii), would be material in the context of the offering of the Notes) in the internal controls of the Parent.
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(t) Anti-Corruption Matters. Except for potential violations in relation to the matters disclosed in [insert cross reference] in each of the Time of Sale Information and the Prospectus, neither the Issuer nor the Guarantor[s] nor, to the knowledge of each of the Issuer and Guarantor[s], any director, officer, agent or employee of the Issuer or the Guarantor[s], has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of any applicable anti-bribery or anti-corruption law or regulation; or made, offered or promised to make, or authorized the payment or giving of any bribe, rebate, payoff, influence payment, facilitation payment, kickback or other unlawful payment or gift of money or anything of value prohibited under any applicable law or regulation and the Issuer and the Guarantor[s] have conducted their businesses in compliance with such applicable laws and regulations and have in place and will enforce policies and procedures designed to ensure compliance therewith.
(u) Compliance with Money Laundering Laws. The operations of each of the Issuer and the Guarantor[s] are in compliance with all applicable statutes and administrative regulations relating to money-laundering, unlawful financial activities, and control and prevention of terrorism, and the Issuer and the Guarantor[s] have in place and will enforce policies and procedures designed to ensure continued compliance therewith.
(v) Economic Sanctions. None of the Issuer, Guarantor[s] or their respective subsidiaries or, to the knowledge of the Issuer or the Guarantor[s], any director, officer, agent or employee of the Issuer, the Guarantor[s] or any of their respective subsidiaries is currently the subject of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”). The Issuer will not, directly or indirectly, use the proceeds of the offering of the Notes hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing activities or business of or with any person that, at the time of such financing, is the subject of any U.S. sanctions administered by OFAC or any sanctions administered by the Commission of the European Union or Her Majesty’s Treasury. Each Underwriter, the Issuer and [the/each] Guarantor agrees and confirms that it is not entitled to the benefit of or does not make, seek or repeat, as appropriate, the representations and warranties in this clause (v) to the extent that those provisions would result in a violation of Council Regulation (EC) 2271/1996 and/or any applicable national law which purports to create liability in respect of such violation in any member state of the European Union or in the United Kingdom.
(w) Sarbanes-Oxley Act. There is and has been no failure on the part of the Parent or any of the Parent’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications, in each case of the Sarbanes-Oxley Act.
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(x) Status under the Securities Act. The Parent is not an ineligible issuer and is a well-known seasoned issuer, in each case as defined under the Securities Act, in each case at the times specified in the Securities Act in connection with the offering of the Notes.
5. Further Agreements of the Issuer and the Guarantor[s]. The Issuer and [the/each] Guarantor jointly and severally covenants and agrees with each Underwriter that:
(a) Required Filings. The Issuer and the Guarantor[s] will file the Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act, as applicable, and will file any Issuer Free Writing Prospectus (including the pricing term sheet in the form of Annex B hereto) to the extent required by Rule 433 under the Securities Act; and the Issuer will file promptly all reports or information statements required to be filed by the Issuer with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act during the Prospectus Delivery Period (as defined below); and the Issuer will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City within a reasonable amount of time prior to such proposed use, in such quantities as the Representatives may reasonably request. The Issuer will pay the registration fees for this offering within the time period required by Rule 456(b)(1)(i) under the Securities Act (without giving effect to the proviso therein) and in any event prior to the Closing Date.
(b) Delivery of Copies. The Issuer will deliver, without charge, to each Underwriter (i) a copy of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith and (ii) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein) and each Issuer Free Writing Prospectus as the Representatives may reasonably request. As used herein, the term “Prospectus Delivery Period” means the period of time during which a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) relating to the Notes is required by law to be delivered in connection with sales of the Notes by any Underwriter or dealer.
(c) Amendments or Supplements; Issuer Free Writing Prospectuses. Before using, authorizing, approving or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement or the Prospectus, during the Prospectus Delivery Period, the Issuer will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and will not use, authorize, approve or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably object.
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(d) Notice to the Representatives. The Issuer will advise the Representatives promptly during the Prospectus Delivery Period (i) when any amendment to the Registration Statement has been filed or becomes effective; (ii) when any supplement to the Prospectus or any amendment to the Prospectus or any Issuer Free Writing Prospectus has been filed; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (iv) of the issuance by the Commission or any other governmental or regulatory authority of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any of the Preliminary Prospectus, the Prospectus or the Time of Sale Information or any Issuer Free Writing Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence of any event as a result of which the Prospectus, any of the Time of Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading; (vi) of the receipt by the Issuer of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; and (vii) of the receipt by the Issuer of any notice with respect to any suspension of the qualification of the Notes for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Issuer will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, any of the Time of Sale Information, Issuer Free Writing Prospectus or the Prospectus, or suspending any such qualification of the Notes and, if any such order is issued, will obtain as soon as practicable the withdrawal thereof.
(e) Time of Sale Information. If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Time of Sale Information to comply with law, the Issuer will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters such amendments or supplements to any of the Time of Sale Information (including any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in any of the Time of Sale Information as so amended or supplemented (including such documents to be incorporated by reference therein) will not, in light of the
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circumstances under which they were made, be misleading or so that any of the Time of Sale Information will comply with law; provided that nothing in this paragraph shall require supplementary listing particulars to be prepared, submitted to any securities exchange or listing authority for approval or published.
(f) Ongoing Compliance. If during the Prospectus Delivery Period (i) any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Issuer will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; provided that nothing in this paragraph (f) shall require supplementary listing particulars to be prepared, submitted to any securities exchange or listing authority for approval or published.
(g) Blue Sky Compliance. The Issuer will qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request in due course and will continue such qualifications in effect so long as required for the distribution of the Notes; provided that neither the Issuer nor the Guarantor[s] shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(h) Clear Market. During the period from and including the date hereof through and including the Closing Date, none of the Issuer or [the/any] Guarantor will, without the prior written consent of the Representatives, offer, sell, contract to sell or otherwise dispose of any debt securities in the United States issued or guaranteed by the Issuer or [the/any] Guarantor and having a tenor of more than one year.
(i) Use of Proceeds. The Issuer will apply the net proceeds from the sale of the Notes as described in each of the Time of Sale Information and the Prospectus, as such Prospectus may be amended or supplemented from time to time, under the heading “Use of Proceeds”.
(j) Public Disclosure of Information. The Issuer authorizes [ ] to make adequate public disclosure of information and to act as the central point responsible for handling any request from a competent authority, in each case as required by Article 6(5) of Commission Delegated Regulation (EU) 2016/1052 of March 8, 2016 with regard to regulatory technical standards for the conditions applicable to buy-back programs and stabilization measures.
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(k) Clearance and Settlement. The Issuer will cooperate with the Representatives and use its reasonable best efforts to permit the Notes to be eligible for clearance and settlement through [DTC] [the common depositary for Euroclear Bank SA/NV and Clearstream Banking, S.A.].
(l) No Stabilization. None of the Issuer or the Guarantor[s] will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Notes.
(m) [Exchange Listing. If the applicable pricing term sheet provides that the Notes are to be listed, the Issuer will use its reasonable efforts to list the Notes on the securities exchange designated in the pricing term sheet.]
(n) Earning Statement. The Parent will make generally available to its security holders and the Representatives an earning statement of the Parent that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder covering a period of at least twelve months; provided that the Parent will be deemed to have furnished such statement to its security holders and the Representatives if it is filed in accordance with Rule 158 of the Securities Act; provided further that the Statement of Comprehensive Income (or equivalent) included in the Parent’s Annual Report on Form 20-F dated [ ] is deemed to satisfy this requirement.
6. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees that:
(a) It has not used and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Issuer and not incorporated by reference into the Registration Statement and any press release issued by the Issuer) other than (i) a free writing prospectus that, solely as a result of use by such Underwriter, would not trigger an obligation to file such free writing prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free Writing Prospectus listed on Annex A hereto or prepared pursuant to Section 4(c) or Section 5(c) above (including any electronic road show) or (iii) any free writing prospectus prepared by such Underwriter and approved by the Issuer in advance in writing. Notwithstanding the foregoing, the Underwriters may use the pricing term sheet referred to in Annex B hereto without the consent of the Issuer.
(b) It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering of the Notes (and will promptly notify the Issuer if any such proceeding against it is initiated during the Prospectus Delivery Period).
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7. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase Notes on the Closing Date as provided herein is subject to the performance by the Issuer and [the/each] Guarantor of their respective covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties of the Issuer and [the/each] Guarantor contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Issuer, [the/each] Guarantor and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.
(c) No Downgrade. Subsequent to the earlier of (i) the Time of Sale and (ii) the execution and delivery of this Agreement and prior to the Closing Date, (A) no downgrading shall have occurred in the rating accorded to the Notes or any other debt securities or preferred stock issued or guaranteed by the Parent or any of its subsidiaries by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 3(a)(62) under the Exchange Act; and (B) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Notes or of any other debt securities or preferred stock issued or guaranteed by the Parent or any of its subsidiaries (other than an announcement with positive implications of a possible upgrading).
(d) No Material Adverse Change. No event or condition of a type described in Section 4(g) hereof shall have occurred or shall exist, which event or condition is not described in each of the Time of Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) the effect of which in the judgment of the Representatives, after consultation with the Parent if practicable, makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
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(e) Officer’s Certificate. The Representatives shall have received on and as of the Closing Date a certificate either of an Executive Director or the Group Treasurer of the Parent (i) confirming that the representations and warranties of the Issuer and [the/each] Guarantor in this Agreement are true and correct and that the Issuer and [the/each] Guarantor have complied with all covenants and agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date and (ii) substantially to the effect set forth in paragraphs (b) and (d) of this Section 7. Any such person signing and delivering such certificate may certify to his or her knowledge.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date, KPMG LLP (UK) shall have furnished to the Representatives, at the request of the Parent, a letter, dated the respective dates of delivery thereof, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the applicable financial statements and certain other financial information contained or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off” date no more than three business days prior to the Closing Date.
(g) Opinion and 10b-5 Statement of Counsel for the Issuer. (i) Linklaters LLP, English counsel for the Issuer and the Guarantor[s], shall have furnished to the Representatives, at the request of the Issuer and the Parent, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex C hereto; [(ii) Stibbe N.V., Dutch counsel for BATNF, shall have furnished to the Representatives, at the request of BATNF, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex D hereto; (iii) Womble Bond Dickinson (US) LLP, North Carolina counsel for RAI, shall have furnished to the Representatives, at the request of RAI, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex E hereto;] and ([ii/iv]) Cravath, Swaine & Moore LLP, U.S. counsel for the Issuer and the Guarantor[s], shall have furnished to the Representatives, at the request of the Issuer and the Guarantor[s], their written opinion and 10b-5 statement, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex [D/F] hereto; in each case, in form and substance reasonably satisfactory to the Representatives.
(h) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date an opinion and 10b-5 statement of Davis Polk & Wardwell London LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
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(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Notes or the issuance of the Guarantees; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Notes or the issuance of the Guarantees.
(j) Clearance and Settlement. The Notes shall be eligible for clearance and settlement through [DTC] [Euroclear Bank SA/NV and Clearstream Banking, S.A.].
(k) Additional Documents. On or prior to the Closing Date, the Issuer and [the/each] Guarantor shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to Davis Polk & Wardwell London LLP as counsel for the Underwriters.
8. Indemnification and Contribution. (a) Indemnification of the Underwriters. The Issuer and [the/each] Guarantor jointly and severally agrees to indemnify and hold harmless each Underwriter, its affiliates, directors, officers, employees, agents of each Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses reasonably incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus (or any amendment or supplement thereto), or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Issuer in writing by such Underwriter through the Representatives expressly for use therein.
(b) Indemnification of the Issuer and [the/each] Guarantor. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Issuer, [the/each] Guarantor, each of their respective directors and officers and each person, if any, who controls the Issuer or [the/any] Guarantor within the
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meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity to each Underwriter set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Issuer in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information consists of the following: [ ].
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 8. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 8 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses (excluding any recoverable VAT (or similar taxes levied by reference to added value or sales)) of such proceeding and shall pay the fees and expenses (excluding any recoverable VAT (or similar taxes levied by reference to added value or sales)) of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses (including any amount paid for or in respect of VAT (or similar tax levied by reference to added value or sales)) of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with
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any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representatives and any such separate firm for the Issuer, the Guarantor[s], their respective directors and officers and any control persons of the Issuer and [the/any] Guarantor shall be designated in writing by the Issuer. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened claim in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient for any reason in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantor[s] on the one hand and the Underwriters on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i), but also the relative fault of the Issuer and the Guarantor[s] on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Guarantor[s] on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting
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expenses) received by the Issuer from the sale of the Notes and the total discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Notes. The relative fault of the Issuer and the Guarantor[s], on the one hand, and the Underwriters, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or [the/any] Guarantor or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Issuer, [the/each] Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 8, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Notes exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 8 are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
9. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above upon the execution and delivery hereof by the parties hereto.
10. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Issuer, if after the execution and delivery of this Agreement and on or prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the U.S. over-the-counter market; (ii) trading of any securities issued or guaranteed by the Issuer or [the/any] Guarantor shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have
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been declared by U.S. federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis either within or outside the United States that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
11. Defaulting Underwriter. (a) If, on the Closing Date, any Underwriter defaults on its obligation to purchase the Notes that it has agreed to purchase hereunder, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Notes by other persons satisfactory to the Issuer and the Guarantor[s] on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Notes, then the Issuer and the Guarantor[s] shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters, acting reasonably, to purchase such Notes on such terms. If other persons become obligated or agree to purchase the Notes of a defaulting Underwriter, either the non-defaulting Underwriters or the Issuer and the Guarantor[s] may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Issuer and the Guarantor[s] or counsel for the Underwriters may be necessary in the Registration Statement, the Time of Sale Information and the Prospectus or in any other document or arrangement, and the Issuer and the Guarantor[s] agree to promptly prepare any amendment or supplement to the Registration Statement, the Time of Sale Information and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 11, purchases Notes that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Issuer and the Guarantor[s] as provided in paragraph (a) above, the aggregate principal amount of such Notes that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Notes, then the Issuer and [the/each] Guarantor shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Notes that such Underwriter agreed to purchase hereunder plus such Underwriter’s pro rata share (based on the principal amount of Notes that such Underwriter agreed to purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
(c) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Issuer and the Guarantor[s] as provided in paragraph (a) above, the aggregate principal amount of such Notes that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Notes, or if the Issuer and the Guarantor[s] shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the
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non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 11 shall be without liability on the part of the Issuer or [the/any] Guarantor, except that the Issuer and [the/each] Guarantor will continue to be liable for the payment of expenses as set forth in Section 12 hereof and except that the provisions of Section 8 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Issuer, [the/any] Guarantor or any non-defaulting Underwriter for damages caused by its default.
12. Payment of Expenses. (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Issuer and [the/each] Guarantor jointly and severally agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder (excluding, for the avoidance of doubt, the fees and expenses of counsel to the Underwriters), including, without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Notes (excluding any recoverable value added tax) as contemplated by this Agreement, and any transfer taxes payable in connection therewith; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Issuer’s and [the/each] Guarantor’s counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Notes under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters); (vi) any fees charged by rating agencies for rating the Notes, if any; (vii) the preparation of the Indenture and fees and expenses of the Trustee (including related fees and expenses of any counsel to the Trustee); (viii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering of the Notes by, the Financial Industry Regulatory Authority, and the approval of the Notes for book-entry transfer by [DTC] [Euroclear Bank SA/NV and Clearstream Banking, S.A.]; (ix) all expenses incurred by the Issuer and the Underwriters in connection with any “road show” presentation to potential investors (in respect of expenses so incurred by the Underwriters, the total amount payable by the Issuer and the Guarantor[s] shall not exceed $[10,000]); and (x) any fees and expenses incurred in connection with the listing of the Notes on any securities exchange.
(b) If (i) this Agreement is terminated pursuant to Section 10, (ii) the Issuer for any reason fails to tender the Notes for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Notes for any reason permitted under this Agreement, the Issuer and [the/each] Guarantor jointly and severally agrees to reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the
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Underwriters in connection with this Agreement and the offering contemplated hereby; provided that, in respect of expenses so incurred by the Underwriters in the case of (i) above, such reimbursement shall not exceed $[ ] ([inclusive/exclusive] of any value added tax which may be payable).
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and any controlling persons referred to herein, and the affiliates, officers and directors of each Underwriter referred to in Section 8 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Notes from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
14. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Issuer, [the/each] Guarantor and the Underwriters contained in this Agreement or made by or on behalf of the Issuer, [the/each] Guarantor or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Notes and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Issuer, [the/each] Guarantor or the Underwriters.
15. Certain Defined Terms. For purposes of this Agreement (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City or London; and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act.
16. Miscellaneous. (a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken by [REPRESENTATIVES] on behalf of the Underwriters, and any such action taken shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, addressed as follows:
[ADDRESS OF REPRESENTATIVES]
with a copy to:
Davis Polk & Wardwell London LLP
5 Aldermanbury Square
London EC2V 7HR
Attention: Reuven B. Young
Email: Reuven.Young@DavisPolk.com
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(c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(d) Jurisdiction. The Issuer and the Guarantor[s] agree that any suit, action or proceeding against any of them brought by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or by any person who controls any Underwriter, arising solely out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the courts of the State of New York in the City and County of New York and of the United States for the Southern District of New York, and waives to the fullest extent that each may effectively do so any objection of which it may now or hereafter have to the laying of venue or of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Parent[,/and] the Issuer [and BATNF] hereby appoint [ ] as their authorized agent (the “Authorized Agent”) (and [ ] hereby accepts such appointment) upon whom process may be served in any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated herein that may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan in the City, County and State of New York, United States of America, by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or any person who controls any Underwriter, and expressly accept the non-exclusive jurisdiction of any such court in respect of any such suit, action or proceeding. The Parent[,/and] the Issuer [and BATNF] hereby represent and warrant that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Parent[,/and] the Issuer [and BATNF] agree to take any and all action, including the filing of any and all documents that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Parent[,/and] the Issuer [and BATNF].
(e) Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuer, the Guarantor[s] and the Underwriters, or any of them, with respect to the subject matter hereof.
(f) Waiver of Jury Trial. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
(g) Currency. Each reference in this Agreement to [U.S. dollars] (the “relevant currency”), including by use of the symbol [“$”], is of the essence. To the fullest extent permitted by law, the obligation of each party in respect of any amount due under this Agreement will, notwithstanding any payment in any other
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currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the party entitled to receive such payment may, in accordance with its normal procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the business day immediately following the day on which such party receives such payment. If the amount in the relevant currency that may be so purchased for any reason falls short of the amount originally due, the applicable party will pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligation of the applicable party not discharged by such payment will, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, will continue in full force and effect.
(h) Waiver of Immunity. To the extent that the Issuer or [the/any] Guarantor has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, the Issuer hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Agreement.
(i) Waiver of Tax Confidentiality. Notwithstanding anything herein to the contrary, purchasers of the Notes (and each employee, representative or other agent of a purchaser) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any transaction contemplated herein and all materials of any kind (including opinions or other tax analyses) that are provided to the purchasers of the Notes relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.
(j) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
(k) Electronic Communication. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, if any, shall include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the
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United States Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
(l) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(m) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
17. [Contractual Recognition of EU Bail-In. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Underwriters, the Issuer and the Guarantor[s], the Issuer and each of the Guarantor[s] acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts and agrees to be bound by:
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of an Underwriter to the Issuer and the Guarantor[s] under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
| 1. | the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; |
| 2. | the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Issuer and the Guarantor[s] of such shares, securities or obligations; |
| 3. | the cancellation of the BRRD Liability; or |
| 4. | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
(b) the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.
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For purposes of this Section 17, the following terms shall have the respective meanings set out below:
“Bail-in Legislation” shall mean in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
“Bail-in Powers” shall mean any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation.
“BRRD” shall mean Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“BRRD Liability” shall mean a liability in respect of which the relevant Write-down and Conversion Powers in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” shall mean the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/.
“Relevant Resolution Authority” shall mean the resolution authority with the ability to exercise any Bail-in Powers in relation to any of the Underwriters.]
18. [Contractual Recognition of UK Bail-In. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Underwriters, the Issuer and the Guarantor[s], the Issuer and each of the Guarantor[s] acknowledges and accepts that a UK Bail-in Liability arising under this Agreement may be subject to the exercise of UK Bail-in Powers by the relevant UK resolution authority, and acknowledges, accepts and agrees to be bound by:
(a) the effect of the exercise of UK Bail-in Powers by the relevant UK resolution authority in relation to any UK Bail-in Liability of an Underwriter to the Issuer and the Guarantor[s] under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
| 1. | the reduction of all, or a portion, of the UK Bail-in Liability or outstanding amounts due thereon; |
| 2. | the conversion of all, or a portion, of the UK Bail-in Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Issuer and the Guarantor[s] of such shares, securities or obligations; |
| 3. | the cancellation of the UK Bail-in Liability; or |
| 4. | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
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(b) the variation of the terms of this Agreement, as deemed necessary by the relevant UK resolution authority, to give effect to the exercise of UK Bail-in Powers by the relevant UK resolution authority.
For purposes of this Section [18], the following terms shall have the respective meanings set out below:
“UK Bail-in Legislation” means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“UK Bail-in Liability” means a liability in respect of which the UK Bail-in Powers may be exercised.
“UK Bail-in Powers” means the powers under the UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability.]
19. Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Underwriter, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
In the event that any Underwriter that is a Covered Entity or a Covered Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
For the purposes of this Section [19]:
“Covered Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k);
“Covered Entity” means any of the following:
| (i) | a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); |
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| (ii) | a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or |
| (iii) | a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); |
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and
“U.S. Special Resolution Regime” means each of (i) the U.S. Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[SIGNATURE PAGES FOLLOW]
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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
| Very truly yours,
| ||
| B.A.T INTERNATIONAL FINANCE P.L.C., | ||
| by | ||
| Name: |
||
| Title: |
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| BRITISH AMERICAN TOBACCO P.L.C., | ||
| by | ||
| Name: |
||
| Title: |
||
| [B.A.T. CAPITAL CORPORATION, | ||
| by | ||
| Name: |
||
| Title:] |
||
| [B.A.T. NETHERLANDS FINANCE B.V., | ||
| by | ||
| Name: |
||
| Title: |
||
| by | ||
| Name: |
||
| Title:] |
||
[Signature Page to Underwriting Agreement]
| [REYNOLDS AMERICAN INC., | ||
| by | ||
| Name: |
||
| Title:] |
||
[Signature Page to Underwriting Agreement]
Accepted as of the date hereof, for itself and on behalf of the several Underwriters listed in Schedule I hereto:
| [REPRESENTATIVES], | ||
| By |
||
| Name: |
||
| Title: |
||
| (for Representatives requiring a second signatory) | ||
| by |
||
| Name: |
||
| Title: |
||
[Signature Page to Underwriting Agreement]
SCHEDULE 1
| Underwriter |
Aggregate Principal Amount of Notes to be Purchased | |
| [ ] |
[$ ][ ] | |
| Total |
[$ ][ ] | |
|
|
S-1
ANNEX A
Additional Time of Sale Information
Pricing term sheet containing the terms of the Notes, substantially in the form of Annex B.
A-1
ANNEX B
[PRICING TERM SHEET TO BE PREPARED SEPARATELY]
B-1
ANNEX C
Form of Opinion of English Counsel
[OPINION TO BE PREPARED SEPARATELY]
C-1
[ANNEX D
Form of Opinion of Dutch Counsel
[OPINION TO BE PREPARED SEPARATELY]
[D-1
ANNEX E]
Form of Opinion of North Carolina Counsel
[OPINION TO BE PREPARED SEPARATELY]
E-1]
ANNEX [D/F]
Form of Opinion of U.S. Counsel
[OPINION TO BE PREPARED SEPARATELY]
[D/F]-1
Form of 10b-5 Letter of U.S. Counsel
[STATEMENT TO BE PREPARED SEPARATELY]
[D/F]-2
Exhibit 1.2
UNDERWRITING AGREEMENT
B.A.T CAPITAL CORPORATION
[$][ ]
[Title of Debt Securities]
Fully and Unconditionally Guaranteed on a [Senior Unsecured] Basis
by
BRITISH AMERICAN TOBACCO P.L.C.
[and
B.A.T. INTERNATIONAL FINANCE P.L.C.
and
B.A.T. NETHERLANDS FINANCE B.V.
and
BRITISH AMERICAN TOBACCO HOLDINGS (THE NETHERLANDS) B.V.
and
REYNOLDS AMERICAN INC.]
[Date]
[NAME OF REPRESENTATIVES]
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
Ladies and Gentlemen:
B.A.T Capital Corporation, a Delaware corporation (the “Issuer”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), [$][ ] aggregate principal amount of the Issuer’s [[ ]% / floating rate] notes due [ ] (the “Notes”) in the respective amounts set forth in Schedule 1 hereto. The Notes will be entitled to the benefit of full and unconditional guarantees (the “Guarantees”), on a [senior unsecured and] joint and several basis, of the payment of all amounts owing with respect to the Notes by the Issuer, by British American Tobacco p.l.c., a public limited company incorporated under the laws of England and Wales (the “Parent”)[, B.A.T. International Finance p.l.c., a public limited company incorporated under the laws of England and Wales (“BATIF”), B.A.T. Netherlands Finance B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of The Netherlands (“BATNF”)[, British American Tobacco Holdings (The Netherlands) B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of The Netherlands (“BATHTN”)] and, unless its guarantee is released in accordance with the Indenture referred to below, Reynolds American Inc., a North Carolina corporation (“RAI”), each] as a guarantor ([together,] the “Guarantor[s]”).
The Notes will be issued pursuant to an indenture [to be] dated as of [[ ]/September 6, 2019/August 15, 2017] (the “Base Indenture”), among the Issuer, the Guarantor[s] and [Citibank, N.A./Wilmington Trust, National Association], as trustee (the “Trustee”), and [Citibank, N.A., as authentication agent, transfer agent, registrar, calculation agent and initial paying agent/Citibank, N.A., London Branch as authentication agent, paying agent, transfer agent, registrar and calculation agent]. Certain terms of the Notes will be established pursuant to [a] supplemental indenture[s] (the “Supplemental Indenture[s]”; together with the Base Indenture, the “Indenture”) to the Base Indenture or an officer’s certificate.
The Issuer and [the/each] Guarantor hereby confirms its agreement with the several Underwriters concerning the purchase and resale of the Notes, as follows:
1. Registration Statement. The Issuer meets the requirements for use of Form F-3 under the Securities Act of 1933, as amended (the “Securities Act”) and has prepared and filed with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement” (as defined under Rule 405 under the Securities Act), on Form F-3 (File No. 333-[ ]) in respect of the Issuer’s debt securities and guarantees thereof. Such registration statement, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the
1
registration statement at the time of its effectiveness (together, “Rule 430 Information”), is referred to herein as the “Registration Statement”. As used herein, the term “Base Prospectus” means the prospectus included in such Registration Statement (and any amendments thereto) at the time of its effectiveness that omits Rule 430 Information. The term “Preliminary Prospectus” means the Base Prospectus and any preliminary prospectus supplement specifically relating to the Notes and the offering thereof used prior to filing of the Prospectus (as defined below). The term “Prospectus” means the Base Prospectus and the final prospectus supplement that amends or supplements the Base Prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Notes. Any reference in this underwriting agreement (this “Agreement”) to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 6 of Form F-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be, any reference to “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder that are deemed to be incorporated by reference therein, and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Parent filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement and any filings by the Parent on Form 6-K the Parent deems incorporated by reference into the Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.
At or prior to the time when sales of the Notes were first made (the “Time of Sale”), the Issuer prepared the following information (collectively, the “Time of Sale Information”): a Preliminary Prospectus and each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex A hereto.
2. Purchase and Sale of the Notes. (a) The Issuer agrees to issue and sell the Notes to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Issuer the respective principal amount of Notes set forth opposite such Underwriter’s name in Schedule 1 hereto at a price equal to [ ]% of the principal amount of the Notes, plus accrued interest, if any, from [ ], [ ], to the Closing Date (as defined below).
(b) The Issuer acknowledges and agrees that the Underwriters may offer and sell Notes to or through any affiliate of an Underwriter and that any such affiliate may offer and sell Notes purchased by it to or through any Underwriter.
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(c) The Issuer understands that the Underwriters intend to make a public offering of the Notes as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Notes on the terms set forth in the Time of Sale Information.
(d) The Issuer and [the/each] Guarantor acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s-length contractual counterparty to the Issuer and [the/each] Guarantor with respect to the offering of the Notes contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or agents of, the Issuer, [the/any] Guarantor or any other person. Additionally, neither the Representatives nor any other Underwriter are advising the Issuer, [the/any] Guarantor or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Issuer and [the/each] Guarantor shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representatives nor any other Underwriter shall have any responsibility or liability to the Issuer or [the/any] Guarantor with respect thereto. Any review by the Representatives or any Underwriter of the Issuer, [the/any] Guarantor, and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representatives or such Underwriter, as the case may be, and shall not be on behalf of the Issuer, [the/any] Guarantor or any other person. The Issuer agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Issuer, in connection with such transactions or the process leading thereto.
3. Payment and Delivery. (a) Payment for and delivery of the Notes will be made at the offices of Davis Polk & Wardwell London LLP, 5 Aldermanbury Square, London EC2V 7HR, at [ ] A.M., New York City time, on [ ], [ ], or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Issuer may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Closing Date”.
(b) The Notes will be represented by one or more global notes (collectively, the “Global Notes”) in book-entry form. Payment for the Notes shall be made by wire transfer in immediately available funds to the account(s) specified by the Issuer to the Representatives against delivery of the Global Notes to the [nominee of The Depository Trust Company (“DTC”)] [common depositary for Euroclear Bank SA/NV or Clearstream Banking, S.A.], for the account of the Underwriters, with any transfer taxes payable in connection with the initial sale of the Notes duly paid by the Issuer. The Global Notes will be made available for inspection by the Representatives not later than [ ] P.M., New York City time, on the business day prior to the Closing Date.
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4. Representations and Warranties of the Issuer and the Guarantor[s]. The Issuer and [the/each] Guarantor jointly and severally represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the Securities Act and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer and the Guarantor[s] make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale, did not, and at the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer and the Guarantor[s] make no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in the Preliminary Prospectus, the Time of Sale Information or the Prospectus.
(c) Issuer Free Writing Prospectus. Neither the Issuer nor [the/any] Guarantor (including their respective agents and representatives, other than the Underwriters in their capacity as such) has prepared, made, used, authorized, approved or referred to, nor will it prepare, make, use, authorize, approve or refer to, any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Notes (each such communication by the Issuer, the Guarantor[s] or their respective agents and representatives (other than a communication referred to in any of clauses (i), (ii) and (iii) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act, (ii) the Preliminary Prospectus, (iii) the Prospectus, (iv) the documents listed on Annex A hereto, including the pricing term sheet substantially in the form of Annex B hereto, which constitute part of the Time of Sale Information, and (v) any electronic road show or other written communications, in each case approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complies in all material respects with the Securities Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and, when taken together with the
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Preliminary Prospectus filed prior to the first use of such Issuer Free Writing Prospectus, at the Time of Sale, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and the information contained in each written communication under clause (v) does not conflict with the information either in the Time of Sale Information or the Prospectus; provided that the Issuer and the Guarantor[s] make no representation or warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof; and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Issuer. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Issuer or related to the offering has been initiated or threatened by the Commission; as of the applicable effective date of the Registration Statement and any amendment thereto, the Registration Statement complied and will comply in all material respects with the Securities Act and the Trust Indenture Act of 1939 (the “Trust Indenture Act”), as amended, and the rules and regulations of the Commission thereunder, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer makes no representation or warranty with respect to (i) that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) of the Trustee under the Trust Indenture Act or (ii) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer or the Guarantor[s] in writing by or on behalf of such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto.
5
(e) Incorporated Documents. The documents incorporated by reference in each of the Registration Statement, the Prospectus and the Time of Sale Information, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the Time of Sale Information, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Financial Statements. The consolidated financial statements and the related notes thereto of the Parent included or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus comply with applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder, and present a true and fair view of the consolidated financial position of the Parent and its subsidiaries, as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such consolidated financial statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS-IASB”) and the International Financial Reporting Standards as adopted by the United Kingdom (“IFRS-UK”) applied on a consistent basis throughout the periods covered thereby.
(g) No Material Adverse Change. Since the date of the most recent consolidated financial statements of the Parent included in each of the Registration Statement, the Time of Sale Information and the Prospectus, there has not been any material adverse change in or affecting the business, consolidated financial position, consolidated results of operations or prospects of the Parent and its subsidiaries taken as a whole, as applicable, except in each case as otherwise disclosed in the Registration Statement, the Time of Sale Information or the Prospectus.
(h) Organization and Good Standing. The Issuer and [the/each] Guarantor have been duly organized, are validly existing and are in good standing under the laws of each of their respective jurisdictions of organization (to the extent that a legal concept of “good standing” is provided for under the laws of such jurisdictions of organization), except where the failure to be so qualified, in good standing or have such power or authority would not reasonably be expected to, individually or in the aggregate, have a material adverse effect on the business, financial position, results of operations or prospects of the Parent and its subsidiaries taken as a whole or on the performance by the Issuer and the Guarantor[s] of their respective obligations under the Notes and the applicable Guarantees, whether or not arising from transactions in the ordinary course of business (a “Material Adverse Effect”).
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(i) Due Authorization. The Issuer and [the/each] Guarantor have full right, power and authority to execute and deliver this Agreement, the Notes, the Guarantees and the Indenture (collectively, the “Transaction Documents”), as applicable, and to perform their respective obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of each transaction contemplated thereby has been duly and validly taken.
(j) The Indenture. The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized[, executed and delivered] by the Issuer and [the/each] Guarantor party thereto and [when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute] [constitutes] a valid and legally binding agreement of the Issuer and [the/each] Guarantor party thereto enforceable against the Issuer and [the/each] Guarantor party thereto in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally from time to time in effect or by general principles of equity, regardless of whether considered in a proceeding in equity or at law (collectively, the “Enforceability Exceptions”).
(k) The Notes and the Guarantees. The Notes have been duly authorized by the Issuer and, when duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the Guarantees have been duly authorized by [the/each] Guarantor and, when executed and delivered by [the/each] Guarantor and when the Notes have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of [the/each] Guarantor, enforceable against [the/such] Guarantor in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.
(l) No Violation or Default. No event has occurred nor, so far as the Issuer and the Guarantor[s] are aware, have any circumstances arisen since [date of annual report] which constitute or result in, or would with the giving of notice or lapse of time or the fulfillment of any condition or the making of any determination constitute or result in default or the acceleration or breach of any payment obligation under any debt agreement, instrument or arrangement to which the Issuer and [the/any] Guarantor is a party, other than as would not reasonably be expected to have a Material Adverse Effect.
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(m) No Conflicts. The execution, delivery and performance by the Issuer and [the/each] Guarantor of each of the Transaction Documents to which each is a party, the issuance and sale of the Notes (including the Guarantees) and compliance by the Issuer and [the/each] Guarantor with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Issuer or [the/any] Guarantor, pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Issuer or [the/any] Guarantor is a party, or by which the Issuer or [the/any] Guarantor is bound, or to which any of the property or assets of the Issuer or [the/any] Guarantor is subject, or (ii) result in any violation of the provisions of the memorandum and articles of association or comparable constitutional documents of the Issuer or [the/any] Guarantor, or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation applicable to the Issuer or [the/any] Guarantor of any court or arbitrator or governmental or regulatory authority, having jurisdiction over the Issuer or [the/each such] Guarantor, except, in the case of (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect upon the consummation of any transaction contemplated in any of the Transaction Documents.
(n) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority in the United States, the United Kingdom or the Netherlands is required for the execution, delivery and performance by the Issuer and [the/each] Guarantor of any of the Transaction Documents to which any is a party, the issuance and sale of the Notes (including each Guarantee) and compliance by the Issuer and [the/each] Guarantor with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, orders and registrations or qualifications as (i) have been obtained or made under the Securities Act, the Exchange Act and the Trust Indenture Act, (ii) may be required under applicable state securities laws or foreign securities laws or (iii) may be required in connection with the admission of the Notes to trading on any exchange.
(o) Legal Proceedings. Except as disclosed in each of the Time of Sale Information and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Issuer or [the/any] Guarantor is or may be a party or to which any property of the Issuer or [the/any] Guarantor is or may be the subject that, individually or in the aggregate, if determined adversely to the Issuer or [the/any] Guarantor, could reasonably be expected to have a Material Adverse Effect or a material adverse effect upon the consummation of any transaction contemplated in any of the Transaction Documents; and no such investigations, actions, suits or proceedings are threatened or, to the best knowledge of the Issuer and [the/each] Guarantor, contemplated by any governmental or regulatory authority or by others.
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(p) Auditors. KPMG LLP (UK), which has audited the consolidated historical financial statements for the years ended December 31, [ ] of the Parent and its subsidiaries and delivered their reports with respect to such financial statements, were, on the date of such audit reports, independent auditors with respect to the Parent in accordance with audit regulation and guidance issued by the Institute of Chartered Accountants in England and Wales.
(q) Investment Company Act. None of the Issuer or the Guarantor[s] is, and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as disclosed in each of the Time of Sale Information and the Prospectus, none of them will be, required to register as an “investment company” as such term is defined in the U.S. Investment Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder.
(r) Disclosure Controls. The Parent maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Parent in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Parent’s management as appropriate to allow timely decisions regarding required disclosure. The Parent’s management has carried out evaluations of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(s) Accounting Controls. The Parent maintains a system of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS-UK, IFRS-IASB or applicable local generally accepted accounting principles (“GAAP”), including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS-UK, IFRS-IASB or applicable local GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (A) There were no (i) material weaknesses or (ii) significant deficiencies (which, in the case of (ii), would be material in the context of the
9
offering of the Notes) in the internal controls of the Parent in respect of the fiscal years ended December 31, [ ] and (B) to the best knowledge of the Parent, as of the date hereof, there are no (i) material weaknesses or (ii) significant deficiencies (which, in the case of (ii), would be material in the context of the offering of the Notes) in the internal controls of the Parent.
(t) Anti-Corruption Matters. Except for potential violations in relation to the matters disclosed in [insert cross reference] in each of the Time of Sale Information and the Prospectus, neither the Issuer nor the Guarantor[s] nor, to the knowledge of each of the Issuer and the Guarantor[s], any director, officer, agent or employee of the Issuer or the Guarantor[s], has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of any applicable anti-bribery or anti-corruption law or regulation; or made, offered or promised to make, or authorized the payment or giving of any bribe, rebate, payoff, influence payment, facilitation payment, kickback or other unlawful payment or gift of money or anything of value prohibited under any applicable law or regulation and the Issuer and the Guarantor[s] have conducted their businesses in compliance with such applicable laws and regulations and have in place and will enforce policies and procedures designed to ensure compliance therewith.
(u) Compliance with Money Laundering Laws. The operations of each of the Issuer and the Guarantor[s] are in compliance with all applicable statutes and administrative regulations relating to money laundering, unlawful financial activities, and control and prevention of terrorism, and the Issuer and the Guarantor[s] have in place and will enforce policies and procedures designed to ensure continued compliance therewith.
(v) Economic Sanctions. None of the Issuer, Guarantor[s] or their respective subsidiaries or, to the knowledge of the Issuer or the Guarantor[s], any director, officer, agent or employee of the Issuer, the Guarantor[s] or any of their respective subsidiaries is currently the subject of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”). The Issuer will not, directly or indirectly, use the proceeds of the offering of the Notes hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing activities or business of or with any person that, at the time of such financing, is the subject of any U.S. sanctions administered by OFAC or any sanctions administered by the Commission of the European Union or Her Majesty’s Treasury. Each Underwriter, the Issuer and [the/each] Guarantor agrees and confirms that it is not entitled to the benefit of or does not make, seek or repeat, as appropriate, the representations and warranties in this clause (v) to the extent that those provisions would result in a violation of Council Regulation (EC) 2271/1996 and/or any applicable national law which purports to create liability in respect of such violation in any member state of the European Union or in the United Kingdom.
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(w) Sarbanes-Oxley Act. There is and has been no failure on the part of the Parent or any of the Parent’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications, in each case of the Sarbanes-Oxley Act.
(x) Status under the Securities Act. The Parent is not an ineligible issuer and is a well-known seasoned issuer, in each case as defined under the Securities Act, in each case at the times specified in the Securities Act in connection with the offering of the Notes.
5. Further Agreements of the Issuer and the Guarantor[s]. The Issuer and [the/each] Guarantor jointly and severally covenants and agrees with each Underwriter that:
(a) Required Filings. The Issuer and the Guarantor[s] will file the Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act, as applicable, and will file any Issuer Free Writing Prospectus (including the pricing term sheet in the form of Annex B hereto) to the extent required by Rule 433 under the Securities Act; and the Issuer will file promptly all reports or information statements required to be filed by the Issuer with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act during the Prospectus Delivery Period (as defined below); and the Issuer will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City within a reasonable amount of time prior to such proposed use, in such quantities as the Representatives may reasonably request. The Issuer will pay the registration fees for this offering within the time period required by Rule 456(b)(1)(i) under the Securities Act (without giving effect to the proviso therein) and in any event prior to the Closing Date.
(b) Delivery of Copies. The Issuer will deliver, without charge, to each Underwriter (i) a copy of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith and (ii) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein) and each Issuer Free Writing Prospectus as the Representatives may reasonably request. As used herein, the term “Prospectus Delivery Period” means the period of time during which a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) relating to the Notes is required by law to be delivered in connection with sales of the Notes by any Underwriter or dealer.
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(c) Amendments or Supplements; Issuer Free Writing Prospectuses. Before using, authorizing, approving or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement or the Prospectus, during the Prospectus Delivery Period, the Issuer will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and will not use, authorize, approve or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably object.
(d) Notice to the Representatives. The Issuer will advise the Representatives promptly during the Prospectus Delivery Period (i) when any amendment to the Registration Statement has been filed or becomes effective; (ii) when any supplement to the Prospectus or any amendment to the Prospectus or any Issuer Free Writing Prospectus has been filed; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (iv) of the issuance by the Commission or any other governmental or regulatory authority of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any of the Preliminary Prospectus, the Prospectus or the Time of Sale Information or any Issuer Free Writing Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence of any event as a result of which the Prospectus, any of the Time of Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading; (vi) of the receipt by the Issuer of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; and (vii) of the receipt by the Issuer of any notice with respect to any suspension of the qualification of the Notes for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Issuer will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, any of the Time of Sale Information, Issuer Free Writing Prospectus or the Prospectus, or suspending any such qualification of the Notes and, if any such order is issued, will obtain as soon as practicable the withdrawal thereof.
(e) Time of Sale Information. If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in
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order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Time of Sale Information to comply with law, the Issuer will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters such amendments or supplements to any of the Time of Sale Information (including any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in any of the Time of Sale Information as so amended or supplemented (including such documents to be incorporated by reference therein) will not, in light of the circumstances under which they were made, be misleading or so that any of the Time of Sale Information will comply with law; provided that nothing in this paragraph shall require supplementary listing particulars to be prepared, submitted to any securities exchange or listing authority for approval or published.
(f) Ongoing Compliance. If during the Prospectus Delivery Period (i) any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Issuer will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; provided that nothing in this paragraph (f) shall require supplementary listing particulars to be prepared, submitted to any securities exchange or listing authority for approval or published.
(g) Blue Sky Compliance. The Issuer will qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request in due course and will continue such qualifications in effect so long as required for the distribution of the Notes; provided that neither the Issuer nor the Guarantor[s] shall be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(h) Clear Market. During the period from and including the date hereof through and including the Closing Date, none of the Issuer or [the/any] Guarantor will, without the prior written consent of the Representatives, offer, sell, contract to sell or otherwise dispose of any debt securities in the United States issued or guaranteed by the Issuer or [the/any] Guarantor and having a tenor of more than one year.
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(i) Use of Proceeds. The Issuer will apply the net proceeds from the sale of the Notes as described in each of the Time of Sale Information and the Prospectus, as such Prospectus may be amended or supplemented from time to time, under the heading “Use of Proceeds”.
(j) Public Disclosure of Information. The Issuer authorizes [ ] to make adequate public disclosure of information and to act as the central point responsible for handling any request from a competent authority, in each case as required by Article 6(5) of Commission Delegated Regulation (EU) 2016/1052 of March 8, 2016 with regard to regulatory technical standards for the conditions applicable to buy-back programs and stabilization measures.
(k) Clearance and Settlement. The Issuer will cooperate with the Representatives and use its reasonable best efforts to permit the Notes to be eligible for clearance and settlement through [DTC] [the common depositary for Euroclear Bank SA/NV and Clearstream Banking, S.A.].
(l) No Stabilization. None of the Issuer or the Guarantor[s] will take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Notes.
(m) [Exchange Listing. If the applicable pricing term sheet provides that the Notes are to be listed, the Issuer will use its reasonable efforts to list the Notes on the securities exchange designated in the pricing term sheet.]
(n) Earning Statement. The Parent will make generally available to its security holders and the Representatives an earning statement of the Parent that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder covering a period of at least twelve months; provided that the Parent will be deemed to have furnished such statement to its security holders and the Representatives if it is filed in accordance with Rule 158 of the Securities Act; provided further that the Statement of Comprehensive Income (or equivalent) included in the Parent’s Annual Report on Form 20-F dated [ ] is deemed to satisfy this requirement.
6. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees that:
(a) It has not used and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Issuer and not incorporated by reference into the Registration Statement and any press release issued by the Issuer) other than (i) a free writing prospectus that, solely as a result of use by such Underwriter, would not trigger an obligation to file such free writing
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prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free Writing Prospectus listed on Annex A hereto or prepared pursuant to Section 4(c) or Section 5(c) above (including any electronic road show) or (iii) any free writing prospectus prepared by such Underwriter and approved by the Issuer in advance in writing. Notwithstanding the foregoing, the Underwriters may use the pricing term sheet referred to in Annex B hereto without the consent of the Issuer.
(b) It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering of the Notes (and will promptly notify the Issuer if any such proceeding against it is initiated during the Prospectus Delivery Period).
7. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase Notes on the Closing Date as provided herein is subject to the performance by the Issuer and [the/each] Guarantor of their respective covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties of the Issuer and [the/each] Guarantor contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Issuer, [the/each] Guarantor and their respective officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.
(c) No Downgrade. Subsequent to the earlier of (i) the Time of Sale and (ii) the execution and delivery of this Agreement and prior to the Closing Date, (A) no downgrading shall have occurred in the rating accorded to the Notes or any other debt securities or preferred stock issued or guaranteed by the Parent or any of its subsidiaries by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 3(a)(62) under the Exchange Act; and (B) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Notes or of any other debt securities or preferred stock issued or guaranteed by the Parent or any of its subsidiaries (other than an announcement with positive implications of a possible upgrading).
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(d) No Material Adverse Change. No event or condition of a type described in Section 4(g) hereof shall have occurred or shall exist, which event or condition is not described in each of the Time of Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) the effect of which in the judgment of the Representatives, after consultation with the Parent if practicable, makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
(e) Officer’s Certificate. The Representatives shall have received on and as of the Closing Date a certificate either of an Executive Director or the Group Treasurer of the Parent (i) confirming that the representations and warranties of the Issuer and [the/each] Guarantor in this Agreement are true and correct and that the Issuer and [the/each] Guarantor have complied with all covenants and agreements and satisfied all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date and (ii) substantially to the effect set forth in paragraphs (b) and (d) of this Section 7. Any such person signing and delivering such certificate may certify to his or her knowledge.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date, KPMG LLP (UK) shall have furnished to the Representatives, at the request of the Parent, a letter, dated the respective dates of delivery thereof, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the applicable financial statements and certain other financial information contained or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off” date no more than three business days prior to the Closing Date.
(g) Opinion and 10b-5 Statement of Counsel for the Issuer. (i) Linklaters LLP, English counsel for the Issuer and the Guarantor[s], shall have furnished to the Representatives, at the request of the Issuer and the Parent, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex C hereto; [(ii) Stibbe N.V., Dutch counsel for BATNF, shall have furnished to the Representatives, at the request of BATNF, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex D hereto; (iii) Womble Bond Dickinson (US) LLP, North Carolina counsel for RAI, shall have furnished to the Representatives, at the request of RAI, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex E hereto;] and ([ii/iv]) Cravath, Swaine & Moore LLP, U.S. counsel for the Issuer and the Guarantor[s], shall have furnished to the Representatives, at the request of the Issuer and the Guarantor[s], their written opinion and 10b-5 statement, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex [D/F] hereto; in each case, in form and substance reasonably satisfactory to the Representatives.
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(h) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date an opinion and 10b-5 statement of Davis Polk & Wardwell London LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Notes or the issuance of the Guarantees; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Notes or the issuance of the Guarantees.
(j) Clearance and Settlement. The Notes shall be eligible for clearance and settlement through [DTC] [Euroclear Bank SA/NV and Clearstream Banking, S.A.].
(k) Additional Documents. On or prior to the Closing Date, the Issuer and [the/each] Guarantor shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to Davis Polk & Wardwell London LLP as counsel for the Underwriters.
8. Indemnification and Contribution. (a) Indemnification of the Underwriters. The Issuer and [the/each] Guarantor jointly and severally agrees to indemnify and hold harmless each Underwriter, its affiliates, directors, officers, employees, agents of each Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses reasonably incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus (or any amendment or supplement thereto), or caused by any omission or alleged omission to state therein a
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material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Issuer in writing by such Underwriter through the Representatives expressly for use therein.
(b) Indemnification of the Issuer and [the/each] Guarantor. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Issuer, [the/each] Guarantor, each of their respective directors and officers and each person, if any, who controls the Issuer or [the/any] Guarantor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity to each Underwriter set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Issuer in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information consists of the following: [ ].
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 8. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 8 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses (excluding any recoverable VAT (or similar taxes levied by reference to added value or sales)) of such proceeding and shall pay the fees and expenses (excluding any recoverable VAT (or similar taxes levied by reference to added value or sales)) of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses (including any amount paid for or in respect of VAT (or similar tax levied by reference to added value or sales))
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of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representatives and any such separate firm for the Issuer, the Guarantor[s], their respective directors and officers and any control persons of the Issuer and [the/any] Guarantor shall be designated in writing by the Issuer. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened claim in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient for any reason in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or
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liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer and the Guarantor[s] on the one hand and the Underwriters on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i), but also the relative fault of the Issuer and the Guarantor[s] on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Issuer and the Guarantor[s] on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Issuer from the sale of the Notes and the total discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Notes. The relative fault of the Issuer and the Guarantor[s], on the one hand, and the Underwriters, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or [the/any] Guarantor or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Issuer, [the/each] Guarantor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 8, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Notes exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 8 are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
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9. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above upon the execution and delivery hereof by the parties hereto.
10. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Issuer, if after the execution and delivery of this Agreement and on or prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the U.S. over-the-counter market; (ii) trading of any securities issued or guaranteed by the Issuer or [the/any] Guarantor shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by U.S. federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis either within or outside the United States that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
11. Defaulting Underwriter. (a) If, on the Closing Date, any Underwriter defaults on its obligation to purchase the Notes that it has agreed to purchase hereunder, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Notes by other persons satisfactory to the Issuer and the Guarantor[s] on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Notes, then the Issuer and the Guarantor[s] shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters, acting reasonably, to purchase such Notes on such terms. If other persons become obligated or agree to purchase the Notes of a defaulting Underwriter, either the non-defaulting Underwriters or the Issuer and the Guarantor[s] may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Issuer and the Guarantor[s] or counsel for the Underwriters may be necessary in the Registration Statement, the Time of Sale Information and the Prospectus or in any other document or arrangement, and the Issuer and the Guarantor[s] agree to promptly prepare any amendment or supplement to the Registration Statement, the Time of Sale Information and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 11, purchases Notes that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Issuer and the Guarantor[s] as provided in paragraph (a) above, the aggregate principal amount of such Notes that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Notes, then the Issuer and [the/each] Guarantor shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Notes that such Underwriter agreed to purchase hereunder plus such Underwriter’s pro rata share (based on the principal amount of Notes that such Underwriter agreed to purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
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(c) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Issuer and the Guarantor[s] as provided in paragraph (a) above, the aggregate principal amount of such Notes that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Notes, or if the Issuer and the Guarantor[s] shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 11 shall be without liability on the part of the Issuer or [the/any] Guarantor, except that the Issuer and [the/each] Guarantor will continue to be liable for the payment of expenses as set forth in Section 12 hereof and except that the provisions of Section 8 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Issuer, [the/any] Guarantor or any non-defaulting Underwriter for damages caused by its default.
12. Payment of Expenses. (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Issuer and [the/each] Guarantor jointly and severally agree to pay or cause to be paid all costs and expenses incident to the performance of their respective obligations hereunder (excluding, for the avoidance of doubt, the fees and expenses of counsel to the Underwriters), including, without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Notes (excluding any recoverable value added tax) as contemplated by this Agreement, and any transfer taxes payable in connection therewith; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Issuer’s and [the/each] Guarantor’s counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Notes under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters); (vi) any fees charged by rating agencies for rating the Notes, if any; (vii) the preparation of the Indenture and fees and expenses of the Trustee (including related fees and expenses of any counsel to the Trustee); (viii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering of the Notes by, the Financial Industry Regulatory Authority, and the approval of the Notes for book-entry transfer by [DTC] [Euroclear Bank SA/NV and Clearstream Banking, S.A.]; (ix) all expenses incurred by the Issuer and the Underwriters in connection with any “road show” presentation to potential investors (in respect of expenses so incurred by the Underwriters, the total amount payable by the Issuer and the Guarantor[s] shall not exceed $[10,000]); and (x) any fees and expenses incurred in connection with the listing of the Notes on any securities exchange.
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(b) If (i) this Agreement is terminated pursuant to Section 10, (ii) the Issuer for any reason fails to tender the Notes for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Notes for any reason permitted under this Agreement, the Issuer and [the/each] Guarantor jointly and severally agrees to reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby; provided that, in respect of expenses so incurred by the Underwriters in the case of (i) above, such reimbursement shall not exceed $[ ] ([inclusive/exclusive] of any value added tax which may be payable).
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and any controlling persons referred to herein, and the affiliates, officers and directors of each Underwriter referred to in Section 8 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Notes from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
14. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Issuer, [the/each] Guarantor and the Underwriters contained in this Agreement or made by or on behalf of the Issuer, [the/each] Guarantor or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Notes and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Issuer, [the/each] Guarantor or the Underwriters.
15. Certain Defined Terms. For purposes of this Agreement (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City or London; and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act.
16. Miscellaneous. (a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken by [REPRESENTATIVES] on behalf of the Underwriters, and any such action taken shall be binding upon the Underwriters.
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(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, addressed as follows:
[ADDRESS OF REPRESENTATIVES]
with a copy to:
Davis Polk & Wardwell London LLP
5 Aldermanbury Square
London EC2V 7HR
Attention: Reuven B. Young
Email: Reuven.Young@DavisPolk.com
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(d) Jurisdiction. The Issuer and the Guarantor[s] agree that any suit, action or proceeding against any of them brought by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or by any person who controls any Underwriter, arising solely out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the courts of the State of New York in the City and County of New York and of the United States for the Southern District of New York, and waives to the fullest extent that each may effectively do so any objection of which it may now or hereafter have to the laying of venue or of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Parent[, BATNF, BATHTN and BATIF] hereby appoint[s] [ ] as [its/their] authorized agent (the “Authorized Agent”) (and [ ] hereby accepts such appointment) upon whom process may be served in any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated herein that may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan in the City, County and State of New York, United States of America, by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or any person who controls any Underwriter, and expressly accept the non-exclusive jurisdiction of any such court in respect of any such suit, action or proceeding. The Parent[, BATNF, BATHTN and BATIF] hereby represent[s] and warrant[s] that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Parent[, BATNF, BATHTN and BATIF] agree[s] to take any and all action, including the filing of any and all documents that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Parent[, BATNF, BATHTN and BATIF].
(e) Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuer, the Guarantor[s] and the Underwriters, or any of them, with respect to the subject matter hereof.
(f) Waiver of Jury Trial. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
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(g) Currency. Each reference in this Agreement to [U.S. dollars] (the “relevant currency”), including by use of the symbol [“$”], is of the essence. To the fullest extent permitted by law, the obligation of each party in respect of any amount due under this Agreement will, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the party entitled to receive such payment may, in accordance with its normal procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the business day immediately following the day on which such party receives such payment. If the amount in the relevant currency that may be so purchased for any reason falls short of the amount originally due, the applicable party will pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligation of the applicable party not discharged by such payment will, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, will continue in full force and effect.
(h) Waiver of Immunity. To the extent that the Issuer or [the/any] Guarantor has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, the Issuer hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Agreement.
(i) Waiver of Tax Confidentiality. Notwithstanding anything herein to the contrary, purchasers of the Notes (and each employee, representative or other agent of a purchaser) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any transaction contemplated herein and all materials of any kind (including opinions or other tax analyses) that are provided to the purchasers of the Notes relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.
(j) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
(k) Electronic Communication. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, if any, shall include images of manually executed signatures transmitted by facsimile or other electronic format
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(including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the United States Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
(l) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(m) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
17. [Contractual Recognition of EU Bail-In. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Underwriters, the Issuer and the Guarantor[s], the Issuer and each of the Guarantor[s] acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts and agrees to be bound by:
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of an Underwriter to the Issuer and the Guarantor[s] under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
| 1. | the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; |
| 2. | the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Issuer and the Guarantor[s] of such shares, securities or obligations; |
| 3. | the cancellation of the BRRD Liability; or |
| 4. | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
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(b) the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.
For purposes of this Section 17, the following terms shall have the respective meanings set out below:
“Bail-in Legislation” shall mean in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
“Bail-in Powers” shall mean any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation.
“BRRD” shall mean Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“BRRD Liability” shall mean a liability in respect of which the relevant Write-down and Conversion Powers in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” shall mean the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/.
“Relevant Resolution Authority” shall mean the resolution authority with the ability to exercise any Bail-in Powers in relation to any of the Underwriters.]
18. [Contractual Recognition of UK Bail-In. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Underwriters, the Issuer and the Guarantor[s], the Issuer and each of the Guarantor[s] acknowledges and accepts that a UK Bail-in Liability arising under this Agreement may be subject to the exercise of UK Bail-in Powers by the relevant UK resolution authority, and acknowledges, accepts and agrees to be bound by:
(a) the effect of the exercise of UK Bail-in Powers by the relevant UK resolution authority in relation to any UK Bail-in Liability of an Underwriter to the Issuer and the Guarantor[s] under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
| 1. | the reduction of all, or a portion, of the UK Bail-in Liability or outstanding amounts due thereon; |
| 2. | the conversion of all, or a portion, of the UK Bail-in Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Issuer and the Guarantor[s] of such shares, securities or obligations; |
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| 3. | the cancellation of the UK Bail-in Liability; or |
| 4. | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
(b) the variation of the terms of this Agreement, as deemed necessary by the relevant UK resolution authority, to give effect to the exercise of UK Bail-in Powers by the relevant UK resolution authority.
For purposes of this Section [18], the following terms shall have the respective meanings set out below:
“UK Bail-in Legislation” means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“UK Bail-in Liability” means a liability in respect of which the UK Bail-in Powers may be exercised.
“UK Bail-in Powers” means the powers under the UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability.]
19. Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Underwriter, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
In the event that any Underwriter that is a Covered Entity or a Covered Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
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For the purposes of this Section [19]:
“Covered Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k);
“Covered Entity” means any of the following:
| (i) | a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); |
| (ii) | a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or |
| (iii) | a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); |
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and
“U.S. Special Resolution Regime” means each of (i) the U.S. Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[SIGNATURE PAGES FOLLOW]
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If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
| Very truly yours, | ||
| B.A.T CAPITAL CORPORATION, | ||
| by |
| |
| Name: | ||
| Title: |
| BRITISH AMERICAN TOBACCO P.L.C., | ||
| by |
| |
| Name: | ||
| Title: |
| [B.A.T. INTERNATIONAL FINANCE P.L.C., | ||
| by |
| |
| Name: | ||
| Title:] |
| [B.A.T. NETHERLANDS FINANCE B.V., | ||
| by |
| |
| Name: | ||
| Title: |
| by |
|
| Name: | ||
| Title:] |
[Signature Page to Underwriting Agreement]
| [BRITISH AMERICAN TOBACCO HOLDING (THE NETHERLANDS) B.V., | ||
| by |
| |
| Name: | ||
| Title: |
| by |
| Name: | ||
| Title:] |
| [REYNOLDS AMERICAN INC., | ||
| by |
| |
| Name: | ||
| Title:] |
[Signature Page to Underwriting Agreement]
Accepted as of the date hereof, for itself and on behalf of the several Underwriters listed in Schedule I hereto:
|
[REPRESENTATIVES], | ||
| By: |
| |
| Name: | ||
| Title: |
| (for Representatives requiring a second signatory) | ||
| By: |
| |
| Name: | ||
| Title: |
[Signature Page to Underwriting Agreement]
SCHEDULE 1
| Underwriter |
Aggregate Principal Amount of Notes to be Purchased | |
| [ ] |
[$] [ ] | |
| Total |
[$] [ ] | |
|
|
S-1
ANNEX A
Additional Time of Sale Information
Pricing term sheet containing the terms of the Notes, substantially in the form of Annex B.
A-1
ANNEX B
[PRICING TERM SHEET TO BE PREPARED SEPARATELY]
B-1
ANNEX C
Form of Opinion of English Counsel
[OPINION TO BE PREPARED SEPARATELY]
C-1
[ANNEX D
Form of Opinion of Dutch Counsel
[OPINION TO BE PREPARED SEPARATELY]
[D-1
ANNEX E]
Form of Opinion of North Carolina Counsel
[OPINION TO BE PREPARED SEPARATELY]
E-1]
ANNEX [D/F]
Form of Opinion of U.S. Counsel
[OPINION TO BE PREPARED SEPARATELY]
[D/F]-1
Form of 10b-5 Letter of U.S. Counsel
[STATEMENT TO BE PREPARED SEPARATELY]
[D/F]-2
Exhibit 1.3
UNDERWRITING AGREEMENT
BRITISH AMERICAN TOBACCO P.L.C.
[$][ ]
[Title of Debt Securities]
[Fully and Unconditionally Guaranteed on a [Senior Unsecured] Basis
by
B.A.T CAPITAL CORPORATION
and
B.A.T. INTERNATIONAL FINANCE P.L.C.
and
B.A.T. NETHERLANDS FINANCE B.V.
and
REYNOLDS AMERICAN INC.]
[Date]
[NAME OF REPRESENTATIVES]
As Representatives of the
several Underwriters listed
in Schedule 1 hereto
Ladies and Gentlemen:
British American Tobacco p.l.c., a public limited company incorporated under the laws of England and Wales (the “Issuer”), proposes to issue and sell to the several underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as representatives (the “Representatives”), [$][ ] aggregate principal amount of the Issuer’s [[ ]% / floating rate] notes due [ ] (the “Notes”) in the respective amounts set forth in Schedule 1 hereto. [The Notes will be entitled to the benefit of full and unconditional guarantees (the “Guarantees”), on a [senior unsecured and] joint and several basis, of the payment of all amounts owing with respect to the Notes by the Issuer, by B.A.T Capital Corporation, a Delaware corporation (“BATCAP”), B.A.T. International Finance p.l.c., a public limited company incorporated under the laws of England and Wales (“BATIF”), B.A.T. Netherlands Finance B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of The Netherlands (“BATNF”) and, unless its guarantee is released in accordance with the Indenture referred to below, Reynolds American Inc., a North Carolina corporation (“RAI”), each as a guarantor (together, the “Guarantors”).]
The Notes will be issued pursuant to an indenture dated as of [ ] (the “Base Indenture”), among the Issuer, BATCAP, BATIF and Citibank, N.A, as trustee (the “Trustee”), and Citibank, N.A., as authentication agent, transfer agent, registrar, calculation agent and initial paying agent. Certain terms of the Notes will be established pursuant to [a] supplemental indenture[s] (the “Supplemental Indenture[s]”; together with the Base Indenture, the “Indenture”) to the Base Indenture or an officer’s certificate.
The Issuer [and [each/the] Guarantor] hereby confirms its agreement with the several Underwriters concerning the purchase and resale of the Notes, as follows:
1. Registration Statement. The Issuer meets the requirements for use of Form F-3 under the Securities Act of 1933, as amended (the “Securities Act”) and has prepared and filed with the Securities and Exchange Commission (the “Commission”) an “automatic shelf registration statement” (as defined under Rule 405 under the Securities Act), on Form F-3 (File No. 333-[ ]) in respect of the Issuer’s debt securities and guarantees thereof. Such registration statement, including the information, if any, deemed pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration statement at the time of its effectiveness (together, “Rule 430 Information”), is referred to herein as the “Registration Statement”. As used herein, the term “Base Prospectus” means the prospectus included in such Registration Statement (and any amendments thereto) at the time of its effectiveness that omits Rule 430 Information. The term “Preliminary Prospectus” means the Base Prospectus and any preliminary
1
prospectus supplement specifically relating to the Notes and the offering thereof used prior to filing of the Prospectus (as defined below). The term “Prospectus” means the Base Prospectus and the final prospectus supplement that amends or supplements the Base Prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Notes. Any reference in this underwriting agreement (this “Agreement”) to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 6 of Form F-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such Preliminary Prospectus or the Prospectus, as the case may be, any reference to “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the Commission thereunder that are deemed to be incorporated by reference therein, and any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Issuer filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement and any filings by the Issuer on Form 6-K the Issuer deems incorporated by reference into the Registration Statement. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.
At or prior to the time when sales of the Notes were first made (the “Time of Sale”), the Issuer prepared the following information (collectively, the “Time of Sale Information”): a Preliminary Prospectus and each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex A hereto.
2. Purchase and Sale of the Notes. (a) The Issuer agrees to issue and sell the Notes to the several Underwriters as provided in this Agreement, and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Issuer the respective principal amount of Notes set forth opposite such Underwriter’s name in Schedule 1 hereto at a price equal to [ ]% of the principal amount of the Notes, plus accrued interest, if any, from [ ], [ ], to the Closing Date (as defined below).
(b) The Issuer acknowledges and agrees that the Underwriters may offer and sell Notes to or through any affiliate of an Underwriter and that any such affiliate may offer and sell Notes purchased by it to or through any Underwriter.
(c) The Issuer understands that the Underwriters intend to make a public offering of the Notes as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Notes on the terms set forth in the Time of Sale Information.
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(d) The Issuer [and [the/each] Guarantor] acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s-length contractual counterparty to the Issuer [and [the/each] Guarantor] with respect to the offering of the Notes contemplated hereby (including in connection with determining the terms of the offering) and not as financial advisors or fiduciaries to, or agents of, the Issuer[, [the/any] Guarantor] or any other person. Additionally, neither the Representatives nor any other Underwriter are advising the Issuer[, [the/any] Guarantor] or any other person as to any legal, tax, investment, accounting or regulatory matters in any jurisdiction. The Issuer [and [the/each] Guarantor] shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and neither the Representatives nor any other Underwriter shall have any responsibility or liability to the Issuer [or [the/any] Guarantor] with respect thereto. Any review by the Representatives or any Underwriter of the Issuer[, [the/any] Guarantor,] and the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Representatives or such Underwriter, as the case may be, and shall not be on behalf of the Issuer[, [the/any] Guarantor] or any other person. The Issuer agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Issuer, in connection with such transactions or the process leading thereto.
3. Payment and Delivery. (a) Payment for and delivery of the Notes will be made at the offices of Davis Polk & Wardwell London LLP, 5 Aldermanbury Square, London EC2V 7HR, at [ ] A.M., New York City time, on [ ], [ ], or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Issuer may agree upon in writing. The time and date of such payment and delivery is referred to herein as the “Closing Date”.
(b) The Notes will be represented by one or more global notes (collectively, the “Global Notes”) in book-entry form. Payment for the Notes shall be made by wire transfer in immediately available funds to the account(s) specified by the Issuer to the Representatives against delivery of the Global Notes to the [nominee of The Depository Trust Company (“DTC”)] [common depositary for Euroclear Bank SA/NV or Clearstream Banking, S.A.], for the account of the Underwriters, with any transfer taxes payable in connection with the initial sale of the Notes duly paid by the Issuer. The Global Notes will be made available for inspection by the Representatives not later than [ ] P.M., New York City time, on the business day prior to the Closing Date.
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4. Representations and Warranties of the Issuer[ and the Guarantor[s]]. The Issuer [and [the/each] Guarantor jointly and severally] represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the Securities Act and did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer [and the Guarantor[s]] make[s] no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer [or the Guarantor[s]] in writing by or on behalf of such Underwriter through the Representatives expressly for use in any Preliminary Prospectus.
(b) Time of Sale Information. The Time of Sale Information, at the Time of Sale, did not, and at the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer [and the Guarantor[s]] make[s] no representation or warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer [or the Guarantor[s]] in writing by or on behalf of such Underwriter through the Representatives expressly for use in the Preliminary Prospectus, the Time of Sale Information or the Prospectus.
(c) Issuer Free Writing Prospectus. [Neither] the Issuer [nor [the/any] Guarantor] (including [its/their respective] agents and representatives, other than the Underwriters in their capacity as such) has [not] prepared, made, used, authorized, approved or referred to, [nor will it/and will not] prepare, make, use, authorize, approve or refer to, any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Notes (each such communication by the Issuer[, the Guarantor[s]] or [its/their respective] agents and representatives (other than a communication referred to in any of clauses (i), (ii) and (iii) below) an “Issuer Free Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act, (ii) the Preliminary Prospectus, (iii) the Prospectus, (iv) the documents listed on Annex A hereto, including the pricing term sheet substantially in the form of Annex B hereto, which constitute part of the Time of Sale Information, and (v) any electronic road show or other written communications, in each case approved in writing in advance by the Representatives. Each such Issuer Free Writing Prospectus complies in all material respects with the Securities Act, has been or will be (within the time period specified in Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and, when taken together with the Preliminary Prospectus filed prior to the first use of such Issuer Free Writing Prospectus, at the Time of Sale, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and the information contained in each written communication under clause (v) does not conflict with the information
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either in the Time of Sale Information or the Prospectus; provided that the Issuer [and the Guarantor[s]] make[s] no representation or warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer [or the Guarantor[s]] in writing by or on behalf of such Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.
(d) Registration Statement and Prospectus. The Registration Statement is an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof; and no notice of objection of the Commission to the use of such registration statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act has been received by the Issuer. No order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Issuer or related to the offering has been initiated or threatened by the Commission; as of the applicable effective date of the Registration Statement and any amendment thereto, the Registration Statement complied and will comply in all material respects with the Securities Act and the Trust Indenture Act of 1939 (the “Trust Indenture Act”), as amended, and the rules and regulations of the Commission thereunder, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Issuer makes no representation or warranty with respect to (i) that part of the Registration Statement that constitutes the Statement of Eligibility and Qualification (Form T-1) of the Trustee under the Trust Indenture Act or (ii) any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Issuer [or the Guarantor[s]] in writing by or on behalf of such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto.
(e) Incorporated Documents. The documents incorporated by reference in each of the Registration Statement, the Prospectus and the Time of Sale Information, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Prospectus or the Time of Sale Information, when
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such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) Financial Statements. The consolidated financial statements and the related notes thereto of the Issuer included or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus comply with applicable requirements of the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder, and present a true and fair view of the consolidated financial position of the Issuer and its subsidiaries, as of the dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such consolidated financial statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS-IASB”) and the International Financial Reporting Standards as adopted by the United Kingdom (“IFRS-UK”) applied on a consistent basis throughout the periods covered thereby.
(g) No Material Adverse Change. Since the date of the most recent consolidated financial statements of the Issuer included in each of the Registration Statement, the Time of Sale Information and the Prospectus, there has not been any material adverse change in or affecting the business, consolidated financial position, consolidated results of operations or prospects of the Issuer and its subsidiaries taken as a whole, as applicable, except in each case as otherwise disclosed in the Registration Statement, the Time of Sale Information or the Prospectus.
(h) Organization and Good Standing. The Issuer [and [the/each] Guarantor] [has/have] been duly organized, [is/are] validly existing and [is/are] in good standing under the laws of [its/each of their respective] jurisdiction[s] of organization (to the extent that a legal concept of “good standing” is provided for under the laws of such jurisdiction[s] of organization), except where the failure to be so qualified, in good standing or have such power or authority would not reasonably be expected to, individually or in the aggregate, have a material adverse effect on the business, financial position, results of operations or prospects of the Issuer and its subsidiaries taken as a whole or on the performance by the Issuer [and the Guarantor[s]] of [its/their respective] obligations under the Notes [and the applicable Guarantees], whether or not arising from transactions in the ordinary course of business (a “Material Adverse Effect”).
(i) Due Authorization. The Issuer [and [the/each] Guarantor] [has/have] full right, power and authority to execute and deliver this Agreement, the Notes[, the Guarantees] and the Indenture (collectively, the “Transaction Documents”), as applicable, and to perform [its/their respective] obligations hereunder and thereunder; and all action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of each transaction contemplated thereby has been duly and validly taken.
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(j) The Indenture. The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized by the Issuer [and [the/each] Guarantor party thereto] and when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Issuer [and [the/each] Guarantor party thereto] enforceable against the Issuer [and [the/each] Guarantor party thereto] in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally from time to time in effect or by general principles of equity, regardless of whether considered in a proceeding in equity or at law (collectively, the “Enforceability Exceptions”).
(k) The Notes [and the Guarantees]. The Notes have been duly authorized by the Issuer and, when duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Issuer, enforceable against the Issuer in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture[; and the Guarantees have been duly authorized by [the/each] Guarantor and, when executed and delivered by [the/each] Guarantor and when the Notes have been duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be valid and legally binding obligations of [the/each] Guarantor, enforceable against [the/such] Guarantor in accordance with their terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the Indenture].
(l) No Violation or Default. No event has occurred nor, so far as the Issuer [and the Guarantor[s]] [is/are] aware, have any circumstances arisen since [date of annual report] which constitute or result in, or would with the giving of notice or lapse of time or the fulfillment of any condition or the making of any determination constitute or result in default or the acceleration or breach of any payment obligation under any debt agreement, instrument or arrangement to which the Issuer [and [the/any] Guarantor] is a party, other than as would not reasonably be expected to have a Material Adverse Effect.
(m) No Conflicts. The execution, delivery and performance by the Issuer [and [the/each] Guarantor] of each of the Transaction Documents to which [it/each] is a party, the issuance and sale of the Notes (including the Guarantees) and compliance by the Issuer [and [the/each] Guarantor] with the terms thereof and the consummation of the transactions contemplated by the Transaction
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Documents will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Issuer [or [the/any] Guarantor], pursuant to any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Issuer [or [the/any] Guarantor] is a party, or by which the Issuer [or [the/any] Guarantor] is bound, or to which any of the property or assets of the Issuer [or [the/any] Guarantor] is subject, or (ii) result in any violation of the provisions of the memorandum and articles of association or comparable constitutional documents of the Issuer [or [the/any] Guarantor], or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation applicable to the Issuer [or [the/any] Guarantor] of any court or arbitrator or governmental or regulatory authority, having jurisdiction over the Issuer [or [the/each such] Guarantor], except, in the case of (i) and (iii) above, for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a Material Adverse Effect or a material adverse effect upon the consummation of any transaction contemplated in any of the Transaction Documents.
(n) No Consents Required. No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority in the United States, the United Kingdom or the Netherlands is required for the execution, delivery and performance by the Issuer [and [the/each] Guarantor] of any of the Transaction Documents to which any is a party, the issuance and sale of the Notes [(including each Guarantee)] and compliance by the Issuer [and [the/each] Guarantor] with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, orders and registrations or qualifications as (i) have been obtained or made under the Securities Act, the Exchange Act and the Trust Indenture Act, (ii) may be required under applicable state securities laws or foreign securities laws or (iii) may be required in connection with the admission of the Notes to trading on any exchange.
(o) Legal Proceedings. Except as disclosed in each of the Time of Sale Information and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Issuer [or [the/any] Guarantor] is or may be a party or to which any property of the Issuer [or [the/any] Guarantor] is or may be the subject that, individually or in the aggregate, if determined adversely to the Issuer [or [the/any] Guarantor], could reasonably be expected to have a Material Adverse Effect or a material adverse effect upon the consummation of any transaction contemplated in any of the Transaction Documents; and no such investigations, actions, suits or proceedings are threatened or, to the best knowledge of the Issuer [and [the/each] Guarantor], contemplated by any governmental or regulatory authority or by others.
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(p) Auditors. KPMG LLP (UK), which has audited the consolidated historical financial statements for the years ended [December 31, [ ]] of the Issuer and its subsidiaries and delivered their reports with respect to such financial statements, were, on the date of such audit reports, independent auditors with respect to the Issuer in accordance with audit regulation and guidance issued by the Institute of Chartered Accountants in England and Wales.
(q) Investment Company Act. [None of] the Issuer [or the Guarantor[s]] is [not], and after giving effect to the offering and sale of the Notes and the application of the proceeds thereof as disclosed in each of the Time of Sale Information and the Prospectus, [none of them will/will not be] be, required to register as an “investment company” as such term is defined in the U.S. Investment Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission thereunder.
(r) Disclosure Controls. The Issuer maintains an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Issuer in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Issuer’s management as appropriate to allow timely decisions regarding required disclosure. The Issuer’s management has carried out evaluations of the effectiveness of its disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
(s) Accounting Controls. The Issuer maintains a system of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) sufficient to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS-UK, IFRS-IASB or applicable local generally accepted accounting principles (“GAAP”), including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with IFRS-UK, IFRS-IASB or applicable local GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (A) There were no (i) material weaknesses or (ii) significant deficiencies (which, in the case of (ii), would be material in the context of the offering of the Notes) in the internal controls of the Issuer in respect of the fiscal years ended December 31, [ ] and (B) to the best knowledge of the Issuer, as of the date hereof, there are no (i) material weaknesses or (ii) significant deficiencies (which, in the case of (ii), would be material in the context of the offering of the Notes) in the internal controls of the Issuer.
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(t) Anti-Corruption Matters. Except for potential violations in relation to the matters disclosed in [insert cross reference] in each of the Time of Sale Information and the Prospectus, neither the Issuer [nor the Guarantor[s]] nor, to the knowledge of [each of] the Issuer [and Guarantor[s]], any director, officer, agent or employee of the Issuer [or the Guarantor[s]], has used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of any applicable anti-bribery or anti-corruption law or regulation; or made, offered or promised to make, or authorized the payment or giving of any bribe, rebate, payoff, influence payment, facilitation payment, kickback or other unlawful payment or gift of money or anything of value prohibited under any applicable law or regulation and the Issuer [and the Guarantor[s]] [has/have] conducted [its/their] businesses in compliance with such applicable laws and regulations and [has/have] in place and will enforce policies and procedures designed to ensure compliance therewith.
(u) Compliance with Money Laundering Laws. The operations of [each of] the Issuer [and the Guarantor[s]] [is/are] in compliance with all applicable statutes and administrative regulations relating to money laundering, unlawful financial activities, and control and prevention of terrorism, and the Issuer [and the Guarantor[s]] [has/have] in place and will enforce policies and procedures designed to ensure continued compliance therewith.
(v) Economic Sanctions. None of the Issuer[, Guarantor[s]] or [its/their respective] subsidiaries or, to the knowledge of the Issuer [or the Guarantor[s]], any director, officer, agent or employee of the Issuer[, the Guarantor[s]] or any of [its/their respective] subsidiaries is currently the subject of any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”). The Issuer will not, directly or indirectly, use the proceeds of the offering of the Notes hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing activities or business of or with any person that, at the time of such financing, is the subject of any U.S. sanctions administered by OFAC or any sanctions administered by the Commission of the European Union or Her Majesty’s Treasury. Each Underwriter[,/and] the Issuer [and [the/each] Guarantor] agrees and confirms that it is not entitled to the benefit of or does not make, seek or repeat, as appropriate, the representations and warranties in this clause (v) to the extent that those provisions would result in a violation of Council Regulation (EC) 2271/1996 and/or any applicable national law which purports to create liability in respect of such violation in any member state of the European Union or in the United Kingdom.
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(w) Sarbanes-Oxley Act. There is and has been no failure on the part of the Issuer or any of the Issuer’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications, in each case of the Sarbanes-Oxley Act.
(x) Status under the Securities Act. The Issuer is not an ineligible issuer and is a well-known seasoned issuer, in each case as defined under the Securities Act, in each case at the times specified in the Securities Act in connection with the offering of the Notes.
5. Further Agreements of the Issuer [and the Guarantor[s]]. The Issuer [and [the/each] Guarantor jointly and severally] covenants and agrees with each Underwriter that:
(a) Required Filings. The Issuer [and the Guarantor[s]] will file the Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act, as applicable, and will file any Issuer Free Writing Prospectus (including the pricing term sheet in the form of Annex B hereto) to the extent required by Rule 433 under the Securities Act; and the Issuer will file promptly all reports or information statements required to be filed by the Issuer with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act during the Prospectus Delivery Period (as defined below); and the Issuer will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City within a reasonable amount of time prior to such proposed use, in such quantities as the Representatives may reasonably request. The Issuer will pay the registration fees for this offering within the time period required by Rule 456(b)(1)(i) under the Securities Act (without giving effect to the proviso therein) and in any event prior to the Closing Date.
(b) Delivery of Copies. The Issuer will deliver, without charge, to each Underwriter (i) a copy of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith and (ii) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto and documents incorporated by reference therein) and each Issuer Free Writing Prospectus as the Representatives may reasonably request. As used herein, the term “Prospectus Delivery Period” means the period of time during which a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) relating to the Notes is required by law to be delivered in connection with sales of the Notes by any Underwriter or dealer.
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(c) Amendments or Supplements; Issuer Free Writing Prospectuses. Before using, authorizing, approving or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement or the Prospectus, during the Prospectus Delivery Period, the Issuer will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and will not use, authorize, approve or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably object.
(d) Notice to the Representatives. The Issuer will advise the Representatives promptly during the Prospectus Delivery Period (i) when any amendment to the Registration Statement has been filed or becomes effective; (ii) when any supplement to the Prospectus or any amendment to the Prospectus or any Issuer Free Writing Prospectus has been filed; (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (iv) of the issuance by the Commission or any other governmental or regulatory authority of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any of the Preliminary Prospectus, the Prospectus or the Time of Sale Information or any Issuer Free Writing Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (v) of the occurrence of any event as a result of which the Prospectus, any of the Time of Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading; (vi) of the receipt by the Issuer of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities Act; and (vii) of the receipt by the Issuer of any notice with respect to any suspension of the qualification of the Notes for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Issuer will use its reasonable best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus, any of the Time of Sale Information, Issuer Free Writing Prospectus or the Prospectus, or suspending any such qualification of the Notes and, if any such order is issued, will obtain as soon as practicable the withdrawal thereof.
(e) Time of Sale Information. If at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which any of the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) it is necessary to amend or supplement any of the Time of Sale Information to comply with law, the Issuer
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will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters such amendments or supplements to any of the Time of Sale Information (including any document to be filed with the Commission and incorporated by reference therein) as may be necessary so that the statements in any of the Time of Sale Information as so amended or supplemented (including such documents to be incorporated by reference therein) will not, in light of the circumstances under which they were made, be misleading or so that any of the Time of Sale Information will comply with law; provided that nothing in this paragraph shall require supplementary listing particulars to be prepared, submitted to any securities exchange or listing authority for approval or published.
(f) Ongoing Compliance. If during the Prospectus Delivery Period (i) any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Issuer will promptly notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; provided that nothing in this paragraph (f) shall require supplementary listing particulars to be prepared, submitted to any securities exchange or listing authority for approval or published.
(g) Blue Sky Compliance. The Issuer will qualify the Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request in due course and will continue such qualifications in effect so long as required for the distribution of the Notes; provided that [neither] the Issuer [nor the Guarantor[s]] shall [not] be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it is not otherwise so subject.
(h) Clear Market. During the period from and including the date hereof through and including the Closing Date, [none of] the Issuer [or [the/any] Guarantor] will [not], without the prior written consent of the Representatives, offer, sell, contract to sell or otherwise dispose of any debt securities in the United States issued [or guaranteed] by the Issuer [or [the/any] Guarantor] and having a tenor of more than one year.
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(i) Use of Proceeds. The Issuer will apply the net proceeds from the sale of the Notes as described in each of the Time of Sale Information and the Prospectus, as such Prospectus may be amended or supplemented from time to time, under the heading “Use of Proceeds”.
(j) Public Disclosure of Information. The Issuer authorizes [ ] to make adequate public disclosure of information and to act as the central point responsible for handling any request from a competent authority, in each case as required by Article 6(5) of Commission Delegated Regulation (EU) 2016/1052 of March 8, 2016 with regard to regulatory technical standards for the conditions applicable to buy-back programs and stabilization measures.
(k) Clearance and Settlement. The Issuer will cooperate with the Representatives and use its reasonable best efforts to permit the Notes to be eligible for clearance and settlement through [DTC] [the common depositary for Euroclear Bank SA/NV and Clearstream Banking, S.A.].
(l) No Stabilization. [None of] the Issuer [or [the/any] Guarantor[s]] will [not] take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Notes.
(m) [Exchange Listing. If the applicable pricing term sheet provides that the Notes are to be listed, the Issuer will use its reasonable efforts to list the Notes on the securities exchange designated in the pricing term sheet.]
(n) Earning Statement. The Issuer will make generally available to its security holders and the Representatives an earning statement of the Issuer that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder covering a period of at least twelve months; provided that the Issuer will be deemed to have furnished such statement to its security holders and the Representatives if it is filed in accordance with Rule 158 of the Securities Act; provided further that the Statement of Comprehensive Income (or equivalent) included in the Issuer’s Annual Report on Form 20-F dated [ ] is deemed to satisfy this requirement.
6. Certain Agreements of the Underwriters. Each Underwriter hereby represents and agrees that:
(a) It has not used and will not use, authorize use of, refer to or participate in the planning for use of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Issuer and not incorporated by reference into the Registration Statement and any press release issued by the Issuer) other than (i) a free writing prospectus that, solely as a result of use by such Underwriter, would not trigger an obligation to file such free writing prospectus with the Commission pursuant to Rule 433, (ii) any Issuer Free
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Writing Prospectus listed on Annex A hereto or prepared pursuant to Section 4(c) or Section 5(c) above (including any electronic road show) or (iii) any free writing prospectus prepared by such Underwriter and approved by the Issuer in advance in writing. Notwithstanding the foregoing, the Underwriters may use the pricing term sheet referred to in Annex B hereto without the consent of the Issuer.
(b) It is not subject to any pending proceeding under Section 8A of the Securities Act with respect to the offering of the Notes (and will promptly notify the Issuer if any such proceeding against it is initiated during the Prospectus Delivery Period).
7. Conditions of Underwriters’ Obligations. The obligation of each Underwriter to purchase Notes on the Closing Date as provided herein is subject to the performance by the Issuer [and [the/each] Guarantor] of their respective covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose, pursuant to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 5(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.
(b) Representations and Warranties. The representations and warranties of the Issuer [and [the/each] Guarantor] contained herein shall be true and correct on the date hereof and on and as of the Closing Date; and the statements of the Issuer[, [the/each] Guarantor] and [its/their respective] officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date.
(c) No Downgrade. Subsequent to the earlier of (i) the Time of Sale and (ii) the execution and delivery of this Agreement and prior to the Closing Date, (A) no downgrading shall have occurred in the rating accorded to the Notes or any other debt securities or preferred stock issued or guaranteed by the Issuer or any of its subsidiaries by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 3(a)(62) under the Exchange Act; and (B) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of the Notes or of any other debt securities or preferred stock issued or guaranteed by the Issuer or any of its subsidiaries (other than an announcement with positive implications of a possible upgrading).
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(d) No Material Adverse Change. No event or condition of a type described in Section 4(g) hereof shall have occurred or shall exist, which event or condition is not described in each of the Time of Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) the effect of which in the judgment of the Representatives, after consultation with the Issuer if practicable, makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
(e) Officer’s Certificate. The Representatives shall have received on and as of the Closing Date a certificate either of an Executive Director or the Group Treasurer of the Issuer (i) confirming that the representations and warranties of the Issuer [and [the/each] Guarantor] in this Agreement are true and correct and that the Issuer [and [the/each] Guarantor] [has/have] complied with all covenants and agreements and satisfied all conditions on [its/their] part to be performed or satisfied hereunder at or prior to the Closing Date and (ii) substantially to the effect set forth in paragraphs (b) and (d) of this Section 7. Any such person signing and delivering such certificate may certify to his or her knowledge.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date, KPMG LLP (UK) shall have furnished to the Representatives, at the request of the Issuer, a letter, dated the respective dates of delivery thereof, and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the applicable financial statements and certain other financial information contained or incorporated by reference in each of the Registration Statement, the Time of Sale Information and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off” date no more than three business days prior to the Closing Date.
(g) Opinion and 10b-5 Statement of Counsel for the Issuer. (i) Linklaters LLP, English counsel for the Issuer [and the Guarantor[s]], shall have furnished to the Representatives, at the request of the Issuer, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex C hereto; [(ii) Stibbe N.V., Dutch counsel for BATNF, shall have furnished to the Representatives, at the request of BATNF, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex D hereto; (iii) Womble Bond Dickinson (US) LLP, North Carolina counsel for RAI, shall have furnished to the Representatives, at the request of RAI, their written opinion, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex E hereto;] and ([ii/iv]) Cravath, Swaine & Moore LLP, U.S. counsel for the Issuer [and the Guarantor[s]], shall have furnished to the Representatives, at the request of the Issuer [and the Guarantor[s]], their written opinion and 10b-5 statement, dated the Closing Date and addressed to the Underwriters, substantially in the form of Annex [D/F] hereto; in each case, in form and substance reasonably satisfactory to the Representatives.
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(h) Opinion and 10b-5 Statement of Counsel for the Underwriters. The Representatives shall have received on and as of the Closing Date an opinion and 10b-5 statement of Davis Polk & Wardwell London LLP, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.
(i) No Legal Impediment to Issuance. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date, prevent the issuance or sale of the Notes [or the issuance of the Guarantees]; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date, prevent the issuance or sale of the Notes [or the issuance of the Guarantees].
(j) Clearance and Settlement. The Notes shall be eligible for clearance and settlement through [DTC] [Euroclear Bank SA/NV and Clearstream Banking, S.A.].
(k) Additional Documents. On or prior to the Closing Date, the Issuer [and [the/each] Guarantor] shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to Davis Polk & Wardwell London LLP as counsel for the Underwriters.
8. Indemnification and Contribution. (a) Indemnification of the Underwriters. The Issuer [and [the/each] Guarantor jointly and severally] agrees to indemnify and hold harmless each Underwriter, its affiliates, directors, officers, employees, agents of each Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses reasonably incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus (or any amendment or supplement thereto), or caused by any omission or alleged omission to state therein a
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material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Issuer in writing by such Underwriter through the Representatives expressly for use therein.
(b) Indemnification of the Issuer [and [the/each] Guarantor]. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Issuer[, [the/each] Guarantor], each of [its/their respective] directors and officers and each person, if any, who controls the Issuer [or [the/any] Guarantor] within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity to each Underwriter set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Issuer in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, any Issuer Free Writing Prospectus, any Time of Sale Information or the Prospectus (or any amendment or supplement thereto), it being understood and agreed that the only such information consists of the following: [ ].
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 8 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided further that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 8. If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person and any others entitled to indemnification pursuant to this Section 8 that the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses (excluding any recoverable VAT (or similar taxes levied by reference to added value or sales)) of such proceeding and shall pay the fees and expenses (excluding any recoverable VAT (or similar taxes levied by reference to added value or sales)) of such counsel related to such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses (including any amount paid for or in respect of VAT (or similar tax levied by reference to added value or sales))
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of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it that are different from or in addition to those available to the Indemnifying Person; or (iv) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed as they are incurred. Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by the Representatives and any such separate firm for the Issuer[, the Guarantor[s]], [its/their respective] directors and officers and any control persons of the Issuer [and [the/any] Guarantor] shall be designated in writing by the Issuer. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement. No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened claim in respect of which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient for any reason in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or
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liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer [and the Guarantor[s]] on the one hand and the Underwriters on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i), but also the relative fault of the Issuer [and the Guarantor[s]] on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Issuer [and the Guarantor[s]] on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Issuer from the sale of the Notes and the total discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Notes. The relative fault of the Issuer [and the Guarantor[s]], on the one hand, and the Underwriters on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer [or [the/any] Guarantor] or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(e) Limitation on Liability. The Issuer[, [the/each] Guarantor] and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of this Section 8, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Notes exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations to contribute pursuant to this Section 8 are several in proportion to their respective purchase obligations hereunder and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Indemnified Person at law or in equity.
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9. Effectiveness of Agreement. This Agreement shall become effective as of the date first written above upon the execution and delivery hereof by the parties hereto.
10. Termination. This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Issuer, if after the execution and delivery of this Agreement and on or prior to the Closing Date (i) trading generally shall have been suspended or materially limited on the New York Stock Exchange or the U.S. over-the-counter market; (ii) trading of any securities issued [or guaranteed] by the Issuer [or [the/any] Guarantor] shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by U.S. federal or New York State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis either within or outside the United States that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.
11. Defaulting Underwriter. (a) If, on the Closing Date, any Underwriter defaults on its obligation to purchase the Notes that it has agreed to purchase hereunder, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Notes by other persons satisfactory to the Issuer [and the Guarantor[s]] on the terms contained in this Agreement. If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Notes, then the Issuer [and the Guarantor[s]] shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters, acting reasonably, to purchase such Notes on such terms. If other persons become obligated or agree to purchase the Notes of a defaulting Underwriter, either the non-defaulting Underwriters or the Issuer [and the Guarantor[s]] may postpone the Closing Date for up to five full business days in order to effect any changes that in the opinion of counsel for the Issuer [and the Guarantor[s]] or counsel for the Underwriters may be necessary in the Registration Statement, the Time of Sale Information and the Prospectus or in any other document or arrangement, and the Issuer [and the Guarantor[s]] agree to promptly prepare any amendment or supplement to the Registration Statement, the Time of Sale Information and the Prospectus that effects any such changes. As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 11, purchases Notes that a defaulting Underwriter agreed but failed to purchase.
(b) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Issuer [and the Guarantor[s]] as provided in paragraph (a) above, the aggregate principal amount of such Notes that remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Notes, then the Issuer [and [the/each] Guarantor] shall have the right to require each non-defaulting Underwriter to purchase the principal amount of Notes that such Underwriter agreed to purchase hereunder plus such Underwriter’s pro rata share (based on the principal amount of Notes that such Underwriter agreed to purchase hereunder) of the Notes of such defaulting Underwriter or Underwriters for which such arrangements have not been made.
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(c) If, after giving effect to any arrangements for the purchase of the Notes of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Issuer [and the Guarantor[s]] as provided in paragraph (a) above, the aggregate principal amount of such Notes that remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Notes, or if the Issuer [and the Guarantor[s]] shall not exercise the right described in paragraph (b) above, then this Agreement shall terminate without liability on the part of the non-defaulting Underwriters. Any termination of this Agreement pursuant to this Section 11 shall be without liability on the part of the Issuer [or [the/any] Guarantor], except that the Issuer [and [the/each] Guarantor] will continue to be liable for the payment of expenses as set forth in Section 12 hereof and except that the provisions of Section 8 hereof shall not terminate and shall remain in effect.
(d) Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Issuer[, [the/any] Guarantor] or any non-defaulting Underwriter for damages caused by its default.
12. Payment of Expenses. (a) Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Issuer [and [the/each] Guarantor jointly and severally] agree[s] to pay or cause to be paid all costs and expenses incident to the performance of [its/their respective] obligations hereunder (excluding, for the avoidance of doubt, the fees and expenses of counsel to the Underwriters), including, without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Notes (excluding any recoverable value added tax) as contemplated by this Agreement, and any transfer taxes payable in connection therewith; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the fees and expenses of the Issuer’s [and [the/each] Guarantor’s] counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Notes under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters); (vi) any fees charged by rating agencies for rating the Notes, if any; (vii) the preparation of the Indenture and fees and expenses of the Trustee (including related fees and expenses of any counsel to the Trustee); (viii) all expenses and application fees incurred in connection with any filing with, and clearance of the offering of the Notes by, the Financial Industry Regulatory Authority, and the approval of the Notes for book-entry transfer by [DTC] [Euroclear Bank SA/NV and Clearstream Banking, S.A.]; (ix) all expenses incurred by the Issuer and the Underwriters in
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connection with any “road show” presentation to potential investors (in respect of expenses so incurred by the Underwriters, the total amount payable by the Issuer [and the Guarantor[s]] shall not exceed $[10,000]); and (x) any fees and expenses incurred in connection with the listing of the Notes on any securities exchange.
(b) If (i) this Agreement is terminated pursuant to Section 10, (ii) the Issuer for any reason fails to tender the Notes for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Notes for any reason permitted under this Agreement, the Issuer [and [the/each] Guarantor jointly and severally] agrees to reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby; provided that, in respect of expenses so incurred by the Underwriters in the case of (i) above, such reimbursement shall not exceed $[ ] ([inclusive/exclusive] of any value added tax which may be payable).
13. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and any controlling persons referred to herein, and the affiliates, officers and directors of each Underwriter referred to in Section 8 hereof. Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. No purchaser of Notes from any Underwriter shall be deemed to be a successor merely by reason of such purchase.
14. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Issuer[, [the/each] Guarantor] and the Underwriters contained in this Agreement or made by or on behalf of the Issuer[, [the/each] Guarantor] or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Notes and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Issuer[, [the/each] Guarantor] or the Underwriters.
15. Certain Defined Terms. For purposes of this Agreement (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City or London; and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act.
16. Miscellaneous. (a) Authority of the Representatives. Any action by the Underwriters hereunder may be taken by [REPRESENTATIVES] on behalf of the Underwriters, and any such action taken shall be binding upon the Underwriters.
(b) Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives, addressed as follows:
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[ADDRESS OF REPRESENTATIVES]
with a copy to:
Davis Polk & Wardwell London LLP
5 Aldermanbury Square
London EC2V 7HR
Attention: Reuven B. Young
Email: Reuven.Young@DavisPolk.com
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
(d) Jurisdiction. The Issuer [and the Guarantor[s]] agree[s] that any suit, action or proceeding against [it/any of them] brought by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or by any person who controls any Underwriter, arising solely out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the courts of the State of New York in the City and County of New York and of the United States for the Southern District of New York, and waives to the fullest extent that [it/each] may effectively do so any objection of which it may now or hereafter have to the laying of venue or of any such proceeding, and irrevocably submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. The Issuer [, BATNF and BATIF] hereby appoint[s] [ ] as [its/their] authorized agent (the “Authorized Agent”) (and [ ] hereby accepts such appointment) upon whom process may be served in any suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated herein that may be instituted in any U.S. Federal or New York State court in the Borough of Manhattan in the City, County and State of New York, United States of America, by any Underwriter, the directors, officers, employees, affiliates and agents of any Underwriter, or any person who controls any Underwriter, and expressly accept the non-exclusive jurisdiction of any such court in respect of any such suit, action or proceeding. The Issuer [, BATNF and BATIF] hereby represent[s] and warrant[s] that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Issuer [, BATNF and BATIF] agree[s] to take any and all action, including the filing of any and all documents that may be necessary to continue such appointment in full force and effect as aforesaid. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Issuer [, BATNF and BATIF].
(e) Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Issuer[, the Guarantor[s]] and the Underwriters, or any of them, with respect to the subject matter hereof.
(f) Waiver of Jury Trial. Each party hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
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(g) Currency. Each reference in this Agreement to [U.S. dollars] (the “relevant currency”), including by use of the symbol [“$”], is of the essence. To the fullest extent permitted by law, the obligation of each party in respect of any amount due under this Agreement will, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the relevant currency that the party entitled to receive such payment may, in accordance with its normal procedures, purchase with the sum paid in such other currency (after any premium and costs of exchange) on the business day immediately following the day on which such party receives such payment. If the amount in the relevant currency that may be so purchased for any reason falls short of the amount originally due, the applicable party will pay such additional amounts, in the relevant currency, as may be necessary to compensate for the shortfall. Any obligation of the applicable party not discharged by such payment will, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, will continue in full force and effect.
(h) Waiver of Immunity. To the extent that the Issuer [or [the/any] Guarantor] has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, the Issuer hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Agreement.
(i) Waiver of Tax Confidentiality. Notwithstanding anything herein to the contrary, purchasers of the Notes (and each employee, representative or other agent of a purchaser) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of any transaction contemplated herein and all materials of any kind (including opinions or other tax analyses) that are provided to the purchasers of the Notes relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws.
(j) Counterparts. This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.
(k) Electronic Communication. The words “execution,” “signed,” “signature,” and words of like import in this Agreement or in any other certificate, agreement or document related to this Agreement, if any, shall include images of manually executed signatures transmitted by facsimile or other electronic format
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(including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the United States Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
(l) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.
(m) Headings. The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
17. [Contractual Recognition of EU Bail-In. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Underwriters, the Issuer and the Guarantor[s], the Issuer and each of the Guarantor[s] acknowledges and accepts that a BRRD Liability arising under this Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts and agrees to be bound by:
(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of an Underwriter to the Issuer and the Guarantor[s] under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
| 1. | the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon; |
| 2. | the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Issuer and the Guarantor[s] of such shares, securities or obligations; |
| 3. | the cancellation of the BRRD Liability; or |
| 4. | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
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(b) the variation of the terms of this Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.
For purposes of this Section 17, the following terms shall have the respective meanings set out below:
“Bail-in Legislation” shall mean in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.
“Bail-in Powers” shall mean any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation.
“BRRD” shall mean Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
“BRRD Liability” shall mean a liability in respect of which the relevant Write-down and Conversion Powers in the applicable Bail-in Legislation may be exercised.
“EU Bail-in Legislation Schedule” shall mean the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/.
“Relevant Resolution Authority” shall mean the resolution authority with the ability to exercise any Bail-in Powers in relation to any of the Underwriters.]
18. [Contractual Recognition of UK Bail-In. Notwithstanding and to the exclusion of any other term of this Agreement or any other agreements, arrangements or understanding between the Underwriters, the Issuer and the Guarantor[s], the Issuer and each of the Guarantor[s] acknowledges and accepts that a UK Bail-in Liability arising under this Agreement may be subject to the exercise of UK Bail-in Powers by the relevant UK resolution authority, and acknowledges, accepts and agrees to be bound by:
(a) the effect of the exercise of UK Bail-in Powers by the relevant UK resolution authority in relation to any UK Bail-in Liability of an Underwriter to the Issuer and the Guarantor[s] under this Agreement, that (without limitation) may include and result in any of the following, or some combination thereof:
| 1. | the reduction of all, or a portion, of the UK Bail-in Liability or outstanding amounts due thereon; |
| 2. | the conversion of all, or a portion, of the UK Bail-in Liability into shares, other securities or other obligations of the relevant Underwriter or another person, and the issue to, or conferral on, the Issuer and the Guarantor[s] of such shares, securities or obligations; |
27
| 3. | the cancellation of the UK Bail-in Liability; or |
| 4. | the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period; and |
(b) the variation of the terms of this Agreement, as deemed necessary by the relevant UK resolution authority, to give effect to the exercise of UK Bail-in Powers by the relevant UK resolution authority.
For purposes of this Section [18], the following terms shall have the respective meanings set out below:
“UK Bail-in Legislation” means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
“UK Bail-in Liability” means a liability in respect of which the UK Bail-in Powers may be exercised.
“UK Bail-in Powers” means the powers under the UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or affiliate of a bank or investment firm, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability.]
19. Recognition of the U.S. Special Resolution Regimes. In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Agreement, and any interest and obligation in or under this Underwriter, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
In the event that any Underwriter that is a Covered Entity or a Covered Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.
28
For the purposes of this Section [19]:
“Covered Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k);
“Covered Entity” means any of the following:
| (i) | a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); |
| (ii) | a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or |
| (iii) | a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b); |
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable; and
“U.S. Special Resolution Regime” means each of (i) the U.S. Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
[SIGNATURE PAGES FOLLOW]
29
If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.
| Very truly yours, | ||
| BRITISH AMERICAN TOBACCO P.L.C., | ||
| by | ||
| Name: | ||
| Title: |
| [B.A.T CAPITAL CORPORATION, | ||
| by | ||
| Name: | ||
| Title:] |
| [B.A.T. INTERNATIONAL FINANCE P.L.C., | ||
| by | ||
| Name: | ||
| Title:] |
| [B.A.T. NETHERLANDS FINANCE B.V., | ||
| by | ||
| Name: | ||
| Title: |
| by | ||
| Name: | ||
| Title:] |
[Signature Page to Underwriting Agreement]
| [REYNOLDS AMERICAN INC., | ||
| by | ||
| Name: | ||
| Title:] |
[Signature Page to Underwriting Agreement]
Accepted as of the date hereof, for itself and on behalf of the several Underwriters listed in Schedule I hereto:
| [REPRESENTATIVES], | ||
| By: | ||
| Name: | ||
| Title: |
| (for Representatives requiring a second signatory) |
| By: | ||
| Name: | ||
| Title: |
[Signature Page to Underwriting Agreement]
SCHEDULE 1
| Underwriter |
Aggregate Principal Amount of Notes to be Purchased | |
| [ ] |
[$] [ ] | |
| Total |
[$] [ ] | |
|
|
S-1
ANNEX A
Additional Time of Sale Information
Pricing term sheet containing the terms of the Notes, substantially in the form of Annex B.
A-1
ANNEX B
[PRICING TERM SHEET TO BE PREPARED SEPARATELY]
B-1
ANNEX C
Form of Opinion of English Counsel
[OPINION TO BE PREPARED SEPARATELY]
C-1
[ANNEX D
Form of Opinion of Dutch Counsel
[OPINION TO BE PREPARED SEPARATELY]
[D-1
ANNEX E]
Form of Opinion of North Carolina Counsel
[OPINION TO BE PREPARED SEPARATELY]
E-1]
ANNEX [D/F]
Form of Opinion of U.S. Counsel
[OPINION TO BE PREPARED SEPARATELY]
[D/F]-1
Form of 10b-5 Letter of U.S. Counsel
[STATEMENT TO BE PREPARED SEPARATELY]
[D/F]-2
Exhibit 4.1
EXECUTION VERSION
THIRTY-FOURTH SUPPLEMENTAL TRUST DEED
17 MARCH 2022
B.A.T. INTERNATIONAL FINANCE p.l.c.
and
B.A.T CAPITAL CORPORATION
and
B.A.T. NETHERLANDS FINANCE B.V.
and
BRITISH AMERICAN TOBACCO p.l.c.
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
further modifying and restating the Trust Deed dated 6 July 1998 (as previously modified and
restated) relating to the U.S.$3,000,000,000 (now £25,000,000,000) Euro Medium Term Note
Programme
Allen & Overy LLP
THIS THIRTY-FOURTH SUPPLEMENTAL TRUST DEED is made on 17 March 2022
BETWEEN:
| (1) | B.A.T. INTERNATIONAL FINANCE p.l.c. (a public limited company with company number 1060930) whose registered office is at Globe House, 4 Temple Place, London WC2R 2PG (BATIF); |
| (2) | B.A.T. NETHERLANDS FINANCE B.V. (a company incorporated with limited liability under the laws of The Netherlands and registered with the Trade Register of the Chamber of Commerce under No. 60533536) whose registered office is at Handelsweg 53A, 1181 ZA Amstelveen, The Netherlands (BATNF); |
| (3) | B.A.T CAPITAL CORPORATION, (a company incorporated with limited liability in the State of Delaware, United States of America) whose registered office is at 103 Foulk Road, Suite 120, Wilmington, Delaware 19803, United States of America (BATCAP and, together with BATNF and BATIF each in their capacities as Issuer, the Issuers and each an Issuer); |
| (4) | BRITISH AMERICAN TOBACCO p.l.c. (a public limited company with company number 3407696) whose registered office is at Globe House, 4 Temple Place, London WC2R 2PG (British American Tobacco and, together with BATCAP, BATIF and BATNF in their capacities as guarantors of Notes issued by the other Issuers, the Guarantors and each a Guarantor); and |
| (5) | THE LAW DEBENTURE TRUST CORPORATION p.l.c. (company number 1675231) whose registered office is at 8th Floor, 100 Bishopsgate, London EC2N 4AG (the Trustee, which expression, where the context so admits, includes any successor or other trustee for the time being of this Thirty-Fourth Supplemental Trust Deed) as trustee for the Noteholders and the Couponholders. |
WHEREAS:
| (A) | This Thirty-Fourth Supplemental Trust Deed is supplemental to: |
| (i) | the Trust Deed dated 6 July 1998 (hereinafter called the Principal Trust Deed) made between BATIF, BATCAP, British American Tobacco, B.A.T Finance B.V. (BATFIN), B.A.T. Industries p.l.c. (BAT Industries), British American Tobacco Mexico, S.A. de C.V. (BAT Mexico) and the Trustee relating to the U.S.$3,000,000,000 (now £25,000,000,000) Euro Medium Term Note Programme (the Programme) established by BATIF, BATCAP and originally BATFIN; |
| (ii) | the First Supplemental Trust Deed dated 22 March 1999 (hereinafter called the First Supplemental Trust Deed) made between the same parties as are parties to the Principal Trust Deed and modifying the provisions of the Principal Trust Deed; |
| (iii) | the Second Supplemental Trust Deed dated 19 January 2000 (hereinafter called the Second Supplemental Trust Deed) made between the same parties as are parties to the Principal Trust Deed and BAT(CI) Finance Limited (BATCIF) and effecting the substitution of BATCIF in place of BATIF as principal debtor in respect of certain Notes issued by BATIF pursuant to the Programme; |
| (iv) | the Third Supplemental Trust Deed dated 15 August 2000 (hereinafter called the Third Supplemental Trust Deed) made between the same parties as are parties to the Principal Trust Deed and BATCIF and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (v) | the Fourth Supplemental Trust Deed dated 3 July 2002 (hereinafter called the Fourth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF), BATFIN and BATCIF and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (vi) | the Fifth Supplemental Trust Deed dated 16 April 2003 (hereinafter called the Fifth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATFIN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (vii) | the Sixth Supplemental Trust Deed dated 26 May 2005 (hereinafter called the Sixth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and effecting the substitution of British American Tobacco Holdings (The Netherlands) B.V. (BATHTN) in place of BATIF as principal debtor in respect of the Series 25 EUR 1,000,000,000 Floating Rate Guaranteed Notes due 2006 issued by BATIF pursuant to the Programme; |
| (viii) | the Seventh Supplemental Trust Deed dated 21 June 2005 (hereinafter called the Seventh Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF), BATHTN, BATFIN, BAT Industries and BAT Mexico and effecting the substitution of BATHTN in place of BATIF as principal debtor in respect of the Series 1 DM 1,000,000,000 5.375 per cent Guaranteed Notes due 2006 issued by BATIF pursuant to the Programme; |
| (ix) | the Eighth Supplemental Trust Deed dated 30 November 2005 (hereinafter called the Eighth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (x) | the Ninth Supplemental Trust Deed dated 30 November 2007 (hereinafter called the Ninth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xi) | the Tenth Supplemental Trust Deed dated 1 December 2008 (hereinafter called the Tenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xii) | the Eleventh Supplemental Trust Deed dated 4 March 2010 (hereinafter called the Eleventh Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATHTN and effecting the substitution of BATHTN in place of BATIF as principal debtor in respect of the Series 22 €1,000,000,000 5.125 per cent. Guaranteed Notes due 2013 issued by BATIF pursuant to the Programme; |
| (xiii) | the Twelfth Supplemental Trust Deed dated 1 December 2010 (hereinafter called the Twelfth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xiv) | the Thirteenth Supplemental Trust Deed dated 25 May 2011 (hereinafter called the Thirteenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF) and BATHTN and substituting BATHTN in place of BATIF as the principal debtor in respect of the Series 36 €650,000,000 4.875 per cent. Guaranteed Notes due 2021 issued by BATIF pursuant to the Programme; |
| (xv) | the Fourteenth Supplemental Trust Deed dated 9 December 2011 (hereinafter called the Fourteenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF and BATCAP) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xvi) | the Fifteenth Supplemental Trust Deed dated 11 December 2012 (hereinafter called the Fifteenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF and BATCAP) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xvii) | the Sixteenth Supplemental Trust Deed dated 12 December 2013 (hereinafter called the Sixteenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATNF and BATCAP) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xviii) | the Seventeenth Supplemental Trust Deed dated 16 May 2014 (hereinafter called the Seventeenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xix) | the Eighteenth Supplemental Trust Deed dated 4 September 2014 (hereinafter called the Eighteenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and modifying the provisions of the Principal Trust Deed (as previously modified and restated) in respect of the Series 47 CHF 400,000,000 0.625 per cent. Guaranteed Notes due 2021 issued by BATIF pursuant to the Programme; |
| (xx) | the Nineteenth Supplemental Trust Deed dated 4 September 2014 (hereinafter called the Nineteenth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and modifying the provisions of the Principal Trust Deed (as previously modified and restated) in respect of the Series 48 CHF 250,000,000 1.375 per cent. Guaranteed Notes due 2026 issued by BATIF pursuant to the Programme; |
| (xxi) | the Twentieth Supplemental Trust Deed dated 4 September 2014 (hereinafter called the Twentieth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and modifying the provisions of the Principal Trust Deed (as previously modified and restated) in respect of the Series 46 CHF 350,000,000 Floating Rate Guaranteed Notes due 2016 issued by BATIF pursuant to the Programme; |
| (xxii) | the Twenty-First Supplemental Trust Deed dated 8 December 2014 (hereinafter called the Twenty-First Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and BATHTN and substituting BATNF in place of BATHTN as the principal debtor in respect of the Series 30 £325,000,000 5.500 per cent. Guaranteed Notes due 2016, the Series 36 €650,000,000 4.875 per cent. Guaranteed Notes due 2021 and the Series 37 €600,000,000 4.000 per cent. Guaranteed Notes due 2020, each issued by BATHTN pursuant to the Programme; |
| (xxiii) | the Twenty-Second Supplemental Trust Deed dated 8 December 2014 (hereinafter called the Twenty-Second Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and substituting BATNF in place of BATHTN as the principal debtor in respect of the Series 40 €750,000,000 2.375 per cent. Guaranteed Notes due 2023 and the Series 44 €600,000,000 3.125 per cent. Guaranteed Notes due 2029, each issued by BATHTN pursuant to the Programme; |
| (xxiv) | the Twenty-Third Supplemental Trust Deed dated 8 December 2014 (hereinafter called the Twenty-Third Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and BATHTN and effecting the addition of BATNF as a guarantor in respect of the Series 26 £500,000,000 6.375 per cent. Guaranteed Notes due 2019, the Series 32 €1,250,000,000 5.375 per cent. Guaranteed Notes due 2017, the Series 33 £500,000,000 7.250 per cent. Guaranteed Notes due 2024, the Series 34 €1,250,000,000 5.875 per cent. Guaranteed Notes due 2015, the Series 35 £250,000,000 6.000 per cent. Guaranteed Notes due 2022, the Series 37 £500,000,000 6.000 per cent. Guaranteed Notes due 2034, the Series 38 £275,000,000 5.750 per cent. Guaranteed Notes due 2040 and the Series 39 €600,000,000 3.625 per cent. Guaranteed Notes due 2021, each issued by BATIF pursuant to the Programme; |
| (xxv) | the Twenty-Fourth Supplemental Trust Deed dated 8 December 2014 (hereinafter called the Twenty-Fourth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and effecting the addition of BATNF as a guarantor in respect of the Series 41 US$300,000,000 1.125 per cent. Guaranteed Notes due 2016, the Series 42 €650,000,000 2.750 per cent. Guaranteed Notes due 2025, the Series 43 £650,000,000 4.000 per cent. Guaranteed Notes due 2026, and the Series 45 €400,000,000 Floating Rate Guaranteed Notes due 2018, each issued by BATIF pursuant to the Programme; |
| (xxvi) | the Twenty-Fifth Supplemental Trust Deed dated 12 April 2016 (hereinafter called the Twenty-Fifth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and BATHTN and substituting BATIF in place of BATNF as the principal debtor in respect of the Series 36 €650,000,000 4.875 per cent. Guaranteed Notes due 2021 and the Series 37 €600,000,000 4.000 per cent. Guaranteed Notes due 2020, each issued by BATNF pursuant to the Programme; |
| (xxvii) | the Twenty-Sixth Supplemental Trust Deed dated 12 April 2016 (hereinafter called the Twenty-Sixth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN substituting BATIF in place of BATNF as the principal debtor in respect of the Series 40 €750,000,000 2.375 per cent. Guaranteed Notes due 2023 and the Series 44 €600,000,000 3.125 per cent. Guaranteed Notes due 2029, each issued by BATNF pursuant to the Programme; |
| (xxviii) | the Twenty-Seventh Supplemental Trust Deed dated 20 May 2016 (hereinafter called the Twenty-Seventh Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed (other than BATCAP) and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xxix) | the Twenty-Eighth Supplemental Trust Deed dated 31 May 2017 (hereinafter called the Twenty-Eighth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xxx) | the Twenty-Ninth Supplemental Trust Deed dated 12 February 2018 (hereinafter called the Twenty-Ninth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and BATHTN and effecting the addition of BATCAP as a guarantor in respect of the Series 40 €750,000,000 2.375 per cent. Guaranteed Notes due 2023, the Series 42 €650,000,000 2.750 per cent. Guaranteed Notes due 2025, the Series 43 £650,000,000 4.000 per cent. Guaranteed Notes due 2026, the Series 44 €600,000,000 3.125 per cent. Guaranteed Notes due 2029, the Series 45 €400,000,000 Floating Rate Guaranteed Notes due 2018, the Series 47 CHF400,000,000 0.625 per cent. Guaranteed Notes due 2021, the Series 48 CHF250,000,000 1.375 per cent. Guaranteed Notes due 2026, the Series 49 €800,000,000 0.375 per cent. Guaranteed Notes due 2019, the Series 50 €800,000,000 0.875 per cent. Guaranteed Notes due 2023, the Series 51 €800,000,000 1.250 per cent. Guaranteed Notes due 2027, the Series 52 €600,000,000 2.000 per cent. Guaranteed Notes due 2045, the Series 53 €600,000,000 1.000 per cent. Guaranteed Notes due 2022, the Series 54 £350,000,000 4.000 per cent. Guaranteed Notes due 2055, the Series 55 £500,000,000 1.750 per cent. Guaranteed Notes due 2021, the Series 56 £650,000,000 2.250 per cent. Guaranteed Notes due 2052, and the Series 57 US$650,000,000 1.625 per cent. Guaranteed Notes due 2019, each issued by BATIF pursuant to the Programme; |
| (xxxi) | the Thirtieth Supplemental Trust Deed dated 25 May 2018 (hereinafter called the Thirtieth Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and BATHTN and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xxxii) | the Thirty-First Supplemental Trust Deed dated 1 May 2019 (hereinafter called the Thirty-First Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); |
| (xxxiii) | the Thirty-Second Supplemental Trust Deed dated 31 March 2020 (hereinafter called the Thirty-Second Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated); and |
| (xxxiv) | the Thirty-Third Supplemental Trust Deed dated 18 March 2021 (hereinafter called the Thirty-Third Supplemental Trust Deed) made between the same parties as are parties to this Thirty-Fourth Supplemental Trust Deed and modifying and restating the provisions of the Principal Trust Deed (as previously modified and restated) (and together with the Principal Trust Deed, the First Supplemental Trust Deed, the Second Supplemental Trust Deed, the Third Supplemental Trust Deed, the Fourth Supplemental Trust Deed, the Fifth Supplemental Trust Deed, the Sixth Supplemental Trust Deed, the Seventh Supplemental Trust Deed, the Eighth Supplemental Trust Deed, the Ninth Supplemental Trust Deed, the Tenth Supplemental Trust Deed, the Eleventh Supplemental Trust Deed, the Twelfth Supplemental Trust Deed, the Thirteenth Supplemental Trust Deed, the Fourteenth Supplemental Trust Deed, the Fifteenth Supplemental Trust Deed, the Sixteenth Supplemental Trust Deed, the Seventeenth Supplemental Trust Deed, the Eighteenth Supplemental Trust Deed, the Nineteenth Supplemental Trust Deed, the Twentieth Supplemental Trust Deed, the Twenty-First Supplemental Trust Deed, the Twenty-Second Supplemental Trust Deed, the Twenty-Third Supplemental Trust Deed, the Twenty-Fourth |
| Supplemental Trust Deed, the Twenty-Fifth Supplemental Trust Deed, the Twenty-Sixth Supplemental Trust Deed, the Twenty-Seventh Supplemental Trust Deed, the Twenty-Eighth Supplemental Trust Deed, the Twenty-Ninth Supplemental Trust Deed, the Thirtieth Supplemental Trust Deed, the Thirty-First Supplemental Trust Deed, the Thirty-Second Supplemental Trust Deed and the Thirty-Third Supplemental Trust Deed, the Subsisting Trust Deeds). |
| (B) | On 17 March 2022 the Issuers published a modified and updated Prospectus relating to the Programme (the Base Prospectus). |
| (C) | The Issuers have requested the Trustee to concur in making further modifications to the Principal Trust Deed (as previously modified and restated) to reflect the relevant modifications referred to in Recital (B) above. |
NOW THIS THIRTY-FOURTH SUPPLEMENTAL TRUST DEED WITNESSETH AND IT IS HEREBY DECLARED as follows:
| 1. | Subject as hereinafter provided and unless there is something in the subject matter or context inconsistent therewith, all words and expressions defined in the Subsisting Trust Deeds shall have the same meanings in this Thirty-Fourth Supplemental Trust Deed. |
| 2. | Save: |
| (a) | in relation to all Series of Notes issued during the period up to and including the day last preceding the date of this Thirty-Fourth Supplemental Trust Deed; |
| (b) | in relation to any Notes issued on or after the date of this Thirty-Fourth Supplemental Trust Deed so as to be consolidated and form a single series with the Notes of any Series issued during the period up to and including the day last preceding the date of this Thirty-Fourth Supplemental Trust Deed; and |
| (c) | for the purpose (where necessary) of construing the provisions of this Thirty-Fourth Supplemental Trust Deed, |
with effect on and from the date of this Thirty-Fourth Supplemental Trust Deed:
| (i) | the Principal Trust Deed (as previously modified, restated and supplemented) is hereby modified and restated in such manner as would result in the Principal Trust Deed being in the form set out in the Schedule hereto; and |
| (ii) | the provisions of the Principal Trust Deed (as previously modified, restated and supplemented) insofar as the same still have effect shall cease to have effect and in lieu thereof the provisions of the Principal Trust Deed as so further modified (and being in the form set out in the Schedule hereto) shall have effect. |
| 3. | The Subsisting Trust Deeds and this Thirty-Fourth Supplemental Trust Deed shall henceforth be read and construed together as one trust deed. |
| 4. | A memorandum of this Thirty-Fourth Supplemental Trust Deed shall be endorsed by the Trustee on the original of the Principal Trust Deed and by BATIF, BATNF, BATCAP and the Guarantors on their respective duplicates thereof. |
| 5. | This Thirty-Fourth Supplemental Trust Deed and any non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with, English law. |
| 6. | Each of the parties hereto irrevocably agrees that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Thirty-Fourth Supplemental Trust Deed (including a dispute relating to any non-contractual obligations arising out of or in connection with it) and that accordingly any suit, action or proceedings arising out of or in connection with these presents (together referred to as Proceedings) may be brought in the courts of England, including any Proceedings relating to any non-contractual obligations arising out of or in connection with this Thirty-Fourth Supplemental Trust Deed. Each of the parties hereto irrevocably and unconditionally waives and agrees not to raise any objection which it may have now or subsequently to the laying of the venue of any Proceedings in the courts of England and any claim that any Proceedings have been brought in an inconvenient forum and further irrevocably and unconditionally agrees that a judgment in any Proceedings brought in the courts of England shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. Nothing in this Clause shall limit any right to take Proceedings against any of the parties hereto in any other court of competent jurisdiction (outside the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982), nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. |
| 7. | Each of BATNF and BATCAP irrevocably and unconditionally appoints British American Tobacco at its registered office at Globe House, 4 Temple Place, London WC2R 2PG and in the event of its ceasing so to act will appoint such other person as the Trustee may approve and as BATNF or BATCAP, as the case may be, may nominate in writing to the Trustee for the purpose to accept service of process on its behalf in England in respect of any Proceedings. Each of BATNF and BATCAP: |
| (a) | agrees to procure that, so long as any Notes issued by it remain liable to prescription, there shall be in force an appointment of such a person approved by the Trustee with an office in London with authority to accept service as aforesaid; |
| (b) | agrees that failure by any such person to give notice of such service of process to BATNF or BATCAP, as the case may be, shall not impair the validity of such service or of any judgment based thereon; and |
| (c) | agrees that nothing in this Thirty-Fourth Supplemental Trust Deed shall affect the right to serve process in any other manner permitted by law. |
| 8. | This Thirty-Fourth Supplemental Trust Deed may be executed and delivered in any number of counterparts, all of which, taken together, shall constitute one and the same deed and any party to this Thirty-Fourth Supplemental Trust Deed may enter into the same by executing and delivering a counterpart. |
| 9. | A person who is not a party to this Thirty-Fourth Supplemental Trust Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Thirty-Fourth Supplemental Trust Deed, but this does not affect any right or remedy of a third party which exists or is available apart from that Act. |
IN WITNESS whereof this Thirty-Fourth Supplemental Trust Deed has been executed as a deed by each of the parties hereto and delivered on the date first stated above.
SCHEDULE 1
FORM OF MODIFIED AND RESTATED PRINCIPAL TRUST DEED
Dated 6 July 1998 and modified and restated on 17 March 2022
TRUST DEED
6 JULY 1998
DATED 6 JULY 1998 AND MODIFIED AND RESTATED ON 17 MARCH 2022
B.A.T. INTERNATIONAL FINANCE p.l.c.
and
B.A.T CAPITAL CORPORATION
and
B.A.T. NETHERLANDS FINANCE B.V.
and
BRITISH AMERICAN TOBACCO p.l.c.
and
THE LAW DEBENTURE TRUST CORPORATION p.l.c.
relating to a
£25,000,000,000
Euro Medium Term Note Programme
CONTENTS
| Clause | Page | |||||||
| 1. | Interpretation |
2 | ||||||
| 2. | Amount and Issue of the Notes |
10 | ||||||
| 3. | Form of the Notes |
13 | ||||||
| 4. | Stamp Duties and Taxes |
14 | ||||||
| 5. | Guarantee and Indemnity |
15 | ||||||
| 6. | Application of Moneys and Partial Payments |
19 | ||||||
| 7. | Investment by the Trustee |
19 | ||||||
| 8. | Covenants |
20 | ||||||
| 9. | Remuneration and Indemnification of the Trustee |
22 | ||||||
| 10. | Provisions Supplemental to the Trustee Acts |
24 | ||||||
| 11. | Trustee Liable for Negligence |
27 | ||||||
| 12. | Waiver and Proof of Default |
28 | ||||||
| 13. | Trustee Contracting with the Issuer and the Guarantors |
28 | ||||||
| 14. | Modification and Substitution |
29 | ||||||
| 15. | Appointment, Retirement and Removal of the Trustee |
31 | ||||||
| 16. | Holder of Definitive Note Assumed to be Couponholder |
31 | ||||||
| 17. | Currency Indemnity |
32 | ||||||
| 18. | Communications |
32 | ||||||
| 19. | Governing Law |
33 | ||||||
| 20. | Submission to Jurisdiction |
34 | ||||||
| 21. | Waiver of trial by jury |
34 | ||||||
| 22. | Counterparts |
34 | ||||||
| 23. | Contracts (Rights of Third Parties) Act 1999 |
35 | ||||||
| Schedule | ||||||||
| 1. | Terms and Conditions of the Notes |
36 | ||||||
| 2. | Forms of Global and Definitive Notes, Coupons and Talons |
70 | ||||||
| Part 1 Form of Global Note |
71 | |||||||
| Part 2 Form of Definitive Note |
79 | |||||||
| Part 3 Form of Coupon |
83 | |||||||
| Part 4 Form of Talon |
85 | |||||||
| 3. | Provisions for Meetings of Noteholders |
88 | ||||||
| Signatories |
96 | |||||||
THIS TRUST DEED originally made on 6 July 1998 was amended and restated on 17 March 2022
BETWEEN:
| (1) | B.A.T. INTERNATIONAL FINANCE p.l.c. (company number 1060930) whose registered office is at Globe House, 4 Temple Place, London WC2R 2PG (BATIF); |
| (2) | B.A.T. NETHERLANDS FINANCE B.V. (a company incorporated with limited liability under the laws of The Netherlands and registered with the Trade Register of the Chamber of Commerce under No. 60533536) whose registered office is at Handelsweg 53A, 1181 ZA Amstelveen, The Netherlands (BATNF); |
| (3) | B.A.T CAPITAL CORPORATION (a company incorporated with limited liability in the State of Delaware, United States of America) whose registered office is at 103 Foulk Road, Suite 120, Wilmington, Delaware 19803, United States of America (BATCAP and, together with BATIF and BATNF each in their capacities as Issuer, the Issuers and each an Issuer); |
| (4) | BRITISH AMERICAN TOBACCO p.l.c. (company number 3407696) whose registered office is at Globe House, as aforesaid (British American Tobacco and, together with, in their capacities as guarantors of Notes issued by the other Issuers, BATIF, BATCAP and BATNF, the Guarantors and each a Guarantor); and |
| (5) | THE LAW DEBENTURE TRUST CORPORATION p.l.c. (company number 1675231) whose registered office is at 8th Floor, 100 Bishopsgate, London EC2N 4AG (the Trustee, which expression, where the context so admits, includes any successor or other trustee for the time being of this Trust Deed) as trustee for the Noteholders and the Couponholders (each as defined below). |
WHEREAS:
| (A) | By a resolution of the Board of Directors of BATIF passed on 30 June 1998 BATIF resolved to establish a Euro Medium Term Note Programme pursuant to which it may from time to time issue Notes as set out herein. By a resolution of the Board of Directors of BATNF passed on 12 May 2014, BATNF resolved to accede to the Programme as an issuer. By a resolution of the Board of Directors of BATCAP passed on 20 April 2017, BATCAP resolved to accede to the Programme as an issuer. By resolutions of the Boards of Directors of BATIF passed on 23 February 1999, 23 May 2000, 24 July 2000, 24 June 2002, 14 April 2003, 25 February 2004, 12 April 2005, 21 November 2005, 23 November 2006, 23 November 2007, 21 November 2008, 25 November 2009, 19 November 2010, 23 November 2011, 30 November 2012, 29 November 2013, 15 May 2014, 24 April 2015, 6 May 2016, 27 April 2017, 10 May 2018, 24 April 2019, 4 March 2020, 28 January 2021 and 22 February 2022 and of BATNF passed on 28 April 2015, 11 May 2016, 22 May 2017, 15 May 2018, 29 April 2019, 26 February 2020, 29 January 2021 and 22 February 2022 and of BATCAP passed on 11 May 2018, 25 April 2019, 26 March 2020, 2 February 2021 and 10 February 2022, the Issuers have resolved to update the Programme. Notes up to a maximum nominal amount (calculated in accordance with Clause 3.5 of the Programme Agreement (as defined below)) from time to time outstanding of £25,000,000,000 (subject to increase as provided in the Programme Agreement) (the Programme Limit) may be issued pursuant to the said Programme. |
| (B) | By resolutions of the Board of Directors of British American Tobacco passed on 18 June 1998, 5 March 1999, 24 May 2000, 28 July 2000, 14 April 2003, 20 February 2004, 29 October 2007, 25 February 2014 and 25 April 2017 and resolutions of a Committee of the Board of Directors passed on 1 July 1998 and of the Executive Committee of the Board of Directors passed on 24 April 2002 and 24 June 2002 and of the Transactions Committee of the Board of Directors on 11 April 2005, 21 November 2005, 16 November 2006, 20 November 2007, 21 November 2008, 17 November 2009, |
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| 19 November 2010, 23 November 2011, 30 November 2012, 29 November 2013, 12 May 2014, 23 April 2015, 3 May 2016, 10 May 2018, 23 April 2019, 3 February 2020, 28 January 2021 and 22 February 2022 and of the Board of Directors of BATIF passed on 30 June 1998, 23 February 1999, 23 May 2000, 24 July 2000, 24 June 2002, 14 April 2003, 25 February 2004, 12 April 2005, 21 November 2005, 23 November 2006, 23 November 2007, 21 November 2008, 25 November 2009, 19 November 2010, 23 November 2011, 30 November 2012, 29 November 2013, 15 May 2014, 24 April 2015, 6 May 2016, 27 April 2017, 10 May 2018, 24 April 2019, 4 March 2020, 28 January 2021 and 22 February 2022 and of the Board of Directors of BATNF passed on 12 May 2014, 28 April 2015, 11 May 2016, 22 May 2017, 15 May 2018, 29 April 2019, 26 February 2020, 29 January 2021 and 22 February 2022 and of the Board of Directors of BATCAP passed on 20 April 2017, 11 May 2018, 25 April 2019, 26 March 2020, 2 February 2021 and 10 February 2022, the Guarantors have resolved to guarantee Notes issued under the said Programme and to enter into certain covenants as set out in this Trust Deed. |
| (C) | The Trustee has agreed to act as trustee of this Trust Deed for the benefit of the Noteholders and the Couponholders upon and subject to the terms and conditions of this Trust Deed. |
| (D) | References hereafter in this Trust Deed to the Issuer and the Guarantors are to the Issuer and the Guarantors specified in the applicable Final Terms (as defined below) in relation to a particular Series of the Notes. |
THIS DEED WITNESSES AND IT IS DECLARED as follows:
| 1. | INTERPRETATION |
| 1.1 | Definitions |
The following expressions have the following meanings:
Agency Agreement means the agreement dated 6 July 1998, as amended and/or supplemented and/or restated from time to time, appointing the Agent and the other Paying Agents in relation to all or any Series of the Notes and any other agreement for the time being in force appointing another Agent or further or other Paying Agents in relation to all or any Series of the Notes, or in connection with their duties, the terms of which have previously been approved in writing by the Trustee, together with any agreement for the time being in force amending or modifying with the prior written approval of the Trustee any of the aforesaid agreements;
Agent means, in relation to all or any Series of the Notes, Citibank, N.A., London Branch at its office at Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, England, or, if applicable, any Successor agent in relation thereto;
Appointee means any attorney, manager, agent, delegate, nominee, receiver, custodian or other person appointed by the Trustee under this Trust Deed;
Auditors means the auditors for the time being of the relevant Issuer or a Guarantor (as the case may be), or, if they are unable or unwilling to carry out any action requested of them pursuant to the provisions of this Trust Deed, such other firm of accountants as may be selected for the purpose by the relevant Issuer or the relevant Guarantor (as the case may be) which, for the avoidance of doubt in the case of the auditors of the relevant Issuer so being unable or unwilling, may be the auditors of the ultimate Holding Company of the Group, in either such case, as approved by the Trustee (such approval not to be unreasonably withheld) and, failing such selection by the relevant Issuer or the relevant Guarantor (as the case may be) as may be nominated in writing by the Trustee for the purpose;
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Borrowed Moneys Indebtedness has the meaning ascribed thereto in Condition 9(a);
Calculation Agent means, in relation to all or any Series of the Notes, the person appointed as such from time to time pursuant to the provisions of the Agency Agreement or, if applicable, any Successor calculation agent in relation thereto;
CGN means a Global Note in respect of which the applicable Final Terms indicates is not in New Global Note form;
Clearstream, Luxembourg means Clearstream Banking SA;
Conditions means, in relation to the Notes of any Series, the terms and conditions endorsed on or incorporated by reference into the Note or Notes constituting such Series, such terms and conditions being in or substantially in the form set out in Schedule 1 or in such other form, having regard to the terms of issue of the Notes of the relevant Series, as may be agreed between the relevant Issuer, the relevant Guarantor(s), the Agent, the Trustee and the relevant Dealer(s) as supplemented by the Final Terms applicable to the Notes of the relevant Series, in each case as from time to time modified in accordance with the provisions of this Trust Deed;
Coupon means an interest coupon appertaining to a Definitive Note (other than a Zero Coupon Note), such coupon being:
| (a) | if appertaining to a Fixed Rate Note, in the form or substantially in the form set out in Part 3 (Part A) of Schedule 2 or in such other form, having regard to the terms of issue of the Notes of the relevant Series, as may be agreed between the relevant Issuer, the relevant Guarantor(s), the Agent, the Trustee and the relevant Dealer(s); or |
| (b) | if appertaining to a Floating Rate Note, in the form or substantially in the form set out in Part 3 (Part B) of Schedule 2 or in such other form, having regard to the terms of issue of the Notes of the relevant Series, as may be agreed between the relevant Issuer, the relevant Guarantor(s), the Agent, the Trustee and the relevant Dealer(s), |
and includes, where applicable, the Talon(s) appertaining thereto and any replacements for Coupons and Talons issued pursuant to Condition 10;
Couponholders means the several persons who are for the time being holders of the Coupons and includes, where applicable, the Talonholders;
Dealers means Banco Bilbao Vizcaya Argentaria, S.A., Banco Santander, S.A., Bank of China Limited, London Branch, Barclays Bank PLC, BofA Securities Europe SA, Citigroup Global Markets Europe AG, Citigroup Global Markets Limited, Commerzbank Aktiengesellschaft, Deutsche Bank AG, London Branch, Goldman Sachs Bank Europe SE, HSBC Bank plc, Lloyds Bank Corporate Markets plc, Lloyds Bank Corporate Markets Wertpapierhandelsbank GmbH, Merrill Lynch International, Mizuho International plc, Mizuho Securities Europe GmbH, NatWest Markets Plc, SMBC Nikko Capital Markets Europe GmbH, SMBC Nikko Capital Markets Limited, Standard Chartered Bank, UniCredit Bank AG, Wells Fargo Securities International Limited and Wells Fargo Securities Europe S.A. and any other entity appointed as a Dealer and notice of whose appointment has been given to the Agent and the Trustee in accordance with the provisions of the Programme Agreement but excluding any entity whose appointment has been terminated in accordance with the provisions of the Programme Agreement and notice of which termination has been given to the Agent and the Trustee in accordance with the provisions of the Programme Agreement and references to a relevant Dealer or relevant Dealer(s) mean, in relation to any Tranche or Series of Notes, the Dealer or Dealers with whom the relevant Issuer has agreed the issue of the Notes of such Tranche or Series and Dealer means any one of them;
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Definitive Note means a Note in definitive form issued or, as the case may require, to be issued by the relevant Issuer in accordance with the provisions of the Programme Agreement or any other agreement between the relevant Issuer and the relevant Dealer(s), the Agency Agreement and this Trust Deed in exchange for a Global Note (all as indicated in the applicable Final Terms), such Note in definitive form being in the form or substantially in the form set out in Part 2 of Schedule 2 with such modifications (if any) as may be agreed between the relevant Issuer, the relevant Guarantor(s), the Agent, the Trustee and the relevant Dealer(s) and having the Conditions endorsed thereon or, if permitted by the relevant Stock Exchange, incorporating the Conditions by reference (where applicable to this Trust Deed) as indicated in the applicable Final Terms and having the relevant information supplementing, replacing or modifying the Conditions appearing in the applicable Final Terms endorsed thereon or attached thereto and (except in the case of a Zero Coupon Note) having Coupons and, where appropriate, Talons attached thereto on issue;
Early Redemption Amount has the meaning ascribed thereto in Condition 6(f);
Euroclear means Euroclear Bank SA/NV; Eurosystem means the central banking system for the euro;
Event of Default means an event described in Condition 9(a) and which, if so required by that Condition, has been certified by the Trustee to be, in its opinion, materially prejudicial to the interests of the holders of the Notes of the relevant Series;
Extraordinary Resolution has the meaning set out in Schedule 3;
Final Terms has the meaning set out in the Programme Agreement;
Fixed Rate Note means a Note on which interest is calculated at a fixed rate payable in arrear on a fixed date or fixed dates in each year and on redemption or on such other dates as may be agreed between the relevant Issuer and the relevant Dealer(s) (as indicated in the applicable Final Terms);
Floating Rate Note means a Note on which interest is calculated at a floating rate payable one-, two-, three-, six- or twelve-monthly or in respect of such other period or on such date(s) as may be agreed between the relevant Issuer and the relevant Dealer(s) (as indicated in the applicable Final Terms);
FSMA means the Financial Services and Markets Act 2000 of the United Kingdom;
Global Note means a global note in the form or substantially in the form set out in Part 1 of Schedule 2 with such modifications (if any) as may be agreed between the relevant Issuer, the Agent, the Trustee and the relevant Dealer(s), together with the copy of the applicable Final Terms annexed thereto, comprising some or all of the Notes of the same Series, issued by the relevant Issuer pursuant to the Programme Agreement or any other agreement between the relevant Issuer and the relevant Dealer(s), the Agency Agreement and this Trust Deed on issue;
Group has the meaning ascribed thereto in Condition 9(a);
Guarantee means the guarantee and indemnity of the Guarantors in Clause 5;
Holding Company means a holding company within the meaning of Section 1159 of the Companies Act 2006;
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Interest Commencement Date means, in the case of interest-bearing Notes, the date specified in the applicable Final Terms from (and including) which such Notes bear interest, which may or may not be the Issue Date;
Interest Payment Date means, in relation to any Floating Rate Note, either:
| (a) | the date which falls the number of months or other period specified as the Specified Period in the applicable Final Terms after the preceding Interest Payment Date or the Interest Commencement Date (in the case of the first Interest Payment Date); or |
| (b) | such date or dates as are indicated in the applicable Final Terms; |
Issue Date means, in respect of any Note, the date of issue and purchase of such Note pursuant to and in accordance with the Programme Agreement or any other agreement between the relevant Issuer and the relevant Dealer(s), being in the case of any Definitive Note the same date as the date of issue of the Global Note which initially represented such Note;
Issue Price means the price, generally expressed as a percentage of the nominal amount of the Notes, at which the Notes will be issued;
London Business Day has the meaning set out in Condition 4(b)(v);
London Stock Exchange means the London Stock Exchange plc or such other body to which its functions and business have been transferred;
Maturity Date means the date on which a Note is expressed to be redeemable;
month means calendar month;
NGN means a Global Note in respect of which the applicable Final Terms indicates is in New Global Note form;
Note means a note issued pursuant to the Programme and denominated in such currency or currencies as may be agreed between the relevant Issuer and the relevant Dealer(s) which:
| (a) | has such maturity as may be agreed between the relevant Issuer and the relevant Dealer(s), subject to such minimum or maximum maturity as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant Issuer or the relevant currency; and |
| (b) | has such denomination as may be agreed between the relevant Issuer and the relevant Dealer(s), subject to such minimum denomination as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant currency, which will be at least €1,000 (or its equivalent in other currencies) in any event, provided that (i) in the case of any Notes which are to be admitted to trading on the London Stock Exchange’s main market or offered to the public in the United Kingdom in circumstances which require the publication of a prospectus under the Prospectus Regulation (EU) (2017/1129) as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, the minimum specified denomination shall be €100,000 (or the equivalent of such amounts in another currency as at the date of issue of the Notes); and (ii) unless otherwise permitted by then current laws and regulations, Notes (including Notes denominated in sterling) in respect of which the issue proceeds are received by the relevant Issuer in the United Kingdom and which have a maturity of less than one year will have a minimum redemption value of £100,000 (or its equivalent in other currencies), |
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issued or to be issued by the relevant Issuer pursuant to the Programme Agreement or any other agreement between the relevant Issuer and the relevant Dealer(s), the Agency Agreement and this Trust Deed and which shall initially be represented by, and comprised in, a Global Note which may (in accordance with the terms of such Global Note) be exchanged for Definitive Notes (as indicated in the applicable Final Terms) and includes any replacements for a Note issued pursuant to Condition 10;
Noteholders means the several persons who are for the time being bearers of outstanding Notes save that, in respect of the Notes of any Series, for so long as such Notes or any part thereof are represented by a Global Note deposited with a common depositary (in the case of a CGN) or common safekeeper (in the case of a NGN) for Euroclear and Clearstream, Luxembourg, each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg (other than Clearstream, Luxembourg, if Clearstream, Luxembourg shall be an accountholder of Euroclear and Euroclear, if Euroclear shall be an accountholder of Clearstream, Luxembourg) as the holder of a particular nominal amount of the Notes of such Series shall be deemed to be the holder of such nominal amount of such Notes (and the holder of the relevant Global Note shall be deemed not to be the holder) for all purposes of this Trust Deed other than with respect to the payment of principal or interest on such nominal amount of such Notes, the rights to which shall be vested, as against the relevant Issuer and the Guarantors, solely in such common depositary (in the case of a CGN) or common safekeeper (in the case of a NGN) and for which purpose such common depositary (in the case of a CGN) or common safekeeper (in the case of a NGN) shall be deemed to be the holder of such nominal amount of such Notes in accordance with and subject to the terms of the relevant Global Note and the provisions of this Trust Deed and the expressions Noteholder, holder and holder of Notes and related expressions shall be construed accordingly;
notice means, in respect of a notice to be given to Noteholders, a notice validly given pursuant to Condition 13;
Official List has the meaning ascribed thereto in Section 103 of the FSMA;
outstanding means, in relation to the Notes of all or any Series, all the Notes of such Series issued other than:
| (a) | those Notes which have been redeemed pursuant to this Trust Deed; |
| (b) | those Notes in respect of which the date for redemption in accordance with the Conditions has occurred and the redemption moneys (including all interest payable thereon) have been duly paid to the Trustee or to the Agent in the manner provided in the Agency Agreement (and where appropriate notice to that effect has been given to the relative Noteholders in accordance with Condition 13) and remain available for payment against presentation of the relevant Notes and/or Coupons; |
| (c) | those Notes which have been purchased and cancelled in accordance with Conditions 6(g) and 6(h); |
| (d) | those Notes which have become void under Condition 8; |
| (e) | those mutilated or defaced Notes which have been surrendered and cancelled and in respect of which replacements have been issued pursuant to Condition 10; |
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| (f) | (for the purpose only of ascertaining the nominal amount of the Notes outstanding and without prejudice to the status for any other purpose of the relevant Notes) those Notes which are alleged to have been lost, stolen or destroyed and in respect of which replacements have been issued pursuant to Condition 10; and |
| (g) | any Global Note to the extent that it shall have been exchanged for Definitive Notes in each case pursuant to its provisions, the provisions of this Trust Deed and the Agency Agreement; |
PROVIDED THAT for each of the following purposes, namely:
| (i) | the right to attend and vote at any meeting of the holders of the Notes of any Series; |
| (ii) | the determination of how many and which Notes of any Series are for the time being outstanding for the purposes of Conditions 9(a), 9(b) and 14 and Schedule 3; |
| (iii) | any discretion, power or authority (whether contained in this Trust Deed or vested by operation of law) which the Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the holders of the Notes of any Series; and |
| (iv) | the determination by the Trustee whether any event, circumstance, matter or thing is, in its opinion, materially prejudicial to the interests of the holders of the Notes of any Series, |
those Notes of the relevant Series (if any) which are for the time being held by or on behalf of the relevant Issuer, the Guarantors or any other subsidiary of the relevant Issuer or the Guarantors, in each case as beneficial owner, shall (unless and until ceasing to be so held) be deemed not to remain outstanding;
Paying Agents means, in relation to all or any Series of the Notes, the several institutions (including, where the context permits, the Agent) at their respective specified offices initially appointed as paying agents in relation to such Notes pursuant to the Agency Agreement and/or, if applicable, any Successor paying agents in relation thereto;
Potential Event of Default means an event or circumstance which would with the giving of notice, lapse of time, issue of a certificate and/or fulfilment of any other requirement provided for in Condition 9(a) become an Event of Default;
Programme means the Euro Medium Term Note Programme established by, or otherwise contemplated in, the Programme Agreement;
Programme Agreement means the agreement of even date herewith between the parties hereto (other than the Trustee) and the Dealers named therein concerning the purchase of Notes to be issued pursuant to the Programme as amended and/or supplemented and/or restated from time to time;
Put Notice means a notice in the form set out in Schedule 2 to the Agency Agreement;
Reference Banks means the several banks initially appointed as reference banks in relation to the Notes of any relevant Series and/or, if applicable, any Successor reference banks in relation thereto such banks being, in the case of a determination of LIBOR, the principal London office of four major banks in the London inter-bank market and, in the case of a determination of EURIBOR, the principal Euro-zone office of four major banks in the Euro-zone inter-bank market, in each case selected by the Agent or as specified in the applicable Final Terms;
Relevant Date has the meaning ascribed thereto in Condition 7(f);
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repay, redeem and pay shall each include both the others and cognate expressions shall be construed accordingly;
Series means a Tranche of Notes together with any further Tranche or Tranches of Notes which are (a) expressed to be consolidated and form a single series and (b) identical in all respects (including as to listing) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices and the expressions Notes of the relevant Series, holders of Notes of the relevant Series and related expressions shall be construed accordingly;
specified office means, in relation to a Paying Agent, the office identified with its name at the end of the Conditions or any other office approved by the Trustee and notified to the Noteholders pursuant to Clause 8(j);
Stock Exchange means, in relation to the Notes of any Series, the stock exchange or exchanges on which such Notes may from time to time be listed, and references in this Trust Deed to the relevant Stock Exchange shall, in relation to the Notes of any Series, be references to the Stock Exchange on which such Notes are, from time to time, or are intended to be, listed;
subsidiary means a subsidiary within the meaning of Section 1159 of the Companies Act 2006 of Great Britain;
Successor means, in relation to the Agent, any other Paying Agent, the Reference Banks and the Calculation Agent, any successor to any one or more of them in relation to the Notes which shall become such pursuant to the provisions of this Trust Deed and/or the Agency Agreement (as the case may be) and/or such other or further agent, paying agent, reference banks or calculation agent (as the case may be) in relation to the Notes as may (with the prior approval of, and on terms previously approved by, the Trustee in writing) from time to time be appointed as such, and/or, if applicable, such other or further specified offices (in the former case being within the same city as those for which they are substituted) as may from time to time be nominated, in each case by the relevant Issuer and the Guarantors and (except in the case of the initial appointments and specified offices made under and specified in the Conditions and/or the Agency Agreement, as the case may be) notice of whose appointment or, as the case may be, nomination has been given to the Noteholders pursuant to Clause 8(j);
successor in business means a company which has acquired as a going concern all or substantially all of the undertaking, assets and liabilities of the relevant Issuer or any Guarantor, as the case may be;
Talonholders means the several persons who are for the time being holders of the Talons;
Talons means the talons (if any) appertaining to, and exchangeable in accordance with the provisions therein contained for further Coupons appertaining to, the Definitive Notes (other than the Zero Coupon Notes), such talons being in the form or substantially in the form set out in Part 4 of Schedule 2 or in such other form as may be agreed between the relevant Issuer, the Agent, the Trustee and the relevant Dealer(s) and includes any replacements for Talons issued pursuant to Condition 10;
this Deed means this trust deed and the Schedules (or, in respect of any reference to the provisions thereof, the same as may be from time to time modified in accordance with the provisions hereof);
this Trust Deed means this Deed and any trust deed supplemental hereto and the schedules (if any) thereto and the Notes, the Coupons, the Talons, the Conditions and, unless the context otherwise requires, the Final Terms, all as from time to time modified in accordance with the provisions herein or therein contained;
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Tranche means all Notes which are identical in all respects (including as to listing);
trust corporation means a trust corporation (as defined in the Law of Property Act 1925) or a corporation entitled to act as a trustee pursuant to applicable foreign legislation relating to trustees;
Trustee Acts means the Trustee Act 1925 and the Trustee Act 2000; and
Zero Coupon Note means a Note on which no interest is payable.
| 1.2 | Construction of Certain References |
| (a) | All references in this Trust Deed to costs, charges, remuneration or expenses include any value added, turnover or similar tax charged in respect thereof. |
| (b) | All references in this Trust Deed to principal and/or principal amount and/or interest in respect of the Notes or to any moneys payable by the relevant Issuer and/or the Guarantors under this Trust Deed shall, unless the context otherwise requires, be construed in accordance with Condition 5(f). |
| (c) | All references in this Trust Deed to any statute or any provision of any statute shall be deemed to be references to that statute as from time to time modified, extended, amended, superseded or re-enacted or to any statutory instrument, order or regulation made thereunder or under any such modification or re-enactment. |
| (d) | All references in this Trust Deed to any action, remedy or method of proceeding for the enforcement of the rights of creditors shall be deemed to include, in respect of any jurisdiction other than England, references to such action, remedy or method of proceeding for the enforcement of the rights of creditors available or appropriate in such jurisdiction as shall most nearly approximate to such action, remedy or method of proceeding described or referred to in this Trust Deed. |
| (e) | All references in this Trust Deed to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits (but not in the case of any NGN), be deemed to include references to any additional or alternative clearing system as is approved by the relevant Issuer, the Agent and the Trustee. In the case of NGNs, such alternative clearing system must also be authorised to hold such Notes as eligible collateral for Eurosystem monetary policy and intra-day credit operations. |
| (f) | All references in this Trust Deed to the relevant currency shall be construed as references to the currency in which payments in respect of the Notes and/or Coupons of the relevant Series are to be made as indicated in the applicable Final Terms. |
| (g) | All references in this Trust Deed to a Directive include any relevant implementing measure of each Member State of the European Economic Area which has implemented such Directive. |
| (h) | As used herein, in relation to any Notes which have a listing or are listed (i) on the London Stock Exchange, listing and listed shall be construed to mean that such Notes have been admitted to the Official List and admitted to trading on the main market of the London Stock Exchange and (ii) on any Stock Exchange within the European Economic Area, listing and listed shall be construed to mean that Notes have been admitted to trading on a market within that jurisdiction which is a regulated market for the purposes of Directive 2014/65/EU of the European Parliament and of the Council on Markets in Financial Instruments. All references in this Trust Deed to listing and listed shall include references to quotation and quoted respectively. |
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| (i) | All references in this Trust Deed to the records of Euroclear and Clearstream, Luxembourg shall be to the records that each of Euroclear and Clearstream, Luxembourg holds for its customers which reflect the amount of such customers interest in the Notes. |
| (j) | All references in these presents involving compliance by the Trustee with a test of reasonableness shall be deemed to include a reference to a requirement that such reasonableness shall be determined by reference solely to the interest of the Noteholders. |
| 1.3 | Headings |
Headings shall be ignored in construing this Trust Deed.
| 1.4 | Schedules |
The Schedules are part of this Trust Deed and have effect accordingly.
| 1.5 | Defined terms |
Words and expressions defined in this Trust Deed or the Agency Agreement or used in the applicable Final Terms shall have the same meanings where used herein unless the context otherwise requires or unless otherwise stated and provided that, in the event of inconsistency between the Agency Agreement and this Trust Deed, this Trust Deed shall prevail and, in the event of inconsistency between the Agency Agreement or this Trust Deed and the applicable Final Terms, the applicable Final Terms shall prevail.
| 2. | AMOUNT AND ISSUE OF THE NOTES |
| 2.1 | Amount of the Notes, Final Terms and Legal Opinions |
The Notes will be issued in Series in an aggregate nominal amount from time to time outstanding not exceeding the Programme Limit from time to time and for the purpose of determining such aggregate nominal amount Clause 3.5 of the Programme Agreement shall apply.
By not later than 3.00 p.m. (London time) on the London Business Day preceding each proposed Issue Date, the relevant Issuer shall deliver or cause to be delivered to the Trustee a copy of the applicable Final Terms and shall notify the Trustee in writing without delay of the relevant Issue Date and the nominal amount of the Notes to be issued. Upon the issue of the relevant Notes, such Notes shall become constituted by this Trust Deed without further formality.
Before the first issue of Notes occurring after each anniversary of this Deed and on such other occasions as the Trustee acting reasonably so requests (on the basis that the Trustee considers it necessary in view of a change (or proposed change) in applicable law or regulations (or the interpretation or application thereof) affecting the relevant Issuer or, as the case may be, the Guarantors, this Trust Deed, the Programme Agreement or the Agency Agreement, or the Trustee has other grounds), the relevant Issuer or, as the case may be, the Guarantors will procure that further legal opinion(s) (relating, if applicable, to any such change or proposed change (or interpretation or application)) in such form and with such content as the Trustee may require from the legal advisers specified in the Programme Agreement or such other legal advisers as the Trustee may require is/are delivered to the Trustee. Whenever such a request is made with respect to any Notes to be issued, the receipt of such opinion in a form satisfactory to the Trustee shall be a further condition precedent to the issue of those Notes.
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| 2.2 | Covenant to repay principal and to pay interest |
The relevant Issuer covenants with the Trustee that it will, as and when the Notes of any Series or any of them becomes due to be redeemed in accordance with the Conditions, unconditionally pay or procure to be paid to or to the order of the Trustee in the relevant currency in immediately available funds the principal amount in respect of the Notes of such Series becoming due for redemption on that date and (except in the case of Zero Coupon Notes) shall (subject to the provisions of the Conditions) in the meantime and until redemption in full of the Notes of such Series (both before and after any judgment or other order of a court of competent jurisdiction) unconditionally pay or procure to be paid to or to the order of the Trustee as aforesaid interest (which shall accrue from day to day) on the nominal amount of the Notes outstanding of such Series at rates and/or in amounts calculated from time to time in accordance with, or specified in, and on the dates provided for in, the Conditions (subject to Clause 2.4) PROVIDED THAT:
| (a) | every payment of principal or interest or other sum due in respect of the Notes made to or to the order of the Agent in the manner provided in the Agency Agreement shall be in satisfaction pro tanto of the relative covenant by the relevant Issuer in this Clause contained in relation to the Notes of such Series, except to the extent that there is a default in the subsequent payment thereof in accordance with the Conditions to the relevant Noteholders or Couponholders (as the case may be); |
| (b) | in the case of any payment of principal made to the Trustee or the Agent after the due date or on or after accelerated maturity following an Event of Default, interest shall (subject, where applicable, as provided in the Conditions) continue to accrue on the nominal amount of the relevant Notes (except in the case of Zero Coupon Notes to which the provisions of Condition 6(i) shall apply) (both before and after any judgment or other order of a court of competent jurisdiction) at the rates aforesaid (or, if higher, the rate of interest on judgment debts for the time being provided by English law) up to and including the date which the Trustee determines to be the date on and after which payment is to be made in respect thereof as stated in a notice given to the holders of such Notes (such date to be not later than seven days after the day on which the whole of such principal amount, together with an amount equal to the interest which has accrued and is to accrue pursuant to this proviso up to and including that date, has been received by the Trustee or the Agent); and |
| (c) | in any case where payment of the whole or any part of the principal amount of any Note is improperly withheld or refused upon due presentation thereof (other than in circumstances contemplated by (b) above), interest shall accrue on the nominal amount of such Note (except in the case of Zero Coupon Notes to which the provisions of Condition 6(i) shall apply) payment of which has been so withheld or refused (both before and after any judgment or other order of a court of competent jurisdiction) at the rates aforesaid (or, if higher, the rate of interest on judgment debts for the time being provided by English law) from the date of such withholding or refusal until the date on which, upon further presentation of the relevant Note, payment of the full amount (including interest as aforesaid) in the relevant currency payable in respect of such Note is made or (if earlier) the seventh day after notice is given to the relevant Noteholder(s) (whether individually or in accordance with Condition 13) that the full amount (including interest as aforesaid) in the relevant currency in respect of such Note is available for payment, provided that, upon further presentation thereof being duly made, such payment is made. |
The Trustee will hold the benefit of this covenant on trust for the Noteholders and the Couponholders and itself in accordance with this Trust Deed.
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| 2.3 | Trustee’s requirements regarding Paying Agents |
At any time after an Event of Default or a Potential Event of Default shall have occurred, the Trustee may:
| (a) | by notice in writing to the relevant Issuer, the Guarantors, the Agent and any other Paying Agent require the Agent and any other Paying Agent, until notified by the Trustee to the contrary, so far as permitted by applicable law: |
| (i) | to act as Paying Agents of the Trustee under this Trust Deed and the Notes on the terms of the Agency Agreement (with consequential amendments as necessary and except that the Trustee’s liability for the indemnification, remuneration and expenses of the Paying Agents will be limited to the amounts for the time being held by the Trustee in respect of the Notes on the terms of this Trust Deed) and thereafter to hold all Notes and Coupons and all moneys, documents and records held by them in respect of Notes and Coupons to the order of the Trustee; or |
| (ii) | to deliver all Notes and Coupons and all moneys, documents and records held by them in respect of the Notes and Coupons to the Trustee or as the Trustee directs in such notice; and |
| (b) | by notice in writing to the relevant Issuer and the Guarantors require them to make all subsequent payments in respect of the Notes and Coupons to or to the order of the Trustee and not to the Agent. |
| 2.4 | Rate and amount of interest |
If the Floating Rate Notes of any Series become immediately due and repayable under Condition 9(a), the rate and/or amount of interest payable in respect of them will be calculated at the same intervals as if such Notes had not become due and repayable, the first of which will commence on the expiry of the Interest Period during which the Notes of the relevant Series become so due and repayable mutatis mutandis in accordance with the provisions of Condition 4(b) except that the rates of interest need not be published.
| 2.5 | Currency of payments |
All payments in respect of, under and in connection with this Trust Deed and the Notes of any Series to the relevant Noteholders and Couponholders shall be made in the relevant currency.
| 2.6 | Further Notes |
The relevant Issuer shall be at liberty from time to time (but subject always to the provisions of this Trust Deed) without the consent of the Noteholders or the Couponholders, to create and issue further Notes ranking pari passu in all respects (or in all respects save for the date from which interest thereon accrues and the amount of the first payment of interest on such further Notes) and so that the same shall be consolidated and form a single series with the outstanding Notes of a particular Series.
| 2.7 | Separate Series |
The Notes of each Series shall form a separate Series of Notes and accordingly, unless for any purpose the Trustee in its absolute discretion shall otherwise determine, the provisions of this Clause and of Clauses 3 to 14 (both inclusive), 15.3, 16, 17 and Schedule 3 shall apply mutatis mutandis separately and independently to the Notes of each Series and in such Clauses and Schedule the expressions Notes, Noteholders, Coupons, Couponholders, Talons and Talonholders shall be construed accordingly.
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| 3. | FORM OF THE NOTES |
| 3.1 | Global Notes |
| (a) | The Notes of each Tranche will initially be represented by a single Global Note. Each Global Note shall be exchangeable for Definitive Notes together with, where applicable, (except in the case of Zero Coupon Notes) Coupons and, where applicable, Talons attached, in accordance with the provisions of such Global Note. |
All Global Notes shall be prepared, completed and delivered to a common depositary (in the case of a CGN) or a common safekeeper (in the case of a NGN) for Euroclear and Clearstream, Luxembourg in accordance with the provisions of the Programme Agreement or (in the case of a CGN) to another appropriate depositary in accordance with any other agreement between the relevant Issuer and the relevant Dealer(s) and, in each case, the Agency Agreement and this Trust Deed.
| (b) | Each Global Note shall be printed or typed in the form or substantially in the form set out in Part 1 of Schedule 2 and may be a facsimile. Each Global Note shall have annexed thereto a copy of the applicable Final Terms and shall be signed manually or in facsimile by two directors or one director and the secretary or assistant secretary of the relevant Issuer, and shall be authenticated by or on behalf of the Agent and shall, in the case of a Eurosystem-eligible NGN or in the case of a Non-eligible NGN in respect of which effectuation is to be applicable, be effectuated by the common safekeeper acting on the instructions of the Agent. Each Global Note so executed and authenticated (and if applicable effectuated) shall be a binding and valid obligation of the Issuer and title thereto shall pass by delivery. |
| 3.2 | Definitive Notes |
| (a) | The Definitive Notes, the Coupons and the Talons shall be to bearer in the respective forms or substantially in the respective forms set out in Part 2, Part 3 and Part 4, respectively, of Schedule 2. The Definitive Notes, the Coupons and the Talons shall be serially numbered and, if listed or quoted, shall be security printed in accordance with the requirements (if any) from time to time of the relevant Stock Exchange and the relevant Conditions shall be incorporated by reference (where applicable to this Trust Deed) into such Definitive Notes if permitted by the relevant Stock Exchange (if any), or, if not so permitted, the Definitive Notes shall be endorsed with or have attached thereto the relevant Conditions, and, in either such case, the Definitive Notes shall have endorsed thereon or attached thereto a copy of the applicable Final Terms (or the relevant provisions thereof). Title to the Definitive Notes, the Coupons and the Talons shall pass by delivery. |
| (b) | The Definitive Notes shall be signed manually or in facsimile by two directors or one director and the secretary or assistant secretary of the relevant Issuer, and shall be authenticated by or on behalf of the Agent. The Definitive Notes so executed and authenticated, and the Coupons and Talons, upon execution, and upon execution and authentication of the Definitive Notes, shall be binding and valid obligations of the Issuer. The Coupons and the Talons shall be signed manually or in facsimile by two directors or one director and the secretary or assistant secretary of the relevant Issuer. No Definitive Note and none of the Coupons or Talons appertaining to such Definitive Note shall be binding or valid until such Definitive Note shall have been executed and authenticated and the Coupons or Talons shall have been executed, in each case as aforesaid. |
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| 3.3 | Facsimile Signatures |
The relevant Issuer may use the facsimile signature of any person who at the date such signature is affixed to a Note is duly authorised by the relevant Issuer or a director or a secretary of the relevant Issuer notwithstanding that at the time of issue of any of the Notes he may have ceased for any reason to be so authorised or to hold such office.
| 3.4 | Persons to be treated as Noteholders |
Except as ordered by a court of competent jurisdiction or as required by law, the relevant Issuer, the Guarantors, the Trustee, the Agent and any other Paying Agent (notwithstanding any notice to the contrary and whether or not it is overdue and notwithstanding any notation of ownership or writing thereon or notice of any previous loss or theft thereof) may (a) for the purpose of making payment thereon or on account thereof deem and treat the bearer of any Global Note, Definitive Note, Coupon or Talon and of all rights thereunder free from all encumbrances, and shall not be required to obtain proof of such ownership or as to the identity of the bearer and (b) for all other purposes deem and treat:
| (a) | the bearer of any Definitive Note, Coupon or Talon; and |
| (b) | each person for the time being shown in the records of Euroclear or Clearstream, Luxembourg as having a particular nominal amount of Notes credited to his securities account, |
as the absolute owner thereof free from all encumbrances and shall not be required to obtain proof of such ownership or as to the identity of the bearer of any Global Note, Definitive Note, Coupon or Talon.
| 4. | STAMP DUTIES AND TAXES |
| 4.1 | Stamp Duties |
The relevant Issuer will pay any stamp, issue, documentary or other taxes and duties, including interest and penalties, payable in the United Kingdom, The Netherlands, Belgium and Luxembourg in respect of the creation, issue and offering of the Notes and the Coupons and the execution or delivery of this Trust Deed. The relevant Issuer will also indemnify the Trustee, the Noteholders and the Couponholders from and against all stamp, issue, documentary or other taxes paid by any of them in any jurisdiction in connection with any action taken by or on behalf of the Trustee or, as the case may be, the Noteholders or the Couponholders to enforce the relevant Issuer’s or any Guarantor’s obligations under this Trust Deed.
| 4.2 | Change of Taxing Jurisdiction |
If the relevant Issuer or a Guarantor becomes subject generally to the taxing jurisdiction of a territory or an authority of or in that territory having power to tax other than or in addition to the United Kingdom (in the case of BATIF and British American Tobacco) or The Netherlands (in the case of BATNF) or the United States (in the case of BATCAP) or any such authority of or in such territory then such Issuer or, as the case may be, the relevant Guarantor will (unless the Trustee otherwise agrees) give the Trustee an undertaking satisfactory to the Trustee in terms corresponding to the terms of Condition 7 with the substitution for, or (as the case may require) the addition to, the references in that Condition to the United Kingdom (in the case of BATIF and British American Tobacco), The Netherlands (in the case of BATNF) or the United States (in the case of BATCAP) of references to that other or additional territory or authority to whose taxing jurisdiction such Issuer or the relevant Guarantor has become so subject. In such event this Trust Deed and the Notes will be read accordingly.
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| 5. | GUARANTEE AND INDEMNITY |
| 5.1 | Guarantee |
The Guarantors, jointly and severally, unconditionally and irrevocably guarantee that, if the relevant Issuer does not pay any sum payable by it under this Trust Deed by the time and on the date specified for such payment (whether on the normal due date, on acceleration or otherwise), the Guarantors will pay that sum to or to the order of the Trustee, in the manner provided in Clause 2.2 (or if in respect of sums due under Clause 9, in London in pounds sterling in immediately available funds) before close of business on that date in the city to which payment is so to be made. Clause 2.2(a), (b) and (c) will apply (with consequential amendments as necessary) to such payments other than those in respect of sums due under Clause 9. All payments under this Trust Deed by the Guarantors will be made subject to the provisions of Clause 4.2, Condition 7 and Subclause 5.9 of this Clause.
| 5.2 | Guarantor(s) as Principal Debtor |
As between the Guarantors and the Trustee, the Noteholders and the Couponholders but without affecting the relevant Issuer’s obligations, each of the Guarantors will be liable under this Clause as if it were the sole principal debtor and not merely a surety. Accordingly, it will not be discharged, nor will its liability be affected, by anything which would not discharge it or affect its liability if it were the sole principal debtor (including (a) any time, indulgence, waiver or consent at any time given to the relevant Issuer or any other person, (b) any amendment to any other provisions of this Trust Deed or to the Conditions or to any security or other guarantee or indemnity, (c) the making or absence of any demand on the relevant Issuer or any other person for payment, (d) the enforcement or absence of enforcement of this Trust Deed or of any security or other guarantee or indemnity, (e) the taking, existence or release of any security, guarantee or indemnity, (f) the dissolution, amalgamation, reconstruction or reorganisation of the relevant Issuer or any other person or (g) the illegality, invalidity or unenforceability of or any defect in any provision of this Trust Deed or any of the relevant Issuer’s obligations under any of them).
| 5.3 | Guarantor’s Obligations Continuing |
Each of the Guarantors’ obligations under this Trust Deed are and will remain in full force and effect by way of continuing security until no sum remains payable under this Trust Deed. Furthermore, the obligations of the Guarantors are additional to, and not instead of, any security or other guarantee or indemnity at any time existing in favour of any person, whether from the Guarantors or otherwise and may be enforced without first having recourse to the relevant Issuer, any other person, any security or any other guarantee or indemnity. Each of the Guarantors irrevocably waives (a) any right which it has whether by virtue of the droit de discussion or otherwise to require that recourse be had to the assets of the relevant Issuer before any claim is enforced against it and (b) all notices and demands of any kind.
| 5.4 | Exercise of Guarantor’s Rights |
So long as any sum remains due and outstanding under this Trust Deed:
| (a) | any right of a Guarantor, by reason of the performance of any of its obligations under this Clause, to be indemnified by the relevant Issuer or to take the benefit of or to enforce any security or other guarantee or indemnity will be exercised and enforced by such Guarantor only in such manner and on such terms as the Trustee may require or approve; and |
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| (b) | any amount received or recovered by a Guarantor (a) as a result of any exercise of any such right or (b) in the dissolution, amalgamation, reconstruction or reorganisation of the relevant Issuer will be immediately paid to the Trustee and the Trustee will hold it on the trusts set out in Clause 6.1. |
| 5.5 | Suspense Account |
Any amount received or recovered by the Trustee (otherwise than as a result of a payment by the relevant Issuer to the Trustee in accordance with Clause 2) in respect of any sum payable by the relevant Issuer under this Trust Deed may be placed in a suspense account and kept there for so long as the Trustee thinks fit.
| 5.6 | Avoidance of Payments |
If any payment received by the Trustee or any Noteholder or Couponholder pursuant to the provisions of this Trust Deed is, on the subsequent bankruptcy or insolvency of the relevant Issuer, avoided under any laws related to bankruptcy or insolvency, such payment will not be considered as having discharged or diminished the liability of the Guarantors and this Guarantee will continue to apply as if such payment had at all times remained owing by the relevant Issuer.
| 5.7 | Debts of Issuer |
If any moneys become payable by the Guarantors under this Guarantee, the relevant Issuer will not (except in the event of the liquidation of the relevant Issuer), so long as any such moneys remain unpaid, pay any moneys for the time being due from the relevant Issuer to any of the Guarantors.
| 5.8 | Indemnity |
As separate, independent and alternative stipulations, each of the Guarantors unconditionally and irrevocably agrees (a) that any sum which, although expressed to be payable by the relevant Issuer under this Trust Deed, is for any reason (whether or not now existing and whether or not now known or becoming known to the relevant Issuer, the Guarantors, the Trustee or any Noteholder or Couponholder) not recoverable from a Guarantor on the basis of a guarantee will nevertheless be recoverable from it as if it were the sole principal debtor and will be paid by it to the Trustee on demand and (b) as a primary obligation to indemnify the Trustee, each Noteholder and each Couponholder against any loss suffered by it as a result of (i) any sum expressed to be payable by the relevant Issuer under this Trust Deed not being paid on the date and otherwise in the manner specified in this Trust Deed or (ii) any payment obligation of the relevant Issuer under this Trust Deed being or becoming void, voidable or unenforceable for any reason (whether or not now existing and whether or not now known or becoming known to the Trustee, any Noteholder or any Couponholder), the amount of that loss being the amount expressed to be payable by the relevant Issuer in respect of the relevant sum.
| 5.9 | Taxes |
| (a) | All payments of principal and interest by the Guarantors will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges (together, Taxes) of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom (in the case of BATIF and British American Tobacco), The Netherlands (in the case of BATNF) and the United States (in the case of BATCAP) or any political subdivision thereof or any authority thereof or therein having power to levy the same unless such withholding or deduction is required by law. In that event, the relevant Guarantor shall (subject as provided below) pay such amounts (the Additional Amounts) as will result in the receipt by the Noteholders and the Couponholders of such amounts as would have been received by them had no such Taxes been required to be withheld or deducted. |
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| (b) | No Additional Amounts will be payable by BATIF or British American Tobacco in respect of Notes or Coupons: |
| (i) | presented for payment by or on behalf of a Noteholder or Couponholder who is liable for such withheld or deducted Taxes by reason of his having some connection with the United Kingdom other than the mere holding of a Note or Coupon; or |
| (ii) | to, or to a third party on behalf of, a holder if such withholding or deduction may be avoided by complying with any statutory requirement or by making a declaration of non-residence or other similar claim for exemption to any authority of or in the United Kingdom, unless such holder proves that he is not entitled so to comply or to make such declaration or claim; or |
| (iii) | presented for payment in the United Kingdom; or |
| (iv) | presented for payment more than 30 days after the Relevant Date except to the extent that a Noteholder or Couponholder would have been entitled to payment of such Additional Amounts if he had presented his Note or Coupon for payment on the thirtieth day after the Relevant Date. |
| (c) | No Additional Amounts will be payable by BATNF in respect of Notes or Coupons: |
| (i) | presented for payment by or on behalf of a Noteholder or Couponholder who is liable for such withheld or deducted Taxes by reason of his having some connection with The Netherlands other than the mere holding of a Note or Coupon; or |
| (ii) | to, or to a third party on behalf of, a holder if such withholding or deduction may be avoided by complying with any statutory requirement or by making a declaration of non-residence or other similar claim for exemption to any authority of or in The Netherlands, unless such holder proves that he is not entitled so to comply or to make such declaration or claim; or |
| (iii) | presented for payment in The Netherlands; or |
| (iv) | presented for payment more than 30 days after the Relevant Date except to the extent that a Noteholder or Couponholder would have been entitled to payment of such Additional Amounts if he had presented his Note or Coupon for payment on the thirtieth day after the Relevant Date; or |
| (v) | to, or to another party on behalf of, a holder if such Additional Amounts are payable for or on account of any Taxes imposed or to be withheld in The Netherlands pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021). |
| (d) | In relation to BATCAP, the obligations set out in subclause 5.9(a) above shall not apply to: |
| (i) | any such Taxes which would not have been so imposed but for (i) the existence of any present or former connection between the holder (or between a fiduciary, settlor, beneficiary, member or shareholder of or possessor of a power over such holder, if such holder is an estate, a trust, a partnership or a corporation) and the United States, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof, or being or having been engaged in a trade or business therein or being or having been present therein, or having or having had a permanent establishment therein, or (ii) such holder’s present or former status |
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| as a personal holding company, passive foreign investment company, controlled foreign corporation or private foundation or other tax-exempt organisation (in each case, for United States federal income tax purposes), or as a corporation which accumulates earnings to avoid United States federal income taxes; or |
| (ii) | any such Taxes which would not have been so imposed but for the presentation of a Note or Coupon for payment more than 30 days after the Relevant Date except to the extent that a Noteholder or Couponholder would have been entitled to payment of such Additional Amounts if he had presented his Note or Coupon for payment on the thirtieth day after the Relevant Date; or |
| (iii) | any estate, inheritance, gift, sales, transfer or personal property Taxes or any similar Taxes; or |
| (iv) | any such Taxes which would not have been imposed but for the failure to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder of a Note or Coupon, if such compliance is required by statute, by regulation of the United States Treasury Department or by an applicable income tax treaty to which the United States is a party as a precondition to relief or exemption from such Taxes; or |
| (v) | any such Taxes which are payable otherwise than by deduction or withholding from payments in respect of a Note or Coupon; or |
| (vi) | any such Taxes imposed on interest received by a 10 per cent. shareholder of the Issuer within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the United States Internal Revenue Code of 1986, as amended (the Code) (or any amended or successor provisions); or |
| (vii) | any such Taxes imposed by reason of a holder of a Note or Coupon being or having been a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code (or any amended or successor provisions); or |
| (viii) | any backup withholding imposed pursuant to Section 3406 of the Code (or any amended or successor provisions); or |
| (ix) | any such Taxes imposed pursuant to Section 871(h)(6) or 881(c)(6) of the Code (or any amended or successor provisions); and |
| (x) | any combination of clauses (i) to (ix) above; |
nor will any Additional Amounts be paid in respect of a Note or Coupon to any holder who is not a United States Alien or to any United States Alien who is a fiduciary or partnership or person other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or the beneficial owner would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of such Note or Coupon. The term “United States Alien” means any person who, for United States federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust or a foreign partnership any partner of which is for United States federal income tax purposes a foreign corporation, a nonresident alien individual, a non-resident alien fiduciary of a foreign estate or trust or any such foreign partnership.
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| 6. | APPLICATION OF MONEYS AND PARTIAL PAYMENTS |
| 6.1 | Declaration of Trust |
All moneys received by the Trustee under this Trust Deed from the relevant Issuer or, as the case may be, the Guarantors (including any moneys which represent principal or interest in respect of Notes or Coupons which have become void under Condition 8) shall, unless and to the extent attributable, in the opinion of the Trustee, to a particular Series of the Notes, be apportioned pari passu and rateably between each Series of the Notes, and all moneys received by the Trustee under this Trust Deed from the relevant Issuer or, as the case may be, the Guarantors to the extent attributable in the opinion of the Trustee to a particular Series of the Notes or which are apportioned to such Series as aforesaid, be held by the Trustee upon trust to apply them (subject to Clause 5.5 and Clause 7):
FIRST in payment or satisfaction of all amounts then due and unpaid under these presents to the Trustee and/or any Appointee;
SECONDLY in or towards payment pari passu and rateably of all principal and interest then due and unpaid in respect of the Notes of that Series;
THIRDLY in or towards payment pari passu and rateably of all principal and interest then due and unpaid in respect of the Notes of each other Series; and
FOURTHLY in payment of the balance (if any) to the relevant Issuer (without prejudice to, or liability in respect of, any question as to how such payment to the relevant Issuer shall be dealt with as between the relevant Issuer and any other person) or, in the event that any moneys were received from any Guarantor, to the extent of such moneys, to such Guarantor.
Without prejudice to this Subclause 6.1, if the Trustee holds any moneys which represent principal or interest in respect of Notes which have become void or in respect of which claims have been prescribed under Condition 8, the Trustee will hold such moneys on the above trusts.
| 6.2 | Partial Payments |
Upon any payment under Subclause 6.1 (other than payment in full against surrender of a Note or Coupon) the Note or Coupon in respect of which such payment is made shall be produced to the Trustee or the Paying Agent by or through whom such payment is made and (except in the case of a NGN) the Trustee shall or shall cause such Paying Agent to enface thereon a memorandum of the amount and the date of payment but the Trustee may in any particular case dispense with such production and enfacement upon such indemnity being given as it shall think sufficient.
| 7. | INVESTMENT BY THE TRUSTEE |
| 7.1 | No provision of these presents shall (a) confer on the Trustee any right to exercise any investment discretion in relation to the assets subject to the trust constituted by these presents and, to the extent permitted by law, Section 3 of the Trustee Act 2000 shall not apply to the duties of the Trustee in relation to the trusts constituted by these presents and (b) require the Trustee to do anything which may cause the Trustee to be considered a sponsor of a covered fund under Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any regulations promulgated thereunder. |
| 7.2 | The Trustee may deposit moneys in respect of the Notes or Coupons in its name in an account at such bank or other financial institution as the Trustee may, in its absolute discretion, think fit. If that bank or financial institution is the Trustee or a subsidiary, holding or associated company of the Trustee, the Trustee need only account for an amount of interest equal to the amount of interest which would, at then current rates, be payable by it on such a deposit to an independent customer. |
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| 7.3 | The parties acknowledge and agree that in the event that any deposits in respect of the Notes or Coupons are held by a bank or a financial institution in the name of the Trustee and the interest rate in respect of certain currencies is a negative value such that the application thereof would result in amounts being debited from funds held by such bank or financial institution (“negative interest”), the Trustee shall not be liable to make up any shortfall or be liable for any loss. |
| 7.4 | The Trustee may at its discretion accumulate such deposits and the resulting interest and other income derived thereon. The accumulated deposits shall be applied under Clause 6. All interest and other income deriving from such deposits shall be applied first in payment or satisfaction of all amounts then due and unpaid under Clause 9 to the Trustee and/or any Appointee and otherwise held for the benefit of and paid to the Noteholders of such Series or the holders of the related Coupons, as the case may be. |
| 8. | COVENANTS |
So long as any of the Notes of any Series remains outstanding, the relevant Issuer and the Guarantors will each:
| (a) | Books of Account: keep, and use reasonable endeavours to procure that each of their respective subsidiaries keeps, proper books of account and, at any time after an Event of Default or Potential Event of Default has occurred or if the Trustee reasonably believes that such an event has occurred, so far as permitted by applicable law, allow, and procure that each of their respective subsidiaries will allow, the Trustee and anyone appointed by it to whom the relevant Issuer, the Guarantors and/or the relevant subsidiary has no reasonable objection, access to its books of account at all reasonable times during normal business hours; |
| (b) | Notice of Events of Default: notify the Trustee in writing immediately on becoming aware of the occurrence of any Event of Default or Potential Event of Default; |
| (c) | Information: so far as permitted by applicable law, give the Trustee such information as it reasonably requires to perform its functions pursuant to this Trust Deed; |
| (d) | Financial Statements etc: send to the Trustee at the time of their issue and in the case of annual financial statements in any event within 180 days of the end of each financial year three copies (in English) of every balance sheet, profit and loss account, report or other notice, statement or circular issued, or which legally or contractually should be issued, to the members or creditors (or any class of them) of the relevant Issuer or the Guarantors or any Holding Company thereof, as the case may be, generally in its or their capacity as such; |
| (e) | Certificates of Directors: send to the Trustee, within 30 days of its annual audited financial statements being made available to its members, and also within 30 days of any request by the Trustee, a certificate of the relevant Issuer or, as the case may be, each Guarantor signed by any two of its Directors or any one of its Directors and its Secretary or Assistant Secretary that, having made all reasonable enquiries, to the best of the knowledge, information and belief of the relevant Issuer or, as the case may be, the relevant Guarantor as at a date (the Certification Date) not more than five days before the date of the certificate no Event of Default or Potential Event of Default or other breach of this Trust Deed existed or had occurred since the Certification Date of the last such certificate or, if none, the date of this Deed or, if such an event exists or had occurred, giving details of it; |
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| (f) | Notices to Bondholders: send, or procure that the Agent sends, to the Trustee at least 48 hours prior to publication the form of each notice to be given to Noteholders and, once given, two copies of each such notice, such notice to be in a form approved in writing by the Trustee (such approval, unless expressed to do so not to constitute approval for the purposes of Section 21 of the FSMA of a communication within the meaning of Section 21 of the FSMA); |
| (g) | Further Acts: so far as permitted by applicable law, do such further things as may be necessary in the opinion of the Trustee to give effect to this Trust Deed; |
| (h) | Notice of late payment: forthwith upon request by the Trustee give notice to the Noteholders of any unconditional payment to the Agent or the Trustee of any sum due in respect of the Notes or Coupons made after the due date for such payment; |
| (i) | Listing: use all reasonable endeavours to maintain the quotation or listing of the Notes on the Stock Exchange but, if it is unable to do so, having used such endeavours, or if the obtaining or maintenance of such quotation or listing is agreed by the Trustee to be unduly onerous and the Trustee is satisfied that the interests of the Noteholders would not be thereby materially prejudiced, instead use all reasonable endeavours to obtain and maintain a quotation or listing of the Notes on another stock exchange approved in writing by the Trustee; |
| (j) | Change in Agents: give at least 14 days’ prior notice to the Noteholders of any future appointment, resignation or removal of any Agent, Calculation Agent, Reference Bank or other Paying Agent or of any change by any Paying Agent or Reference Bank of its specified office and not make any such appointment or removal without the Trustee’s written approval; |
| (k) | Notes held by Issuer etc: send to the Trustee as soon as practicable after being so requested by the Trustee a certificate of the relevant Issuer or, as the case may be, each Guarantor signed by any two of its Directors or any one of its Directors and its Secretary or Assistant Secretary stating the number and nominal amount of Notes held at the date of such certificate by or on behalf of the relevant Issuer or, as the case may be, each Guarantor or their respective subsidiaries; |
| (l) | Payment of interest in the United States: if, in accordance with the provisions of the Conditions, interest in respect of the Notes becomes payable at the specified office of any Paying Agent in the United States of America promptly give notice thereof to the relative Noteholders in accordance with Condition 13; |
| (m) | Euroclear and Clearstream, Luxembourg: use all reasonable endeavours to procure that Euroclear and/or Clearstream, Luxembourg (as the case may be) issue(s) any record, certificate or other document requested by the Trustee under Clause 10.18 or otherwise as soon as practicable after such request; |
| (n) | Drawings: give prior written notice to the Trustee of any proposed redemption pursuant to Conditions 6(b) or 6(c) and, if it shall have given notice to the Noteholders of its intention to redeem any Notes pursuant to Condition 6(c), duly proceed to make drawings (if appropriate) and to redeem Notes accordingly; |
| (o) | Programme Agreement: promptly provide the Trustee with copies of all supplements and/or amendments and/or restatements of the Programme Agreement; and |
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| (p) | Holding Company: in the event that any company, the share capital of which is or is to be listed on the London Stock Exchange, becomes the ultimate Holding Company of British American Tobacco, procure that such Holding Company shall become a guarantor under this Trust Deed, jointly and severally with the Guarantors, with effect from the later of (i) the date on which such company becomes the ultimate Holding Company of British American Tobacco and (ii) the date on which the share capital of such Holding Company is listed on the London Stock Exchange and, in such event, the term “Guarantors” herein shall be deemed to include such Holding Company. |
| 9. | REMUNERATION AND INDEMNIFICATION OF THE TRUSTEE |
| 9.1 | Normal Remuneration |
So long as the Notes remain outstanding the relevant Issuer will pay the Trustee as remuneration for its services as Trustee such sum on such dates in each case as they may from time to time agree. Such remuneration will accrue from day to day from the date of this Deed or as otherwise agreed between the relevant Issuer, and the Trustee from time to time and shall be payable on such dates as they may from time to time agree. Such remuneration shall accrue from day to day and be payable (in priority to payments to Noteholders and Couponholders) up to and including the date when, all the Notes having become due for redemption, the moneys payable in respect thereof have been paid to the Agent or the Trustee. However, if any payment to a Noteholder or Couponholder of moneys due in respect of any Note or Coupon is improperly withheld or refused, such remuneration will again accrue as from the date of such withholding or refusal until payment to such Noteholder or Couponholder is duly made.
| 9.2 | Extra Remuneration |
If an Event of Default or a Potential Event of Default shall have occurred the relevant Issuer hereby agrees that the Trustee shall be entitled to be paid additional remuneration, which may be calculated at its normal hourly rates in force from time to time. In any other case, if the Trustee finds it expedient or necessary or is requested by the relevant Issuer to undertake duties which they both agree to be of an exceptional nature or otherwise outside the scope of the Trustee’s normal duties under this Trust Deed, the relevant Issuer will pay such additional remuneration as they may agree (which may be calculated by reference to the Trustee’s normal hourly rates in force from time to time) or, in the event of the Trustee and the relevant Issuer failing to agree as to any of the matters in this Subclause (or as to such sums referred to in Subclause 9.1), as determined by an investment bank or other person (acting as an expert and not as an arbitrator) selected by the Trustee and approved by the relevant Issuer or, failing such approval, nominated by the President for the time being of The Law Society of England and Wales. The expenses involved in such nomination and such investment bank’s or other person’s fee will be payable by the relevant Issuer. The determination of such investment bank or other person will be conclusive and binding on the relevant Issuer, the Guarantors, the Trustee, the Noteholders and the Couponholders.
| 9.3 | Expenses |
The relevant Issuer will also on demand by the Trustee pay or discharge all liabilities and expenses reasonably incurred by the Trustee in the preparation and execution of this Trust Deed and the performance of its functions under this Trust Deed including, but not limited to, legal and travelling expenses and any stamp, documentary or other taxes or duties paid by the Trustee in connection with any legal proceedings reasonably brought or contemplated by the Trustee against the relevant Issuer or any Guarantor to enforce any provision of, or resolving any doubt concerning, or for any other purpose in relation to this Trust Deed.
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| 9.4 | Indemnity |
Subject to section 750 of the Companies Act 2006 (if applicable), the relevant Issuer will indemnify the Trustee in respect of all liabilities and expenses properly incurred by it or by anyone appointed by it or to whom any of its functions hereunder may be delegated by it in the carrying out of its functions hereunder and against any loss, liability, cost, claim, action, demand or expense (including, but not limited to, all costs, charges and expenses paid or incurred in disputing or defending any of the foregoing) which any of them may incur or which may be made against any of them arising out of or in relation to or in connection with, its appointment or the exercise of its functions hereunder.
| 9.5 | Rate of Interest |
All amounts due and payable pursuant to Subclauses 9.3 and 9.4 shall be payable by the relevant Issuer on the date specified in a demand in writing by the Trustee. The rate of interest applicable to such payments shall be a rate equivalent to 2 per cent. per annum over the base rate of National Westminster Bank PLC for such time as such amount remains unpaid and interest shall accrue:
| (a) | in the case of payments made by the Trustee before the date of such written demand from the date on which the payment was made or such later date as specified in such written demand; or |
| (b) | in the case of payments made by the Trustee on or after the date of the written demand, from the date specified in such written demand, which date shall not be a date earlier than the date such payments are made. |
All remuneration payable to the Trustee shall carry interest at the rate specified in this clause 9.5 from the date thereof.
| 9.6 | Continuing Effect |
Subclauses 9.3 and 9.4 will continue in full force and effect as regards the Trustee even if it no longer is Trustee.
| 9.7 | Apportionment |
The Trustee shall be entitled in its absolute discretion to determine in respect of which Series of Notes any liabilities, costs, charges and expenses incurred under this Trust Deed have been incurred or to allocate any such liabilities, costs, charges and expenses between the Notes of more than one Series.
| 9.8 | No withholding or deduction |
All payments to be made by the relevant Issuer to the Trustee under clause 9 of this Trust Deed shall be made free and clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed by or within any relevant jurisdiction or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law. In that event, the relevant Issuer shall pay such additional amounts as will, after such deduction or withholding has been made, leave the Trustee with the full amount which would have been received by it had no such withholding or deduction been required.
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| 10. | PROVISIONS SUPPLEMENTAL TO THE TRUSTEE ACTS |
| 10.1 | Advice |
The Trustee may act on the opinion or advice of, or information obtained from, any expert and will not be responsible to anyone for any loss occasioned by so acting. Any such opinion, advice or information may be sent or obtained by letter, fax or email and the Trustee will not be liable to anyone for acting in good faith on any opinion, advice or information purporting to be conveyed by such means even if it contains some error or is not authentic.
| 10.2 | Trustee to Assume Performance |
The Trustee need not notify anyone of the execution of this Trust Deed or do anything to find out if an Event of Default or Potential Event of Default has occurred. Until it has actual knowledge or express notice to the contrary, the Trustee may assume that no such event has occurred and that the relevant Issuer and the Guarantors are performing all their obligations under this Trust Deed.
| 10.3 | Resolutions of Noteholders |
The Trustee will not be responsible for having acted in good faith on a resolution in writing or any resolution purporting to have been passed at a meeting of Noteholders in respect of which minutes have been made and signed or any Extraordinary Resolution passed by way of electronic consents received through the relevant Clearing System(s) in accordance with this Trust Deed even if it is later found that there was a defect in the constitution of the meeting or the passing of the resolution, (in the case of a resolution in writing) that not all the holders had signed the resolution or (in the case of an Extraordinary Resolution passed by electronic consents received through the relevant Clearing System(s)) it was not approved by the requisite number of Noteholders or that the resolution was not valid or binding on the Noteholders or the Couponholders.
| 10.4 | Certificate signed by Directors |
If the Trustee, in the exercise of its functions, requires to be satisfied or to have information as to any fact or the expediency of any act, it may call for and accept as sufficient evidence of that fact or the expediency of that act a certificate signed by any two Directors or any one Director and the Secretary or Assistant Secretary of the relevant Issuer or any Guarantor (as the case may be) as to that fact or to the effect that, in their opinion, that act is expedient and the Trustee need not call for further evidence and will not be responsible for any loss occasioned by acting on such a certificate.
| 10.5 | Deposit of Documents |
The Trustee may deposit this Trust Deed and any other documents with any bank or entity whose business includes the safe custody of documents or with any lawyer or firm of lawyers believed by it to be of good repute and may pay all sums due in respect thereof.
| 10.6 | Discretion |
The Trustee will have absolute and uncontrolled discretion as to the exercise of its functions and will not be responsible for any loss, liability, cost, claim, action, demand, expense or inconvenience which may result from their exercise or non-exercise.
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| 10.7 | Agents |
Whenever it considers it expedient in the interests of the Noteholders, the Trustee may, in the conduct of its trust business, instead of acting personally, employ and pay an agent selected by it, whether or not a lawyer or other professional person, to transact or conduct, or concur in transacting or conducting, any business and to do or concur in doing all acts required to be done by the Trustee (including the receipt and payment of money). If the Trustee exercises reasonable care in selecting such agent, the Trustee will not be responsible to anyone for any misconduct or omission by any such agent so employed by it or be bound to supervise the proceedings or acts of any such agent.
| 10.8 | Delegation |
Whenever it considers it expedient in the interests of the Noteholders, the Trustee may delegate to any person on any terms (including power to sub-delegate) all or any of its functions. If the Trustee exercises reasonable care in selecting such delegate, it will not have any obligation to supervise such delegate or be responsible for any loss, liability, cost, claim, action, demand or expense incurred by reason of any misconduct or default by any such delegate or sub-delegate.
| 10.9 | Nominee/Custodian |
The Trustee may appoint and pay a custodian or nominee on any terms in relation to assets of the trusts constituted by these presents. If the Trustee exercises reasonable care in selecting such custodian or nominee, it will not have any obligation to supervise such custodian or nominee and shall not be responsible to anyone for any loss, liability, cost, claim, action, demand or expense incurred as a result of any misconduct or default by the custodian or nominee.
| 10.10 | Forged Bonds |
The Trustee will not be liable to the relevant Issuer or any Guarantor or any Noteholder or Couponholder by reason of having accepted as valid or not having rejected any Note or Coupon purporting to be such and later found to be forged or not authentic.
| 10.11 | Confidentiality |
Unless ordered to do so by a court of competent jurisdiction the Trustee shall not be required to disclose to any Noteholder or Couponholder any confidential, financial or other information made available to the Trustee by the relevant Issuer or any Guarantor or any other person.
| 10.12 | Determinations Conclusive |
As between itself and the Noteholders and Couponholders the Trustee may determine all questions and doubts arising in relation to any of the provisions of this Trust Deed. Such determinations, whether made upon such a question actually raised or implied in the acts or proceedings of the Trustee, will be conclusive and shall bind the Trustee, the Noteholders and the Couponholders.
| 10.13 | Currency Conversion |
Where it is necessary or desirable to convert any sum from one currency to another, it will (unless otherwise provided hereby or required by law) be converted at such rate or rates, in accordance with such method and as at such date as may reasonably be specified by the Trustee but having regard to current rates of exchange, if available. Any rate, method and date so specified will be binding on the relevant Issuer, the Guarantors, the Noteholders and the Couponholders.
| 10.14 | Events of Default |
The Trustee may determine whether or not an Event of Default or Potential Event of Default is in its opinion capable of remedy and/or materially prejudicial to the interests of the Noteholders. Any such determination will be conclusive and binding on the relevant Issuer, the Guarantors, the Noteholders and the Couponholders.
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| 10.15 | Payment for and Delivery of Notes |
The Trustee will not be responsible for the receipt or application by the relevant Issuer of the proceeds of the issue of the Notes, any exchange of Notes or the delivery of Notes to the persons entitled to them.
| 10.16 | Notes held by the Issuer etc |
In the absence of knowledge or express notice to the contrary, the Trustee may assume without enquiry (other than requesting a certificate under Clause 8(k)) that no Notes are for the time being held by or on behalf of the relevant Issuer, the Guarantors or their respective subsidiaries.
| 10.17 | Interests of Noteholders as a class |
In connection with the exercise by it of any of its trusts, powers, authorities or discretions under this Trust Deed (including, without limitation, any modification, waiver, authorisation or determination), the Trustee shall have regard to the general interests of the Noteholders as a class but shall not have regard to any interests arising from circumstances particular to individual Noteholders or Couponholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of such exercise for individual Noteholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the relevant Issuer, the Guarantors, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders except to the extent already provided for in Condition 7 and/or any undertaking given in addition thereto or in substitution therefor under this Trust Deed.
| 10.18 | Certificate of Euroclear or Clearstream, Luxembourg |
The Trustee may call for and rely on any record and/or document and/or evidence and/or information and/or certification to be issued or given by Euroclear or Clearstream, Luxembourg (a) as to the nominal amount of Notes represented by a Global Note standing to the account of any person and/or (b) in relation to any determination of the nominal amount of Notes represented by a NGN. Any such certificate or other document shall, in the absence of manifest error, be conclusive and binding for all purposes. Any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear’s Easy-Way or Clearstream, Luxembourg’s Creation Online system) in accordance with its usual procedures. The Trustee shall not be liable to any person by reason of having accepted as valid or not having rejected any record and/or document and/or evidence and/or information and/or certification to such effect purporting to be issued or given by Euroclear or Clearstream, Luxembourg and subsequently found to be forged or not authentic.
| 10.19 | Trustee not bound to act |
Save as otherwise expressly provided in this Trust Deed, the Trustee shall have absolute and uncontrolled discretion as to the exercise of the discretions hereby vested in the Trustee, but, whenever the Trustee is under the provisions of this Trust Deed bound to act at the request or direction of the Noteholders, the Trustee shall nevertheless not be so bound unless first indemnified and/or secured and/or prefunded to its satisfaction against all proceedings, claims and demands to which it may render itself liable and all costs, charges, expenses and liabilities which it may incur by so doing, including the cost of its management’s time and/or other internal resources, calculated using its normal hourly rates in force from time to time.
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| 10.20 | Illegality |
No provision of this Trust Deed shall require the Trustee to do anything which may in its opinion be illegal or contrary to applicable law or regulation.
| 10.21 | Trustee’s own funds |
Nothing contained in this Trust Deed shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties or the exercise of any right, power, authority or discretion hereunder if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not assured to it.
| 10.22 | Trustee entitled to evaluate risk |
When determining whether an indemnity or any security is satisfactory to it, the Trustee shall be entitled to evaluate its risk in given circumstances by considering the worst-case scenario and, for this purpose, it may take into account, without limitation, the potential costs of defending or commencing proceedings in England or elsewhere and the risk however remote, of any award of damages against it in England or elsewhere.
| 10.23 | Noteholder indemnities |
The Trustee shall be entitled to require that any indemnity or security given to it by the Noteholders or any of them be given on a joint and several basis and be supported by evidence satisfactory to it as to the financial standing and creditworthiness of each counterparty and/or as to the value of the security and an opinion as to the capacity, power and authority of each counterparty and/or the validity and effectiveness of the security.
| 10.24 | Consents and Approvals |
Any consent or approval given by the Trustee for the purposes of these presents may be given on such terms and subject to such conditions (if any) as the Trustee thinks fit and notwithstanding anything to the contrary in these presents may be given retrospectively. The Trustee may give any consent or approval, exercise any power, authority or discretion or take any similar action (whether or not such consent, approval, power, authority, discretion or action is specifically referred to in these presents) if it is satisfied that the interests of the Noteholders will not be materially prejudiced thereby. For the avoidance of doubt, the Trustee shall not have any duty to the Noteholders in relation to such matters other than that which is contained in the preceding sentence.
| 11. | TRUSTEE LIABLE FOR NEGLIGENCE |
| 11.1 | The duty of care contained in Section 1 of the Trustee Act 2000 shall not apply to this Trust Deed. However, subject to Section 750 of the Companies Act 2006 (if applicable), if the Trustee fails to show the degree of care and diligence required of it as trustee, nothing in this Trust Deed shall relieve or indemnify it for, from or against any liability which would otherwise attach to it in respect of any gross negligence, wilful default or fraud of which it may be guilty. Where there are any inconsistencies between the Trustee Acts and the provisions of these presents, the provisions of these presents shall, to the extent allowed by law, prevail and, in the case of any such inconsistency with the Trustee Act 2000, the provisions of this Trust Deed shall take effect as a restriction or exclusion for the purposes of that Act. |
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| 11.2 | Notwithstanding any provision of these presents to the contrary, the Trustee shall not in any event be liable for: |
| (a) | loss of profit, loss of business, loss of goodwill, loss of opportunity, whether direct or indirect; and |
| (b) | special, indirect, punitive or consequential loss or damage of any kind whatsoever, |
whether or not foreseeable, even if the Trustee has been advised of the likelihood of such loss or damage, unless the claim for loss or damage is made in respect of fraud on the part of the Trustee.
| 12. | WAIVER AND PROOF OF DEFAULT |
| 12.1 | Waiver |
The Trustee may, without the consent of the Noteholders or the Couponholders and without prejudice to its rights in respect of any subsequent breach, from time to time and at any time, if in its opinion the interests of the Noteholders will not be materially prejudiced thereby, on such terms as seem expedient to it, waive or authorise any breach or proposed breach by the relevant Issuer or any Guarantor of this Trust Deed or the Conditions or determine that any Event of Default or Potential Event of Default will not be treated as such provided that the Trustee will not do so in contravention of an express direction given by an Extraordinary Resolution or a request made pursuant to Condition 9(a). No such direction or request will affect a previous waiver, authorisation or determination. Any such waiver, authorisation or determination will be binding on the Noteholders and the Couponholders and, if the Trustee so requires, will be notified to the Noteholders as soon as practicable.
| 12.2 | Proof of Default |
Proof that the relevant Issuer or any Guarantor has failed to pay a sum due to the holder of any Note or Coupon will (unless the contrary be proved) be sufficient evidence that it has made the same default as regards all other Notes or Coupons which are then payable.
| 13. | TRUSTEE CONTRACTING WITH THE ISSUER AND THE GUARANTORS |
Neither the Trustee nor any director or officer or holding company, subsidiary or associated company of a corporation acting as a trustee under this Trust Deed shall by reason of its or his fiduciary position be in any way precluded from:
| (a) | entering into or being interested in any contract or financial or other transaction or arrangement with the relevant Issuer or any of the Guarantors or any person or body corporate associated with the relevant Issuer or any of the Guarantors (including without limitation any contract, transaction or arrangement of a banking or insurance nature or any contract, transaction or arrangement in relation to the making of loans or the provision of financial facilities or financial advice to, or the purchase, placing or underwriting of or the subscribing or procuring subscriptions for or otherwise acquiring, holding or dealing with, or acting as paying agent in respect of, the Notes or any other notes, bonds, stocks, shares, debenture stock, debentures or other securities of, any Issuer or any person or body corporate associated as aforesaid); or |
| (b) | accepting or holding the trusteeship of any other trust deed constituting or securing any other securities issued by or relating to the relevant Issuer or any of the Guarantors or any such person or body corporate so associated or any other office of profit under the relevant Issuer or any of the Guarantors or any such person or body corporate so associated, |
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and shall be entitled to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such contract, transaction or arrangement as is referred to in (a) above or, as the case may be, any such trusteeship or office of profit as is referred to in (b) above without regard to the interests of the Noteholders and notwithstanding that the same may be contrary or prejudicial to the interests of the Noteholders and shall not be responsible for any liability or expense occasioned to the Noteholders thereby and shall be entitled to retain and shall not be in any way liable to account for any profit made or share of brokerage or commission or remuneration or other amount or benefit received thereby or in connection therewith.
Where any holding company, subsidiary or associated company of the Trustee or any director or officer of the Trustee acting other than in his capacity as such a director or officer has any information, the Trustee shall not thereby be deemed also to have knowledge of such information and, unless it shall have actual knowledge of such information, shall not be responsible for any loss suffered by Noteholders resulting from the Trustee’s failing to take such information into account in acting or refraining from acting under or in relation to this Trust Deed.
| 14. | MODIFICATION AND SUBSTITUTION |
14.1 Modification
The Trustee may without the consent or sanction of the Noteholders or the Couponholders at any time and from time to time concur with the relevant Issuer in making any modification (a) to this Trust Deed which in the opinion of the Trustee it may be proper to make PROVIDED THAT the Trustee is of the opinion that such modification will not be materially prejudicial to the interests of the Noteholders or (b) to this Trust Deed if in the opinion of the Trustee such modification is of a formal, minor or technical nature, to correct a manifest error or to comply with mandatory provisions of applicable law.
In addition, the Trustee shall be obliged to concur with the relevant Issuer in effecting any Benchmark Amendments in the circumstances and as otherwise set out in Condition 4(b)(ii)(C)(4) without the consent of the Noteholders or Couponholders.
Any such modification may be made on such terms and subject to such conditions (if any) as the Trustee may determine, shall be binding upon the Noteholders and the Couponholders and, unless the Trustee agrees otherwise, shall be notified by the relevant Issuer to the Noteholders in accordance with Condition 13 as soon as practicable thereafter.
| 14.2 | Substitution |
(a) Substitute Issuer
The Trustee may, without the consent of the Noteholders or the Couponholders, agree to the substitution of any Guarantor or its successor in business or Holding Company or any other subsidiary of any Guarantor or its successor in business or Holding Company (the Substituted Obligor) in place of the relevant Issuer (or of any previous substitute under this Subclause) as the principal debtor under this Trust Deed provided that:
| (i) | amendments to this Trust Deed are made or a trust deed is executed or some other form of undertaking is given by the Substituted Obligor to the Trustee, in any such case, in form and manner satisfactory to the Trustee, agreeing to be bound by the terms of this Trust Deed with any consequential amendments which the Trustee may deem appropriate as fully as if the Substituted Obligor had been named in this Trust Deed and on the Notes and Coupons as the principal debtor in place of the relevant Issuer; |
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| (ii) | where the Substituted Obligor is subject generally to the taxing jurisdiction of any territory or any authority of or in that territory having power to tax (the Substituted Territory) other than the territory to the taxing jurisdiction of which (or to any such authority of or in which) the relevant Issuer is subject generally (the Issuer’s Territory), the Substituted Obligor will (unless the Trustee otherwise agrees) give to the Trustee an undertaking in form and manner satisfactory to the Trustee in terms corresponding to the terms of Condition 7 with the substitution for the references in that Condition to the relevant jurisdiction specified in such Condition of references to the Substituted Territory and in such event this Trust Deed, the Notes and the Coupons (including, but without limitation, Clause 4.2) will be read accordingly; |
| (iii) | if any two of the Directors of the Substituted Obligor certify that it will be solvent immediately after such substitution, the Trustee need not have regard to the financial condition, profits or prospects of the Substituted Obligor or compare them with those of the relevant Issuer or any Guarantor; and |
| (iv) | the obligations of the Substituted Obligor under this Trust Deed are guaranteed by the Guarantors or their successors in business or Holding Companies (or where a Guarantor or its successor in business or Holding Company is the Substituted Obligor by the other Guarantors or their successors in business or Holding Companies) in the same terms (with consequential amendments as necessary) as the Guarantee in form and manner satisfactory to the Trustee. |
| (b) | Release of Substituted Issuer |
Any such agreement by the Trustee pursuant to this Subclause 14.2 will, if so expressed, operate to release the relevant Issuer (or any such previous substitute) from any or all of its obligations under this Trust Deed. Not later than 14 days after the execution of any such documents and after compliance with such requirements, notice of the substitution will be given to the Noteholders.
| (c) | Completion of Substitution |
Upon the execution of such documents and compliance with such requirements, the Substituted Obligor will be deemed to be named in this Trust Deed and on the Notes and Coupons as the principal debtor in place of the relevant Issuer (or of any previous substitute under this Subclause 15.2) and this Trust Deed will be deemed to be modified in such manner as shall be necessary to give effect to the substitution.
| (d) | Substitute Guarantor |
The Trustee may similarly, without the consent of the Noteholders or the Couponholders, agree to the substitution of any Guarantor’s successor in business or Holding Company in place of any Guarantor, mutatis mutandis so far as applicable (except that the references to Condition 7 in paragraph 14.2(a)(ii) shall be construed as references to Clause 5.9 and paragraph 14.2(a)(v) shall not be so applicable) upon the terms and subject to the conditions hereinbefore provided, with such modifications or additions as the Trustee may agree or require.
| (e) | In the case of any proposed substitution pursuant to this Clause 14.2, the Trustee may, without the consent of the Noteholders or the Couponholders, agree to a change in law governing the Notes, the Coupons and/or this Trust Deed, provided that such change would not, in the opinion of the Trustee, be materially prejudicial to the interests of the Noteholders. |
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| 15. | APPOINTMENT, RETIREMENT AND REMOVAL OF THE TRUSTEE |
| 15.1 | Appointment |
The Issuer has the power of appointing new trustees but no trustee may be so appointed unless previously approved by an Extraordinary Resolution. A trust corporation will at all times be a Trustee and may be the sole Trustee. Any appointment of a new Trustee will be notified by the relevant Issuer to the Noteholders as soon as practicable.
| 15.2 | Retirement and Removal |
Any Trustee may retire at any time on giving at least three months’ written notice to the relevant Issuer and the Guarantors without giving any reason or being responsible for any costs occasioned by such retirement and the Noteholders may by Extraordinary Resolution remove any Trustee provided that the retirement or removal of a sole trust corporation will not be effective until a trust corporation is appointed as successor Trustee. If a sole trust corporation gives notice of retirement or an Extraordinary Resolution is passed for its removal, the relevant Issuer and the Guarantors will use all reasonable endeavours to procure that another trust corporation be appointed as Trustee.
| 15.3 | Co-Trustees |
The Trustee may, despite Subclause 15.1, by written notice to the relevant Issuer and the Guarantors (unless it is not, in the opinion of the Trustee, reasonably practicable to do so) appoint anyone to act as an additional Trustee jointly with the Trustee:
| (a) | if the Trustee considers the appointment to be in the interests of the Noteholders and/or the Couponholders; |
| (b) | to conform with a legal requirement, restriction or condition in any jurisdiction in which a particular act is to be performed; or |
| (c) | to obtain a judgment or to enforce a judgment or any provision of this Trust Deed in any jurisdiction. |
Subject to the provisions of this Trust Deed the Trustee may confer on any person so appointed such functions as it thinks fit. The Trustee may by written notice to the relevant Issuer, the Guarantors and that person remove that person. At the Trustee’s request, the relevant Issuer and the Guarantors will forthwith do all things as may be required to perfect such appointment or removal and each of them irrevocably appoints the Trustee as its attorney in its name and on its behalf to do so other than the payment of the costs of such appointee, if any, which will be agreed between the appointee and the Issuers and the Guarantors and otherwise subject to Clause 9.
| 15.4 | Competence of a Majority of Trustees |
If there are more than two Trustees the majority of them will be competent to perform the Trustee’s functions provided the majority includes a trust corporation.
| 16. | HOLDER OF DEFINITIVE NOTE ASSUMED TO BE COUPONHOLDER |
| 16.1 | Wherever in this Trust Deed the Trustee is required or entitled to exercise a power, trust, authority or discretion under this Trust Deed, except as ordered by a court of competent jurisdiction or as required by applicable law, the Trustee shall, notwithstanding that it may have express notice to the contrary, assume that each Noteholder is the holder of all Coupons appertaining to each Definitive Note of which he is the holder. |
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NO NOTICE TO COUPONHOLDERS
| 16.2 | No notices need be given to Couponholders. They will be deemed to have notice of the contents of any notice given to Noteholders. Even if it has express notice to the contrary, in exercising any of its functions by reference to the interests of the Noteholders, the Trustee will assume that the holder of each Note is the holder of all Coupons relating to it. |
| 17. | CURRENCY INDEMNITY |
| 17.1 | Currency of Account and Payment |
The currency in which the Notes are denominated (the Contractual Currency) is the currency of account and payment for all sums payable by the relevant Issuer or a Guarantor under or in connection with this Trust Deed in respect of such Notes and the relative Coupons, including damages.
| 17.2 | Extent of discharge |
An amount received or recovered in a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the relevant Issuer or a Guarantor or otherwise), by the Trustee or any Noteholder or Couponholder in respect of any sum expressed to be due to it from the relevant Issuer or a Guarantor will only discharge the relevant Issuer and the relevant Guarantor to the extent of the Contractual Currency amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so).
| 17.3 | Indemnity |
If the relevant Contractual Currency amount is less than the Contractual Currency amount expressed to be due to the recipient under this Trust Deed, the Notes or the Coupons, the relevant Issuer will indemnify the Trustee, any Noteholder or Couponholder against any loss sustained by any of those parties as a result. In any event, the relevant Issuer will indemnify the recipient against the cost of making any such purchase.
| 17.4 | Indemnity separate |
This indemnity constitutes a separate and independent obligation from the other obligations in this Trust Deed, will give rise to a separate and independent cause of action, will apply irrespective of any indulgence granted by the Trustee and/or any Noteholder or Couponholder and will continue in full force and effect despite any judgment, order, claim or proof for a liquidated amount in respect of any sum due under this Trust Deed, the Notes and/or the Coupons or any other judgment or order.
| 18. | COMMUNICATIONS |
Any communication shall be by letter or email:
| (a) | in the case of BATIF, to it (with a copy to British American Tobacco) at: |
Globe House
4 Temple Place
London WC2R 2PG
Tel No. 020 7845 1000
Email Corporate_Finance_Financial_Risk@bat.com
Attention The Group Treasurer
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| (b) | in the case of BATNF, to it (with a copy to British American Tobacco) at: |
Handelsweg 53A
1181 ZA Amstelveen
The Netherlands
Tel No. +31 20 5406 911
Email judith_bollen@bat.com
Attention The Board of Directors
| (c) | in the case of BATCAP, to it (with a copy to British American Tobacco) at: |
| 103 | Foulk Road, Suite 120 |
Wilmington
Delaware 19803
United States of America
Tel No. +1 302 691 6323
Email Brian.Harrison@cscgfm.com
Attention Secretary
| (d) | in the case of British American Tobacco, to it at: |
Globe House
4 Temple Place
London WC2R 2PG
Tel No. 020 7845 1000
Email Corporate_Finance_Financial_Risk@bat.com
Attention The Group Treasurer
| (e) | and in the case of the Trustee, to it at: |
8th Floor
100 Bishopsgate
London EC2N 4AG
Email Trust.Support@lawdeb.com,
Attention The Manager, Trust Management
Communications will take effect, in the case of delivery, when delivered or, in the case of email, when received. Communications not by letter shall be confirmed by letter but failure to send or receive that letter shall not invalidate the original communication (provided always that in relation to any communication sent by email to the Trustee, such communication shall only be deemed delivered upon written confirmation by the Trustee and, for the avoidance of doubt, an automatically generated “read” or “received” receipt shall not constitute such confirmation).
| 19. | GOVERNING LAW |
This Trust Deed and any non-contractual obligations arising out of or in connection with it is governed by, and shall be construed in accordance with, English law.
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| 20. | SUBMISSION TO JURISDICTION |
| 20.1 | Each of the parties hereto irrevocably agrees that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with this Trust Deed (including a dispute relating to any non-contractual obligations arising out of or in connection with it) and that accordingly any suit, action or proceedings arising out of or in connection with this Trust Deed (together referred to as Proceedings) may be brought in the courts of England, including any Proceedings relating to any non-contractual obligations arising out of or in connection with this Trust Deed. Each of the parties hereto irrevocably and unconditionally waives and agrees not to raise any objection which it may have now or subsequently to the laying of the venue of any Proceedings in the courts of England and any claim that any Proceedings have been brought in an inconvenient forum and further irrevocably and unconditionally agrees that a judgment in any Proceedings brought in the courts of England shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. Nothing in this Clause shall limit any right to take Proceedings against any of the parties hereto in any other court of competent jurisdiction (outside the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982), nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. |
| 20.2 | Each of BATCAP and BATNF irrevocably and unconditionally appoints British American Tobacco at its registered office at Globe House, 4 Temple Place, London WC2R 2PG and in the event of its ceasing so to act will appoint such other person as the Trustee may approve and as BATCAP or BATNF, as the case may be, may nominate in writing to the Trustee for the purpose to accept service of process on its behalf in England in respect of any Proceedings. Each of BATCAP and BATNF: |
| (a) | agrees to procure that, so long as any of the Notes issued by it remains liable to prescription, there shall be in force an appointment of such a person approved by the Trustee with an office in London with authority to accept service as aforesaid; |
| (b) | agrees that failure by any such person to give notice of such service of process to BATCAP or BATNF, as the case may be, shall not impair the validity of such service or of any judgment based thereon; and |
| (c) | agrees that nothing in this Trust Deed shall affect the right to serve process in any other manner permitted by law. |
| 21. | WAIVER OF TRIAL BY JURY |
Each party waives any right it may have to a jury trial or any claim or cause of action in connection with this Deed or any transaction contemplated by this Deed. This Deed may be filed as a written consent to trial by court.
| 22. | COUNTERPARTS |
This Deed and any trust deed supplemental hereto may be executed and delivered in any number of counterparts, all of which, taken together, shall constitute one and the same deed and any party to this Deed or any trust deed supplemental hereto may enter into the same by executing and delivering a counterpart.
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| 23. | CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 |
A person who is not a party to this Trust Deed or any trust deed supplemental hereto has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Trust Deed or any trust deed supplemental hereto, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.
IN WITNESS whereof this Deed has been executed as a deed by BATCAP, BATIF, BATNF, British American Tobacco and the Trustee and delivered on the date first stated on page 1.
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SCHEDULE 1
TERMS AND CONDITIONS OF THE NOTES
This Note is one of a Series (as defined below) of Notes issued by B.A.T. International Finance p.l.c. (“BATIF”), B.A.T. Netherlands Finance B.V. (“BATNF”) or B.A.T Capital Corporation (“BATCAP”) as indicated in the applicable Final Terms (each in its capacity as the issuer of the Notes, the “Issuers” and, together with the other in its capacity as issuer of other notes, the “Issuers”) constituted by a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the “Trust Deed”) dated 6 July 1998 made between, inter alios, each of BATIF, BATNF and BATCAP as an Issuer, and where it is not the Issuer of the Notes, as guarantor of notes issued by the other Issuers, British American Tobacco p.l.c. (“British American Tobacco”) as a guarantor and The Law Debenture Trust Corporation p.l.c. (the “Trustee”, which expression shall include any successor as trustee). Each of BATIF, BATNF, BATCAP and British American Tobacco in its capacity as a guarantor is herein referred to as a “Guarantor” and all together in such capacities are herein referred to as the “Guarantors”. The Issuer and the Guarantors in relation to the Notes are specified in the applicable Final Terms (as defined below) and such expressions shall be construed accordingly.
References herein to the “Notes” shall be references to the Notes of this Series and shall mean:
| (i) | in relation to any Notes represented by a global Note (a “Global Note”), units of each Specified Denomination in the Specified Currency; |
| (ii) | any Global Note; and |
| (iii) | any definitive Notes issued in exchange for a Global Note. |
The Notes and the Coupons (as defined below) have the benefit of an amended and restated Agency Agreement (such Agency Agreement as amended and/or supplemented and/or restated from time to time, the “Agency Agreement”) dated 17 March 2022 and made between the same parties as are parties to the Trust Deed, Citibank, N.A., London Branch as issuing and principal paying agent and agent bank (the “Agent”, which expression shall include any successor agent) and the other paying agent named therein (together with the Agent, the “Paying Agents”, which expression shall include any additional or successor paying agent).
Interest bearing definitive Notes (unless otherwise indicated in the applicable Final Terms) have interest coupons (“Coupons”) and, if indicated in the applicable Final Terms, talons for further Coupons (“Talons”) attached on issue. Any reference herein to Coupons or coupons shall, unless the context otherwise requires, be deemed to include a reference to Talons or talons. Global Notes do not have Coupons or Talons attached on issue.
The final terms for this Note (or the relevant provisions thereof) are set out in Part A of the Final Terms attached to or endorsed on this Note which supplement these Terms and Conditions and may specify other terms and conditions which shall, to the extent so specified or to the extent inconsistent with these Terms and Conditions, complete these Terms and Conditions for the purposes of this Note. References to the “applicable Final Terms” are to Part A of the Final Terms (or the relevant provisions thereof) attached to or endorsed on this Note.
The Trustee acts for the benefit of the holders for the time being of the Notes (the “Noteholders”, which expression shall, in relation to any Notes represented by a Global Note, be construed as provided below) and the holders of the Coupons (the “Couponholders”, which expression shall, unless the context otherwise requires, include the holders of the Talons), in accordance with the provisions of the Trust Deed.
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As used herein, “Tranche” means Notes which are identical in all respects (including as to listing and admission to trading) and “Series” means a Tranche of Notes together with any further Tranche or Tranches of Notes which are (i) expressed to be consolidated and form a single series with an existing Tranche of Notes; and (ii) identical in all respects (including as to listing and admission to trading) except for their respective Issue Dates, Interest Commencement Dates and/or Issue Prices.
Copies of the Trust Deed, the Agency Agreement and the applicable Final Terms are available for inspection during normal business hours at the registered office for the time being of the Trustee (being at the date of this Base Prospectus at Fifth Floor, 100 Bishopsgate, London EC2N 4AG) and at the specified office of each of the Paying Agents. The Noteholders and the Couponholders are deemed to have notice of, and are entitled to the benefit of, all the provisions of the Trust Deed, the Agency Agreement and the applicable Final Terms which are applicable to them. The statements in these Terms and Conditions include summaries of, and are subject to, the detailed provisions of and definitions contained in the Trust Deed.
Words and expressions defined in the Trust Deed or the Agency Agreement or used in the applicable Final Terms shall have the same meanings where used in these Terms and Conditions unless the context otherwise requires or unless otherwise stated and provided that, in the event of inconsistency between the Agency Agreement and the Trust Deed, the Trust Deed will prevail and, in the event of inconsistency between the Agency Agreement or the Trust Deed and the applicable Final Terms, the applicable Final Terms will prevail.
In the Conditions, “euro” means the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty on the Functioning of the European Union, as amended.
| 1 | Form, Denomination and Title |
The Notes are in bearer form and, in the case of definitive Notes, serially numbered, in the Specified Currency and the Specified Denomination(s) specified in the applicable Final Terms. Notes of one Specified Denomination may not be exchanged for Notes of another Specified Denomination.
This Note may be a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note or a combination of any of the foregoing, depending upon the Interest Basis shown in the applicable Final Terms.
Definitive Notes are issued with Coupons attached, unless they are Zero Coupon Notes in which case references to Coupons and Couponholders in these Terms and Conditions, the Trust Deed and the Agency Agreement are not applicable.
Subject as set out below, title to the Notes and Coupons will pass by delivery. The Issuer, the Guarantors and any Paying Agent will (except as otherwise required by law) deem and treat the bearer of any Note or Coupon as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Note, without prejudice to the provisions set out in the next succeeding paragraph.
For so long as any of the Notes is represented by a Global Note held on behalf of Euroclear Bank SA/NV (“Euroclear”) and/or Clearstream Banking S.A. (“Clearstream, Luxembourg”), each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Guarantors and the Paying Agents as the holder of such nominal amount of such Notes for all purposes, other than with respect to the payment of principal or interest on such nominal amount of such Notes, for which purpose the bearer of the relevant Global Note shall be treated by the Issuer, the Guarantors and any Paying Agent as the holder of such nominal amount of such Notes in accordance with and subject to the terms of the relevant Global Note and the expressions “Noteholder” and “holder of Notes” and related expressions shall be construed accordingly.
Notes which are represented by a Global Note will be transferable only in accordance with the rules and procedures for the time being of Euroclear and Clearstream, Luxembourg, as the case may be. References to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits, be deemed to include a reference to any additional or alternative clearing system specified in the applicable Final Terms, or as may otherwise be approved by the Issuer, the Guarantors, the Agent and the Trustee.
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| 2 | Status of the Notes and the Guarantee |
| (a) | Status of the Notes |
The Notes and Coupons constitute direct, unconditional and (subject to the provisions of Condition 3) unsecured obligations of the Issuer and rank and will rank pari passu and without any preference among themselves and (subject as aforesaid and save to the extent that laws affecting creditors’ rights generally in a bankruptcy or winding up may give preference to any of such other obligations) equally with all other present and future unsecured and unsubordinated obligations of the Issuer from time to time outstanding.
| (b) | Status of the Guarantee |
The payment of principal of, and interest on, the Notes together with all other amounts payable by the Issuer under or pursuant to the Trust Deed has been unconditionally and irrevocably and jointly and severally guaranteed in the Trust Deed by the Guarantors (other than the Issuer).
The obligations of each Guarantor under its guarantee constitute direct, unconditional and (subject to the provisions of Condition 3) unsecured obligations of the relevant Guarantor and (subject as aforesaid and save to the extent that laws affecting creditors’ rights generally in a bankruptcy or winding up may give preference to any of such other obligations) rank and will rank equally with all other unsecured and unsubordinated obligations of the relevant Guarantor from time to time outstanding.
The Trust Deed contains a covenant on the part of the Issuers and the Guarantors in the event that any other company, the share capital of which is or is to be admitted to the official list of the Financial Conduct Authority under Part VI of the Financial Services and Markets Act 2000 (the “Official List”) and admitted to trading on the London Stock Exchange plc’s main market (the “Market”), becomes the ultimate Holding Company of British American Tobacco, to procure that such other Holding Company shall become a guarantor under the Trust Deed, jointly and severally with the Guarantors, with effect from the later of (i) the date on which such other company becomes the ultimate Holding Company of British American Tobacco and (ii) the date on which the share capital of such other Holding Company is admitted to the Official List and admitted to trading on the Market. In such event, the term “Guarantors” herein shall be deemed to include such other Holding Company.
| 3 | Negative Pledge |
So long as any of the Notes remains outstanding (as defined in the Trust Deed) neither the Issuer nor any Guarantor will secure or allow to be secured any Quoted Borrowing or any payment under any guarantee by any of them of any Quoted Borrowing by any mortgage, charge, pledge or lien (other than arising by operation of law) upon any of its undertaking or assets, whether present or future, unless at the same time the same mortgage, charge, pledge or lien is extended, or security which is in the opinion of the Trustee not materially less beneficial to the Noteholders than the security given as aforesaid or which shall be approved by Extraordinary Resolution (as defined in the Trust Deed) of the Noteholders is extended, or (as the case may be) created, in favour of the Trustee to secure equally and rateably the principal of, and interest on, and all other payments (if any) in respect of the Notes and under the Trust Deed.
For the purposes of this Condition 3, “Quoted Borrowing” means any indebtedness which (a) is represented by notes, debentures or other securities issued otherwise than to constitute or represent advances made by banks and/or other lending institutions; (b) is denominated, or confers any right to payment of principal and/or interest, in or by reference to any currency other than the currency of the country in which the issuer of the indebtedness has its principal place of business or is denominated, or confers any right to payment of principal and/or interest, in or by reference to the currency of such country but is placed or offered for
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subscription or sale by or on behalf of, or by agreement with, the issuer of such indebtedness as to over 20 per cent. outside such country; and (c) at its date of issue is, or is intended by the issuer of such indebtedness to become, quoted, listed, traded or dealt in on any stock exchange or other organised and regulated securities market in any part of the world.
| 4 | Interest |
| (a) | Interest on Fixed Rate Notes |
The applicable Final Terms contains provisions applicable to the determination of fixed rate interest and must be read in conjunction with this Condition 4(a) for full information on the manner in which interest is calculated on Fixed Rate Notes. In particular, the applicable Final Terms will specify, as applicable, the Interest Commencement Date, the Rate(s) of Interest, the Interest Payment Date(s), the Maturity Date, the Fixed Coupon Amount, any applicable Broken Amount, the Calculation Amount, the Day Count Fraction and any applicable Determination Date.
Each Fixed Rate Note bears interest from (and including) the Interest Commencement Date at the rate(s) per annum equal to the Rate(s) of Interest payable in arrear on the Interest Payment Date(s) in each year up to (and including) the Maturity Date.
If the Notes are in definitive form, except as otherwise provided in the applicable Final Terms, the amount of interest payable on each Interest Payment Date will amount to the Fixed Coupon Amount (if any) specified in the applicable Final Terms. Payments of interest on any Interest Payment Date will, if so specified in the applicable Final Terms, amount to the Broken Amount so specified.
Except in the case of Notes in definitive form where an applicable Fixed Coupon Amount or Broken Amount is specified in the applicable Final Terms, interest shall be calculated in respect of any period by applying the Rate of Interest to:
| (A) | in the case of Fixed Rate Notes which are represented by a Global Note, the aggregate outstanding amount of the Fixed Rate Notes represented by such Global Note; or |
| (B) | in the case of Fixed Rate Notes in definitive form, the Calculation Amount; |
and in each case, multiplying such sum by the applicable Day Count Fraction.
The resultant figure (including after application of any Fixed Coupon Amount or Broken Amount to the Calculation Amount in the case of Fixed Rate Notes in definitive form) shall be rounded to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unit being rounded upwards or otherwise in accordance with applicable market convention.
Where the Specified Denomination of a Fixed Rate Note in definitive form is a multiple of the Calculation Amount, the amount of interest payable in respect of such Fixed Rate Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by which the Calculation Amount is multiplied to reach the Specified Denomination, without any further rounding.
“Day Count Fraction” means in respect of the calculation of an amount of interest in accordance with Condition 4(a):
| (i) | if “Actual/Actual (ICMA)” is specified in the applicable Final Terms: |
| (A) | in the case of Notes where the number of days in the relevant period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (the “Accrual Period”) is equal to or shorter than the Determination Period during which the Accrual Period ends, the number of days in such Accrual Period divided by the product of (1) the number of days in such Determination Period and (2) the number of Determination Dates that would occur in one calendar year; or |
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| (B) | in the case of Notes where the Accrual Period is longer than the Determination Period commencing on the last Interest Payment Date (or, if none, the Interest Commencement Date), the sum of: |
| (1) | the number of days in such Accrual Period falling in the Determination Period in which the Accrual Period begins divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in one calendar year; and |
| (2) | the number of days in such Accrual Period falling in the next Determination Period divided by the product of (x) the number of days in such Determination Period and (y) the number of Determination Periods normally ending in one calendar year; |
| (ii) | if “30/360” is specified in the applicable Final Terms, the number of days in the period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date (such number of days being calculated on the basis of 12 30-day months) divided by 360; and |
| (iii) | if “Actual/365 (Fixed)” is specified in the applicable Final Terms, the actual number of days in the period from (and including) the most recent Interest Payment Date (or, if none, the Interest Commencement Date) to (but excluding) the relevant payment date divided by 365. |
In these Terms and Conditions:
“Determination Period” means the period from (and including) a Determination Date to (but excluding) the next Determination Date.
“sub-unit” means, with respect to any currency other than Euro, the lowest amount of such currency that is available as legal tender in the country of such currency and, with respect to Euro, means one cent.
| (b) | Interest on Floating Rate Notes |
The applicable Final Terms contains provisions applicable to the determination of floating rate interest and must be read in conjunction with this Condition 4(b) for full information on the manner in which interest is calculated on Floating Rate Notes. In particular, the applicable Final Terms will identify, as applicable, any Specified Interest Payment Dates, any Specified Period, the Interest Commencement Date, the Business Day Convention, any Additional Business Centres, whether ISDA Determination or Screen Rate Determination applies to the calculation of interest, the party who will calculate the amount of interest due if it is not the Agent, the Margin, any maximum or minimum interest rates and the Day Count Fraction. Where ISDA Determination applies to the calculation of interest, the applicable Final Terms will also specify the applicable Floating Rate Option, Designated Maturity and Reset Date. Where Screen Rate Determination applies to the calculation of interest, the applicable Final Terms will also specify the applicable Reference Rate, Interest Determination Date(s) and Relevant Screen Page.
| (i) | Interest Payment Dates |
Each Floating Rate Note bears interest from (and including) the Interest Commencement Date and such interest will be payable in arrear on either:
| (A) | the Specified Interest Payment Date(s) in each year specified in the applicable Final Terms; or |
| (B) | if no Specified Interest Payment Date(s) is/are specified in the applicable Final Terms, each date (each such date, together with each Specified Interest Payment Date, an “Interest Payment Date”) which falls the number of months or other period specified as the Specified Period in the applicable Final Terms after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date. |
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Such interest will be payable in respect of each “Interest Period” (which expression shall, in these Terms and Conditions, mean the period from (and including) an Interest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date) or the relevant payment date if the Floating Rate Notes become payable on a date other than an Interest Payment Date.
If a Business Day Convention is specified in the applicable Final Terms and (x) if there is no numerically corresponding day on the calendar month in which an Interest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a day which is not a Business Day, then, if the Business Day Convention specified is:
| (1) | in any case where Specified Periods are specified in accordance with Condition 4(b)(i)(B) above, the Floating Rate Convention, such Interest Payment Date (i) in the case of (x) above, shall be the last day that is a Business Day in the relevant month and the provisions of (B) below shall apply mutatis mutandis or (ii) in the case of (y) above, shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (A) such Interest Payment Date shall be brought forward to the immediately preceding Business Day and (B) each subsequent Interest Payment Date shall be the last Business Day in the month in which the Specified Period falls after the preceding applicable Interest Payment Date occurred; or |
| (2) | the Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day; or |
| (3) | the Modified Following Business Day Convention, such Interest Payment Date shall be postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event such Interest Payment Date shall be brought forward to the immediately preceding Business Day; or |
| (4) | the Preceding Business Day Convention, such Interest Payment Date shall be brought forward to the immediately preceding Business Day. |
In this Condition, “Business Day” means a day (other than a Saturday or a Sunday) which is both:
| (A) | a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in London and each Additional Business Centre (if any) specified in the applicable Final Terms; and |
| (B) | either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (if other than London and any Additional Business Centre and which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney and Auckland, respectively) or (2) in relation to any sum payable in Euro, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (known as TARGET2) System which was launched on 19 November 2007, or any successor thereto (the “TARGET System”) is operating. |
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| (ii) | Rate of Interest |
The Rate of Interest payable from time to time in respect of Floating Rate Notes will be determined in the manner specified in the applicable Final Terms and the provisions below relating to either ISDA Determination or Screen Rate Determination shall apply, depending upon which is specified in the applicable Final Terms.
| (A) | ISDA Determination for Floating Rate Notes |
Where ISDA Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be the relevant ISDA Rate plus or minus (as indicated in the applicable Final Terms) the Margin (if any). For the purposes of this sub-paragraph (A), “ISDA Rate” for an Interest Period means a rate equal to the Floating Rate that would be determined by the Agent under an interest rate swap transaction if the Agent were acting as Calculation Agent for that swap transaction under the terms of an agreement incorporating the 2006 ISDA Definitions, as amended and updated as at the Issue Date of the first Tranche of the Notes and as published by the International Swaps and Derivatives Association, Inc. (the “ISDA Definitions”) and under which:
| (1) | the Floating Rate Option is as specified in the applicable Final Terms; |
| (2) | the Designated Maturity is a period specified in the applicable Final Terms; and |
| (3) | the relevant Reset Date is either (i) if the applicable Floating Rate Option is based on the euro-zone interbank offered rate (“EURIBOR”) for a currency, the first day of that Interest Period or (ii) in any other case, as specified in the applicable Final Terms. |
| (B) | For the purposes of this sub-paragraph (A), (i) “Floating Rate”, “Calculation Agent”, “Floating Rate Option”, “Designated Maturity”, “Reset Date” and “euro-zone” have the meanings given to those terms in the ISDA Definitions and (ii) the definition of “Banking Day” in the ISDA Definitions shall be amended to insert after the words “are open for” in the second line thereof the word “general”. Screen Rate Determination for Floating Rate Notes |
| (1) | Where Screen Rate Determination is specified in the applicable Final Terms as the manner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will, subject as provided below, be either: |
| (I) | the offered quotation; or |
| (II) | the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the offered quotations, |
(expressed as a percentage rate per annum) for the Reference Rate (being EURIBOR) which appears on the Relevant Screen Page as at 11.00 a.m. (Brussels time) on the Interest Determination Date in question plus or minus (as indicated in the applicable Final Terms) the Margin (if any), all as determined by the Agent. If five or more of such offered quotations are available on the Relevant Screen Page, the highest (or, if there is more than one such highest quotation, one only of such quotations) and the lowest (or, if there is more than one such lowest quotation, one only of such quotations) shall be disregarded by the Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations;
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| (2) | If the Relevant Screen Page is not available or, if in the case of sub-paragraph (B)(1)(I) above, no such offered quotation appears or, in the case of sub-paragraph (B)(1)(II) above, fewer than three such offered quotations appear, in each case as at the time specified in the preceding paragraph the Issuer shall request each of the several banks initially appointed as reference banks in relation to the Notes of any relevant Series and/or, if applicable, any Successor reference banks in relation thereto such banks being, the principal euro-zone office of four major banks in the euro-zone inter-bank market, in each case selected by the Issuer or as specified in the applicable Final Terms (each a “Reference Bank”, and together the “Reference Banks”) to provide the Agent with its offered quotation (expressed as a percentage rate per annum) for the Reference Rate at approximately 11.00 a.m. (Brussels time) on the Interest Determination Date in question. If two or more of the Reference Banks provide the Agent with such offered quotations, the Rate of Interest for such Interest Period shall be the arithmetic mean (rounded if necessary to the fifth decimal place with 0.000005 being rounded upwards) of such offered quotations plus or minus (as appropriate) the Margin (if any), all as determined by the Agent; and |
| (3) | If on any Interest Determination Date one only or none of the Reference Banks provides the Agent with such offered quotations as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Agent determines as being the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 being rounded upwards) of the rates, as communicated to the Agent by the Reference Banks or any two or more of them, at which such banks were offered, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate by leading banks in the euro-zone inter-bank market plus or minus (as appropriate) the Margin (if any) or, if fewer than two of the Reference Banks provide the Agent with such offered rates, the offered rate for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Specified Currency for a period equal to that which would have been used for the Reference Rate, at which, at approximately 11.00 a.m. (Brussels time) on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the relevant Issuer suitable for such purpose) informs the Agent it is quoting to leading banks in the euro-zone inter-bank market plus or minus (as appropriate) the Margin (if any), provided that, if the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be determined as at the last preceding Interest Determination Date (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period, in place of the Margin relating to that last preceding Interest Period). |
| (C) | Benchmark Discontinuation |
| (1) | Independent Adviser |
Notwithstanding Conditions 4(b)(ii)(B)(2) and (3), if the Issuer determines that a Benchmark Event occurs in relation to an Original Reference Rate when any Rate of Interest (or any component part thereof) remains to be determined by reference to such Original Reference Rate, the Issuer shall use its reasonable endeavours to appoint an Independent Adviser, as soon as reasonably practicable, to advise the Issuer in determining a Successor Rate, failing which an Alternative Rate (in accordance with Condition 4(b)(ii)(C)(2)) and, in either case, an Adjustment Spread (in accordance with and subject to Condition 4(b)(ii)(C)(3)) and any Benchmark Amendments (in accordance with Condition 4(b)(ii)(C)(4)).
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In advising the Issuer, the Independent Adviser appointed pursuant to this Condition 4(b)(ii)(C) shall act in good faith as an expert. In the absence of bad faith or fraud, the Independent Adviser shall have no liability whatsoever to the Issuer, the Trustee, the Paying Agents, the Noteholders or the Couponholders for any determination made by it or for any advice given to the Issuer in connection with any determination made by the Issuer pursuant to this Condition 4(b)(ii)(C).
If, following the occurrence of a Benchmark Event (i) the Issuer is unable to appoint an Independent Adviser; or (ii) the Issuer fails to determine a Successor Rate or, failing which, an Alternative Rate in accordance with this Condition 4(b)(ii)(C), in each case prior to the relevant Interest Determination Date, the Rate of Interest applicable to the next succeeding Interest Period shall be equal to the Rate of Interest last determined in relation to the Notes in respect of the immediately preceding Interest Period. If there has not been a first Interest Payment Date, the Rate of Interest shall be the initial Rate of Interest. Where a different Margin or Maximum or Minimum Rate of Interest is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin or Maximum or Minimum Rate of Interest relating to the relevant Interest Period shall be substituted in place of the Margin or Maximum or Minimum Rate of Interest relating to that last preceding Interest Period. For the avoidance of doubt, this paragraph shall apply to the determination of the Rate of Interest applicable to the next succeeding Interest Period only and any subsequent Interest Periods are subject to the subsequent operation of, and to adjustment as provided in, this Condition 4(b)(ii)(C).
| (2) | Successor Rate or Alternative Rate |
If the Issuer, following consultation with the Independent Adviser, determines that:
| (I) | there is a Successor Rate, then such Successor Rate and (subject to Condition 4(b)(ii)(C)(3)) the applicable Adjustment Spread shall subsequently be used in place of the Original Reference Rate to determine the Rate of Interest (or the relevant component part thereof) for all relevant future payments of interest on the Notes (subject to the subsequent operation of this Condition 4(b)(ii)(C)); or |
| (II) | there is no Successor Rate but that there is an Alternative Rate, then such Alternative Rate and (subject to Condition 4(b)(ii)(C)(3)) the applicable Adjustment Spread shall subsequently be used in place of the Original Reference Rate to determine the Rate of Interest (or the relevant component part thereof) for all relevant future payments of interest on the Notes (subject to the subsequent operation of this Condition 4(b)(ii)(C)). |
| (3) | Adjustment Spread |
The Adjustment Spread (or the formula or methodology for determining the Adjustment Spread) shall be applied (subject to the proviso in the following sentence) to the Successor Rate or the Alternative Rate (as the case may be). If the Issuer, following consultation with the Independent Adviser and acting in good faith and in a commercially reasonable manner, is unable to determine the quantum of, or a formula or methodology for determining, such Adjustment Spread, then the Successor Rate or Alternative Reference Rate (as applicable) will apply without an Adjustment Spread.
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| (4) | Benchmark Amendments |
If any Successor Rate or Alternative Rate and, in either case (subject to Condition 4(b)(ii)(C)(3)), the applicable Adjustment Spread is determined in accordance with this Condition 4(b)(ii)(C) and the Issuer, following consultation with the Independent Adviser and acting in good faith and in a commercially reasonable manner, determines (a) that amendments to these Conditions, the Agency Agreement and/or the Trust Deed are necessary to ensure the proper operation of such Successor Rate or Alternative Rate and/or (in either case) the applicable Adjustment Spread (such amendments, the “Benchmark Amendments”) and (b) the terms of the Benchmark Amendments, then the Issuer shall, subject to giving notice thereof in accordance with Condition 4(b)(ii)(C)(5), without any requirement for the consent or approval of Noteholders, vary these Conditions, the Agency Agreement and/or the Trust Deed to give effect to such Benchmark Amendments with effect from the date specified in such notice.
At the request of the Issuer, but subject to receipt by the Trustee and the Agent of a certificate signed by one director of the Issuer pursuant to Condition 4(b)(ii)(C)(5), the Trustee and the Agent shall (at the request and expense of the Issuer), without any requirement for the consent or approval of the Noteholders, be obliged to concur with the Issuer in effecting any Benchmark Amendments (including, inter alia, by the execution of a supplement to or document amending the Trust Deed and/or the Agency Agreement) and the Trustee and the Agent shall not be liable to any party for any consequence thereof, provided that the Trustee and the Agent shall not be obliged so to concur if in the opinion of the Trustee and the Agent doing so would impose more onerous obligations upon it or expose it to any additional duties, responsibilities or liabilities or reduce or amend the rights and/or the protective provisions afforded to the Trustee and the Agent (as applicable) in these Conditions, the Agency Agreement or the Trust Deed (including, for the avoidance of doubt, any supplemental trust deed or supplemental agency agreement) in any way.
In connection with any such variation in accordance with this Condition 4(b)(ii)(C)(4), the Issuer shall comply with the rules of any stock exchange on which the Notes are for the time being listed or admitted to trading.
| (5) | Notices, etc. |
Any Successor Rate, Alternative Rate, Adjustment Spread and the specific terms of any Benchmark Amendments determined under this Condition 4(b)(ii)(C) will be notified promptly by the Issuer to the Trustee, the Agent and, in accordance with Condition 13, the Noteholders. Such notice shall be irrevocable and shall specify the effective date of the Benchmark Amendments, if any.
No later than notifying the Trustee and the Agent of the same, the Issuer shall deliver to the Trustee and the Agent a certificate signed by one director of the Issuer:
| (I) | confirming (a) that a Benchmark Event has occurred, (b) the Successor Rate or, as the case may be, the Alternative Rate, (c) the applicable Adjustment Spread and (d) the specific terms of the Benchmark Amendments (if any), in each case as determined in accordance with the provisions of this Condition 4(b)(ii)(C); and |
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| (II) | certifying that the Benchmark Amendments (if any) are necessary to ensure the proper operation of such Successor Rate or Alternative Rate and (in either case) the applicable Adjustment Spread. |
The Trustee and the Agent shall be entitled to rely on such certificate (without liability to any person) as sufficient evidence thereof. The Successor Rate or Alternative Rate and the Adjustment Spread and the Benchmark Amendments (if any) specified in such certificate will (in the absence of manifest error or bad faith in the determination of the Successor Rate or Alternative Rate and the Adjustment Spread and the Benchmark Amendments (if any) and without prejudice to the Trustee’s and Agent’s ability to rely on such certificate as aforesaid) be binding on the Issuer, the Trustee, the Agents, the Noteholders and the Couponholders. For the avoidance of doubt, neither the Trustee nor the Agent shall be liable to the Noteholders or any other person for so acting or relying on such certificate.
| (6) | Survival of Original Reference Rate |
Without prejudice to the obligations of the Issuer under Condition 4(b)(ii)(C)(1), (2), (3) and (4), the Original Reference Rate and the fallback provisions provided for in Condition 4(b)(ii)(B) and Clause 9.2 of the Agency Agreement will continue to apply unless and until the Issuer determines that a Benchmark Event has occurred and the Trustee and the Agents have been notified of the Successor Rate or the Alternative Rate (as the case may be) and the Adjustment Spread (if applicable) and any Benchmark Amendments in accordance with this Condition 4(b)(ii)(C).
| (7) | Definitions |
As used in this Condition 4(b)(ii)(C):
“Adjustment Spread” means either (a) a spread (which may be positive, negative or zero), or (b) a formula or methodology for calculating a spread, in each case to be applied (subject to Condition 4(b)(ii)(C)(3)) to the Successor Rate or the Alternative Rate (as the case may be) and is the spread, formula or methodology which:
| (I) | in the case of a Successor Rate, is formally recommended in relation to the replacement of the Original Reference Rate with the Successor Rate by any Relevant Nominating Body; |
| (II) | if no such recommendation has been made, or in the case of an Alternative Rate, the Issuer, following consultation with the Independent Adviser, determines, is customarily applied to the relevant Successor Rate or the Alternative Rate (as the case may be) in international debt capital markets transactions to produce an industry-accepted replacement rate for the Original Reference Rate; |
| (III) | if neither (I) nor (II) above apples, the Issuer, following consultation with the Independent Adviser, determines, is recognised or acknowledged as being the industry standard for over-the-counter derivative transactions which reference the Original Reference Rate, where such rate has been replaced by the Successor Rate or the Alternative Rate (as the case may be). |
“Alternative Rate” means an alternative benchmark or screen rate which the Issuer, following consultation with the Independent Adviser, determines in accordance with Condition 4(b)(ii)(C)(2) is customarily applied in international debt capital markets transactions for the purposes of determining rates of interest (or
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the relevant component part thereof) for an interest period of comparable duration and in the same Specified Currency as the Notes or, if the Issuer (following consultation with the Independent Adviser) determines that there is no such rate, such other rate as the Issuer, following consultation with the Independent Adviser and acting in good faith and in a commercially reasonable manner, determines in its discretion is most comparable to the relevant Original Reference Rate.
“Benchmark Amendments” has the meaning given to it in Condition 4(b)(ii)(C)(4).
“Benchmark Event” means:
| (I) | the Original Reference Rate ceasing to be published for a period of at least five Business Days or ceasing to exist; or |
| (II) | a public statement by the administrator of the Original Reference Rate that it has ceased or that it will cease publishing the Original Reference Rate permanently or indefinitely (in circumstances where no successor administrator has been appointed that will continue publication of the Original Reference Rate); or |
| (III) | a public statement by the supervisor of the administrator of the Original Reference Rate that the Original Reference Rate has been or will be permanently or indefinitely discontinued; or |
| (IV) | a public statement by the supervisor of the administrator of the Original Reference Rate as a consequence of which the Original Reference Rate will be prohibited from being used either generally, or in respect of the Notes; or |
| (V) | a public statement by the supervisor of the administrator of the relevant Original Reference Rate that, in the view of such supervisor, such Original Reference Rate is no longer representative of an underlying market; or |
| (VI) | it has become unlawful for any Agent or the Issuer to calculate any payments due to be made to any Noteholder using the Original Reference Rate, |
provided that the Benchmark Event shall be deemed to occur (a) in the case of sub-paragraphs (II) and (III) above, on the date of the cessation of publication of the Original Reference Rate or the discontinuation of the Original Reference Rate, as the case may be, (b) in the case of sub-paragraph (IV) above, on the date of the prohibition of use of the Original Reference Rate and (c) in the case of sub-paragraph (V) above, on the date with effect from which the Original Reference Rate will no longer be (or will be deemed by the relevant supervisor to no longer be) representative of its relevant underlying market and which is specified in the relevant public statement, and, in each case, not the date of the relevant public statement.
“Independent Adviser” means an independent financial institution of international repute or an independent financial adviser, in each case, with appropriate expertise in capital markets appointed by the Issuer at its own expense under Condition 4(b)(ii)(C)(1) and notified in writing to the Trustee.
“Original Reference Rate” means the originally-specified benchmark or screen rate (as applicable) used to determine the Rate of Interest (or any component part thereof) on the Notes.
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“Relevant Nominating Body” means, in respect of a benchmark or screen rate (as applicable):
| (I) | the central bank for the currency to which the benchmark or screen rate (as applicable) relates, or any central bank or other supervisory authority which is responsible for supervising the administrator of the benchmark or screen rate (as applicable); or |
| (II) | any working group or committee sponsored by, chaired or co-chaired by or constituted at the request of (a) the central bank for the currency to which the benchmark or screen rate (as applicable) relates, (b) any central bank or other supervisory authority which is responsible for supervising the administrator of the benchmark or screen rate (as applicable), (c) a group of the aforementioned central banks or other supervisory authorities or (d) the Financial Stability Board or any part thereof. |
“Successor Rate” means a successor to or replacement of the Original Reference Rate which is formally recommended by any Relevant Nominating Body.
| (D) | Linear Interpolation |
Where Linear Interpolation is specified as applicable in respect of an Interest Period in the applicable Final Terms, the Rate of Interest for such Interest Period shall be calculated by the Agent by straight line linear interpolation by reference to two rates based on the relevant Reference Rate (where Screen Rate Determination is specified as applicable in the applicable Final Terms) or the relevant Floating Rate Option (where ISDA Determination is specified as applicable in the applicable Final Terms), one of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next shorter than the length of the relevant Interest Period and the other of which shall be determined as if the Applicable Maturity were the period of time for which rates are available next longer than the length of the relevant Interest Period, provided however, that if there is no rate available for the period of time next shorter or, as the case may be, next longer, then the Agent shall determine such rate at such time and by reference to such sources as it determines appropriate.
“Applicable Maturity” means: (a) in relation to Screen Rate Determination, the period of time designated in the Reference Rate, and (b) in relation to ISDA Determination, the Designated Maturity.
| (iii) | Minimum Rate of Interest and/or Maximum Rate of Interest |
If the applicable Final Terms specifies a Minimum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (ii) above is less than such Minimum Rate of Interest, the Rate of Interest for such Interest Period shall be such Minimum Rate of Interest.
If the applicable Final Terms specifies a Maximum Rate of Interest for any Interest Period, then, in the event that the Rate of Interest in respect of such Interest Period determined in accordance with the provisions of paragraph (ii) above is greater than such Maximum Rate of Interest, the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.
| (iv) | Determination of Rate of Interest and calculation of Interest Amounts |
The Agent will at or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest for the relevant Interest Period.
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The Agent will calculate the amount of interest (the “Interest Amount”) payable on the Floating Rate Notes for the relevant Interest Period by applying the Rate of Interest to:
| (A) | in the case of Floating Rate Notes which are represented by a Global Note, the aggregate outstanding nominal amount of the Notes represented by such Global Note; or |
| (B) | in the case of Floating Rate Notes in definitive form, the Calculation Amount; |
and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such subunit being rounded upwards or otherwise in accordance with applicable market convention.
Where the Specified Denomination of a Floating Rate Note in definitive form is a multiple of the Calculation Amount, the Interest Amount payable in respect of such Note shall be the product of the amount (determined in the manner provided above) for the Calculation Amount and the amount by which the Calculation Amount is multiplied to reach the Specified Denomination, without any further rounding.
“Day Count Fraction” means, in respect of the calculation of an amount of interest for any Interest Period:
| (A) | if “Actual/Actual” or “Actual/Actual (ISDA)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 (or, if any portion of that Interest Period falls in a leap year, the sum of (A) the actual number of days in that portion of the Interest Period falling in a leap year divided by 366 and (B) the actual number of days in that portion of the Interest Period falling in a non-leap year divided by 365); |
| (B) | if “Actual/365 (Fixed)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365; |
| (C) | if “Actual/360” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 360; |
| (D) | if “30/360”, “360/360” or “Bond Basis” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows: |
| Day Count Fraction = | [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1) | |||||
| 360 |
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
“M2” is the calendar month, expressed as number, in which the day immediately following the last day included in the Interest Period falls;
“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31 and D1 is greater than 29, in which case D2 will be 30;
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| (E) | if “30E/360” or “Eurobond Basis” is specified in the applicable Final Terms, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows: |
| Day Count Fraction = | [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1) | |||||
| 360 |
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;
“D1” is the first calendar day, expressed as a number, of the Interest Period, unless such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless such number would be 31, in which case D2 will be 30
| (F) | if “30E/360 (ISDA)” is specified hereon, the number of days in the Interest Period divided by 360, calculated on a formula basis as follows: |
| Day Count Fraction = | [360 x (Y2 -Y1)] + [30 x (M2 -M1)]+ (D2 -D1) | |||||
| 360 |
where:
“Y1” is the year, expressed as a number, in which the first day of the Interest Period falls;
“Y2” is the year, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;
“M1” is the calendar month, expressed as a number, in which the first day of the Interest Period falls;
“M2” is the calendar month, expressed as a number, in which the day immediately following the last day included in the Interest Period falls;
“D1” is the first calendar day, expressed as a number, of the Interest Period, unless (i) that day is the last day of February or (ii) such number would be 31, in which case D1 will be 30; and
“D2” is the calendar day, expressed as a number, immediately following the last day included in the Interest Period, unless (i) that day is the last day of February but not the Maturity Date or (ii) such number would be 31, in which case D2 will be 30; and
| (G) | if “Actual/365 (Sterling)” is specified in the applicable Final Terms, the actual number of days in the Interest Period divided by 365 or, in the case of an Interest Payment Date falling in a leap year, 366. |
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| (v) | Notification of Rate of Interest and Interest Amounts |
The Agent will cause the Rate of Interest and each Interest Amount for each Interest Period and the relevant Interest Payment Date to be notified to the Issuer and any stock exchange or other relevant authority on which the relevant Floating Rate Notes are for the time being listed or by which they have been admitted to trading (if the rules of that stock exchange or other relevant authority so require) and notice thereof to be published in accordance with Condition 13 as soon as possible after their determination but in no event later than (a) the commencement of the relevant Interest Period, if determined prior to such time, in the case of notification to such stock exchange of a Rate of Interest and Interest Amount, or (b) in all other cases, the fourth London Business Day thereafter. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrangements made by way of adjustment) without prior notice in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to each stock exchange or other relevant authority on which the relevant Floating Rate Notes are for the time being listed or by which they have been admitted to trading (if the rules of that stock exchange or other relevant authority so require) and to the Noteholders in accordance with Condition 13. For the purposes of this paragraph, the expression “London Business Day” means a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in London.
| (vi) | Certificates to be final |
All certificates, communications, opinions, determinations, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 4(b), by the Agent shall (in the absence of manifest error) be binding on the Issuer, the Guarantors, the Agent, the other Paying Agents, the Trustee and all Noteholders and Couponholders and (in the absence as aforesaid) no liability to the Issuer, the Guarantors, the Trustee, the Noteholders or the Couponholders shall attach to the Agent in connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to such provisions.
| (c) | Accrual of interest |
Each Note (or in the case of the redemption of part only of a Note, that part only of such Note) will cease to bear interest (if any) from the date for its redemption unless, upon due presentation thereof, payment of principal is improperly withheld or refused. In such event, interest will continue to accrue as provided in the Trust Deed.
| 5 | Payments |
| (a) | Method of payment |
Subject as provided below:
| (i) | payments in a Specified Currency other than euro will be made by credit or transfer to an account in the relevant Specified Currency maintained by the payee with, or, at the option of the payee, by a cheque in such Specified Currency drawn on a bank in the principal financial centre of the country of such Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney and Auckland, respectively); and |
| (ii) | payments in euro will be made by credit or transfer to a euro account (or any other account to which euro may be credited or transferred) specified by the payee or, at the option of the payee, by a euro cheque. |
Payments will be subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment, but without prejudice to the provisions of Condition 7.
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| (b) | Presentation of definitive Notes and Coupons |
Payments of principal in respect of definitive Notes will (subject as provided below) be made in the manner provided in paragraph (a) above only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of definitive Notes, and payments of interest in respect of definitive Notes will (subject as provided below) be made as aforesaid only against presentation and surrender (or, in the case of part payment of any sum due, endorsement) of Coupons, in each case at the specified office of any Paying Agent outside the United States (which expression, as used herein, means the United States of America (including the States and the District of Columbia, its territories, its possessions and other areas subject to its jurisdiction)).
Fixed Rate Notes in definitive form should be presented for payment together with all unmatured Coupons appertaining thereto (which expression shall for this purpose include Coupons falling to be issued on exchange of matured Talons), failing which the amount of any missing unmatured Coupon (or, in the case of payment not being made in full, the same proportion of the amount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deducted from the sum due for payment. Each amount of principal so deducted will be paid in the manner mentioned above against surrender of the relative missing Coupon at any time before the expiry of ten years after the Relevant Date (as defined in Condition 7) in respect of such principal (whether or not such Coupon would otherwise have become void under Condition 8) or, if later, five years from the date on which such Coupon would otherwise have become due, but in no event thereafter.
Where any definitive Note that provides that the relative unmatured Coupons are to become void upon the due date for redemption of those Notes is presented for redemption without all unmatured Coupons, and where any definitive Note is presented for redemption without any unexchanged Talon relating to it, redemption shall be made only against the provision of such indemnity as the Issuer may require.
Upon any Fixed Rate Note in definitive form becoming due and repayable prior to its Maturity Date, all unmatured Talons (if any) appertaining thereto will become void and no further Coupons will be issued in respect thereof.
Upon the date on which any Floating Rate Note in definitive form becomes due and repayable, unmatured Coupons and Talons (if any) relating thereto (whether or not attached) shall become void and no payment or, as the case may be, exchange for further Coupons shall be made in respect thereof.
If the due date for redemption of any definitive Note is not an Interest Payment Date, interest (if any) accrued in respect of such Note from (and including) the preceding Interest Payment Date or, as the case may be, the Interest Commencement Date shall be payable only against surrender of the relevant definitive Note.
| (c) | Payments in respect of Global Notes |
Payments of principal and interest (if any) in respect of Notes represented by any Global Note will (subject as provided below) be made in the manner specified above in relation to definitive Notes and otherwise in the manner specified in the relevant Global Note against presentation or surrender, as the case may be, of such Global Note at the specified office of any Paying Agent outside the United States. A record of each payment made against presentation or surrender of any Global Note, distinguishing between any payment of principal and any payment of interest, will be made on such Global Note by the Paying Agent to which it was presented and such record shall be prima facie evidence that the payment in question has been made.
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| (d) | General provisions applicable to payments |
The holder of a Global Note shall be the only person entitled to receive payments in respect of Notes represented by such Global Note and the Issuer or, as the case may be, any Guarantor will be discharged by payment to, or to the order of, the holder of such Global Note in respect of each amount so paid. Each of the persons shown in the records of Euroclear or Clearstream, Luxembourg as the beneficial holder of a particular nominal amount of Notes represented by such Global Note must look solely to Euroclear or Clearstream, Luxembourg, as the case may be, for his share of each payment so made by the Issuer or, as the case may be, any Guarantor to, or to the order of, the holder of such Global Note.
Notwithstanding the provisions of paragraph (a) above, if any amount of principal and/or interest in respect of Notes is payable in US dollars, such US dollar payments of principal and/or interest in respect of such Notes will be made at the specified office of a Paying Agent in the United States if:
| (i) | the Issuer has appointed Paying Agents with specified offices outside the United States with the reasonable expectation that such Paying Agents would be able to make payment in US dollars at such specified offices outside the United States of the full amount of principal and interest on the Notes in the manner provided above when due; |
| (ii) | payment of the full amount of such principal and interest at all such specified offices outside the United States is illegal or effectively precluded by exchange controls or other similar restrictions on the full payment or receipt of principal and interest in US dollars; and |
| (iii) | such payment is then permitted under United States law without involving, in the opinion of the Issuer and the Guarantors, adverse tax consequences to the Issuer or the Guarantors. |
| (e) | Payment Day |
If the date for payment of any amount in respect of any Note or Coupon is not a Payment Day, the holder thereof shall not be entitled to payment until the next following Payment Day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay. For these purposes, “Payment Day” means any day (other than a Saturday or a Sunday) which (subject to Condition 8) is:
| (i) | a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in: |
| (A) | in the case of definitive Notes only, the relevant place of presentation; |
| (B) | each Additional Financial Centre (if any) specified in the applicable Final Terms; and |
| (ii) | either (1) in relation to any sum payable in a Specified Currency other than euro, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealings in foreign exchange and foreign currency deposits) in the principal financial centre of the country of the relevant Specified Currency (which, if the Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney and Auckland, respectively) or (2) in relation to any sum payable in euro, a day on which the TARGET System is operating. |
| (f) | Interpretation of principal and interest |
Any reference in these Terms and Conditions to principal in respect of the Notes shall be deemed to include, as applicable:
| (i) | any additional amounts which may be payable with respect to principal under Condition 7 or pursuant to any undertaking or covenant to pay additional amounts given in addition thereto, or in substitution therefor, pursuant to the Trust Deed; |
| (ii) | the Final Redemption Amount of the Notes; |
| (iii) | the Early Redemption Amount of the Notes; |
| (iv) | the Optional Redemption Amount(s) (if any) of the Notes; |
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| (v) | the Clean-Up Redemption Amount (if any) of the Notes; and |
| (vi) | any premium and any other amounts (other than interest) which may be payable by the Issuer under or in respect of the Notes. |
Any reference in these Terms and Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any additional amounts which may be payable with respect to interest under Condition 7 or pursuant to any undertaking or covenant to pay additional amounts given in addition thereto, or in substitution therefor, pursuant to the Trust Deed.
| 6 | Redemption and Purchase |
| (a) | Redemption at maturity |
Unless previously redeemed or purchased and cancelled as specified below, each Note will be redeemed by the Issuer at its Final Redemption Amount specified in, or determined in the manner specified in, the applicable Final Terms in the relevant Specified Currency on the Maturity Date.
| (b) | Redemption for tax reasons |
| (i) | Where the Issuer is BATIF |
| (A) | The provisions of this paragraph shall only apply where the Issuer is BATIF. |
| (B) | The Notes may be redeemed in whole but not in part, at the option of the Issuer, at any time or, if the Notes are Floating Rate Notes, on any Interest Payment Date, upon not more than 30 nor less than 10 days’ (or, in each case, such other number of days as specified in the applicable Final Terms) prior notice given in accordance with Condition 13 (which notice will be irrevocable), at their Early Redemption Amount referred to in paragraph (f) below, together, if applicable, with interest accrued to (but excluding) the date fixed for redemption, if the Issuer satisfies the Trustee that, as a result of any amendment to, or change in, the laws or regulations of the United Kingdom or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official application or interpretation of such laws or regulations, which amendment or change becomes effective on or after the Issue Date of the first Tranche of the Notes, the Issuer will become obliged to pay any Additional Amounts pursuant to Condition 7(a) on the next succeeding Interest Payment Date in respect of the Notes; provided, however, that (1) no such notice of redemption will be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts were a payment in respect of the Notes then due and (2) at the time such notice of redemption is given, such obligation to pay such Additional Amounts remains in effect. Immediately prior to the publication of any notice of redemption pursuant to this paragraph (b)(i) the Issuer will deliver to the Trustee a certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and the Trustee shall be entitled to accept such certificate as sufficient evidence of the satisfaction of the same in which event it shall be conclusive and binding on the Noteholders and the Couponholders. Upon the expiry of any notice of redemption pursuant to this paragraph (b)(i), the Issuer shall be bound to redeem the Notes as provided herein. |
| (ii) | Where the Issuer is BATCAP |
| (A) | The provisions of this paragraph shall only apply where the Issuer is BATCAP. |
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| (B) | The Notes may be redeemed in whole but not in part, at the option of the Issuer, at any time or, if the Notes are Floating Rate Notes, on any Interest Payment Date, upon not more than 30 nor less than 10 days’ (or, in each case, such other number of days as specified in the applicable Final Terms) prior notice given in accordance with Condition 13 (which notice will be irrevocable), at their Early Redemption Amount referred to in paragraph (f) below, together, if applicable, with interest accrued to (but excluding) the date fixed for redemption, if the Issuer satisfies the Trustee that, as a result of any amendment to, or change in, the laws or regulations of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official application or interpretation of such laws or regulations, which amendment or change becomes effective on or after the Issue Date of the first Tranche of the Notes, the Issuer will become obliged to pay any Additional Amounts pursuant to Condition 7(b) on the next succeeding Interest Payment Date in respect of the Notes; provided, however, that (1) no such notice of redemption will be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts in respect of the Notes were a payment in respect of the Notes then due and (2) at the time such notice of redemption is given, such obligation to pay such Additional Amounts remains in effect. Immediately prior to the publication of any notice of redemption pursuant to this paragraph (b)(ii) the Issuer will deliver to the Trustee a certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and the Trustee shall be entitled to accept such certificate as sufficient evidence of the satisfaction of the same in which event it shall be conclusive and binding on the Noteholders and the Couponholders. Upon the expiry of any notice of redemption pursuant to this paragraph (b)(ii), the Issuer shall be bound to redeem the Notes as provided herein. |
| (iii) | Where the Issuer is BATNF |
| (A) | The provisions of this paragraph shall only apply where the Issuer is BATNF. |
| (B) | The Notes may be redeemed in whole but not in part, at the option of the Issuer, at any time or, if the Notes are Floating Rate Notes, on any Interest Payment Date, upon not more than 30 nor less than 10 days’ (or, in each case, such other number of days as specified in the applicable Final Terms) prior notice given in accordance with Condition 13 (which notice will be irrevocable), at their Early Redemption Amount referred to in paragraph (f) below, together, if applicable, with interest accrued to (but excluding) the date fixed for redemption, if, as a result of any amendment to, or change in, the laws or regulations of The Netherlands or any political subdivision or taxing authority thereof or therein affecting taxation, or any amendment to or change in an official application or interpretation of such laws or regulations, which amendment or change becomes effective on or after the Issue Date of the first Tranche of the Notes, the Issuer will become obliged to pay any Additional Amounts pursuant to Condition 7(c) on the next succeeding Interest Payment Date in respect of the Notes; provided, however, that (1) no such notice of redemption will be given earlier than 90 days prior to the earliest date on which the Issuer would be obliged to pay such Additional Amounts were a payment in respect of the Notes then due and (2) at the time such notice of redemption is given, such obligation to pay such Additional Amounts remains in effect. Immediately prior to the publication of any notice of redemption pursuant to this paragraph (b)(iii) the Issuer will deliver to the Trustee a certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred, and the Trustee shall be entitled to accept such certificate as sufficient evidence of the satisfaction of the same in which event it shall be conclusive and binding on the Noteholders and the Couponholders. Upon the expiry of any notice of redemption pursuant to this paragraph (b)(iii), the Issuer shall be bound to redeem the Notes as provided herein. |
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| (c) | Redemption at the option of the Issuer (Issuer Call) |
This Condition 6(c) applies to Notes which are subject to redemption prior to the Maturity Date at the option of the Issuer (other than for taxation reasons), such option being referred to as an “Issuer Call”. The applicable Final Terms contains provisions applicable to any Issuer Call and must be read in conjunction with this Condition 6(c) for full information on any Issuer Call. In particular, the applicable Final Terms will identify, as applicable, the Optional Redemption Date(s), the Optional Redemption Amount (or, if applicable, that the Optional Redemption Amount(s) applicable to any Optional Redemption Date will be the Make-whole Amount), any minimum or maximum amount of Notes which can be redeemed and the applicable notice periods.
If Issuer Call is specified in the applicable Final Terms, the Issuer may (save in respect of any Notes in respect of which a Put Notice has been given pursuant to Condition 6(e)), having given:
| (i) | not less than 10 nor more than 30 days’ (or, in each case, such other number of days as specified in the applicable Final Terms) notice to the Noteholders in accordance with Condition 13; and |
| (ii) | not less than 10 days (or such shorter notice as such party shall accept) before the giving of the notice referred to in (i), notice to the Agent and the Trustee, |
(which notices shall be irrevocable (other than in the circumstances set out below) and shall specify the date fixed for redemption) redeem all or some only of the Notes then outstanding on any Optional Redemption Date and at the Optional Redemption Amount(s) applicable to such Optional Redemption Date together, if appropriate, with interest accrued to (but excluding) the relevant Optional Redemption Date. Any such notice of redemption may, at the Issuer’s discretion, be subject to one or more conditions precedent, in which case such notice shall state that, in the Issuer’s discretion, the Optional Redemption Date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Issuer in its sole discretion) by the Optional Redemption Date, or by the Optional Redemption Date so delayed. In the case of a partial redemption of Notes, the Notes to be redeemed (“Redeemed Notes”) will be selected individually by lot, in the case of Redeemed Notes represented by definitive Notes, and in accordance with the rules of Euroclear and/ or Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either a pool factor or a reduction in nominal amount, at their discretion), in the case of Redeemed Notes represented by a Global Note, not more than 30 days prior to the date fixed for redemption (such date of selection being hereinafter called the “Selection Date”). Any such partial redemption must be of a nominal amount not less than the Minimum Redemption Amount and not more than the Maximum Redemption Amount, in each case as specified in the applicable Final Terms. In the case of Redeemed Notes represented by definitive Notes, a list of the serial numbers of such Redeemed Notes will be published in accordance with Condition 13 not less than 14 days prior to the date fixed for redemption. No exchange of the relevant Global Note will be permitted during the period from (and including) the Selection Date to (and including) the date fixed for redemption pursuant to this paragraph (c) and notice to that effect shall be given by the Issuer to the Noteholders in accordance with Condition 13 at least five days prior to the Selection Date.
If, in respect of any Optional Redemption Date, Make-whole Amount is specified in the applicable Final Terms as the Optional Redemption Amount, the Optional Redemption Amount per Note shall be equal to the higher of the following:
| (i) | the nominal amount of the relevant Note; and |
| (ii) | the nominal amount of the relevant Note multiplied by the price (as reported in writing to the Issuer and the Trustee by the Determination Agent) expressed as a percentage (rounded to five decimal places, with 0.000005 being rounded upwards) at which the Gross Redemption Yield |
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| on the Notes on the Determination Date specified in the applicable Final Terms is equal to (A) the Gross Redemption Yield at the Quotation Time specified in the applicable Final Terms on the Determination Date of the Reference Bond specified in the applicable Final Terms (or, where the Determination Agent advises the Issuer and the Trustee that, for reasons of illiquidity or otherwise, such Reference Bond is not appropriate for such purpose, such other government stock as the Determination Agent may recommend) plus (B) any applicable Redemption Margin specified in the applicable Final Terms. |
Any notice of redemption given under Condition 6(e) will override any notice of redemption given (whether previously, on the same date or subsequently) under this Condition 6(c).
In this Condition:
“Determination Agent” means the financial adviser appointed by the Issuer for the purpose of determining the Make-whole Amount; and
“Gross Redemption Yield” means a yield calculated in accordance with generally accepted market practice at such time, as advised to the Issuer and the Trustee by the Determination Agent.
| (d) | Clean-Up Call Option |
If Clean-Up Call is specified in the applicable Final Terms and 80 per cent. or more in nominal amount of the Notes originally issued (which shall for this purpose include any further Notes issued pursuant to Condition 15) have been redeemed or purchased and cancelled, the Issuer may, having given:
| (i) | not less than 10 nor more than 30 days’ (or, in each case, such other number of days as specified in the applicable Final Terms) notice to the Noteholders in accordance with Condition 13; and |
| (ii) | not less than 10 days (or such shorter notice as such party shall accept) before the giving of the notice referred to in (i), notice to the Agent and the Trustee, |
(which notice shall be irrevocable and shall specify the date fixed for redemption) redeem or, at the Issuer’s option, purchase (or procure the purchase of) on any Interest Payment Date (if the relevant Note is a Floating Rate Note) or at any time (if the relevant Note is not a Floating Rate Note), all but not some only of the Notes then outstanding at the Clean-Up Redemption Amount specified in the applicable Final Terms together with interest accrued (if any) to (but excluding) the date fixed for redemption.
| (e) | Redemption at the option of the Noteholders (Investor Put) |
This Condition 6(e) applies to Notes which are subject to redemption prior to the Maturity Date at the option of the Noteholder, such option being referred to as an “Investor Put”. The applicable Final Terms contains provisions applicable to any Investor Put and must be read in conjunction with this Condition 6(e) for full information on any Investor Put. In particular, the applicable Final Terms will identify the Optional Redemption Date(s), the Optional Redemption Amount and the applicable notice periods.
If Investor Put is specified in the applicable Final Terms, upon the holder of any Note giving to the Issuer in accordance with Condition 13 not less than 10 nor more than 30 days’ (or, in each case, such other number of days as specified in the applicable Final Terms) notice (which notice shall be irrevocable) the Issuer will, upon the expiry of such notice, redeem, subject to, and in accordance with, the terms specified in the applicable Final Terms, in whole (but not in part), such Note on the Optional Redemption Date and at the Optional Redemption Amount together, if appropriate, with interest accrued to (but excluding) the Optional Redemption Date.
To exercise the right to require redemption of a Note the holder of this Note must, if the relevant Note is in definitive form and held outside Euroclear and Clearstream, Luxembourg, deliver at the specified office of any Paying Agent at any time during normal business hours of such Paying Agent falling
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within the notice period a duly completed and signed notice of exercise in the form (for the time being current) obtainable from any specified office of any Paying Agent (a “Put Notice”) and in which the holder must specify a bank account (or, if payment is required to be made by cheque, an address) to which payment is to be made under this Condition accompanied by the relevant Note or evidence satisfactory to the Paying Agent concerned that such Note will, following delivery of the Put Notice, be held to its order or under its control. If a Note is represented by a Global Note or is in definitive form and held through Euroclear or Clearstream, Luxembourg, to exercise the right to require redemption of such Note the holder must, within the notice period, give notice to the Agent of such exercise in accordance with the standard procedures of Euroclear and Clearstream, Luxembourg (which may include notice being given on his instruction by Euroclear or Clearstream, Luxembourg or any common depositary or common safekeeper, as the case may be, for them to the Agent by electronic means) in a form acceptable to Euroclear and Clearstream, Luxembourg from time to time and, if the relevant Note is represented by a Global Note, at the same time present or procure the presentation of the relevant Global Note to the Agent for notation accordingly.
| (f) | Early Redemption Amounts |
For the purpose of paragraph (b) above and Condition 9, the Notes will be redeemed at the Early Redemption Amount calculated as follows:
| (i) | in the case of Notes with a Final Redemption Amount equal to the Issue Price, at the Final Redemption Amount thereof; |
| (ii) | in the case of Notes (other than Zero Coupon Notes) with a Final Redemption Amount which is or may be less or greater than the Issue Price, at the amount specified in the applicable Final Terms or, if no such amount or manner is so specified in the applicable Final Terms, at their nominal amount; or |
| (iii) | in the case of Zero Coupon Notes, at their Early Redemption Amount equal to the sum of: |
| (A) | the Reference Price; and |
| (B) | the product of the Accrual Yield (compounded annually) being applied to the Reference Price from (and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon which such Notes become due and repayable. |
Where such calculation is to be made for a period which is not a whole number of years, it shall be made (i) in the case of a Zero Coupon Note payable in a Specified Currency other than Sterling, on the basis of a 360-day year consisting of 12 months of 30 days each or (ii) in the case of a Zero Coupon Note payable in Sterling, on the basis of the actual number of days elapsed divided by 365 (or, if any of the days elapsed falls in a leap year, the sum of (x) the number of those days falling in a leap year divided by 366 and (y) the number of those days falling in a non-leap year divided by 365).
| (g) | Purchases |
The Issuer, the Guarantors or any other subsidiary (as defined in the Trust Deed) of the Issuer or any Guarantor may at any time purchase Notes (provided that, in the case of definitive Notes, all unmatured Coupons and Talons appertaining thereto are purchased therewith) at any price in the open market or otherwise. If purchases are made by tender, tenders must be available to all Noteholders alike. Such Notes may be held, reissued, resold or, at the option of the Issuer or the relevant Guarantor, surrendered to any Paying Agent for cancellation.
| (h) | Cancellation |
All Notes which are redeemed will forthwith be cancelled (together with all unmatured Coupons and Talons attached thereto or surrendered therewith at the time of redemption). All Notes so cancelled and any Notes purchased and cancelled pursuant to paragraph (g) above (together with all unmatured Coupons and Talons cancelled therewith) shall be forwarded to the Agent and cannot be reissued or resold.
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| (i) | Late payment on Zero Coupon Notes |
If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero Coupon Note pursuant to paragraph (a), (b), (c), (d) or (e) above or upon its becoming due and repayable as provided in Condition 9 is improperly withheld or refused, the amount due and repayable in respect of such Zero Coupon Note shall be the amount calculated as provided in paragraph (f)(iii) above as though the references therein to the date fixed for the redemption or the date upon which such Zero Coupon Note becomes due and payable were replaced by references to the date which is the earlier of:
| (i) | the date on which all amounts due in respect of such Zero Coupon Note have been paid; and |
| (ii) | five days after the date on which the full amount of the moneys payable in respect of such Zero Coupon Note has been received by the Agent or the Trustee and notice to that effect has been given to the Noteholders in accordance with Condition 13. |
| 7 | Taxation |
| (a) | Where the Issuer is BATIF |
| (1) | The provisions of this paragraph shall only apply where the Issuer is BATIF. |
| (2) | All payments of principal and interest by the Issuer or any Guarantor will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges (together, “Taxes”) of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision thereof or any authority thereof or therein having power to levy the same unless such withholding or deduction is required by law. In that event, the Issuer or the relevant Guarantor (as the case may be) shall pay such amounts (the “Additional Amounts”) as will result in the receipt by the Noteholders and the Couponholders of such amounts as would have been received by them had no such Taxes been required to be withheld or deducted; provided that no such Additional Amounts will be payable in respect of Notes or Coupons: |
| (i) | presented for payment by or on behalf of a Noteholder or Couponholder who is liable for such withheld or deducted Taxes by reason of his having some connection with the United Kingdom other than the mere holding of a Note or Coupon; or |
| (ii) | to, or to a third party on behalf of, a holder if such withholding or deduction may be avoided by complying with any statutory requirement or by making a declaration of nonresidence or other similar claim for exemption to any authority of or in the United Kingdom, unless such holder proves that he is not entitled so to comply or to make such declaration or claim; or |
| (iii) | presented for payment in the United Kingdom; or |
| (iv) | presented for payment more than 30 days after the Relevant Date except to the extent that a Noteholder or Couponholder would have been entitled to payment of such Additional Amounts if he had presented his Note or Coupon for payment on the thirtieth day after the Relevant Date. |
| (b) | Where the Issuer is BATCAP |
| (1) | The provisions of this paragraph shall only apply where the Issuer is BATCAP. |
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| (2) | All payments of principal and interest by the Issuer or any Guarantor will be made without withholding or deduction for or on account of any Taxes of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of the United States or any political subdivision thereof or any authority thereof or therein having power to levy the same unless such withholding or deduction is required by law. In that event, the Issuer or the relevant Guarantor (as the case may be) shall pay such Additional Amounts as will result in the receipt by the Noteholders and the Couponholders of such amounts as would have been received by them had no such Taxes been required to be withheld or deducted; provided that the foregoing obligations shall not apply to: |
| (i) | any such Taxes which would not have been so imposed but for (i) the existence of any present or former connection between the holder (or between a fiduciary, settlor, beneficiary, member or shareholder of or possessor of a power over such holder, if such holder is an estate, a trust, a partnership or a corporation) and the United States, including, without limitation, such holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident thereof, or being or having been engaged in a trade or business therein or being or having been present therein, or having or having had a permanent establishment therein, or (ii) such holder’s present or former status as a personal holding company, passive foreign investment company, controlled foreign corporation or private foundation or other tax-exempt organisation (in each case, for United States federal income tax purposes), or as a corporation which accumulates earnings to avoid United States federal income taxes; |
| (ii) | any such Taxes which would not have been so imposed but for the presentation of a Note or Coupon for payment more than 30 days after the Relevant Date except to the extent that a Noteholder or Couponholder would have been entitled to payment of such Additional Amounts if he had presented his Note or Coupon for payment on the thirtieth day after the Relevant Date; |
| (iii) | any estate, inheritance, gift, sales, transfer or personal property Taxes or any similar Taxes; |
| (iv) | any such Taxes which would not have been imposed but for the failure to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder of a Note or Coupon, if such compliance is required by statute, by regulation of the United States Treasury Department or by an applicable income tax treaty to which the United States is a party as a precondition to relief or exemption from such Taxes; |
| (v) | any such Taxes which are payable otherwise than by deduction or withholding from payments in respect of a Note or Coupon; |
| (vi) | any such Taxes imposed on interest received by a ten per cent. shareholder of the Issuer within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the United States Internal Revenue Code of 1986, as amended (the “Code”) (or any amended or successor provisions); |
| (vii) | any such Taxes imposed by reason of a holder of a Note or Coupon being or having been a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code (or any amended or successor provisions); |
| (viii) | any backup withholding imposed pursuant to Section 3406 of the Code (or any amended or successor provisions); |
| (ix) | any such Taxes imposed pursuant to Section 871(h)(6) or 881(c)(6) of the Code (or any amended or successor provisions); and |
| (x) | any combination of clauses (i) to (ix) above; |
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| nor will any Additional Amounts be paid in respect of a Note or Coupon to any holder who is not a United States Alien or to any United States Alien who is a fiduciary or partnership or person other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or the beneficial owner would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the holder of such Note or Coupon. The term “United States Alien” means any person who, for United States federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust or a foreign partnership any partner of which is for United States federal income tax purposes a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust or any such foreign partnership. |
| (c) | Where the Issuer is BATNF |
| (1) | The provisions of this paragraph shall only apply where the Issuer is BATNF. |
| (2) | All payments of principal and interest by the Issuer or any Guarantor will be made without withholding or deduction for or on account of any Taxes of whatever nature imposed, levied, collected, withheld or assessed by or on behalf of The Netherlands or any political subdivision thereof or any authority thereof or therein having power to levy the same unless such withholding or deduction is required by law. In that event, the Issuer or the relevant Guarantor (as the case may be) shall pay such Additional Amounts as will result in the receipt by the Noteholders and the Couponholders of such amounts as would have been received by them had no such Taxes been required to be withheld or deducted; provided that no such Additional Amounts will be payable in respect of Notes or Coupons: |
| (i) | presented for payment by or on behalf of a Noteholder or Couponholder who is liable for such withheld or deducted Taxes by reason of his having some connection with The Netherlands other than the mere holding of a Note or Coupon; or |
| (ii) | to, or to a third party on behalf of, a holder if such withholding or deduction may be avoided by complying with any statutory requirement or by making a declaration of nonresidence or other similar claim for exemption to any authority of or in The Netherlands, unless such holder proves that he is not entitled so to comply or to make such declaration or claim; or |
| (iii) | presented for payment in The Netherlands; or |
| (iv) | presented for payment more than 30 days after the Relevant Date except to the extent that a Noteholder or Couponholder would have been entitled to payment of such Additional Amounts if he had presented his Note or Coupon for payment on the thirtieth day after the Relevant Date; or |
| (v) | to, or to another party on behalf of, a holder if such Additional Amounts are payable for or on account of any Taxes imposed or to be withheld in The Netherlands pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021). |
| (d) | The Trust Deed contains provisions (mutatis mutandis) to those contained in paragraphs (a), (b) and (c) above in relation to the relevant taxing jurisdiction of each Guarantor. |
| (e) | Notwithstanding any other provision of these Terms and Conditions, any amounts to be paid on any Note or Coupon by or on behalf of the relevant Issuer will be paid net of any deduction or withholding imposed under Sections 1471 through 1474 of the Code (or any amended or successor provisions), including any regulations thereunder or official interpretations thereof, or required pursuant to an agreement described in Section 1471(b) of the Code or an intergovernmental agreement between the United States and another jurisdiction facilitating the implementation of any of the foregoing (or any fiscal or regulatory legislation, rules or practices implementing such an intergovernmental agreement) (any such withholding or deduction, a “FATCA Withholding”). Neither the relevant Issuer nor any Guarantor nor any other person will be required to pay any Additional Amounts in respect of FATCA Withholding. |
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| (f) | For the purpose of this Condition 7, “Relevant Date” means, in respect of any payment, the date on which such payment became due and payable or the date on which payment thereof was duly provided for, whichever occurs the later. |
| 8 | Prescription |
The Notes and Coupons will become void unless presented for payment within a period of ten years (in the case of principal) and five years (in the case of interest) after the Relevant Date (as defined in Condition 7) therefor.
There shall not be included in any Coupon sheet issued on exchange of a Talon any Coupon the claim for payment in respect of which would be void pursuant to this Condition or Condition 5(b) or any Talon which would be void pursuant to Condition 5(b).
| 9 | Events of Default |
| (a) | The Trustee at its discretion may, and if so requested in writing by Noteholders holding at least one-quarter in nominal amount of the Notes then outstanding or if so directed by an Extraordinary Resolution shall (subject in each case to being indemnified to its satisfaction), (provided that, except in the case of the happening of any of the events mentioned in paragraph (i) below, the Trustee shall have certified in writing to the Issuer that, in its opinion, such event is materially prejudicial to the interests of the Noteholders) give notice to the Issuer that the Notes are, and they shall thereupon immediately become, due and repayable at their Early Redemption Amount referred to in Condition 6(f), together with accrued interest as provided in the Trust Deed, if any of the following events occurs and is continuing (each, an “Event of Default”): |
| (i) | default is made for a period of seven days or more in the payment on the due date of any principal on the Notes or any of them or for a period of 14 days or more in the payment of any interest due in respect of the Notes or any of them; or |
| (ii) | default is made by the Issuer or any Guarantor in the performance or observance of any covenant or provision binding on it under or pursuant to the Trust Deed or the Notes (other than a covenant for the payment of principal or interest due on or in respect of the Notes) and (except where the Trustee considers such default to be incapable of remedy when no notice as is referred to below is required, and for this purpose, something shall remain capable of remedy notwithstanding that it was required to have been previously done) such default continues on the thirtieth day after service by the Trustee on the Issuer or, as the case may be, the relevant Guarantor of written notice requiring the same to be remedied (or such later date as the Trustee may permit); or |
| (iii) | any other Borrowed Moneys Indebtedness (as defined below) of either the Issuer or any Guarantor becomes due and repayable by reason of any event of default (howsoever described) prior to its stated date of payment or any other Borrowed Moneys Indebtedness of either the Issuer or any Guarantor is not paid within the longer of seven days of its due date or any applicable grace period therefor (and for such purpose there shall be deemed to be a grace period of not less than seven days in respect of any obligation under any guarantee or indemnity or otherwise as surety), provided that no such event shall constitute an Event of Default unless the Borrowed Moneys Indebtedness either (a) in any particular case amounts to at least £50,000,000 or the equivalent thereof in any other currency, or (b) when aggregated with other Borrowed Moneys Indebtedness then so due and repayable or not so paid amounts to at least £200,000,000 or the equivalent thereof in any other currency; or |
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| (iv) | where the Issuer or any Guarantor is incorporated in England and Wales: |
| (A) | an order is made or an effective resolution is passed for the winding-up of the Issuer or a relevant Guarantor, or any similar action is taken in any other jurisdiction; or |
| (B) | a distress or execution or other legal process is levied or enforced against or an encumbrancer takes possession of or a receiver, administrative receiver or other similar officer is appointed of the whole or a part of its assets which is substantial in relation to the Group (as defined below) taken as a whole and is not discharged, stayed, removed or paid out within 45 days after such execution or appointment; or |
| (C) | an administration order is made in relation to the Issuer or a relevant Guarantor which is not discharged, stayed or removed within 45 days of such order being made; or |
| (v) | where the Issuer or the relevant Guarantor is BATCAP: |
| (A) | a decree or order by a court having jurisdiction is entered adjudging BATCAP a bankrupt or insolvent, or approving as properly filed a petition seeking reorganisation of BATCAP under the United States Bankruptcy Code or any other similar federal or state applicable law, and such decree or order is continued undischarged and unstayed for a period of 45 days; or |
| (B) | a decree or order of a court having jurisdiction for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of BATCAP is entered in respect of the whole of its property or a part thereof, which is substantial in relation to the Group taken as a whole, or for the winding-up or liquidation of its affairs, and such decree or order is continued and undischarged and unstayed for a period of 45 days; or |
| (C) | BATCAP institutes proceedings to be adjudicated a voluntary bankrupt, or consents to the filing of a bankruptcy proceeding against it, or files a petition or answer or consent seeking reorganisation under the United States Bankruptcy Code or any other similar federal or state applicable law, or consents to the filing of any such petition, or consents to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of the whole of its property or a part thereof (which part is substantial in relation to the Group taken as a whole) or consents to the winding-up or liquidation of its affairs; |
(the terms used in this sub-paragraph (v) shall be construed as they would be in the context of a proceeding instituted and conducted pursuant to the United States Bankruptcy Code or any other similar Federal or state applicable law); or
| (vi) | where the Issuer or the relevant Guarantor is BATNF: |
| (A) | an order is made or an effective resolution is passed for the winding-up of BATNF or any similar action is taken in any other jurisdiction, including, without limitation, an application being made by BATNF for a ‘surseance van betaling’ (within the meaning of The Netherlands Bankruptcy Code (Faillissementswet)); or |
| (B) | a distress or execution or other legal process is levied or enforced against or an encumbrancer takes possession of or a receiver, administrative receiver or other similar officer is appointed of the whole or a part of its assets which is substantial in relation to the Group taken as a whole and is not discharged, stayed, removed or paid out within 45 days after such execution or appointment; or |
| (C) | an administration order is made in relation to BATNF which is not discharged, stayed or removed within 45 days of such order being made; or |
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| (vii) | either the Issuer or any Guarantor: |
| (A) | admits in writing its inability to pay its debts generally as they fall due or makes or enters into a general assignment or composition with or for the benefit of its creditors generally; or |
| (B) | stops or threatens to stop payment of its obligations generally or ceases or threatens to cease to carry on its business (except in either case for the purposes of amalgamation, reconstruction or corporate reorganisation, the terms of which shall have been previously approved by the Trustee in writing or by an Extraordinary Resolution of the Noteholders); or |
| (viii) | for any reason whatsoever any guarantee ceases to be binding on and enforceable against the relevant Guarantor other than with the prior written consent of the Trustee or the sanction of an Extraordinary Resolution of the Noteholders. |
For this purpose, “Borrowed Moneys Indebtedness” means, in relation to any person, any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent comprising or constituted by:
| (A) | any liability to repay the principal of or to pay interest on borrowed money or deposits; or |
| (B) | any liability (i) under or pursuant to any (a) letter of credit, (b) acceptance credit facility or (c) note purchase facility; or (ii) in relation to (a) any foreign currency transaction or (b) any liability in respect of any purchase price for property or services payment of which is deferred for a period in excess of 180 days after the later of taking possession or becoming the legal owner thereof; or (iii) with regard to any guarantee or indemnity in respect of repayment of obligations as referred to in (i) and (ii) above or of any other borrowed money, |
provided that nothing in Condition 9(a)(iv), (v), (vi) or (vii) shall apply to any matter or event resulting from or in connection with a disposal or divestiture of all or part of the interests in financial services businesses of the Group or any reconstruction, amalgamation or corporate reorganisation (or any similar action in any other jurisdiction), the terms of which shall have been approved by the Trustee in writing or by an Extraordinary Resolution of the Noteholders.
For the purposes of these Terms and Conditions, “Group” means British American Tobacco and its Subsidiaries together with its or their ultimate Holding Company (if any) (as defined in the Trust Deed) and any such ultimate Holding Company’s Subsidiaries.
| (b) | At any time after the Notes become due and repayable pursuant to paragraph (a) of this Condition the Trustee may, at its discretion and without further notice, institute such proceedings against the Issuer and/or any Guarantor as it may think fit to enforce payment of the Notes, but it shall not be bound to take any such proceedings unless (i) it shall have been so directed by an Extraordinary Resolution or so requested in writing by Noteholders holding at least one-quarter in principal amount of the Notes outstanding and (ii) it shall have been indemnified to its satisfaction. No Noteholder or Couponholder may proceed directly against the Issuer or any relevant Guarantor unless the Trustee, having become bound to proceed, fails to do so within a reasonable period and such failure is continuing. |
| 10 | Replacement of Notes, Coupons and Talons |
Should any Note Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, it may be replaced at the specified office of the Agent upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity the Issuer may reasonably require. Mutilated or defaced Notes Coupons or Talons must be surrendered before replacements will be issued.
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| 11 | Agents |
The names of the initial Paying Agents and their initial specified offices are set out below.
The Issuer is entitled to vary or terminate the appointment of any Paying Agent and/or appoint additional or other Paying Agents and/or approve any change in the specified office through which any Paying Agent acts, provided that:
| (i) | there will at all times be an Agent; |
| (ii) | so long as the Notes are listed on any stock exchange or admitted to trading by any other relevant authority, there will at all times be a Paying Agent with a specified office in such place as may be required by the rules and regulations of the relevant stock exchange or any other relevant authority; and |
| (iii) | there will at all times be a Paying Agent with a specified office in a city approved by the Trustee in Western Europe outside the United Kingdom and The Netherlands. |
In addition, the Issuer and the Guarantors shall forthwith appoint a Paying Agent having a specified office in New York City in the circumstances described in Condition 5(d). Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days’ prior notice thereof shall have been given to the Noteholders in accordance with Condition 13.
In acting under the Agency Agreement, the Agents act solely as agents of the Issuer and the Guarantors and, in certain circumstances specified therein, of the Trustee and do not assume any obligation to, or relationship of agency or trust with, any Noteholders or Couponholders.
| 12 | Exchange of Talons |
On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at the specified office of the Agent or any other Paying Agent in exchange for a further Coupon sheet including (if such further Coupon sheet does not include Coupons to (and including) the final date for the payment of interest due in respect of the Note to which it appertains) a further Talon, subject to the provisions of Condition 8.
| 13 | Notices |
All notices regarding the Notes will be deemed to be validly given if published in a leading English language daily newspaper of general circulation in London. It is expected that such publication will be made in the Financial Times in London. The Issuer shall also ensure that notices are duly published in a manner which complies with the rules and regulations of any stock exchange or any other relevant authority on which the Notes are for the time being listed or by which they have been admitted to trading. Any such notice will be deemed to have been given on the date of the first publication or, where required to be published in more than one newspaper, on the date of the first publication in all required newspapers.
Until such time as any definitive Notes are issued, there may, so long as any Global Notes representing the Notes are held in their entirety on behalf of Euroclear and/or Clearstream, Luxembourg, be substituted for such publication in such newspaper the delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg for communication by them to the holders of the Notes and, in addition, for so long as any Notes are listed on a stock exchange or are admitted to trading by another relevant authority and the rules of that stock exchange or other relevant authority so require, such notice will be published in a daily newspaper of general circulation in the place or places required by that stock exchange or other relevant authority. Any such notice shall be deemed to have been given to the holders of the Notes on the day on which the said notice was given to Euroclear and/or Clearstream, Luxembourg.
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Notices to be given by any Noteholder shall be in writing and given by lodging the same, together with the relative Note or Notes, with the Agent. Whilst any of the Notes are represented by a Global Note, such notice may be given by any holder of a Note to the Agent through Euroclear and/or Clearstream, Luxembourg, as the case may be, in such manner as the Agent and Euroclear and/or Clearstream, Luxembourg, as the case may be, may approve for this purpose.
| 14 | Meetings of Noteholders, Modification and Waiver |
The Trust Deed contains provisions for convening meetings (including by way of audio or video conference call) of the Noteholders to consider any matter affecting their interests, including the sanctioning by an Extraordinary Resolution of a modification of the Notes, the Coupons or any of the provisions of the Trust Deed. Such a meeting may be convened by the Issuer, any Guarantor or the Trustee and shall (subject to being indemnified and/or secured and/or pre-funded to its satisfaction) be convened by the Trustee upon a request by Noteholders holding not less than ten per cent. in nominal amount of the Notes for the time being remaining outstanding. The quorum at any such meeting for passing an Extraordinary Resolution is one or more persons holding or representing not less than a clear majority in nominal amount of the Notes for the time being outstanding, or at any adjourned meeting one or more persons being or representing Noteholders whatever the nominal amount of the Notes so held or represented, except that at any meeting the business of which includes the modification of certain provisions of the Notes or Coupons or the Trust Deed (including modifying the date of maturity of the Notes or any date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest payable in respect of the Notes or altering the currency of payment of the Notes or Coupons) the quorum shall be one or more persons holding or representing not less than three-fourths in nominal amount of the Notes for the time being outstanding, or at any adjourned such meeting one or more persons holding or representing not less than one-fourth in nominal amount of the Notes for the time being outstanding. An Extraordinary Resolution passed at any meeting of the Noteholders shall be binding on all the Noteholders, whether or not they are present at the meeting, and on all Couponholders. Notwithstanding the foregoing, a resolution by way of electronic consents or in writing signed by persons holding or representing not less than 75 per cent. of the nominal amount of the Notes for the time being outstanding shall for all purposes be as valid and effective as an Extraordinary Resolution passed at a meeting of the Noteholders duly convened and held in accordance with the provisions contained in the Trust Deed.
The Trustee may agree, without the consent of the Noteholders or Couponholders, to any modification of, or to the waiver or authorisation of any breach or proposed breach of, any of these Terms and Conditions or any of the provisions of the Trust Deed, or determine, without any such consent as aforesaid, that any Event of Default or Potential Event of Default (as defined in the Trust Deed) shall not be treated as such, which in any such case is not, in the opinion of the Trustee, materially prejudicial to the interests of the Noteholders or may agree, without any such consent as aforesaid, to any modification which is of a formal, minor or technical nature, to correct a manifest error or to comply with mandatory provisions of applicable law. In addition, the Trustee shall be obliged to concur with the Issuer in effecting any Benchmark Amendments in the circumstances and as otherwise set out in Condition 4(b)(C)(4) without the consent of the Noteholders or the Couponholders.
The Trustee may also agree without the consent of the Noteholders or Couponholders, to the substitution (i) in place of the Issuer as the principal debtor under the Notes and the Trust Deed of any Guarantor or any successor in business or Holding Company of any Guarantor or any other subsidiary of any Guarantor, such successor in business or such Holding Company provided that all payments in respect of the Notes continue to be unconditionally and irrevocably guaranteed by each Guarantor or the successor in business or Holding Company of each Guarantor in the manner provided in the Trust Deed (or, where a Guarantor or its successor in business or Holding Company is the new principal debtor, by the other Guarantors or their successors in business or Holding Companies); or (ii) in place of any Guarantor as guarantor of the Notes under the Trust Deed, of any successor in business or Holding Company of any Guarantor. In the case of any proposed substitution, the Trustee may agree, without the consent of the Noteholders or Couponholders, to a change of the law governing the Notes, the Coupons and/or the Trust Deed, provided that such change would not, in the opinion of the Trustee, be materially prejudicial to the interests of the Noteholders.
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Any such modification, waiver, authorisation, determination or substitution shall be binding on the Noteholders and the Couponholders and, unless the Trustee otherwise agrees, any such modification or substitution shall be notified to the Noteholders in accordance with Condition 13 as soon as practicable thereafter.
In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorisation or determination), the Trustee shall have regard to the general interests of the Noteholders as a class but shall not have regard to any interests arising from circumstances particular to individual Noteholders or Couponholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual Noteholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Trustee shall not be entitled to require, nor shall any Noteholder or Couponholder be entitled to claim, from the Issuer, any Guarantor, the Trustee or any other person any indemnification or payment in respect of any tax consequence of any such exercise upon individual Noteholders or Couponholders except to the extent already provided for in Condition 7 and/or any undertaking given in addition to, or in substitution for, Condition 7 pursuant to the Trust Deed.
| 15 | Further Issues |
The Issuer shall be at liberty from time to time without the consent of the Noteholders or the Couponholders to create and issue further notes having terms and conditions the same as the Notes or the same in all respects save for the amount and date of the first payment of interest thereon and so that the same shall be consolidated and form a single Series with the outstanding Notes. The Trust Deed contains provisions for convening a single meeting of the Noteholders and the holders of notes of other Series where the Trustee so decides.
| 16 | Indemnification of the Trustee and its Contracting with the Issuer and the Guarantors |
The Trust Deed contains provisions for the indemnification, the prefunding and/or the provision of security for the Trustee and for its relief from responsibility, including provisions relieving it from taking action unless indemnified and/or secured and/or prefunded to its satisfaction.
The Trust Deed also contains provisions pursuant to which the Trustee is entitled, inter alia, (i) to enter into business transactions with the Issuer and/or any Guarantor and/or any Subsidiaries of any of them and to act as trustee for the holders of any other securities issued or guaranteed by, or relating to, the Issuer and/or any Guarantor and/or any Subsidiaries of any of them, (ii) to exercise and enforce its rights, comply with its obligations and perform its duties under or in relation to any such transactions or, as the case may be, any such trusteeship without regard to the interests of, or consequences for, the Noteholders or Couponholders, and (iii) to retain and not be liable to account for any profit made or any other amount or benefit received thereby or in connection therewith.
| 17 | Contracts (Rights of Third Parties) Act 1999 |
No person shall have any right to enforce any term or condition of this Note under the Contracts (Rights of Third Parties) Act 1999 but this does not affect any right or remedy of any person which exists or is available apart from that Act.
| 18 | Governing Law and Submission to Jurisdiction |
(a) The Trust Deed, the Notes and the Coupons, and any non-contractual obligations arising out of or in connection with them, are governed by, and shall be construed in accordance with, English law.
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| (b) | Each of the parties to the Trust Deed has in the Trust Deed irrevocably agreed that the courts of England are to have jurisdiction to settle any disputes which may arise out of or in connection with the Trust Deed, the Notes and/or the Coupons (including a dispute relating to any non-contractual obligations arising out of or in connection with them) and that accordingly any suit, action or proceedings (together referred to as “Proceedings”) arising out of or in connection with the Trust Deed, the Notes and the Coupons (including any proceedings relating to any non-contractual obligations arising out of or in connection with them) may be brought in such courts. |
| (c) | Each of the parties to the Trust Deed has in the Trust Deed irrevocably and unconditionally waived any objection which it may have now or hereafter to the laying of the venue of any such Proceedings in any such court and any claim that any such Proceedings have been brought in an inconvenient forum and further irrevocably and unconditionally agreed that a judgment in any such Proceedings brought in the English courts shall be conclusive and binding upon it and may be enforced in the courts of any other jurisdiction. |
| (d) | Nothing contained in this Condition shall limit any right to take Proceedings against any of the parties to the Trust Deed in any other court of competent jurisdiction (outside the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982, as amended), nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not. |
| (e) | Each of BATNF and BATCAP has in the Trust Deed appointed British American Tobacco at its registered office for the time being (being at the date of this Base Prospectus at Globe House, 4 Temple Place, London WC2R 2PG) as its agent for service of process, and undertaken that, in the event of British American Tobacco ceasing so to act or ceasing to be registered in England, each of BATNF and BATCAP will appoint another person as its agent for service of process in England in respect of any Proceedings. |
| (f) | Nothing herein shall affect the right to serve proceedings in any other manner permitted by law. |
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AGENT
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
Canary Wharf
London E14 5LB
OTHER PAYING AGENT
Citibank Europe PLC
1 North Wall Quay
Dublin 1
Ireland
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SCHEDULE 2
FORMS OF GLOBAL AND DEFINITIVE NOTES, COUPONS AND TALONS
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PART 1
FORM OF GLOBAL NOTE
[ANY UNITED STATES PERSON WHO HOLDS DEFINITIVE NOTES AND COUPONS AND/OR TALONS IN RESPECT OF THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]1
THE NOTES COVERED HEREBY HAVE NOT BEEN AND ARE NOT REQUIRED TO BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE NOTES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE NOTES ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S PROMULGATED UNDER THE SECURITIES ACT. THE NOTES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME, OR (II) UNTIL 40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION OF ALL NOTES OF THE TRANCHE OF WHICH THOSE NOTES ARE A PART, AS DETERMINED AND CERTIFIED TO THE DEALERS OR, IN THE CASE OF NOTES ISSUED ON A SYNDICATED BASIS, THE LEAD MANAGER, BY THE AGENT, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S.
[B.A.T. INTERNATIONAL FINANCE p.l.c.
(the Issuer)
(incorporated with limited liability in England and Wales)/
B.A.T. NETHERLANDS FINANCE B.V.
(the Issuer)
(incorporated with limited liability in The Netherlands)/
B.A.T CAPITAL CORPORATION
(the Issuer)
(incorporated with limited liability in the State of Delaware, United States of America)]2
unconditionally and irrevocably guaranteed by
BRITISH AMERICAN TOBACCO p.l.c., [ ]3
(each a Guarantor and together the Guarantors)
GLOBAL NOTE
| 1 | Applicable to Notes in bearer form with a maturity of more than one year. |
| 2 | Delete whichever are not applicable. |
| 3 | Insert names of the other Guarantors. |
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This Note is a Global Note in respect of a duly authorised issue of Notes of the Issuer (the Notes) of the Nominal Amount, Specified Currency(ies) and Specified Denomination(s) as are specified in the Final Terms applicable to the Notes (the Final Terms), a copy of which is annexed hereto. References herein to the Conditions shall be to the Terms and Conditions of the Notes as set out in Schedule 1 to the Trust Deed (as defined below) as supplemented, replaced and modified by the Final Terms but, in the event of any conflict between the provisions of the said Conditions and the information in the Final Terms, the Final Terms will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Global Note. This Global Note is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 6 July 1998.
The Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Maturity Date and/or on such earlier date(s) as all or any of the Notes represented by this Global Note may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable under the Conditions in respect of such Notes on each such date and to pay interest (if any) on the nominal amount of the Notes from time to time represented by this Global Note calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed, upon presentation and, at maturity, surrender of this Global Note to or to the order of the Agent or any other Paying Agent located outside the United States, its territories and possessions (except as provided in the Conditions) from time to time appointed by the Issuer in respect of the Notes.
If the Final Terms indicates that this Global Note is intended to be a New Global Note, the nominal amount of Notes represented by this Global Note shall be the aggregate amount from time to time entered in the records of both Euroclear Bank SA/NV (Euroclear) and Clearstream Banking SA (Clearstream, Luxembourg and together with Euroclear, the relevant Clearing Systems). The records of the relevant Clearing Systems (which expression in this Global Note means the records that each relevant Clearing System holds for its customers which reflect the amount of each such customer’s interest in the Notes) shall be conclusive evidence of the nominal amount of Notes represented by this Global Note and, for these purposes a statement issued by a relevant Clearing System (which statement shall be made available to the bearer upon request) stating the nominal amount of Notes represented by this Global Note at any time shall be conclusive evidence of the records of the relevant Clearing System at that time.
If the Final Terms indicates that this Global Note is not intended to be a New Global Note, the nominal amount of the Notes represented by this Global Note shall be the amount stated in the applicable Final Terms or, if lower, the nominal amount most recently entered by or on behalf of the Issuer in the relevant column in Part II or III of Schedule One hereto or in Schedule Two hereto.
On any redemption of, or payment of interest being made in respect of, or purchase and cancellation of, any of the Notes represented by this Global Note the Issuer shall procure that:
| (a) | if the Final Terms indicates that this Global Note is intended to be a New Global Note, details of such redemption, payment or purchase and cancellation (as the case may be) shall be entered pro rata in the records of the relevant Clearing Systems, and, upon any such entry being made, the nominal amount of the Notes recorded in the records of the relevant Clearing Systems and represented by this Global Note shall be reduced by the aggregate nominal amount of the Notes so redeemed or purchased and cancelled; or |
| (b) | if the Final Terms indicates that this Global Note is not intended to be a New Global Note, details of such redemption, payment, purchase and cancellation (as the case may be) shall be entered by or on behalf of the Issuer in Schedule One hereto and the relevant space in Schedule One hereto recording any such redemption, payment, purchase and cancellation (as the case may be) shall be signed by or on behalf of the Issuer. Upon any such redemption or purchase and cancellation the nominal amount of this Global Note and the Notes represented by this Global Note shall be reduced by the nominal amount of such Notes so redeemed or purchased and cancelled. |
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Payments due in respect of Notes for the time being represented by this Global Note shall be made to the bearer of this Global Note and each payment so made will discharge the Issuer’s obligations in respect thereof. Any failure to make entries referred to above shall not affect such discharge.
This Global Note may be exchanged (free of charge) in whole, but not in part, for Definitive Notes and (if applicable) Coupons and/or Talons in or substantially in the forms set out in Part 2, Part 3 and Part 4 of Schedule 2 to the Trust Deed (on the basis that all the appropriate details have been included on the face of such Definitive Notes and (if applicable) Coupons and/or Talons and the relevant information supplementing, replacing or modifying the Conditions appearing in the Final Terms has been endorsed on or attached to such Definitive Notes) only upon the occurrence of an Exchange Event.
An Exchange Event means:
| (i) | both Euroclear and Clearstream, Luxembourg have terminated their businesses without a successor clearing organisation being available; or |
| (ii) | the relevant Issuer has requested the issuance of definitive Notes upon a change in tax law that would be adverse to such Issuer but for the issuance of definitive Notes in bearer form. |
Upon the occurrence of an Exchange Event:
| (A) | the Issuer will promptly give notice to Noteholders in accordance with Condition 13 upon the occurrence of such Exchange Event; and |
| (B) | Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in this Global Note) or the Trustee may give notice to the Agent requesting exchange and, in the event of the occurrence of an Exchange Event as described in (ii) above, the Issuer may also give notice to the Agent requesting exchange. Any such exchange shall occur on a date specified in the notice not later than 60 days after the date of receipt of the first relevant notice by the Agent. |
The first notice requesting exchange in accordance with the above provisions shall give rise to the issue of Definitive Notes for the total nominal amount of Notes represented by this Global Note.
Any such exchange as aforesaid may be made on any day (other than a Saturday or Sunday) on which banks are open for general business in London.
The aggregate nominal amount of Definitive Notes issued upon an exchange of this Global Note will be equal to the aggregate nominal amount of this Global Note. Upon exchange of this Global Note for Definitive Notes, the Agent shall cancel it or procure that it is cancelled.
Until the exchange of the whole of this Global Note as aforesaid, the bearer hereof shall (subject as provided in the next paragraph) in all respects be entitled to the same benefits as if he were the bearer of Definitive Notes and the relative Coupons and/or Talons (if any) in the form(s) set out in Part 2, Part 3 and Part 4 (as applicable) of Schedule 2 to the Trust Deed.
Each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular nominal amount of the Notes represented by this Global Note (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Notes standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated by the Issuer, the Guarantors, the Trustee, the Agent and any other Paying Agent as the holder of such nominal amount of such Notes for all purposes other than with respect to the payment of principal and interest on such nominal amount of such Notes, the right to which shall be vested, as against the Issuer, solely in the bearer of this Global Note in accordance with and subject to the terms of this Global Note and the Trust Deed.
73
This Global Note and any non-contractual obligations arising out of or in connection with it is governed by, and shall be construed in accordance with, English law.
No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Global Note, but this does not affect any right or remedy of any person which exists or is available apart from that Act.
This Global Note shall not be valid unless (i) authenticated by Citibank, N.A., London Branch as Agent and (ii) if the Final Terms indicates that this Global Note is intended to be a New Global Note and Euroclear or Clearstream, Luxembourg has been appointed as the common safekeeper, effectuated by such common safekeeper.
This Global Note is transferable only to a successor clearing organisation that is subject to the same terms, in accordance with the rules and procedures for the time being of Euroclear or Clearstream, Luxembourg, as the case may be.
IN WITNESS whereof the Issuer has caused this Global Note to be signed manually or in facsimile by two persons duly authorised on its behalf.
74
Issued as of [ ].
B.A.T. INTERNATIONAL FINANCE p.l.c./
B.A.T. NETHERLANDS FINANCE B.V./
B.A.T CAPITAL CORPORATION 4
| By: |
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| Director
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| Director/Secretary |
Authenticated by
Citibank, N.A., London Branch
as Agent.
| By: |
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| Authorised Officer | ||
| 5Effectuated without recourse, | ||
| Warranty or liability by | ||
as common safekeeper
| By: |
| 4 | Delete whichever are not applicable. |
| 5 | This should only be completed where the Final Terms indicates that this Global Note is intended to be a New Global Note in respect of which effectuation is applicable. |
75
Schedule One6
PART I
INTEREST PAYMENTS
| Date made | Interest Payment Date |
Total amount of interest payable |
Amount of interest paid |
Confirmation of payment by or on behalf of the Issuer | ||||
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| 6 | Schedule One should only be completed where the Final Terms indicates that this Global Note is not intended to be a New Global Note. |
76
PART II
REDEMPTIONS
| Date made | Total amount of principal payable |
Amount of principal paid |
Remaining nominal amount of this Global Note following such redemption7 |
Confirmation of redemption by or on behalf of the Issuer | ||||
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| 7 | See most recent entry in Part II or III or Schedule Two in order to determine this amount. |
77
PART III
PURCHASES AND CANCELLATIONS
| Date made | Part of nominal amount of this Global Note |
Remaining nominal purchase and cancellation 8 |
Confirmation of purchase and cancellation by or on behalf of the Issuer | |||
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| 8 | See most recent entry in Part II or III or Schedule Two in order to determine this amount. |
78
PART 2
FORM OF DEFINITIVE NOTE
THE NOTES COVERED HEREBY HAVE NOT BEEN AND ARE NOT REQUIRED TO BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE NOTES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE NOTES ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S PROMULGATED UNDER THE SECURITIES ACT. THE NOTES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME, OR (II) UNTIL 40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION OF ALL NOTES OF THE TRANCHE OF WHICH THOSE NOTES ARE A PART, AS DETERMINED AND CERTIFIED TO THE DEALERS OR, IN THE CASE OF NOTES ISSUED ON A SYNDICATED BASIS, THE LEAD MANAGER, BY THE AGENT, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S.
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]1
B.A.T. INTERNATIONAL FINANCE p.l.c.
(the Issuer)
(incorporated with limited liability in England and Wales)/
B.A.T. NETHERLANDS FINANCE B.V.
(the Issuer)
(incorporated with limited liability in The Netherlands)/
B.A.T CAPITAL CORPORATION
(the Issuer)
(incorporated with limited liability in the State of Delaware, United States of America)2
unconditionally and irrevocably guaranteed by
BRITISH AMERICAN TOBACCO p.l.c., [ ]3
(each a Guarantor and together the Guarantors)
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
| 1 | Applicable to Notes in bearer form with a maturity of more than one year. |
| 2 | Delete whichever are not applicable. |
| 3 | Insert names of the other Guarantors. |
79
This Note is one of a Series of Notes of [Specified Currency(ies) and Specified Denomination(s)] each of the Issuer (Notes). References herein to the Conditions shall be to the Terms and Conditions [endorsed hereon/set out in Schedule 1 to the Trust Deed (as defined below) which shall be incorporated by reference herein and have effect as if set out herein] as supplemented, replaced and modified by the relevant information (appearing in the Final Terms (the Final Terms)) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Final Terms, such information will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Note. This Note is issued subject to, and with the benefit of, the Conditions and a Trust Deed (such Trust Deed as modified and/or supplemented and/or restated from time to time, the Trust Deed) dated 6 July 1998.
The Issuer, subject to and in accordance with the Conditions and the Trust Deed, promises to pay to the bearer hereof on the Maturity Date or on such earlier date as this Note may become due and repayable in accordance with the Conditions and the Trust Deed, the amount payable on redemption of this Note and to pay interest (if any) on the nominal amount of this Note calculated and payable as provided in the Conditions and the Trust Deed together with any other sums payable under the Conditions and the Trust Deed.
This Note shall not be valid unless authenticated by Citibank, N.A., London Branch as Agent.
IN WITNESS whereof this Note has been executed on behalf of the Issuer.
Issued as of [ ].
B.A.T. INTERNATIONAL FINANCE p.l.c./
B.A.T. NETHERLANDS FINANCE B.V./
B.A.T CAPITAL CORPORATION4
| By: |
| |
| Director | ||
|
Director/Secretary | ||
| Authenticated by Citibank, N.A., London Branch as Agent. | ||
| By: |
| |
| Authorised Officer | ||
| 4 | Delete whichever are not applicable. |
80
[Conditions]
[Conditions to be as set out in Schedule 1 to this Trust Deed or such other form as may be agreed between the Issuer, the Agent, the Trustee and the relevant Dealer(s), but shall not be endorsed if not required by the relevant Stock Exchange]
81
Final Terms
[Here to be set out the text of the relevant information supplementing,
replacing or modifying the Conditions which appears in the Final Terms relating to the Notes]
82
PART 3
FORM OF COUPON
On the front:
B.A.T. INTERNATIONAL FINANCE p.l.c./
B.A.T. NETHERLANDS FINANCE B.V./
B.A.T CAPITAL CORPORATION1
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
Series No. [ ]
[Coupon appertaining to a Note in the denomination of [Specified Currency and Specified Denomination]].2
(Part A)
| [For Fixed Rate Notes:
|
||||||
| This Coupon is payable to bearer, separately | Coupon for | |||||
| negotiable and subject to the Terms and | [ ] | |||||
| Conditions of the said Notes. | due on [ ], [ ]] | |||||
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(Part B)
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||||||
| [For Floating Rate Notes:
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||||||
| Coupon for the amount due in accordance with the Terms and Conditions endorsed on, attached to or incorporated by reference into the said Notes on [the Interest Payment Date falling in [ ] [ ]/[ ]]. | ||||||
| This Coupon is payable to bearer, separately negotiable and subject to such Terms and Conditions, under which it may become void before its due date.] | ||||||
| 1 | Delete whichever are not applicable. |
| 2 | Delete where the Notes are all of the same denomination. |
83
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]3
[B.A.T. INTERNATIONAL FINANCE p.l.c./B.A.T. NETHERLANDS FINANCE B.V./B.A.T CAPITAL CORPORATION 4]
| By: |
| |
| Director | ||
|
Director/Secretary]5 | ||
| 3 | Applicable to Notes in bearer form with a maturity of more than one year. |
| 4 | Delete whichever is not applicable. |
| 5 | Delete if not applicable. |
84
PART 4
FORM OF TALON
On the front:
B.A.T. INTERNATIONAL FINANCE p.l.c./
B.A.T. NETHERLANDS FINANCE B.V./
B.A.T CAPITAL CORPORATION1
[Specified Currency and Nominal Amount of Tranche]
NOTES DUE
[Year of Maturity]
Series No. [ ]
[Talon appertaining to a Note in the denomination of [Specified Currency and Specified Denomination]]2.
On and after [ ] further Coupons [and a further Talon]3 appertaining to the Note to which this Talon appertains will be issued at the specified office of any of the Paying Agents set out on the reverse hereof (and/or any other or further Paying Agents and/or specified offices as may from time to time be duly appointed and notified to the Noteholders) upon production and surrender of this Talon.
This Talon may, in certain circumstances, become void under the Terms and Conditions endorsed on the Note to which this Talon appertains.
THE NOTES COVERED HEREBY HAVE NOT BEEN AND ARE NOT REQUIRED TO BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE NOTES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE NOTES ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S PROMULGATED UNDER THE SECURITIES ACT. THE NOTES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME, OR (II) UNTIL 40 DAYS AFTER THE COMPLETION OF THE DISTRIBUTION OF ALL NOTES OF THE TRANCHE OF WHICH THOSE NOTES ARE A PART, AS DETERMINED AND CERTIFIED TO THE DEALERS OR, IN THE CASE OF NOTES ISSUED ON A SYNDICATED BASIS, THE LEAD MANAGER, BY THE AGENT, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S.
| 1 | Delete whichever are not applicable. |
| 2 | Delete where the Notes are all of the same denomination. |
| 3 | Not required on last Coupon sheet. |
85
[ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.]4
B.A.T. INTERNATIONAL FINANCE p.l.c./B.A.T. NETHERLANDS FINANCE B.V./ B.A.T CAPITAL CORPORATION5]
| By: |
| |
| Director | ||
|
Director/Secretary]6 | ||
| 4 | Applicable to Notes in bearer form with a maturity of more than one year. |
| 5 | Delete whichever is not applicable. |
| 6 | Delete if not applicable. |
86
On the back of Coupons and Talons:
AGENT
Citibank, N.A., London Branch
Citigroup Centre
Canada Square
Canary Wharf
London E14 5LB
OTHER PAYING AGENT
Citibank Europe PLC
1 North Wall Quay
Dublin 1
Ireland
87
SCHEDULE 3
PROVISIONS FOR MEETINGS OF NOTEHOLDERS
| 1. | The following expressions have the following meanings: |
| (a) | voting certificate means a certificate in English issued by a Paying Agent and dated in which it is stated: |
| (i) | that on that date Notes (whether in definitive form or represented by a Global Note and not being Notes in respect of which a block voting instruction has been issued and is outstanding in respect of the meeting specified in such voting certificate or any adjournment of it) were deposited with that Paying Agent (or held to its order at a bank or other depositary) or blocked in an account with a clearing system and that no such Notes will cease to be so deposited or held or blocked until the earlier of: |
| (A) | the conclusion of the meeting specified in such certificate or, if later, any adjournment of it; and |
| (B) | the surrender of the certificate to the Paying Agent which issued it; and |
| (ii) | that its bearer is entitled to attend and vote at such meeting or any adjournment of it in respect of the Notes represented by such certificate; |
| (b) | block voting instruction means a document in English issued by a Paying Agent and dated in which: |
| (i) | it is certified that Notes (whether in definitive form or represented by a Global Note and not being Notes in respect of which a voting certificate has been issued and is outstanding in respect of the meeting specified in such block voting instruction or any adjournment of it) have been deposited with that Paying Agent (or to its order at a bank or other depositary) or blocked in an account with a clearing system and that no such Notes will cease to be so deposited or held or blocked until the earlier of: |
| (A) | the conclusion of the meeting specified in such document or, if later, any adjournment of it; and |
| (B) | the surrender, not less than 48 hours before the time fixed for such meeting or adjournment, of the receipt for each such deposited Note which is to be released to the Paying Agent which issued it or (as the case may be) the Notes ceasing with the agreement of the Paying Agent to be held to its order or under its control or so blocked and the notification of the necessary amendment to the block voting instruction by such Paying Agent to the Issuer; |
| (ii) | it is certified that each holder of such Notes or a duly authorised agent on his behalf has instructed that Paying Agent that the votes attributable to his Notes so deposited or held or blocked should be cast in a particular way in relation to each resolution to be put to such meeting or any adjourned such meeting and that all such instructions are, during the period of 48 hours before the time fixed for such meeting or adjourned meeting, neither revocable nor subject to amendment; |
88
| (iii) | the aggregate nominal amount of the Notes so deposited or held or blocked are listed, distinguishing with regard to each resolution between those in respect of which instructions have been so given (A) to vote for, and (B) to vote against, the resolution; and |
| (iv) | a person named in such document (a proxy) is authorised and instructed by that Paying Agent to vote in respect of the Notes so listed in accordance with the instructions referred to in (iii) above as set out in such document. |
| (c) | Extraordinary Resolution means: |
| (i) | a resolution passed at a duly convened meeting of Noteholders held in accordance with this Trust Deed by a majority of not less than 75 per cent. of the votes cast; |
| (ii) | a resolution in writing executed by or on behalf of the persons holding or representing not less than 75 per cent. of the nominal amount of the Notes for the time being outstanding who would have been entitled to vote if it had been proposed at a meeting at which they were present and may consist of several instruments in like form each executed by or on behalf of one or more Noteholders; or |
| (iii) | consent given by way of electronic consents through the relevant Clearing System(s) (in a form satisfactory to the Trustee) by or on behalf of the holders of not less than 75 per cent. of the nominal amount of the Notes for the time being outstanding. |
| 2. | A holder of a Note (whether in definitive form or represented by a Global Note) may obtain a voting certificate from a Paying Agent or require a Paying Agent to issue a block voting instruction by depositing his Note with such Paying Agent or (to the satisfaction of such Paying Agent) by such Note being held to its order or under its control or being blocked in an account with a clearing system, in each case not later than 48 hours before the time fixed for the relevant meeting. Voting certificates and block voting instructions shall be valid until the relevant Notes cease to be deposited or held or blocked pursuant to paragraph 1 and until then the holder of a voting certificate or (as the case may be) the proxy named in a block voting instruction shall, for all purposes in connection with any meeting or adjourned meeting of Noteholders, be deemed to be the holder of the Notes to which that voting certificate or block voting instruction relates and the Paying Agent with which (or to the order of which) such Notes have been deposited, held or blocked shall be deemed for such purposes not to be the holder of those Notes. |
| 3. | The Issuer, the Guarantors or the Trustee may at any time convene a meeting of Noteholders. If it receives a written request by Noteholders holding at least 10 per cent. of the nominal amount of the Notes for the time being outstanding and is indemnified and/or secured and/or prefunded to its satisfaction against all costs and expenses, the Trustee shall convene a meeting of Noteholders. Whenever any party shall take steps to convene any such meeting it shall give notice to the others of the day, time and place of such meeting and the nature of the business to be transacted thereat as soon as is practicable. Every meeting shall be held at a time and place approved by the Trustee (which need not be a physical place and instead may be held by way of audio or video conference call). |
| 4. | At least 21 days’ notice (exclusive of the day on which the notice is given and of the day of the meeting) shall be given to the Noteholders. A copy of the notice shall be given by the party convening the meeting to the other parties. The notice shall specify the day, time and place of meeting, be given in the manner provided in the Conditions and shall specify, unless the Trustee otherwise agrees, the nature of the resolutions to be proposed and shall include a statement to the effect that Notes may be deposited with or held to the order of or under the control of any Paying Agent or blocked in an account with a clearing system for the purpose of obtaining voting certificates or appointing proxies but not thereafter until 48 hours before the time fixed for the relevant meeting. |
89
| 5. | A person (who may, but need not, be a Noteholder) nominated in writing by the Trustee may act as chairman of a meeting but if no such nomination is made or if the person nominated is not present within 15 minutes after the time fixed for the meeting the Noteholders present shall choose one of their number to be chairman, failing which the Issuer may appoint a chairman. The chairman of an adjourned meeting need not be the same person as the chairman of the original meeting. |
| 6. | A meeting that has been validly convened in accordance with paragraph 3 above, may be cancelled by the person who convened such meeting by giving at least 7 days’ notice (exclusive of the day on which the notice is given and the day of the meeting) to the Noteholders. Any meeting cancelled in accordance with this paragraph 6 shall be deemed not to have been convened. |
| 7. | At a meeting one or more persons present in person holding Definitive Notes or voting certificates or being proxies and holding or representing in the aggregate not less than 10 per cent. of the nominal amount of the Notes for the time being outstanding shall (except for the purpose of passing an Extraordinary Resolution) form a quorum for the transaction of business and no business (other than the choosing of a chairman) shall be transacted unless the requisite quorum be present at the commencement of business. The quorum at a meeting for passing an Extraordinary Resolution shall (subject as provided below) be one or more persons present in person holding Definitive Notes or voting certificates or being proxies and holding or representing in the aggregate a clear majority in nominal amount of the Notes for the time being outstanding provided that the quorum at a meeting the business of which includes consideration of proposals specified in the proviso to paragraph 20 shall be one or more persons present holding Definitive Notes or voting certificates or being proxies and holding or representing in the aggregate not less than three-fourths in nominal amount of the Notes for the time being outstanding. |
| 8. | If within 15 minutes from the time fixed for a meeting a quorum is not present the meeting shall, if convened upon the requisition of Noteholders or if the Issuer and the Trustee agree, be dissolved. In any other case it shall stand adjourned to such date, not less than 14 nor more than 42 days later, and to such place as the chairman may decide. At such adjourned meeting one or more persons present in person holding Definitive Notes or voting certificates or being proxies (whatever the nominal amount of the Notes so held or represented) shall form a quorum and may pass any resolution and decide upon all matters which could properly have been dealt with at the meeting from which the adjournment took place had a quorum been present at such meeting provided that at an adjourned meeting at which an Extraordinary Resolution is to be proposed for the purpose of effecting any of the modifications specified in the proviso to paragraph 20 the quorum shall be one or more persons so present holding Definitive Notes or voting certificates or being proxies and holding or representing in the aggregate not less than one-fourth in nominal amount of the Notes for the time being outstanding. |
| 9. | The chairman may with the consent of (and shall if directed by) a meeting adjourn the meeting from time to time and from place to place but no business shall be transacted at an adjourned meeting which might not lawfully have been transacted at the meeting from which the adjournment took place. |
| 10. | At least 10 days’ notice of a meeting adjourned through want of a quorum shall be given in the same manner as for an original meeting and such notice shall state the quorum required at the adjourned meeting. No notice need, however, otherwise be given of an adjourned meeting. |
| 11. | Each question submitted to a meeting shall be decided in the first instance by a show of hands and in case of equality of votes the chairman shall both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) which he may have as a Noteholder or as a holder of a voting certificate or as a proxy. |
90
| 12. | Unless a poll is (before or on the declaration of the result of the show of hands) demanded at any meeting by the chairman, the Issuer, the Guarantor(s), the Trustee or by one or more persons holding one or more Definitive Notes or voting certificates or being proxies and holding or representing in the aggregate not less than two per cent. in nominal amount of the Notes for the time being outstanding, a declaration by the chairman that a resolution has been carried or carried by a particular majority or lost or not carried by any particular majority shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution. |
| 13. | If a poll is demanded, it shall be taken in such manner and (subject as provided below) either at once or after such adjournment as the chairman directs and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll shall not prevent the continuation of the meeting for the transaction of any business other than the question on which the poll has been demanded. |
| 14. | A poll demanded on the election of a chairman or on a question of adjournment shall be taken at the meeting without adjournment. |
| 15. | The Issuer, the Guarantors and the Trustee (through their respective representatives) and their respective financial and legal advisers may attend and speak at any meeting of Noteholders. No one else may attend or speak at a meeting of Noteholders or have any of the powers exercisable by Noteholders in such meeting or join in requesting or convening such meeting, unless he is the holder of a Definitive Note or a voting certificate or is a proxy. |
| 16. | Subject as provided in paragraph 15 hereof at any meeting: |
| (a) | on a show of hands every person who is present in person and produces a Definitive Note or voting certificate or is a proxy shall have one vote; and |
| (b) | on a poll every person who is so present shall have one vote in respect of each £1 or such other amount as the Trustee may in its absolute discretion stipulate (or, in the case of meetings of holders of Notes denominated in another currency, such amount in such other currency as the Trustee in its absolute discretion may stipulate) in nominal amount of the Definitive Notes so produced or represented by the voting certificate so produced or in respect of which he is a proxy. |
Without prejudice to the obligations of the proxies named in any block voting instruction any person entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way.
| 17. | A proxy need not be a Noteholder. |
| 18. | Each block voting instruction shall be deposited at such place as the Trustee shall designate or approve, at least 24 hours before the time appointed for holding the meeting or adjourned meeting at which the proxy named in the block voting instruction proposes to vote and in default the block voting instruction shall not be treated as valid unless the chairman of the meeting decides otherwise before the meeting or adjourned meeting proceeds to business. A notarially certified copy of each block voting instruction shall if required by the Trustee be produced by the proxy at the meeting or adjourned meeting but the Trustee shall not thereby be obliged to investigate or be concerned with the validity of, or the authority of, the proxy named in a block voting instruction. |
91
| 19. | A vote cast in accordance with the terms of a block voting instruction shall be valid even if the block voting instruction or any of the Noteholders’ instructions pursuant to which it was executed has been previously revoked or amended, unless written intimation of such revocation or amendment is received from the relevant Paying Agent by the Issuer or the Trustee at its registered office (or at such other place as the Trustee shall designate or approve) or by the chairman of the meeting in each case at least 24 hours before the time fixed for the meeting or adjourned meeting at which the block voting instruction is used. |
| 20. | A meeting of Noteholders shall, subject to the Conditions, in addition to the powers given above, but without prejudice to any powers conferred on other persons by this Trust Deed, have power exercisable by Extraordinary Resolution: |
| (a) | to sanction any proposal by the Issuer, any of the Guarantors or the Trustee for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Noteholders and/or the Couponholders against the Issuer or any of the Guarantors whether or not these rights arise under this Trust Deed; |
| (b) | to sanction the exchange or substitution for the Notes of, or the conversion of the Notes into, shares, bonds, or other obligations or securities of the Issuer, any of the Guarantors or any other entity; |
| (c) | to assent to any modification of this Trust Deed which shall be proposed by the Issuer, any of the Guarantors or the Trustee; |
| (d) | to authorise anyone to concur in and do anything necessary to carry out and give effect to an Extraordinary Resolution; |
| (e) | to give any authority, direction or sanction required to be given by Extraordinary Resolution; |
| (f) | to appoint any persons (whether Noteholders or not) as a committee or committees to represent the interests of the Noteholders and to confer upon them any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution; |
| (g) | to approve a proposed new Trustee and to remove a Trustee; |
| (h) | to approve the substitution of any entity for the Issuer or any of the Guarantors (or any previous substitute) as principal debtor or guarantor under this Trust Deed; and |
| (i) | to discharge or exonerate the Trustee and/or any Appointee from any liability in respect of any act or omission for which it may become responsible under this Trust Deed; |
provided that the special quorum provisions contained in the proviso to paragraph 7 and, in the case of an adjourned meeting, in the proviso to paragraph 8 shall apply to any Extraordinary Resolution in relation to any of the matters specified in paragraph 20(b) or (h) or for the purpose of making any modification to this Trust Deed (each of which shall only be capable of being effected after having been approved by an Extraordinary Resolution) which would have the effect of:
| (i) | changing the date of maturity of the Notes or the dates on which interest is payable in respect of the Notes; or |
| (ii) | reducing or cancelling the amount of principal of, or the rate of interest payable in respect of, the Notes; or |
| (iii) | changing the currency of payment of the Notes or Coupons; or |
92
| (iv) | modifying the provisions hereof relating to the quorum required at meetings of the Noteholders or the majority required to pass (whether at such meeting or by writing) an Extraordinary Resolution; or |
| (v) | amending this proviso. |
| 21. | Any procedural resolution passed at a meeting of Noteholders duly convened and held in accordance with this Trust Deed and an Extraordinary Resolution duly passed in accordance with this Trust Deed shall be binding on all the Noteholders, whether or not present at the meeting, and on all the Couponholders and each of them shall be bound to give effect to it accordingly. The passing of such a resolution shall be conclusive evidence that the circumstances of such resolution justify the passing of it. The Issuer shall give notice of the passing of an Extraordinary Resolution to Noteholders as soon as practicable after it has been passed but failure to do so shall not invalidate the resolution. |
| 22. | Minutes shall be made of all resolutions and proceedings at every meeting and, if purporting to be signed by the chairman of that meeting or of the next succeeding meeting of Noteholders, shall be conclusive evidence of the matters in them. Until the contrary is proved every meeting for which minutes have been so made and signed shall be deemed to have been duly convened and held and all resolutions passed or proceedings transacted at it to have been duly passed and transacted. |
| 23. | Subject to the following sentence, a Written Resolution may be contained in one document or in several documents in like form, each signed by or on behalf of one or more such Noteholders. |
For so long as the Notes are in the form of a Global Note held on behalf of one or more of Euroclear, Clearstream, Luxembourg or another clearing system, then, in respect of any resolution proposed by the relevant Issuer or the Trustee:
| (a) | where the terms of the resolution proposed by the Issuer, the Guarantor or the Trustee (as the case may be) have been notified to the Noteholders through the relevant clearing system(s) as provided in sub-paragraphs (i) and/or (ii) below, each of the Issuer, the Guarantor and the Trustee shall be entitled to rely upon approval of such resolution given by way of electronic consents communicated through the electronic communications systems of the relevant clearing system(s) to the Principal Paying Agent or another specified agent and/or the Trustee in accordance with their operating rules and procedures by or on behalf of the holders of not less than 75 per cent. in nominal amount of the Notes outstanding (the Required Proportion) (Electronic Consent) by close of business on the Relevant Date. Any resolution passed in such manner shall be binding on all Noteholders and Couponholders, even if the relevant consent or instruction proves to be defective. None of the Issuer, the Guarantor or the Trustee shall be liable or responsible to anyone for such reliance. |
| (i) | When a proposal for a resolution to be passed as an Electronic Consent has been made, at least 10 days’ notice (exclusive of the day on which the notice is given and of the day on which affirmative consents will be counted) shall be given to the Noteholders through the relevant clearing system(s). The notice shall specify, in sufficient detail to enable Noteholders to give their consents in relation to the proposed resolution, the method by which their consents may be given (including, where applicable, blocking of their accounts in the relevant clearing system(s)) and the time and date (the Relevant Date) by which they must be received in order for such consents to be validly given, in each case subject to and in accordance with the operating rules and procedures of the relevant clearing system(s). |
93
| (ii) | If, on the Relevant Date on which the consents in respect of an Electronic Consent are first counted, such consents do not represent the Required Proportion, the resolution shall, if the party proposing such resolution (the Proposer) so determines, be deemed to be defeated. Such determination shall be notified in writing to the other party or parties to this Trust Deed. Alternatively, the Proposer may give a further notice to Noteholders that the resolution will be proposed again on such date and for such period as shall be agreed with the Trustee (unless the Trustee is the Proposer). Such notice must inform Noteholders that insufficient consents were received in relation to the original resolution and the information specified in sub-paragraph (i) above. For the purpose of such further notice, references to “Relevant Date” shall be construed accordingly. |
For the avoidance of doubt, an Electronic Consent may only be used in relation to a resolution proposed by the Issuer , the Guarantor or the Trustee which is not then the subject of a meeting that has been validly convened in accordance with paragraph 3 above, unless that meeting is or shall be cancelled or dissolved; and
| (b) | where Electronic Consent is not being sought, for the purpose of determining whether a Written Resolution has been validly passed, the relevant Issuer, the Guarantor and the Trustee shall be entitled to rely on consent or instructions given in writing directly to the relevant Issuer, the Guarantor and/or the Trustee, as the case may be, (a) by accountholders with entitlements to such Global Note or, (b) where the accountholders hold any such entitlement on behalf of another person, on written consent from or written instruction by the person identified by that accountholder or the person for whom such entitlement is held. For the purpose of establishing the entitlement to give any such consent or instruction, the Issuer, the Guarantor and the Trustee shall be entitled to rely on any certificate or other document issued by, in the case of (a) above, Euroclear, Clearstream, Luxembourg or any other relevant alternative clearing system (the relevant clearing system) and, in the case of (b) above, the relevant clearing system and the person identified by the relevant clearing system for the purposes of (b) above. Any resolution passed in such manner shall be binding on all Noteholders and Couponholders, even if the relevant consent or instruction proves to be defective. Any such certificate or other document shall be conclusive and binding for all purposes. Any such certificate or other document may comprise any form of statement or print out of electronic records provided by the relevant clearing system (including Euroclear’s Easy-Way or Clearstream, Luxembourg’s CreationOnline system) in accordance with its usual procedures and in which the accountholder of a particular principal or nominal amount of the Notes is clearly identified together with the amount of such holding. Neither the relevant Issuer, the Guarantor nor the Trustee shall be liable to any person by reason of having accepted as valid or not having rejected any certificate or other document to such effect purporting to be issued by any such person and subsequently found to be forged or not authentic. |
Each Written Resolution and each Electronic Consent shall for all purposes be as valid and effectual as an Extraordinary Resolution passed at a meeting of such Noteholders duly convened and held in accordance with the provision contained herein. Each Written Resolution and each Electronic Consent will be binding on all Noteholders and holders of Coupons and Talons, whether or not they participated in such Written Resolution or Electronic Consent.
| 24. | (a) | If and whenever the Issuer shall have issued and have outstanding Notes of more than one Series the foregoing provisions of this Schedule shall have effect subject to the following modifications: |
| (i) | a resolution which in the opinion of the Trustee affects the Notes of one Series only shall be deemed to have been duly passed if passed at a meeting (or by a resolution in writing or by a resolution passed by way of consents received through the relevant Clearing System(s)) of the holders of the Notes of that Series; |
94
| (ii) | a resolution which in the opinion of the Trustee affects the Notes of more than one Series but does not give rise to a conflict of interests between the holders of Notes of any of the Series so affected shall be deemed to have been duly passed if passed at a single meeting (or by a single resolution in writing or by a single resolution passed by way of consents received through the relevant Clearing System(s)) of the holders of the Notes of all the Series so affected; |
| (iii) | a resolution which in the opinion of the Trustee affects the Notes of more than one Series and gives or may give rise to a conflict of interests between the holders of the Notes of one Series or group of Series so affected shall be deemed to have been duly passed only if passed at separate meetings (or by separate resolutions in writing or by separate resolutions passed by way of consents received through the relevant Clearing System(s)) of the holders of the Notes of each Series or group of Series so affected; and |
| (iv) | to all such meetings as aforesaid all the preceding provisions of this Schedule shall mutatis mutandis apply as though references therein to Notes and Noteholders were references to the Notes of the Series or group of Series in question and to the holders of such Notes respectively. |
| (b) | If the Issuer shall have issued and have outstanding Notes which are not denominated in pounds sterling in the case of any meeting of holders of Notes of more than one currency the principal amount of such Notes shall (i) for the purposes of paragraph 3 above be the equivalent in pounds sterling at the spot rate of a bank nominated by the Trustee for the conversion of the relevant currency or currencies into pounds sterling on the seventh dealing day prior to the day on which the requisition in writing is received by the Issuer and (ii) for the purposes of paragraphs 7, 8 and 16 above (whether in respect of the meeting or any adjourned such meeting or any poll resulting therefrom) be the equivalent at such spot rate on the seventh dealing day prior to the day of such meeting. In such circumstances, on any poll each person present shall have one vote for each £1 (or such other pounds sterling amount as the Trustee may in its absolute discretion stipulate) in principal amount of the Notes (converted as above) which he holds or represents. |
| 25. | Subject to all other provisions of this Trust Deed, the Trustee may, without the consent of the Noteholders or the Couponholders, prescribe such further regulations regarding the holding of meetings and attendance and voting at them as the Trustee may in its sole discretion determine including (without limitation) such regulations and requirements as the Trustee thinks reasonable (a) to satisfy itself that the persons who purport to make any requisition in accordance with this Trust Deed are entitled to do so; (b) as to the form of voting certificates or block voting instructions so as to satisfy itself that persons who purport to attend or vote at a meeting are entitled to do so; (c) as to the attendance and voting by persons beneficially entitled to interests in the Global Note without the need for them to hold Definitive Notes; (d) where the Trustee has determined that a resolution may properly be put to a meeting of the holders of the Notes of more than one Series issued in different denominations and/or different currencies, as to the weighting of the votes attributable to each such series; (e) so as to satisfy itself that persons who have purported to sign a resolution in writing to constitute an Extraordinary Resolution were in fact Noteholders and holders of different Notes; and (f) as to the holding of meetings by audio or video conference call in circumstances where it may be impractical or inadvisable to hold physical meetings. |
95
SIGNATORIES
| EXECUTED as a DEED by |
) | |||
| B.A.T. INTERNATIONAL FINANCE p.l.c. |
) | |||
| acting by |
) | |||
| and |
) | |||
| EXECUTED as a DEED by |
) | |||
| B.A.T CAPITAL CORPORATION |
) | |||
| acting by |
) | |||
| and |
) | |||
| EXECUTED as a DEED by |
) | |||
| B.A.T. NETHERLANDS FINANCE B.V. |
) | |||
| acting by |
) | |||
| and |
) | |||
| EXECUTED as a DEED by |
) | |||
| BRITISH AMERICAN TOBACCO p.l.c. |
) | |||
| acting by |
||||
| THE COMMON SEAL of |
) | |||
| THE LAW DEBENTURE TRUST |
) | |||
| CORPORATION p.l.c. |
) | |||
| was affixed to this DEED |
) | |||
| in the presence of: |
) | |||
| Director |
| Authorised Signatory |
96
6 JULY 1998 AND MODIFIED AND RESTATED
ON 17 MARCH 2022
B.A.T. INTERNATIONAL FINANCE p.l.c.
and
B.A.T. NETHERLANDS FINANCE B.V.
and
B.A.T CAPITAL CORPORATION
and
BRITISH AMERICAN TOBACCO p.l.c.
and
THE LAW DEBENTURE TRUST CORPORATION
p.l.c.
relating to a
£25,000,000,000
Euro Medium Term Note Programme
TRUST DEED
Allen & Overy LLP
SIGNATORIES TO THE THIRTY-FOURTH SUPPLEMENTAL TRUST DEED
| EXECUTED as a DEED by | ) | |||
| B.A.T. INTERNATIONAL FINANCE p.l.c. | ) |
| ||
| acting by N WADEY | ) | |||
| and R.WILSON | ) |
| ||
| EXECUTED as a DEED by | ) | |||
| B.A.T. NETHERLANDS FINANCE B.V. |
) | |||
| acting by | ) | |||
| and | ) | |||
| EXECUTED as a DEED by | ) | |||
| B.A.T CAPITAL CORPORATION |
) | |||
| acting by | ) | |||
| and | ) | |||
| EXECUTED as a DEED by | ) | |||
| BRITISH AMERICAN TOBACCO p.l.c. | ) | |||
| acting by Tadeu Marroco | ) |
| ||
| and Paul McCrory | ) |
| ||
BAT Signature Page to Thirty-Fourth Supplemental Trust Deed
SIGNATORIES TO THE THIRTY-FOURTH SUPPLEMENTAL TRUST DEED
| EXECUTED as a DEED by | ) | |||
| B.A.T. INTERNATIONAL FINANCE p.l.c. | ) | |||
| acting by | ) | |||
| and | ) | |||
| EXECUTED as a DEED by | ) |
| ||
| B.A.T. NETHERLANDS FINANCE B.V. |
) | |||
| acting by JEPBollen | ) |
| ||
| and HMJ LINE | ) | |||
| EXECUTED as a DEED by | ) | |||
| B.A.T CAPITAL CORPORATION |
) | |||
| acting by | ) | |||
| and | ) | |||
| EXECUTED as a DEED by | ) | |||
| BRITISH AMERICAN TOBACCO p.l.c. | ) | |||
| acting by | ) | |||
| and | ) | |||
BAT Signature Page to Thirty-Fourth Supplemental Trust Deed
SIGNATORIES TO THE THIRTY-FOURTH SUPPLEMENTAL TRUST DEED
| EXECUTED as a DEED by | ) | |||
| B.A.T. INTERNATIONAL FINANCE p.l.c. | ) | |||
| acting by | ) | |||
| and | ) | |||
| EXECUTED as a DEED by | ) | |||
| B.A.T. NETHERLANDS FINANCE B.V. |
) | |||
| acting by | ) | |||
| and | ) | |||
| EXECUTED as a DEED by | ) | |||
| B.A.T CAPITAL CORPORATION |
) | |||
| acting by N.Wadey, Director | ) |
| ||
| and B. Harrison, Secretary | ) |
| ||
| EXECUTED as a DEED by | ) | |||
| BRITISH AMERICAN TOBACCO p.l.c. | ) | |||
| acting by | ) | |||
| and | ) | |||
BAT Signature Page to Thirty-Fourth Supplemental Trust Deed
| EXECUTED as a DEED by | ) | |||
| THE LAW DEBENTURE TRUST | ) | |||
| CORPORATION p.l.c. in the | ) | |||
| presence of: | ) | |||
| Director: |
|
| Representing Law Debenture Corporate Services Limited, Secretary: |
|
Trustee Signature Page to Thirty-Fourth Supplemental Trust Deed
Table of Contents
Exhibit 4.2
BRITISH AMERICAN TOBACCO P.L.C.
B.A.T CAPITAL CORPORATION
B.A.T. INTERNATIONAL FINANCE P.L.C.
as the Issuers
[FORM OF] INDENTURE
Dated as of [ ]
BRITISH AMERICAN TOBACCO P.L.C.
as Guarantor of the Notes issued by B.A.T Capital Corporation and
B.A.T. International Finance p.l.c.
CITIBANK, N.A.
as Trustee
CITIBANK, N.A.
as Authentication Agent, Paying Agent, Transfer Agent, Registrar and Calculation Agent
Table of Contents
BRITISH AMERICAN TOBACCO P.L.C.
B.A.T CAPITAL CORPORATION
B.A.T. INTERNATIONAL FINANCE P.L.C.
Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and Indenture.
| Trust Indenture Act Section | Indenture Section | |||
| §310 | (a)(1) | 6.09 | ||
| (a)(2) | 6.09 | |||
| (a)(3) | Not Applicable | |||
| (a)(4) | Not Applicable | |||
| (b) | 6.03, 6.07, 6.09 | |||
| §311 | (a) | 6.11 | ||
| (b) | 6.09, 6.11 | |||
| §312 | (a) | 2.06 | ||
| (b) | 10.04 | |||
| (c) | 10.04 | |||
| §313 | (a) | 6.10 | ||
| (b) | 6.10 | |||
| (c) | 6.10 | |||
| (d) | 6.10 | |||
| §314 | (a) | 4.03(a) | ||
| (a)(4) | 4.12 | |||
| (b) | Not Applicable | |||
| (c)(1) | 10.02(a) | |||
| (c)(2) | 10.02(b) | |||
| (c)(3) | Not Applicable | |||
| (d) | Not Applicable | |||
| (e) | 10.03 | |||
| §315 | (a) | 6.01(b) | ||
| (b) | 6.05 | |||
| (c) | 6.01(a) | |||
| (d) | 6.01(c) | |||
| (d)(1) | 6.01(c)(1) | |||
| (d)(2) | 6.01(c)(2) | |||
| (d)(3) | 6.01(c)(3) | |||
| (e) | 5.11 | |||
| §316 | (a)(1)(A) | 5.02, 5.05 | ||
| (a)(1)(B) | 5.04 | |||
| (a)(2) | Not Applicable | |||
| (a)(last sentence) | 2.10 | |||
| (b) | 5.07 | |||
| (c) | 7.03 | |||
Table of Contents
| Trust Indenture Act Section | Indenture Section | |||
| §317 | (a)(1) | 5.08 | ||
| (a)(2) | 5.09 | |||
| (b) | 2.04, 4.05 | |||
| §318 | (a) | 1.04 | ||
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
Table of Contents
| Page | ||||||
| ARTICLE I |
1 | |||||
| SECTION 1.01. |
1 | |||||
| SECTION 1.02. |
6 | |||||
| SECTION 1.03. |
7 | |||||
| SECTION 1.04. |
7 | |||||
| ARTICLE II |
8 | |||||
| SECTION 2.01. |
8 | |||||
| SECTION 2.02. |
11 | |||||
| SECTION 2.03. |
12 | |||||
| SECTION 2.04. |
12 | |||||
| SECTION 2.05. |
13 | |||||
| SECTION 2.06. |
13 | |||||
| SECTION 2.07. |
14 | |||||
| SECTION 2.08. |
14 | |||||
| SECTION 2.09. |
15 | |||||
| SECTION 2.10. |
15 | |||||
| SECTION 2.11. |
16 | |||||
| SECTION 2.12. |
16 | |||||
| SECTION 2.13. |
16 | |||||
| SECTION 2.14. |
16 | |||||
| SECTION 2.15. |
17 | |||||
| SECTION 2.16. |
17 | |||||
| SECTION 2.17. |
19 | |||||
| ARTICLE III |
19 | |||||
| SECTION 3.01. |
19 | |||||
| SECTION 3.02. |
19 | |||||
| SECTION 3.03. |
19 | |||||
| SECTION 3.04. |
20 | |||||
| SECTION 3.05. |
21 | |||||
| SECTION 3.06. |
21 | |||||
| SECTION 3.07. |
21 | |||||
| ARTICLE IV |
23 | |||||
| SECTION 4.01. |
23 | |||||
| SECTION 4.02. |
23 | |||||
| SECTION 4.03. |
23 | |||||
| SECTION 4.04. |
24 | |||||
| SECTION 4.05. |
24 | |||||
| SECTION 4.06. |
25 | |||||
i
Table of Contents
| SECTION 4.07. |
25 | |||||
| SECTION 4.08. |
26 | |||||
| SECTION 4.09. |
29 | |||||
| SECTION 4.10. |
Limitation on Mergers, Consolidations, Amalgamations and Combinations |
30 | ||||
| SECTION 4.11. |
31 | |||||
| SECTION 4.12. |
31 | |||||
| SECTION 4.13. |
Mutual Undertaking Regarding Information Reporting and Collection Obligations |
31 | ||||
| SECTION 4.14. |
32 | |||||
| SECTION 4.15. |
32 | |||||
| ARTICLE V |
32 | |||||
| SECTION 5.01. |
32 | |||||
| SECTION 5.02. |
35 | |||||
| SECTION 5.03. |
36 | |||||
| SECTION 5.04. |
36 | |||||
| SECTION 5.05. |
37 | |||||
| SECTION 5.06. |
37 | |||||
| SECTION 5.07. |
37 | |||||
| SECTION 5.08. |
37 | |||||
| SECTION 5.09. |
38 | |||||
| SECTION 5.10. |
38 | |||||
| SECTION 5.11. |
39 | |||||
| SECTION 5.12. |
39 | |||||
| ARTICLE VI |
39 | |||||
| SECTION 6.01. |
39 | |||||
| SECTION 6.02. |
40 | |||||
| SECTION 6.03. |
42 | |||||
| SECTION 6.04. |
42 | |||||
| SECTION 6.05. |
43 | |||||
| SECTION 6.06. |
43 | |||||
| SECTION 6.07. |
45 | |||||
| SECTION 6.08. |
45 | |||||
| SECTION 6.09. |
46 | |||||
| SECTION 6.10. |
46 | |||||
| SECTION 6.11. |
46 | |||||
| ARTICLE VII |
47 | |||||
| SECTION 7.01. |
47 | |||||
| SECTION 7.02. |
48 | |||||
| SECTION 7.03. |
50 | |||||
| SECTION 7.04. |
50 | |||||
ii
Table of Contents
| SECTION 7.05. |
50 | |||||
| ARTICLE VIII |
51 | |||||
| SECTION 8.01. |
Satisfaction and Discharge of Liability on Notes; Defeasance |
51 | ||||
| SECTION 8.02. |
53 | |||||
| SECTION 8.03. |
Deposited Money and Government Obligations To Be Held in Trust; Other Miscellaneous Provisions |
54 | ||||
| SECTION 8.04. |
54 | |||||
| SECTION 8.05. |
54 | |||||
| SECTION 8.06. |
55 | |||||
| ARTICLE IX |
55 | |||||
| SECTION 9.01. |
55 | |||||
| SECTION 9.02. |
57 | |||||
| SECTION 9.03. |
57 | |||||
| SECTION 9.04. |
57 | |||||
| SECTION 9.05. |
57 | |||||
| SECTION 9.06. |
57 | |||||
| SECTION 9.07. |
57 | |||||
| ARTICLE X |
58 | |||||
| SECTION 10.01. |
58 | |||||
| SECTION 10.02. |
60 | |||||
| SECTION 10.03. |
61 | |||||
| SECTION 10.04. |
61 | |||||
| SECTION 10.05. |
61 | |||||
| SECTION 10.06. |
No Personal Liability of Directors, Officers, Employees and Stockholders |
61 | ||||
| SECTION 10.07. |
61 | |||||
| SECTION 10.08. |
62 | |||||
| SECTION 10.09. |
62 | |||||
| SECTION 10.10. |
62 | |||||
| SECTION 10.11. |
62 | |||||
| SECTION 10.12. |
63 | |||||
| SECTION 10.13. |
63 | |||||
| SECTION 10.14. |
63 | |||||
NOTE: This table of contents shall not, for any purpose, be deemed to be a part of the Indenture.
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INDENTURE, dated as of [ ], among BRITISH AMERICAN TOBACCO P.L.C., a public limited company incorporated under the laws of England and Wales, as issuer and guarantor (when it is not the issuer of the relevant series of Notes), B.A.T CAPITAL CORPORATION, a Delaware corporation, as issuer, B.A.T. INTERNATIONAL FINANCE P.L.C., a public limited company incorporated under the laws of England and Wales, as issuer, and CITIBANK, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the Notes are first issued.
Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Notes.
Definitions and Incorporation by Reference
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person.
“Agent” means any Authentication Agent, Paying Agent, Transfer Agent, Registrar or Calculation Agent (each, an “Agent” and collectively, the “Agents”).
“amend” means amend, modify, supplement, restate or amend and restate, including successively; and “amending” and “amended” have correlative meanings.
“Applicable Law” means any applicable law or regulation.
“Authority” means any competent regulatory, prosecuting, Tax or governmental authority in any jurisdiction.
“Bankruptcy Law” means Title 11, United States Code, or any similar U.S. Federal or state law, the UK Insolvency Act 1986, as amended and as supplemented by the Insolvency (England and Wales) Rules 2016, or law of any other jurisdiction relating to bankruptcy, insolvency, winding-up, liquidation, reorganization or relief of debtors.
“BAT” means British American Tobacco p.l.c., a public limited company incorporated under the laws of England and Wales, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
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“BAT Group” means the Parent and its subsidiaries, collectively.
“BATCAP” means B.A.T Capital Corporation, a Delaware corporation, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
“BATIF” means B.A.T. International Finance p.l.c., a public limited company incorporated under the laws of England and Wales, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
“BATNF” means B.A.T. Netherlands Finance B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
“Board of Directors”, when used with reference to any Issuer, means either the board of directors of such Issuer or any duly authorized committee of such board.
“Board Resolution”, when used with reference to any Issuer, means a copy of a resolution or appropriate record of action taken pursuant to such resolution, certified by a member of the Board of Directors, the Secretary, Assistant Secretary or Deputy Secretary (or equivalent of any of the foregoing) of such Issuer to have been duly adopted by the Board of Directors of such Issuer and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day” means any day which is not, in London or New York City, or any other place of payment, a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized or obligated by law or regulation to close.
“Calculation Agent” means Citibank, N.A., as calculation agent.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Commission” means the U.S. Securities and Exchange Commission.
“Company Order” means a written request or order signed in the name of the Issuer of the relevant series of Notes by any Officer, and delivered to the Trustee or any Agent, as applicable.
“Corporate Trust Office of the Trustee/Paying Agent” means (i) with respect to the Trustee and any Paying Agent appointed for Notes of a series denominated in Dollars, the office of the Trustee at which at any particular time its corporate trust business shall be administered, which office as of the date of this Indenture is (a) solely for purposes of surrender for registration of transfer or exchange or for presentation for payment or repurchase or for conversion is located at 480 Washington Boulevard, 30th Floor, Jersey City, New Jersey, Attention: Agency & Trust – [A reference to the Issuer of the relevant series of Notes], and (b) for all other purposes is located at 388 Greenwich Street, New York, New York 10013, Attention: Agency & Trust – [A reference to the Issuer of the relevant series of Notes], or such
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other address as the Trustee may designate from time to time by notice to the relevant Holders and such Issuer and (ii) with respect to any Paying Agent appointed for Notes of a series denominated in any Non-Dollar Currency, the office of such Paying Agent as notified in writing by such Paying Agent to the Issuer of the relevant series of Notes.
“corporation” includes corporations, associations, companies (including any limited liability company), business trusts and limited partnerships.
“Default” means any event which is, or after notice or passage of time or both would be, an Event of Default.
“Depositary” means, with respect to the Notes of any series issuable or issued in whole or in part in global form, the Person specified pursuant to Section 2.01 as the initial Depositary with respect to the Notes of such series, until a successor shall have been appointed and become such pursuant to the applicable provision of this Indenture, and thereafter “Depositary” shall mean or include such successor.
“Dollar” and “$” each refer to United States dollars, or such other money of the United States that at the time of payment is legal tender for payment of public and private debts.
“EMTN Programme” means the Euro Medium Term Note Programme to which BATIF, BATCAP and BATNF are parties as the issuers under the programme and notes issued thereunder are guaranteed by the Parent, each of the issuers thereunder (except when it is the relevant issuer) and RAI, as amended from time to time.
“Event of Default” has the meaning set forth in Section 5.01.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated by the Commission thereunder.
“Government Obligations” means, with respect to a series of Notes, direct obligations of the government that issues the currency in which the Notes of the series are payable for the payment of which the full faith and credit of such government is pledged, or obligations of a Person controlled or supervised by and acting as an agency or instrumentality of such government, the payment of which is unconditionally guaranteed as a full faith and credit obligation by such government.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” means the guarantee of any Guarantor given under Sections 9.01 and 9.07.
“Guarantors” means, until released in accordance with the terms of this Indenture (if ever), the Parent, except when it is the relevant Issuer, and any other Person that becomes a
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guarantor from time to time hereto pursuant to the terms hereof, until a successor replaces the Parent or any such other Person in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
“Holder” means the Person in whose name a Note is registered on the Note register.
“IFRS” means international financial reporting standards as issued by the International Accounting Standards Board and endorsed from time to time by the United Kingdom or any variation thereof with which the Issuers or any Guarantor are, or may be, required to comply.
“Indenture” means this Indenture as amended or supplemented from time to time pursuant to the provisions hereof, and includes the terms of a particular series of Notes established as contemplated by Section 2.01.
“interest” means, unless the context otherwise requires, interest payable on any Notes, and with respect to an Original Issue Discount Note that by its terms bears interest only after maturity, interest payable after maturity.
“Interest Payment Date,” with respect to any Note, has the meaning assigned to such term in the Officer’s Certificate or any supplemental indenture setting forth the terms of such Note, as contemplated by Section 2.01.
“Issuers” means the Persons named as issuers in the introductory paragraph hereto, and any other Person that becomes an issuer from time to time hereto pursuant to the terms hereof, until a successor replaces such Person in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
“Maturity Date,” when used with respect to any Note, means the date on which the principal amount of such Note becomes due and payable as therein or herein provided.
“Non-Dollar Currency” means any currency other than Dollars.
“Notes” means securities evidencing any Issuer’s unsecured indebtedness issued in one or more series from time to time under this Indenture.
“Officer” means any director, any manager, the chief executive officer, the chief financial officer, the president or a vice president, the treasurer, an assistant treasurer, the controller, the secretary or an assistant secretary (or equivalent) of the specified Person or any individual authorized by the Board of Directors to sign documents or otherwise act on behalf of such Person.
“Officer’s Certificate” means a certificate signed by an Officer of any Issuer and delivered to the Trustee.
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“Opinion of Counsel” means a written opinion from legal counsel, who is acceptable to the Trustee, delivered to the Trustee. The counsel may be an employee of, or counsel to, any Issuer.
“Original Issue Discount” means “original issue discount” within the meaning of Section 1273(a) of the Code and Treasury Regulations promulgated thereunder or original issue discount for United States federal income tax purposes, as the context requires.
“Original Issue Discount Note” means any Note that is issued with Original Issue Discount.
“Parent” means BAT.
“Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Physical Notes” means certificated Notes (other than Global Notes) in registered form.
“Place of Payment,” when used with respect to the Notes, means the place or places where the principal of (and premium, if any) and interest on the Notes are payable as specified as contemplated by Section 4.02.
“Quoted Borrowing” means any indebtedness which: (i) is represented by notes, debentures or other securities issued otherwise than to constitute or represent advances made by banks and/or other lending institutions; (ii) is denominated, or confers any right to payment of principal and/or interest, in or by reference to any currency other than the currency of the country in which the issuer of the indebtedness has its principal place of business or is denominated, or confers any right to payment of principal and/or interest, in or by reference to the currency of such country but is sold or subscribed by or on behalf of, or by agreement with, the issuer of such indebtedness as to over 20% outside such country; and (iii) at its date of issue is, or is intended by the issuer of such indebtedness to become, quoted, listed, traded or dealt in on any stock exchange or other organized and regulated securities market in any part of the world.
“RAI” means Reynolds American Inc., a North Carolina corporation, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder and any and all successors thereto hereunder.
“Redemption Date,” when used with respect to any Note to be redeemed pursuant to Article III of this Indenture, means the date fixed for such redemption pursuant to the terms of such Article III.
“Redemption Price,” when used with respect to any Note to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
“Responsible Officer” means, when used with respect to the Trustee, any officer of the Trustee within the Corporate Trust Group (or any successor unit) of the Trustee located at
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the Corporate Trust Office of the Trustee/Paying Agent who has direct responsibility for the administration of this Indenture and shall also mean any other officer of the Trustee to whom any corporate trust matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
“Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated by the Commission thereunder.
“series” refers to any separate series of Notes issued under this Indenture.
“Stated Maturity” means, when used with respect to any indebtedness or any installment of interest thereon, the dates specified in such indebtedness as the fixed date on which the principal of such indebtedness or such installment of interest, as the case may be, is due and payable.
“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) or any successor statute, and the rules and regulations promulgated by the Commission thereunder.
“Trustee” means, unless otherwise specified in accordance with Section 2.01(l), Citibank, N.A., until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.
“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.
SECTION 1.02. Other Definitions.
| Term |
Defined in Section | |||
| “Additional Amounts” |
4.08 | |||
| “Authentication Agent” |
2.03 | |||
| “Agent Member” |
2.16 | |||
| “Change in Tax Law” |
3.07 | |||
| “Covenant Defeasance” |
8.01 | |||
| “Exchange Rate” |
2.09 | |||
| “FATCA Withholding” |
4.08 | |||
| “Global Notes” |
2.16 | |||
| “Legal Defeasance” |
8.01 | |||
| “Paying Agent” |
2.04 | |||
| “Registrar” |
2.04 | |||
| “Relevant Taxing Jurisdiction” |
4.08 | |||
| “Subsidiary Guarantor” |
9.07 | |||
| “Subsidiary Issuers” |
9.01 | |||
| “Taxes” |
4.08 | |||
| “Transfer Agent” |
2.04 | |||
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SECTION 1.03. Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it herein, whether defined expressly or by reference;
(b) unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with IFRS;
(c) “or” is not exclusive;
(d) words in the singular include the plural, and in the plural include the singular;
(e) “will” shall be interpreted to express a command;
(f) words used herein implying any gender shall apply to both genders;
(g) “herein,” “hereof,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subsection;
(h) “£” and “pounds sterling” each refer to British pounds sterling, or such other money of the United Kingdom that at the time of payment is legal tender for payment of public and private debts;
(i) references to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the Commission from time to time;
(j) references to Sections, Articles or Exhibits are references to Sections, Articles or Exhibits of or to this Indenture unless context otherwise requires; and
(k) references to the payment of principal amount of Notes shall, in the case of Original Issue Discount Notes, be read as payment of such portion of principal amount as may be specified in the terms of such series.
SECTION 1.04. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the portion of such provision required to be incorporated herein in order for this Indenture to be qualified under the TIA is incorporated by reference in and made a part of this Indenture, mutatis mutandis. The following TIA terms have the following meanings used in this Indenture:
“indenture securities” means the Notes.
“indenture to be qualified” means this Indenture.
“indenture trustee” means the Trustee.
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“obligor on this indenture securities” means any Issuer or any other obligor on the Notes.
All other terms used in this Indenture (other than those defined herein) that are defined by the TIA, defined in the TIA by reference to another statute or defined by Commission rule have the meanings therein assigned to them.
If any provision hereof limits, qualifies or conflicts with the duties imposed by any of Sections 310 through 317, inclusive, of the TIA through the operation of Section 318(c) thereof, such imposed duties shall control.
The Notes
SECTION 2.01. Amount of Notes. The aggregate principal amount of Notes that may be authenticated by the applicable Authentication Agent and delivered under this Indenture is unlimited.
The Notes may be issued by any of BAT, BATCAP or BATIF in one or more series for original issue. There shall be established in or pursuant to authority granted by one or more Board Resolutions of the Issuer of the relevant series of Notes and set forth in an Officer’s Certificate or established in one or more indentures supplemental hereto, prior to the issuance of any series of Notes, all or any of the following, as applicable (each of which, if so provided, may be determined from time to time by the relevant Issuer with respect to unissued Notes of that series and set forth in the Notes of that series when issued from time to time):
(a) the title of the Notes of that series (which shall distinguish the Notes of that series from all other series of Notes);
(b) any limit upon the aggregate principal amount of the Notes of that series which may be authenticated and delivered under this Indenture (except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes of that series pursuant to Section 2.07, 2.08, 2.11, 3.06 or 7.04);
(c) the dates on which or periods during which the Notes of that series may be issued and the Maturity Date for the Notes of that series (or manner of determining the same) (which, if so provided in such Officer’s Certificate or any supplemental indenture, may be determined by the Issuer of the relevant series of Notes from time to time and set forth in the Notes of that series issued from time to time);
(d) if the principal amount payable at the stated Maturity Date of the Notes of that series will not be determinable as of any one or more dates prior to such stated Maturity Date, the amount that will be deemed to be such principal amount as of any such date for any purpose, including the principal amount thereof which will be due and payable upon any Maturity Date other than the stated Maturity Date and which will be deemed to be outstanding as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined), and if necessary, the manner of determining the equivalent thereof in Dollars;
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(e) the rate or rates (or the manner of calculation thereof) at which the Notes of that series shall bear interest (if any), the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable (or manner of determining the same) and the regular record date for the interest payable on any Notes on any Interest Payment Date and the extent to which, or the manner in which, any interest is payable on a temporary Global Note on an Interest Payment Date;
(f) the right of the Issuer or of the relevant series of Notes, if any, to, and the terms upon which such Issuer may, forgo or defer payment of interest on the Notes of that series, including any maximum duration of any such deferral or deferrals and the additional interest, if any, payable on the Notes of that series during any deferral of the Interest Payment Date;
(g) the place or places where, subject to the provisions of Section 4.02, the principal of, and premium, if any, and interest, if any, and Additional Amounts, if any, on Notes of that series shall be payable, any Notes of that series may be surrendered for registration of transfer, any Notes of that series may be surrendered for exchange, and notices and demands to or upon the Issuer of the relevant series of Notes in respect of the Notes of that series and this Indenture may be served;
(h) if applicable, the period or periods within which (or manner of determining the same), the price or prices at which (or manner of determining the same), the currency or currency unit in which, and the terms and conditions upon which Notes of that series may be redeemed, in whole or in part, at the option of the Issuer of the relevant series of Notes, and any remarketing arrangements with respect to the Notes of that series;
(i) the denominations in which any Notes of that series shall be issuable, if other than denominations of $2,000 and any integral multiple of $1,000 in excess thereof (or in the case of Notes denominated in a Non-Dollar Currency, the equivalent thereof in each case (rounded to an integral multiple of 1,000 units of such Non-Dollar Currency));
(j) if Non-Dollar Currency, the currency, currencies or currency units in which the principal of or any premium or interest or Additional Amounts on any Notes of that series shall be payable;
(k) if other than the entire principal amount thereof, the portion of the principal amount of Notes of that series which shall be payable upon a declaration of acceleration of the Maturity Date thereof pursuant to Section 5.02;
(l) any acceleration provisions, Events of Default and covenants of the Issuer of the relevant series of Notes with respect to the Notes of that series, whether or not such acceleration provisions, Events of Default or covenants are consistent with the Events of Default or covenants set forth herein;
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(m) if a Person other than Citibank, N.A. is to act as Trustee, Registrar, Transfer Agent, Paying Agent or Calculation Agent for the Notes of that series, the name and location of the Corporate Trust Office of such Trustee, Registrar, Transfer Agent, Paying Agent or Calculation Agent, as applicable;
(n) if other than as set forth in Article VIII, provisions for the defeasance, satisfaction and discharge of this Indenture with respect to the Notes of that series;
(o) the date as of which any Global Note representing outstanding Notes of that series shall be dated if other than the date of original issuance of the first Note of that series to be issued;
(p) the application, if any, of Section 4.08 to the Notes of that series;
(q) whether the Notes of that series shall be issued in whole or in part in the form of a Global Note or Notes and, in such case, the initial Depositary, if any, for such Global Note or Notes, whether such global form shall be permanent or temporary and the form of any legend or legends to be borne by any such global note;
(r) if Notes of that series are to be issuable initially in the form of a temporary Global Note, the circumstances under which the temporary Global Note can be exchanged for definitive Notes and whether the definitive Notes will be in global form;
(s) whether the Notes of that series will be convertible or exchangeable into other securities of the Issuer of the relevant series of Notes or another Person (including any ordinary shares, preferred shares, other debt securities or warrants for ordinary shares, preferred shares or other securities of any kind), and if so, the terms and conditions upon which such Notes will be so convertible or exchangeable, including the conversion price or exchange rate and the conversion or exchange period, the terms of any additional redemption rights of such Issuer relating to such terms and conditions for conversion or exchange, and any additions or changes to the Indenture with respect to the Notes of such series to permit or facilitate such conversion or exchange;
(t) whether the Notes of that series are to be issued as Original Issue Discount Notes and the amount of discount with which the Notes of that series may be issued and the rate or rates at which Original Issue Discount will accrue;
(u) the obligation, if any, of the Issuer of the relevant series of Notes to redeem, purchase or repay the Notes of that series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which, the period or periods within which, and the terms and conditions upon which, Notes of that series, shall be redeemed purchased or repaid, in whole or in part, pursuant to such obligations;
(v) if the amount of principal, premium or interest with respect to the Notes of that series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts will be determined;
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(w) with regard to Notes of any series that do not bear interest, the dates for certain required reports to the Trustee;
(x) the intended United States federal income tax consequences of the Notes of that series;
(y) the subordination, if any, of the Notes pursuant to this Indenture and any related changes or additions to the provisions of this Indenture then in effect;
(z) the Guarantees, if any, to be provided in respect of any series of Notes and the terms thereof, including, among other things, the method for determining the identity of the Guarantors and the conditions under which Guarantees will be added or released;
(aa) the form of the Notes of that series and, if applicable, the Guarantees to be endorsed thereon; and
(bb) any other terms of that series (which terms shall not be inconsistent with the provisions of this Indenture).
All Notes of any particular series shall be substantially identical except as to issue date, issue price, denomination, rate of interest, Maturity Date and the date from which interest, if any, shall accrue, and except as may otherwise be provided in or pursuant to such Officer’s Certificate or any supplemental indenture relating thereto. All Notes of any one series need not be issued at the same time, and unless otherwise provided, a series may be reopened for issuance of additional Notes of such series.
Notwithstanding anything else in this Indenture to the contrary, at the option of the Issuer of the relevant series of Notes, additional notes in respect of any series of Notes may be issued with the same CUSIP number as the Notes of any applicable series initially issued under this Indenture; provided that such Issuer has furnished an Opinion of Counsel to the Trustee confirming that all conditions precedent to the issuance and authentication of the Notes have been complied with and that such issuance would not conflict with federal and state securities laws and the rules and regulations of the Commission. Such additional notes of any series will have substantially identical terms and conditions as the applicable Notes initially issued under this Indenture of such series in all respects, except as described in the paragraph above and will be treated as a single class for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that any such additional notes that have the same CUSIP, ISIN or other identifying number as the outstanding Notes of a series must be fungible with the outstanding notes of that series for U.S. federal income tax purposes.
SECTION 2.02. Form and Dating. Each Note shall be dated the date of its authentication. The Authentication Agent’s certificate of authentication on all Notes shall be in substantially the following form: “This is one of the Notes of the series designated herein referred to in the within-mentioned Indenture”.
The terms and provisions contained in the Notes shall constitute, and are expressly made, a part of this Indenture and, to the extent applicable, the Issuer of the relevant
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series of Notes, the Trustee and each Agent, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and agree to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall control and be binding.
The Notes of any particular series may be presented for registration of transfer and exchange at the offices of the Registrar.
SECTION 2.03. Execution and Authentication. The Notes shall be executed on behalf of the Issuer of the relevant series of Notes by any Officer. The signature of any of these Officers on the Notes may be manual or facsimile.
If an Officer whose signature is on a Note was an Officer at the time of such execution but no longer holds that office at the time the applicable Authentication Agent authenticates the Note, the Note shall be valid nevertheless.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the applicable Authentication Agent by manual signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Note shall have been authenticated and delivered hereunder but never issued and sold by the Issuer of such Note, and such Issuer shall deliver such Note to the applicable Paying Agent for cancellation as provided in Section 2.12, for all purposes of this Indenture such Note shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
The Notes of each series shall be issuable in such denominations as shall be specified as contemplated by Section 2.01. In the absence of any such provisions with respect to the Notes of any series, the Notes of such series denominated in Dollars shall be issuable in denominations of $2,000 and integral multiples of $1,000 in excess thereof and the Notes of such series denominated in a Non-Dollar Currency shall be issuable in denominations equivalent to $2,000 and integral multiples equivalent to $1,000 in excess thereof in that Non-Dollar Currency (in each case rounded to an integral multiple of 1,000 units of such Non-Dollar Currency).
The Trustee may appoint an authenticating agent (the “Authentication Agent”) acceptable to the relevant Issuer to authenticate Notes. Any such appointment shall be evidenced by an instrument signed by a Responsible Officer, a copy of which shall be furnished to such Issuer. The Trustee hereby appoints with due care Citibank, N.A., as the Authentication Agent and Citibank, N.A. hereby accepts such appointment. Each Issuer hereby confirms this appointment as acceptable to it. The Trustee shall have no responsibility to compensate, reimburse or indemnify the Authentication Agent. The Trustee may change an Authentication Agent without prior notice to the relevant Holders; provided such Authentication Agent is acceptable to the Issuer of the relevant series of Notes.
SECTION 2.04. Registrar and Paying Agent. Each Issuer shall maintain an office or agency where Notes of such Issuer may be presented for registration of transfer or for
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exchange (the “Registrar”), an office or agency where Notes of such Issuer may be presented for payment (the “Paying Agent”) and an office or agency where notices and demands to or upon such Issuer, if any, in respect of the Notes of such Issuer and this Indenture may be served. The applicable Registrar shall keep a register of the Notes and of their transfer and exchange. Each Issuer may have one or more additional Paying Agents and for each series of Notes of such Issuer denominated in a Non-Dollar Currency, such Issuer shall appoint a separate Paying Agent under a supplemental indenture which supplemental indenture shall be in form and substance acceptable to such Paying Agent. Money held by such Paying Agent shall be held as banker, not subject to the UK FCA Client Money Rules, and need not be segregated except as required by law. The term “Paying Agent” includes any additional Paying Agent. Each Issuer shall also appoint a transfer agent (the “Transfer Agent”).
Each Issuer shall enter into an appropriate agency agreement, which shall incorporate the provisions of the TIA, with any Agent that is not a party to this Indenture. Such agreement shall implement the provisions of this Indenture that relate to such Agent. Such Issuer shall notify the Trustee of the name and address of any such Agent. If any of the Issuers fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation in accordance with Section 6.06.
Each Issuer initially appoints Citibank, N.A., as Registrar, Transfer Agent, Paying Agent and Calculation Agent in connection with the Notes of such Issuer and this Indenture, unless another Paying Agent is appointed prior to the time the Notes of any applicable series are first issued, and the registered office of Citibank, N.A., as the office or agency of each Issuer for such purposes, and each Issuer may change any Paying Agent, any Registrar, any Transfer Agent or any Calculation Agent appointed in connection with the Notes of such Issuer without prior notice to the relevant Holders. Each Issuer or any of its subsidiaries may act as Paying Agent, Transfer Agent, Registrar or Calculation Agent.
SECTION 2.05. Paying Agent To Hold Money in Trust. Each Paying Agent shall hold in trust for the benefit of the relevant Holders or the Trustee all money held by such Paying Agent for the payment of principal of, premium, if any, or interest on the Notes (whether such money has been paid to it by the Issuer of the relevant series of Notes or any other obligor on such Notes), and the Issuer of the relevant series of Notes and such Paying Agent shall notify the Trustee of any default by such Issuer (or any other obligor on such Notes) in making any such payment. In no event shall the applicable Paying Agent be liable for any interest on any money received by it hereunder; provided that if the Issuer of the relevant series of Notes or an Affiliate thereof acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold such money in a separate trust fund. The Issuer of the relevant series of Notes at any time may require the applicable Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of the Event of Default specified in Section 5.01(a), upon written request to such Paying Agent, require such Paying Agent to pay forthwith all money so held by it to the Trustee and to account for any funds disbursed. Upon making such payment, such Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.06. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of the
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Holders of each series of Notes. If the Trustee is not the Registrar of the relevant series of Notes, the Issuer of such series shall furnish or cause to be furnished to the Trustee (i) at least five Business Days before each Interest Payment Date with respect to such series of Notes outstanding on the record date relating to such Interest Payment Date, but in any event not less frequently than semi-annually, and (ii) at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of such series; provided that, as long as the Trustee is the Registrar, no such list need be furnished.
SECTION 2.07. Transfer and Exchange. Subject to Section 2.16, when Notes are presented to the applicable Transfer Agent with a request from the Holder of such Notes to register a transfer or to exchange them for an equal principal amount of Notes of other authorized denominations of the same series, such Transfer Agent shall register the transfer as requested. Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer in form satisfactory to the Issuer of the relevant series of Notes and the applicable Transfer Agent, duly executed by the Holder thereof or its attorney duly authorized in writing. To permit registrations of transfers and exchanges, the Issuer of the relevant series of Notes shall issue and execute, and the applicable Authentication Agent shall authenticate, new Notes evidencing such transfer or exchange at the request of the applicable Transfer Agent. No service charge shall be made to the Holder for any registration of transfer or exchange. The Issuer of the relevant series of Notes may require from the Holder payment of a sum sufficient to cover any transfer taxes or other governmental charge that may be imposed in relation to a transfer or exchange, but this provision shall not apply to any exchange pursuant to Section 2.11, 3.06 or 7.04 (in which events such Issuer shall be responsible for the payment of such taxes). The applicable Transfer Agent shall not be required to exchange or register a transfer of (i) any Notes for a period of 15 days ending on the due date for any payment of principal in respect of the Notes or (ii) any Notes selected, called or being called for redemption.
Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of the beneficial interests in such Global Note may be effected only through a book entry system maintained by the Holder of such Global Note (or its agent), and that ownership of a beneficial interest in the Global Note shall be required to be reflected in a book-entry system.
SECTION 2.08. Replacement Notes. If a mutilated Note of any series is surrendered to the applicable Registrar or the Trustee, if surrendered to the Trustee to be forwarded to such Registrar, or if the Holder of a Note of any series claims that the Note has been lost, destroyed or wrongfully taken, the Issuer of such series of Notes shall issue and the applicable Authentication Agent shall authenticate a replacement Note of such series if the Holder of such Note furnishes to such Issuer and such Authentication Agent, with a copy to the Trustee, evidence reasonably acceptable to them of the ownership and the destruction, loss or theft of such Note and if the requirements of Section 8-405 of the New York Uniform Commercial Code as in effect on the date of this Indenture are met. If required by the applicable Authentication Agent or the Issuer of the relevant series of Notes, an indemnity bond shall be posted, sufficient in the judgment of all to protect such Issuer, the Trustee or any Agent from any loss that any of them may suffer if such Note is replaced. Such Issuer may charge such Holder for such Issuer’s reasonable out-of-pocket expenses in replacing such Note and such
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Authentication Agent may charge such Issuer for such Authentication Agent’s reasonable expenses (including, without limitation, attorneys’ fees and disbursements) in replacing such Note. Every replacement Note shall constitute a contractual obligation of the Issuer of the relevant series of Notes.
SECTION 2.09. Outstanding Notes. The Notes outstanding at any time are all Notes that have been authenticated by the applicable Authentication Agent except for (i) those canceled by it; (ii) those delivered to it for cancellation; (iii) to the extent set forth in Sections 8.01 and 8.02, on or after the date on which the conditions set forth in Section 8.01 or 8.02 have been satisfied, those Notes theretofore authenticated and delivered by such Authentication Agent hereunder; and (iv) those described in this Section 2.09 as not outstanding. Subject to Section 2.10, a Note does not cease to be outstanding because the Issuer of such Note or one of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the applicable Authentication Agent, with a copy to the Trustee, receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser in whose hands such Note is a legal, valid and binding obligation of the Issuer of such Note.
If the applicable Paying Agent holds, in its capacity as such, on any Maturity Date, money sufficient to pay all accrued interest and principal with respect to the Notes payable on that date and is not prohibited from paying such money to the Holders thereof pursuant to the terms of this Indenture, then on and after that date such Notes cease to be outstanding and interest on them ceases to accrue.
For each series of Original Issue Discount Notes, the principal amount of such Notes that shall be deemed to be outstanding and used to determine whether the necessary Holders have given any request, demand, authorization, direction, notice, consent or waiver shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 5.02.
For each series of Notes denominated in a Non-Dollar Currency, the principal amount of such Notes that shall be deemed to be outstanding and used to determine whether the necessary Holders have given any request, demand, authorization, direction, notice, consent or waiver shall be the Dollar equivalent, as determined by the Issuer of the relevant series of Notes by reference to the noon buying rate in New York for cable transfers for such currency, as such rate is certified for customs purposes by the Federal Reserve Bank of New York (the “Exchange Rate”) on the date of original issuance of such Notes, of the principal amount (or, in the case of Original Issue Discount Notes, the Dollar equivalent, as determined by the Issuer of the relevant series of Notes by reference to the Exchange Rate on the date of the original issuance of such Notes, of the amount determined as provided above), of such Notes.
SECTION 2.10. Treasury Notes. In determining whether the Holders of the required principal amount of Notes of a series have concurred in any declaration of acceleration or notice of default or direction, waiver or consent or any amendment, modification or other change to this Indenture, Notes owned by the Issuer of the relevant series of Notes or any other Affiliate of such Issuer shall be disregarded as though they were not outstanding, except that for
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the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent or any amendment, modification or other change to this Indenture, only Notes as to which a Responsible Officer of the Trustee has actually received an Officer’s Certificate stating that such Notes are so owned shall be so disregarded. Notes so owned which have been pledged in good faith shall not be disregarded if the pledgee established to the satisfaction of the Trustee the pledgee’s right so to act with respect to the Notes and that the pledgee is not the Issuer of the relevant series of Notes, any other obligor on such Notes or any of their respective Affiliates.
SECTION 2.11. Temporary Notes. Until definitive Notes are prepared and ready for delivery, the Issuer of the relevant series of Notes may prepare and the applicable Authentication Agent shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Issuer of the relevant series of Notes considers appropriate for temporary Notes. Without unreasonable delay, the Issuer of the relevant series of Notes shall prepare and the applicable Authentication Agent shall authenticate definitive Notes in exchange for temporary Notes. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as definitive Notes.
SECTION 2.12. Cancellation. The Issuer of the relevant series of Notes at any time may deliver Notes of such series to the applicable Paying Agent for cancellation. The applicable Registrar shall forward to such Paying Agent any Notes surrendered to it for registration of transfer, exchange or payment. Such Paying Agent shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall deliver evidence of such canceled Notes to the Issuer of the relevant series of Notes upon such Issuer’s request. The Issuer of the relevant series of Notes may not reissue or resell, or issue new Notes to replace Notes that such Issuer has redeemed or paid, or that have been delivered to such Paying Agent for cancellation (other than in accordance with this Indenture).
SECTION 2.13. Defaulted Interest. If the Issuer of the relevant series of Notes defaults on a payment of interest on such series of Notes, and the applicable grace period shall have expired, it may at its option pay the defaulted interest, in accordance with the terms hereof, to the Persons who are Holders on a subsequent record date (which shall not be less than five Business Days prior to the date of payment of such defaulted interest), and such Issuer will notify such Holders of such record date. The Issuer of the relevant series of Notes may make payment of any defaulted interest to the relevant Holders in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which such series of Notes may be listed and, upon such notice as may be required by such exchange, if, after written notice given by such Issuer to the Trustee and the applicable Paying Agent of the proposed payment pursuant to this sentence, such manner of payment shall be deemed practicable by the Trustee.
SECTION 2.14. CUSIP Number. The Issuer of the relevant series of Notes in issuing such series of Notes may use a “CUSIP”, “ISIN” or other similar number, and if so, such CUSIP, ISIN or other similar number shall be included in notices of redemption or exchange as a convenience to the relevant Holders; provided that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP, ISIN or other similar number printed in the notice or on the applicable series of Notes, and that reliance may be placed
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only on the other identification numbers printed on such Notes. Such Issuer shall promptly notify the Trustee and the applicable Paying Agent of any such CUSIP, ISIN or other similar number used by such Issuer in connection with the issuance of any series of Notes and of any change in the CUSIP, ISIN or other similar number.
SECTION 2.15. Deposit of Moneys. With respect to the Notes of a series denominated in Dollars, prior to 11:00 a.m., New York time, and, with respect to the Notes of a series denominated in any Non-Dollar Currency, prior to 11:00 a.m., London time, or as advised by the applicable Paying Agent in relation to any Non-Dollar Currency other than euro and pounds sterling, on each Interest Payment Date (or, if such Interest Payment Date is not a Business Day, the day on which such interest payment is made) and Maturity Date (or, if such Maturity Date is not a Business Day, the day on which such principal payment is made), the Issuer of the relevant series of Notes shall have deposited with the applicable Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date or Maturity Date, as the case may be, in a timely manner which permits such Paying Agent to remit payment to the Holders on such Interest Payment Date (or, if such Interest Payment Date is not a Business Day, the day on which such interest payment is made) or Maturity Date (or, if such Maturity Date is not a Business Day, the day on which such principal payment is made), as the case may be. The principal and interest on a Global Note shall be payable to the Depositary of such Global Note or its nominee, as the case may be, as the sole registered owner and the sole Holder of the Notes represented thereby. The principal and interest on Physical Notes shall be payable, either in person or by mail, at the office of the applicable Paying Agent.
SECTION 2.16. Book-Entry Provisions for Global Notes. (a) Any series of Notes may initially be represented by one or more Notes of the same series in registered, global form without interest coupons. Any global notes representing the Notes (collectively, the “Global Notes”) initially shall (i) be registered in the name of the Depositary or the nominee of such Depositary, in each case for credit to an account of a member of, or direct or indirect participant in, the Depositary (an “Agent Member”); and (ii) be delivered to Citibank, N.A. as custodian for such Depositary.
(b) Agent Members shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or its custodian, or under the Global Notes, and the Depositary may be treated by the Issuer of the relevant series of Notes, the Trustee and any agent of such Issuer or the Trustee as the absolute owner of the Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer of the relevant series of Notes, the Trustee or any agent of such Issuer, any Agent or the Trustee from giving effect to any written certification, proxy or other authorization (which may be in electronic form) furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.
(c) None of the Issuer of the relevant series of Notes, any Guarantor thereof (if applicable), the Trustee, the applicable Registrar, any Paying Agent or any agent of any of them shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Notes, for maintaining,
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supervising or reviewing any records relating to such beneficial owner interests, or for any acts or omissions of a Depositary or for any transactions between a Depositary and any beneficial owner or between or among beneficial owners. No owner of a beneficial interest in the Notes shall have any rights under this Indenture, and the Depositary or its nominee, if any, shall be deemed and treated by the Issuer of the relevant series of Notes, any Guarantor thereof (if applicable), the Trustee, the applicable Registrar, any Paying Agent or any agent of any of them as the absolute owner and Holder of such Notes for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer of the relevant series of Notes, any Guarantor thereof (if applicable), the Trustee, the applicable Registrar, any Paying Agent or any agent of any of them from giving effect to any written certification, proxy or other authorization furnished by a Depositary, or any of its members and any other Person on whose behalf such member may act, the operation of customary practices of such Persons governing the exercise of the rights of a beneficial owner of any Notes.
(d) Transfers and exchanges pursuant to this Section 2.16 may only be made between Notes of the same series. Transfers of Global Notes shall be limited to transfers in whole, but not in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in the Global Notes may be transferred or exchanged for Physical Notes in accordance with the rules and procedures of the Depositary. In addition, a Global Note shall be exchangeable for Physical Notes if (i) the Depositary (x) notifies the Issuer of the relevant series of Notes that it is unwilling or unable to continue as depositary for such Global Note or (y) has ceased to be registered as a clearing agency under the Exchange Act, and, with respect to (x) or (y), the Issuer of the relevant series of Notes thereupon fails to appoint a successor depositary within 90 days of such notice or cessation; (ii) the Issuer of the relevant series of Notes, at its option, notifies the Trustee and the applicable Authentication Agent in writing that it elects to effect the issuance of Physical Notes or (iii) upon the request of the Depositary at any time that there shall have occurred and be continuing an Event of Default with respect to the Notes. In all cases, Physical Notes delivered in exchange for any Global Note or beneficial interests therein shall be registered in the names, and issued in any approved denominations, requested by or on behalf of the Depositary (in accordance with its customary procedures).
(e) In connection with any transfer or exchange of a portion of the beneficial interest in any Global Note to beneficial owners pursuant to paragraph (b) of this Section 2.16, the applicable Registrar shall (if one or more Physical Notes are to be issued) reflect on its books and records the date and a decrease in the principal amount of the Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Issuer of the relevant series of Notes shall execute, and the applicable Authentication Agent shall upon receipt of a Company Order from such Issuer authenticate and make available for delivery, one or more Physical Notes of like tenor and amount.
(f) In connection with the transfer of Global Notes of a series as an entirety to beneficial owners pursuant to paragraph (b) of this Section 2.16, the Global Notes shall be deemed to be surrendered to the applicable Paying Agent for cancellation, and the Issuer of the relevant series of Notes shall execute, and the applicable Authentication Agent shall authenticate and deliver, to each beneficial owner identified by the Depositary in writing in exchange for its beneficial interest in the Global Notes, an equal aggregate principal amount of Physical Notes of authorized denominations.
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(g) Any beneficial interest in one of the Global Notes that is transferred to a Person who takes delivery in the form of an interest in another Global Note shall, upon transfer, cease to be an interest in such Global Note and become an interest in such other Global Note and, accordingly, shall thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.
(h) The Holder of any Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.
SECTION 2.17. Computation of Interest. Interest on the Notes of a series shall be computed in accordance with the terms of the Notes of such series.
Redemption and Prepayment
SECTION 3.01. Election To Redeem; Notices to Trustee. Notes of any series that are redeemable before their Stated Maturity shall be redeemable in accordance with their respective terms and (except as otherwise specified as contemplated by Section 2.01 for Notes of any series) in accordance with this Article III. Any redemption may, at the discretion of the Issuer of the relevant series of Notes, be subject to the satisfaction of one or more conditions precedent.
If the Issuer of the relevant series of Notes elects to redeem any Notes pursuant to this Article III, at least 10 days prior to the Redemption Date (unless a shorter period is acceptable to the Trustee and the applicable Paying Agent) but not more than 60 days prior to the Redemption Date (unless a longer period is acceptable to the Trustee and the applicable Paying Agent), such Issuer shall notify the Trustee and such Paying Agent in writing of the series of Notes to be redeemed, the Redemption Date and the principal amount of such Notes to be redeemed and the Redemption Price, and deliver to the Trustee and such Paying Agent, no later than two Business Days prior to the Redemption Date (unless a shorter period is acceptable to the Trustee and such Paying Agent), an Officer’s Certificate stating that such redemption will comply with the conditions contained this Article III. Any such notice may be canceled at any time prior to the mailing of such notice of such redemption to any Holder and shall thereupon be void and of no effect. The notice shall reflect the conditions to the redemption and shall be specified by the Issuer of the relevant series of Notes.
SECTION 3.02. Selection of Notes To Be Redeemed. If the Issuer of the relevant series of Notes elects to redeem less than all of the Notes of such series at any time, in the case of Notes issued in definitive form, the Notes to be redeemed shall be selected in accordance with applicable procedures of the Depositary.
SECTION 3.03. Notice of Redemption. Notice of any optional redemption shall be given in accordance with Section 10.01 hereto at least 10 days but not more than 60 days before the Redemption Date to each holder of the Notes to be redeemed. The Issuer of the
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relevant series of Notes may provide in the notice that payment of the Redemption Price and performance of such Issuer’s obligations with respect to the redemption or purchase may be performed by another Person.
The notice shall identify the Notes to be redeemed (including the series and the CUSIP and/or ISIN numbers thereof) and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) any conditions to the redemption as specified by the Issuer of such series of Notes;
(d) if fewer than all outstanding Notes of a series are to be redeemed, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date and upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued;
(e) the name and address of the applicable Paying Agent;
(f) that Notes called for redemption must be surrendered to the applicable Paying Agent to collect the Redemption Price;
(g) that unless the Issuer of such series of Notes defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;
(h) the aggregate principal amount of Notes of such series that are being redeemed;
(i) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and
(j) that no representation is made as to the correctness or accuracy of the CUSIP and/or ISIN number, if any, listed in such notice or printed on the Notes.
At the written request of the Issuer of the relevant series of Notes made at least five Business Days prior to the date on which notice is to be given (unless a shorter period is acceptable to the applicable Paying Agent), the applicable Paying Agent shall give the notice of redemption to the Holders in such Issuer’s name and at such Issuer’s sole expense.
SECTION 3.04. Effect of Notice of Redemption. Once the notice of redemption described in Section 3.03 is sent (or delivered as required by the Depositary), Notes called for redemption shall, subject to the satisfaction of any applicable conditions, become irrevocably due and payable on the Redemption Date and at the Redemption Price, including any premium, plus interest accrued and unpaid to, but excluding, the Redemption Date. Upon surrender to the applicable Paying Agent, such Notes shall be paid at the Redemption Price,
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including any premium, plus interest accrued and unpaid to, but excluding, the Redemption Date; provided that (i) if the Redemption Date is after a record date and on or prior to the related Interest Payment Date, the accrued and unpaid interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date; and (ii) if a Redemption Date is not a Business Day, payment shall be made on the next succeeding Business Day and no interest shall accrue for the period from such Redemption Date to such succeeding Business Day. Such notice, if sent (or delivered as required by the Depositary) in the manner provided in Section 3.03, shall be conclusively presumed to have been given whether or not the Holder receives such notice.
SECTION 3.05. Deposit of Redemption Price. With respect to the Notes of a series denominated in Dollars, prior to 11:00 a.m., New York time, and, with respect to the Notes of a series denominated in any Non-Dollar Currency, prior to 11:00 a.m., London time, or as advised by the applicable Paying Agent in relation to any Non-Dollar Currency other than euro and pounds sterling, or, in each case, such other time as may be agreed by the Issuer of the relevant series of Notes and the applicable Paying Agent, on each Redemption Date, subject to the satisfaction of any applicable conditions, the Issuer of the relevant series of Notes shall deposit with the applicable Paying Agent in immediately available funds money sufficient to pay the Redemption Price of, including premium, if any, and accrued and unpaid interest on all Notes to be redeemed on that date other than Notes or portions thereof called for redemption on that date which have been delivered by such Issuer to the applicable Paying Agent for cancellation.
On and after any Redemption Date, if money sufficient to pay the Redemption Price of, including premium, if any, and accrued and unpaid interest on Notes called for redemption shall have been made available in accordance with the immediately preceding paragraph, the Notes called for redemption will cease to accrue interest and the only right of the Holders of such Notes will be to receive payment of the Redemption Price of, including premium, if any, and, subject to Section 3.04, accrued and unpaid interest on such Notes to, but excluding, the Redemption Date. If any Note surrendered for redemption shall not be so paid, interest will be paid, from the Redemption Date until such redemption payment is made, on the unpaid principal of the Note and any interest not paid on such unpaid principal, in each case at the rate and in the manner provided in the Notes.
SECTION 3.06. Notes Redeemed in Part. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof that is to be redeemed. The Issuer of the relevant series of Notes will issue and execute, and the applicable Authentication Agent will authenticate, a new Note of such series in a principal amount equal to the unredeemed portion of the original Note in the name of the Holder upon cancellation of the original Note. Notes called for redemption become due on the Redemption Date. On and after such date, unless such Issuer defaults in payment of the Redemption Price on such date, interest ceases to accrue on the Notes or portions thereof called for such redemption.
SECTION 3.07. Tax Redemption. Each series of Notes is also redeemable by the Issuer of such series, in whole but not in part, at 100% of the principal amount of such Notes plus any accrued and unpaid interest (including any Additional Amounts) to the applicable Redemption Date at such Issuer’s option at any time prior to their maturity if, due to a Change in
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Tax Law (as defined below): (i) the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof, in accordance with the terms of such Notes or, if applicable, any Guarantee, has, or would, become obligated to pay any Additional Amounts to the Holders of the Notes of that series; (ii) in the case of any Guarantor, (A) the Parent would be unable, for reasons outside its control, to procure payment by the Issuer of the relevant series of Notes (if other than the Parent) or any other Guarantor thereof or (B) the procuring of such payment by such Issuer and each such other Guarantor would be subject to withholding Taxes imposed by a Relevant Taxing Jurisdiction; and (iii) such obligation cannot otherwise be avoided by such Guarantor, the Parent or such Issuer taking reasonable measures available to it. In such case, such Issuer may redeem the applicable Notes upon not less than 30 nor more than 60 days’ notice as provided in Section 3.03, at 100% of the principal amount of such Notes plus accrued and unpaid interest to the Redemption Date (including Additional Amounts); provided that (i) no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which such Issuer or such Guarantor, as the case may be, would be obligated to pay any such Additional Amounts in respect of the applicable Notes or applicable Guarantee then due; and (ii) at the time such notice is given, such obligation to pay such Additional Amounts remains in effect. The right of the Issuer of the relevant series of Notes to redeem such Notes shall continue as long as such Issuer or, if applicable, any Guarantor thereof is obligated to pay such Additional Amounts, notwithstanding that such Issuer or any such Guarantor, as the case may be, shall have made payments of Additional Amounts. Prior to the giving of any such notice of redemption, the relevant Issuer must deliver to the Trustee: (i) an Officer’s Certificate stating that such Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of such Issuer to so redeem have occurred; and (ii) an opinion of independent counsel or an independent accountant of recognized standing with respect to tax matters of the Relevant Taxing Jurisdiction, selected by the relevant Issuer or the relevant Guarantor, as applicable, to the effect that such Issuer or such Guarantor has, or would, become obligated to pay such Additional Amounts as a result of such Change in Tax Law.
For the purposes hereof, “Change in Tax Law” shall mean: (i) any changes in, or amendment to, any law of a Relevant Taxing Jurisdiction (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by the Relevant Taxing Jurisdiction) or any amendment to or change in the application or official interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the first date of issuance of Notes of such series pursuant to Section 2.01; or (ii) if the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof consolidates, merges, amalgamates or combines with, or transfers or leases its assets substantially as an entirety to, any person that is incorporated or tax resident under the laws of any jurisdiction other than a Relevant Taxing Jurisdiction (a “successor”) and as a consequence thereof such person becomes the successor obligor to such Issuer or such Guarantor in respect of Additional Amounts that may become payable (in which case, for purposes of this redemption provision, all references to such Issuer or such Guarantor shall be deemed to be and include references to such person), any change in, or amendment to, any law of the jurisdiction of organization or tax residence of such successor, or the jurisdiction through which payments will be made by the successor, or any political subdivision or taxing authority thereof or thereon for purposes of taxation (including any regulations or rulings promulgated thereunder and including, for this purpose, any treaty entered into by such jurisdiction) or any amendment to or change in the application or official
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interpretation (including judicial or administrative interpretation) of such law, which change or amendment becomes effective or, in the case of an official interpretation, is announced, on or after the date of such consolidation, merger, amalgamation, combination or other transaction.
Covenants
SECTION 4.01. Payment of Principal, Premium and Interest. Each Issuer covenants and agrees that it will duly and punctually pay the principal of (and premium, if any) and interest on the Notes of each series issued by such Issuer in accordance with the terms of the Notes of such series and this Indenture.
SECTION 4.02. Maintenance of Office or Agency. Each Issuer will maintain in each Place of Payment for Notes an office or agency where Notes of such Issuer may be presented or surrendered for payment, where Notes of such Issuer may be presented for registration of transfer or exchange and where notices and demands to or upon such Issuer in respect of the Notes of such Issuer and this Indenture may be served. Each Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time any Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands (except for service of process in relation to any proceeding arising out of or relating to the performance of the obligations of each Issuer under this Indenture and the Notes) may be made or served at the Corporate Trust Office of the Trustee/applicable Paying Agent, and each Issuer hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands; provided that, with respect to any series of Notes of such Issuer issued in Non-Dollar currency, any presentations, surrenders, notices and demands (except for service of process in relation to any proceeding arising out of or relating to the performance of the obligations of each Issuer under this Indenture and the Notes) may be made or served at the Corporate Trust Office of the Paying Agent for such series of Notes, and each Issuer hereby appoints the Paying Agent for such series of Notes as its agent to receive any presentations, surrenders, notices and demands for such Notes.
Each Issuer may also from time to time designate one or more other offices or agencies where the Notes of such Issuer may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve such Issuer of its obligation to maintain an office or agency in each Place of Payment for Notes for such purposes. Such Issuer will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
SECTION 4.03. Reports by the Issuers. (a) If any Issuer or any Guarantor is subject to TIA § 314(a), the requirement to deliver to the Trustee and the relevant Holders the annual reports and information, documents, and other reports which any Issuer or any Guarantor is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act will be satisfied if the relevant Issuer or the relevant Guarantor files such reports, information and documents electronically using the Commission’s EDGAR electronic filing system or any successor system, and such reports, information and documents are publicly available on the Commission’s web site.
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(b) Notwithstanding anything herein to the contrary, in the event that any Issuer fails to comply with its obligation to file or provide such information, documents and reports as required hereunder, such Issuer will be deemed to have cured such Default for purposes of Section 5.01(b) upon the filing or provision of all such information, documents and reports required hereunder prior to the expiration of 120 days after written notice to such Issuer of such failure from the Trustee or from the Holders of at least 25% of the principal amount of the applicable series of Notes (with a copy to the Trustee).
(c) Notwithstanding anything herein to the contrary, the information, documents and reports required pursuant to this Indenture may, at the option of the relevant Issuer, instead be those of any direct or indirect parent entity of such Issuer so long as such parent entity has fully and unconditional guaranteed by execution of this Indenture in the case of the Parent (if such Issuer is BATCAP or BATIF), or fully and unconditionally guarantees, by execution of a supplemental indenture, the obligations of such Issuer in respect of the Notes and such parent entity and such Issuer comply with the requirements of Rule 3-10 of Regulation S-X promulgated by the Commission (or any successor provision).
(d) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including any Issuer’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).
SECTION 4.04. Corporate Existence. Subject to Section 4.10, each Issuer will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a corporation.
SECTION 4.05. Money for Notes Payments. If an Issuer shall at any time act as its own Paying Agent with respect to a series of Notes, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Notes of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act.
Whenever an Issuer shall have a Paying Agent for a series of Notes, it will, with respect to the Notes of a series denominated in Dollars, prior to 11:00 a.m., New York time, and, with respect to the Notes of a series denominated in any Non-Dollar Currency, prior to 11:00 a.m., London time, or as advised by such Paying Agent in relation to any Non-Dollar Currency other than euro and pounds sterling, or, in each case, such other time as may be agreed by the Issuer of the relevant series of Notes and the applicable Paying Agent, on each due date of the principal of (and premium, if any) or interest on the Notes of such series, deposit with the applicable Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) such Issuer will promptly notify the Trustee of its action or failure so to act.
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If a Paying Agent is not a party to this Indenture, the Issuer of the relevant series of Notes will cause such Paying Agent, other than the Trustee, to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section 4.05, that such Paying Agent will:
(a) hold in trust all sums held by it for the payment of the principal of (and premium, if any) or interest on the Notes of such series for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by such Issuer (or any other obligor upon the Notes) in the making of any payment of principal (and premium, if any) or interest on the Notes of such series; and
(c) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held by such Paying Agent.
Each Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct the applicable Paying Agent to pay, to the Trustee all sums held by such Paying Agent or held in trust by such Issuer, such sums to be held in trust by the Trustee; and, upon such payment by such Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
SECTION 4.06. Payment of Taxes and Other Claims. Each Issuer will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges levied or imposed upon such Issuer or upon the income, profits or property of such Issuer, and (ii) all material lawful claims against such Issuer for labor, materials and supplies, which in the case of either clause (i) or (ii) of this Section 4.06, if unpaid, might by law become a lien upon a property; provided, however, that such Issuer shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings.
SECTION 4.07. Stay, Extension and Usury Laws. Each Issuer and each Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and each Issuer and each Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.
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SECTION 4.08. Payment of Additional Amounts. (a) In the case of the Notes issued by BAT or BATIF, unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture establishing such series of Notes or in the form of note for such series, the applicable Issuer or, if applicable, each Guarantor of such Notes will make payments of, or in respect of, principal, premium (if any) and interest on the Notes, or any payment pursuant to the applicable Guarantee, as the case may be, without withholding or deduction for or on account of any present or future tax, levy, impost or other similar governmental charge (“Taxes”) imposed, assessed, levied or collected by or for the account of the United Kingdom, the Netherlands (in the case of a payment by BATNF) or the United States (in the case of a payment by BATCAP or RAI), including in each case any political subdivision thereof or any authority thereof having the power to tax (a “Relevant Taxing Jurisdiction”), unless such withholding or deduction is required by law.
If such Issuer or, if applicable, any such Guarantor is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, such Issuer or, if applicable, such Guarantor will pay to the Holder such additional amounts (“Additional Amounts”) as will result in the receipt by the Holder of such amounts as would have been received by it if no such withholding or deduction of Taxes had been required; provided, however, that Additional Amounts with respect to any United States Tax shall be payable only to Holders that are not United States persons (within the meaning of the Code) and provided further, that neither the applicable Issuer nor such Guarantor shall be required to pay any Additional Amounts for or on account of:
(1) any Taxes that would not have been so imposed, assessed, levied or collected but for the Holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) being or having been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business, maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Note or Guarantee, as the case may be;
(2) any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the Holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period;
(3) any estate, inheritance, gift, sales, transfer, personal property or similar Taxes;
(4) any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee;
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(5) any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the Holder or the beneficial owner of the applicable Note or Guarantee to (i) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or the beneficial owner or its connection with a Relevant Taxing Jurisdiction; or (ii) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in the case of either (i) or (ii), the actions described in (i) or (ii) are required by statute, regulation, relevant income tax treaty or the administrative practice of a Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes;
(6) any Taxes imposed by reason of the Holder or the beneficial owner of the applicable Note or Guarantee being or having been considered a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into in the ordinary course of its trade or business, as described in Section 881(c)(3)(A) of the Code (or any amended or successor provisions);
(7) any Taxes imposed, assessed, levied or collected by or for the account of the United States of America (or any political subdivision thereof or any authority thereof having the power to tax) on interest received by a 10-percent shareholder of the applicable Issuer or any applicable Guarantor within the meaning of Section 871(h)(3)(B) or Section 881(c)(3)(B) of the Code (or any amended or successor provisions);
(8) any backup withholding imposed pursuant to Section 3406 of the Code (or any amended or successor provisions);
(9) any Taxes imposed pursuant to Section 871(h)(6) or Section 881(c)(6) of the Code (or any amended or successor provisions);
(10) any Taxes imposed by reason of the Holder or the beneficial owner of the applicable Note or Guarantee being or having been a personal holding company, passive foreign investment company or controlled foreign corporation for U.S. Federal income tax purposes or a corporation that has accumulated earnings to avoid U.S. Federal income tax;
(11) any Taxes imposed or withheld pursuant to Sections 1471 through 1474 of the Code (or any amended or successor provisions), any U.S. Treasury regulations promulgated thereunder, any official interpretations thereof or any agreements entered into in connection with the implementation thereof (“FATCA Withholding”)
(12) any Taxes imposed or to be withheld pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021); or
(13) any combination of the Taxes described in paragraphs (1) through (12) immediately above.
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In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or premium (if any) or interest on, any Note or, if applicable, any payment pursuant to the applicable Guarantee to any Holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such partnership, an interest holder in such limited liability company or a beneficial owner would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the Holder of the applicable Note or Guarantee.
(b) In the case of the Notes issued by BATCAP, unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any supplemental indenture establishing such series of Notes or in the form of note for such series, the applicable Guarantor of such Notes will make payments pursuant to the applicable Guarantee without withholding or deduction for or on account of any present or future Taxes imposed, assessed, levied or collected by or for the account of a Relevant Taxing Jurisdiction (for the purposes of this subsection (b) only, a Relevant Taxing Jurisdiction means the United Kingdom (in the case of a payment by BAT or BATIF) or the Netherlands (in the case of a payment by BATNF), including in each case any political subdivision thereof or any authority thereof having the power to tax), unless such withholding or deduction is required by law.
If any such Guarantor is required by a Relevant Taxing Jurisdiction to so withhold or deduct such Taxes, such Guarantor will pay to the Holder such Additional Amounts as will result in the receipt by the Holder of such amounts as would have been received by it if no such withholding or deduction of Taxes had been required; provided, however, that no Guarantor shall be required to pay any Additional Amounts for or on account of:
(1) any Taxes that would not have been so imposed, assessed, levied or collected but for the Holder or beneficial owner of the applicable Note or Guarantee (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) being or having been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business, maintaining or having maintained a permanent establishment or being or having been physically present in, a Relevant Taxing Jurisdiction or otherwise having or having had some connection with a Relevant Taxing Jurisdiction other than the holding or ownership of, or the collection of principal of, and premium (if any) or interest on, a Note or the enforcement of the applicable Note or Guarantee, as the case may be;
(2) any Taxes that would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required in order to receive payment, the applicable Note or Guarantee was presented more than 30 days after the date on which such payment became due and payable or was provided for, whichever is later, except to the extent that the Holder or beneficial owner thereof would have been entitled to Additional Amounts had the applicable Note or Guarantee been presented for payment on any day during such 30-day period;
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(3) any estate, inheritance, gift, sales, transfer, personal property or similar Taxes;
(4) any Taxes that are payable otherwise than by withholding or deduction from payments on or in respect of the applicable Note or Guarantee;
(5) any Taxes that would not have been so imposed, assessed, levied or collected but for the failure by the Holder or the beneficial owner of the applicable Note or Guarantee to (i) provide any certification, identification, information, documents or other evidence concerning the nationality, residence or identity of the Holder or the beneficial owner or its connection with a Relevant Taxing Jurisdiction; or (ii) make any valid or timely declaration or claim or satisfy any other reporting, information or procedural requirements relating to such matters if, in either case, compliance is required by statute, regulation, relevant income tax treaty or administrative practice of a Relevant Taxing Jurisdiction as a condition to relief or exemption from such Taxes;
(6) any FATCA Withholding;
(7) any Taxes imposed or to be withheld pursuant to the Dutch Withholding Tax Act 2021 (Wet bronbelasting 2021); or
(8) any combination of the Taxes described in paragraphs (1) through (7) immediately above.
In addition, Additional Amounts will not be paid with respect to any payment of the principal of, or premium (if any) or interest on, any Note or any payment pursuant to the applicable Guarantee to any Holder that is a fiduciary, a partnership, a limited liability company or any person other than the sole beneficial owner of such payment to the extent a beneficiary or settlor with respect to such fiduciary, a member of such partnership, an interest holder in such limited liability company or a beneficial owner would not have been entitled to such amounts had such beneficiary, settlor, member, interest holder or beneficial owner been the Holder of the applicable Note or Guarantee.
(c) Unless otherwise stated, references in any context to the payment of principal of, and premium (if any) or interest on, any Note or any payment pursuant to a Guarantee will be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof.
SECTION 4.09. Negative Pledge. So long as any of the Notes of a particular series of notes remain outstanding, neither the Issuer of such series of Notes nor any Guarantor thereof (if applicable) will secure or allow to be secured any Quoted Borrowing issued by such Issuer or any such Guarantor (if applicable) or any payment under any guarantee by any of them of any such Quoted Borrowing by any mortgage, charge, pledge or lien (other than arising by operation of law) upon any of its undertaking or assets, whether present or future, unless at the same time the same mortgage, charge, pledge or lien is extended, or security which is not materially less beneficial to the Holders of such Notes than the security given as aforesaid or
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which shall be approved by consent of the Holders of not less than 75% in aggregate principal amount of the Notes of such particular series at the time outstanding is extended or created (as the case may be), to secure equally and ratably the principal of, and interest on, and all other payments (if any) in respect of such Notes.
SECTION 4.10. Limitation on Mergers, Consolidations, Amalgamations and Combinations. So long as any of the Notes of a particular series remain outstanding, neither the Issuer of such series of Notes nor any Guarantor thereof (if applicable) may consolidate with or merge into any other person or sell, convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any person (other than any sale or conveyance by way of a lease in the ordinary course of business), unless: (i) in the case of an Issuer, any successor person assumes such Issuer’s obligations on the relevant Notes and under this Indenture and, in the case of any Guarantor, if applicable, any successor person assumes such Guarantor’s obligations on the Guarantee and under this Indenture; (ii) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; (iii) such successor person is organized under the laws of the United States or any State thereof, the United Kingdom, the Netherlands or any other country that is a member of the Organization for Economic Cooperation and Development as of the date of such succession; (iv) such successor person agrees to pay any Additional Amounts with respect to any withholding or deduction of Taxes or any payment on the Notes or Guarantees (as applicable) imposed by the jurisdiction (in the case of Notes issued by BATCAP, other than the United States, unless otherwise required by clause (i) of this Section 4.10) in which such successor person is incorporated or otherwise a resident for tax purposes in accordance with Section 4.08 (for the avoidance of doubt, solely to the extent such successor person is the Issuer of any Notes originally issued by BATCAP, changes will be made to this Indenture as are necessary to obligate such Issuer to pay such Additional Amounts); and (v) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of such Issuer or any such Guarantor which would not be permitted by the applicable Notes of such series or under this Indenture, such Issuer or any such Guarantor or such successor person, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes of such series equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
Upon any consolidation of any Issuer or any Guarantor with, or merger of any Issuer or any Guarantor into, any other Person or any sale, conveyance, transfer or lease of all or substantially all of the assets of any Issuer or any Guarantor in accordance with this Section 4.10, the successor Person formed by such consolidation or into which any Issuer or any Guarantor is merged or to which such sale, conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, an Issuer or a Guarantor under this Indenture and the relevant Notes with the same effect as if such Person had been named as an Issuer or a Guarantor herein, as the case may be, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture, the relevant Notes and the applicable Guarantee, as the case may be. The terms “Issuer” and “Guarantor”, as used in the Notes and the Indenture, also refer to any such successors or assigns so substituted.
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The limitation on mergers, consolidations, amalgamations and combinations contained in this Section 4.10 shall not apply to any consolidation, merger, amalgamation or combination in which any Issuer or any Guarantor is the surviving corporation except that, in such case, the provisions of clauses (ii) and (v) of the first paragraph of this Section 4.10 shall apply such that: (x) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (y) if as a result of such consolidation or merger or such sale, conveyance, transfer or lease, properties or assets of any Issuer or any Guarantor would become subject to a mortgage, pledge, security interest, lien or similar encumbrance to secure payment of any indebtedness for borrowed money of any such Issuer or any such Guarantor which would not be permitted by the Notes or under this Indenture, such Issuer or such Guarantor, as the case may be, shall take such steps as shall be necessary to effectively secure the Notes equally and ratably with (or prior to) all indebtedness for borrowed money secured thereby.
SECTION 4.11. Statement by Officers as to Event of Default. Each Issuer shall, so long as any of the Notes issued by such Issuer is outstanding, deliver to a Responsible Officer of the Trustee, forthwith (and in any event within 10 Business Days) upon any Officer of such Issuer becoming aware of any Event of Default, an Officer’s Certificate specifying such Event of Default, its status and what action such Issuer is taking or proposes to take in respect thereof.
SECTION 4.12. Statements as to Compliance. The Parent will deliver to the Trustee, within 180 days after the end of each fiscal year of the Parent, a written statement signed by the principal executive officer, principal financial officer or principal accounting officer of the Parent (complying with Section 314(a)(4) of the TIA), stating that:
(a) a review of the activities of the Issuers and the Guarantors (if there is any Guarantor different from the Parent) during such year and of performance under this Indenture has been made under his or her supervision; and
(b) to the best of his or her knowledge, based on such review, the Issuers and the Guarantors (if there is any Guarantor different from the Parent) are in compliance with all conditions and covenants under this Indenture.
For purposes of this Section 4.12, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture.
SECTION 4.13. Mutual Undertaking Regarding Information Reporting and Collection Obligations. Each party (other than the Trustee) shall, within 10 Business Days of a written request by another party, supply to that other party such forms, documentation and other information relating to such party, its operations or the Notes as that other party reasonably requests for the purposes of that other party’s compliance with Applicable Law and shall notify the relevant other party reasonably promptly in the event that such party becomes aware that any
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of the forms, documentation or other information provided by such party is (or becomes) inaccurate in any material respect; provided, however, that no party shall be required to provide any forms, documentation or other information pursuant to this Section 4.13 to the extent that: (i) any such form, documentation or other information (or the information required to be provided on such form or documentation) is not reasonably available to such party and cannot be obtained by such party using reasonable efforts; or (ii) doing so would or might in the reasonable opinion of such party constitute a breach of any: (A) Applicable Law; (B) fiduciary duty; or (C) duty of confidentiality. For purposes of this Section 4.13, “Applicable Law” shall be deemed to include (i) any relevant rule or practice of any Authority by which any party is bound or with which it is accustomed to comply; (ii) any relevant agreement between any Authorities; and (iii) any relevant agreement between any Authority and any party that is customarily entered into by institutions of a similar nature.
SECTION 4.14. Agent Right To Withhold. Notwithstanding any other provision of this Indenture, each Agent shall be entitled to make a deduction or withholding from any payment which it makes under the Notes for or on account of any Taxes, if and only to the extent so required by Applicable Law, in which event each such Agent shall make such payment after such deduction or withholding has been made and shall account to the relevant Authority within the time allowed for the amount so deducted or withheld or, at its option in the case of any Tax other than a U.S. federal withholding Tax, shall reasonably promptly after making such payment return to the Issuer of the relevant series of Notes the amount so deducted or withheld, in which case, such Issuer shall so account to the relevant Authority for such amount. For the avoidance of doubt, FATCA Withholding is a deduction or withholding which is deemed to be required by Applicable Law for the purposes of this Section 4.14.
SECTION 4.15. Issuers Right To Redirect. In the event that any Issuer determines in its sole discretion that any deduction or withholding for or on account of any Tax will be required by Applicable Law in connection with any payment due to any of the Agents on any Notes issued by such Issuer, then such Issuer will be entitled to redirect or reorganize any such payment in any way that it sees fit in order that the payment may be made without such deduction or withholding; provided that any such redirected or reorganized payment is made through a recognized institution of international standing and otherwise made in accordance with this Indenture. Such Issuer will promptly notify the Agents and the Trustee in writing of any such redirection or reorganization. For the avoidance of doubt, FATCA Withholding is a deduction or withholding which is deemed to be required by Applicable Law for the purposes of this Section 4.15.
Defaults and Remedies
SECTION 5.01. Events of Default. Unless either inapplicable to a particular series or specifically deleted or modified in or pursuant to the Officer’s Certificate or any
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supplemental indenture establishing such series of Notes or in the form of note for such series, each of the following events shall be an “Event of Default” with respect to any series of Notes:
(a) default is made in the payment of: (i) any installment of interest (excluding Additional Amounts) upon any Note of the relevant series as and when the same shall become due and payable, and there is a continuance of such default for a period of 14 days or more; (ii) applicable Additional Amounts as and when the same shall become due and payable, and there is a continuance of such default for a period of 14 days; or (iii) all or any part of the principal or premium, if any, of any Note of the relevant series as and when the same shall become due and payable either at maturity, upon any redemption, by declaration or otherwise, and there is a continuance of such default for a period of three days;
(b) the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof does not perform or comply with any one or more of its other obligations under the Notes of the relevant series or this Indenture (other than those described in paragraph (a) above) which is not remedied within 30 days (unless a longer period is specified in this Indenture) after written notice of such default shall have been given to such Issuer by the Trustee or to such Issuer and the Trustee by the Holders of at least 25% of the outstanding principal amount of the Notes;
(c) (i) any other present or future indebtedness for borrowed money of the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof, other than the Notes issued by such Issuer, becomes due and payable prior to its Stated Maturity by reason of any default or event of default in respect thereof by such Issuer or any such Guarantor and remains unpaid; (ii) any such indebtedness for borrowed money is not paid when due or, as the case may be, within any applicable grace period; or (iii) any Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof fails to pay when due and called upon (after the expiry of any applicable grace period) any amount payable by it under any present or future guarantee for, or indemnity in respect of, any indebtedness for borrowed money and which remains unpaid; provided that (x) payment of the indebtedness for borrowed money is not being contested in good faith and in accordance with legal advice or (y) the aggregate amount of the indebtedness for borrowed money, guarantees and indemnities in respect of which one or more of the events mentioned above in clauses (i), (ii) and (iii) of this paragraph (c) has or have occurred and is or are continuing, equals or exceeds £750 million or its equivalent in any other currency of the indebtedness for borrowed money or, if greater, 1.25%] of the Total Equity of the Parent, as set out in the “Total Equity” line item in the most recent consolidated group balance sheet of the Parent and its subsidiaries in the Parent’s most recent annual report;
(d) if applicable, any Guarantee of the relevant series of Notes ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or any Guarantor of the relevant series of Notes denies or disaffirms in writing its obligations under this Indenture or Guarantee;
(e) a distress or execution or other legal process is levied or enforced against or an encumbrancer takes possession of or a receiver, administrative receiver or other similar officer is appointed of the whole or a part of the assets of the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof which is substantial in relation to the BAT Group taken as a whole and is not discharged, stayed, removed or paid out within 45 days after such execution or appointment;
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(f) any mortgage, charge, pledge, lien or other encumbrance, present or future, created or assumed by the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof becomes enforceable against all or substantially all of the assets of such Issuer or any such Guarantor, and any step is taken to enforce it (including the taking of possession or the appointment of a receiver, administrative receiver, manager or other similar person) and is not discharged within 45 days;
(g) the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof is insolvent or bankrupt or unable to pay its debts (in respect of companies incorporated in England and Wales, within the meaning of Section 123(1)(b) or (e) or Section 123(2) of the UK Insolvency Act 1986), stops, suspends or threatens to stop or suspend payment of all or a material part of its debts, proposes or makes a general assignment or an arrangement or composition (otherwise than for the purposes of reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement) with or for the benefit of its creditors in respect of any of such debts or a moratorium is agreed or declared in respect of or affecting all or a material part of the debts of such Issuer or any such Guarantor;
(h) an order is made or an effective resolution passed for the winding-up or dissolution or administration of the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof, or such Issuer or any such Guarantor shall apply or petition for a winding-up or administration order in respect of itself or ceases or threatens to cease to carry on all or substantially all of its business or operations, in each case except for the purpose of and followed by a reconstruction, amalgamation, reorganization, merger or consolidation or other similar arrangement; or
(i) any event occurs that under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in any of the foregoing paragraphs (g) and (h).
An Event of Default with respect to any series of Notes would not necessarily constitute an Event of Default with respect to the other series of Notes.
Notwithstanding the foregoing provisions of this Section 5.01, if the principal of, premium (if any) or interest on or Additional Amounts with respect to any Note is payable in a currency or currencies other than Dollars and such currency or currencies are not available to the Issuer of such Note or, if applicable, any Guarantor thereof for making payment thereof due to the imposition of exchange controls or other circumstances beyond the control of such Issuer or any such Guarantor (a “Conversion Event”), such Issuer and, if applicable, the relevant Guarantor will be entitled to satisfy its obligations to Holders of the relevant series of Notes by making such payment in Dollars in an amount equal to the Dollar equivalent of the amount payable in such other currency, as determined by such Issuer or, if applicable, the relevant
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Guarantor, as the case may be, based on the Exchange Rate on the date of such payment, or, if such rate is not then available, on the basis of the most recently available Exchange Rate. Notwithstanding the foregoing provisions of this Section 5.01, any payment made under such circumstances in Dollars where the required payment is in a currency other than Dollars will not constitute an Event of Default under this Indenture.
Promptly after the occurrence of a Conversion Event, such Issuer or, if applicable, the relevant Guarantor shall give written notice thereof to the Trustee and to the applicable Paying Agent; and the Trustee, promptly after receipt of such notice, shall give notice thereof in the manner provided in Section 10.01 to the Holders of the relevant series of Notes. Promptly after the making of any payment in Dollars as a result of a Conversion Event, the Issuer or the Guarantor making such payment, as the case may be, shall give notice in the manner provided in Section 10.01 to the relevant Holders, setting forth the applicable Exchange Rate and describing the calculation of such payments.
SECTION 5.02. Acceleration of Maturity; Rescission. If an Event of Default with respect to the Notes of a series then outstanding occurs and is continuing, then and in each and every such case (other than Events of Default specified in Section 5.01(g), (h) or (i) with respect to any Issuer or any Guarantor), unless the principal of all the Notes of such series shall have already become due and payable, the Holders of not less than 25% in aggregate principal amount of the Notes of such affected series then outstanding, by notice in writing to the Issuer of the relevant series of Notes, any Guarantor thereof, if applicable, and the Trustee, may declare the entire principal amount of all Notes of such series and interest accrued and unpaid thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, without any further declaration or other act on the part of any Holder.
If the Events of Default specified in Section 5.01(g), (h) or (i) occur with respect to any Issuer or any Guarantor and are continuing with respect to a series of Notes, the principal amount of and accrued and unpaid interest on all the Notes of such series issued pursuant to this Indenture shall become immediately due and payable, without any declaration or other act on the part of the Trustee or any Holder.
The registered Holders of a majority in aggregate principal amount of the then outstanding Notes of such series may rescind and annul such acceleration and its consequences (i) if the rescission would not conflict with any judgment or decree and (ii) if all existing Events of Default have been cured or waived except nonpayment of principal, that has become due solely because of the acceleration, by written notice to the Issuer of the relevant series of Notes, any Guarantor thereof, if applicable, and the Trustee. However, no such rescission and annulment shall extend to or shall affect any subsequent Default or shall impart any right consequent thereon.
Subject to Section 6.01, in case an Event of Default shall occur and be continuing, the Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture at the request or direction of any of the Holders of Notes of any series, unless such Holders have offered to the Trustee security or indemnity satisfactory to it. Subject to Section 6.06, the Holders of a majority in aggregate principal amount of any series of Notes then
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outstanding will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power the Trustee holds with respect to the Notes of such series.
For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Notes shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Notes shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Notes.
SECTION 5.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, and interest on the Notes of each applicable series or to enforce the performance of any provision of the Notes of each applicable series or this Indenture and may take any necessary action requested of it as Trustee to settle, compromise, adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. Any such proceeding instituted by the Trustee may be brought in its own name and as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation and reasonable expenses, disbursements of the Trustee and its counsel, be for the ratable benefit of the Holders of the Notes in respect of which such judgment has been recovered. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative, to the extent permitted by law. Any reasonable costs associated with actions taken by the Trustee in good faith and without negligence under this Section 5.03 shall be reimbursed to the Trustee by the Issuer of the relevant series of Notes.
SECTION 5.04. Waiver of Past Defaults and Events of Default. Provided the Notes are not then due and payable by reason of a declaration of acceleration, the Holders of a majority in principal amount of the then outstanding Notes of such series may on behalf of the Holders of all the affected Notes of such series waive any past Default with respect to such series of Notes and its consequences by providing written notice thereof to the Issuer of such series of Notes and the Trustee, except a Default (1) in the payment of interest on or the principal of any Note or (2) in respect of a covenant or provision hereof which under this Indenture cannot be modified or amended without the consent of the Holder of each outstanding Note affected. In the case of any such waiver, such Issuer, the Trustee and the Holders of the Notes of any applicable series will be restored to their former positions and rights under this Indenture, respectively; provided that no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.
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SECTION 5.05. Control by Majority. The Holders of at least a majority in aggregate principal amount of the outstanding Notes of a series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes of such series. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of the affected Notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of the relevant series Notes.
SECTION 5.06. Limitation on Suits. No Holder of the Notes of a series will have any right to institute any action or proceeding at law or in equity or in bankruptcy or otherwise upon or under or with respect to this Indenture, or for the appointment of a trustee, receiver, liquidator, custodian or other similar official or for any other remedy under this Indenture (except suits for the enforcement of payment of overdue principal or interest) unless (1) the Holder has previously given the Trustee written notice of a continuing Event of Default; (2) the Holders of at least 25% in principal amount of the outstanding Notes of such series have made a written request to the Trustee to institute such proceeding as Trustee; (3) the Holder or Holders of the relevant series of Notes have offered, and if requested, have provided to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee has not complied with the request within 60 days after receipt of the request and the offer of indemnity; and (5) during such 60-day period the Holders of a majority in aggregate principal amount of the outstanding Notes of such series have not given the Trustee a direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).
However, the Holder of any Note will have an absolute and unconditional right to receive payment of the principal of, and premium, if any, or interest on, such Note on or after the date or dates they are to be paid as expressed in such Note and to institute suit for the enforcement of any such payment.
SECTION 5.07. Rights of Holders To Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of the principal of or premium, if any, or interest, if any, on such Note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Notes shall not be impaired or affected without the consent of such Holder.
SECTION 5.08. Collection Suit by Trustee. If an Event of Default in payment of principal, premium or interest specified in Section 5.01(a) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer of the relevant series of Notes (or any other obligor on the Notes of such series) for the whole amount of unpaid principal and accrued interest remaining unpaid.
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SECTION 5.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.06) and the Holders allowed in any judicial proceedings relative to the Issuer of the relevant series of Notes (or any other obligor upon the Notes of such series), its creditors or its property and, unless prohibited by law, shall be entitled and empowered to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same after deduction of its charges and expenses to the extent that any such charges and expenses are not paid out of the estate in any such proceedings and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceedings. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.
SECTION 5.10. Priorities. Any money or property collected by the Trustee pursuant to this Article V, and any money or other property distributable in respect of any Issuer’s obligations under this Indenture after an Event of Default shall be applied in the following order:
FIRST: to the Trustee (including any predecessor Trustee) for amounts due under Section 6.06;
SECOND: to Holders for amounts due and unpaid on the affected Notes for principal, premium, if any, and interest as to each, ratably, without preference or priority of any kind, according to the amounts due and payable on the affected Notes; and
THIRD: to the Issuer of the relevant series of Notes or as otherwise determined by a court of competent jurisdiction.
The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 5.10.
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SECTION 5.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 5.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.07 or a suit by Holders of more than 10% in principal amount of the Notes of a series then outstanding.
SECTION 5.12. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Notes to exercise any right or remedy occurring upon an Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Trustee
SECTION 6.01. Duties of Trustee. (a) If an Event of Default actually known to a Responsible Officer of the Trustee has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it under this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture but, in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts, statements, opinions or conclusions stated therein).
(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, its own bad faith or its own wilful misconduct, except that:
(1) this paragraph does not limit the effect of clause (b) or (d) of this Section 6.01;
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(2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction of the Holders of a majority in aggregate principal amount of the outstanding Notes of any series, determined as provided herein, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Notes of such series.
(d) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section 6.01.
(f) The Trustee shall not be liable for interest or earnings on any money received by it except as the Trustee may agree in writing with the Issuer of the relevant series of Notes. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by the law.
(g) The Trustee shall not be responsible for the application of any money by any Paying Agent other than the Trustee.
SECTION 6.02. Rights of Trustee. Subject to Section 6.01:
(a) The Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed in good faith by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.
(b) Any request or direction of any Issuer mentioned herein shall be sufficiently evidenced by a Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.
(c) Whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate.
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(d) The Trustee may execute any of the trusts or power hereunder or perform any duties hereunder either directly or by or through attorneys or agents and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent appointed with due care by it hereunder.
(e) The Trustee shall not be liable for any action taken, suffered, or omitted to be taken in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.
(f) The Trustee may consult with counsel of its selection, and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in reliance thereon.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder.
(i) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further reasonable inquiry or reasonable investigation into such facts or matters as it may see fit.
(j) The Trustee shall not be deemed to have notice or be charged with knowledge of any Default or Event of Default unless written notice of such Default or Event of Default from the Issuer of the relevant series of Notes or any Holder is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee/applicable Paying Agent, and such notice references the relevant Notes and this Indenture.
(k) The Trustee may request that the Issuer of the relevant series of Notes delivers an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officer’s Certificate may be signed by any person authorized to sign an Officer’s Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.
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(l) Anything contrary in this Indenture notwithstanding, in no event shall the Trustee be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit), even if the Trustee has been advised as to the likelihood of such loss or damage and regardless of the form of action.
(m) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its control, including, without limitation, any provision of any law or regulation or any act of any Governmental Authority; acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority; and governmental action and may do anything which is, in its reasonable opinion, necessary to comply with any such law, directive or regulation.
(n) The permissive right of the Trustee to take or refrain from taking action hereunder shall not be construed as a duty.
(o) Notwithstanding anything else herein contained, the Trustee and Agents may refrain without liability from doing anything that would or might in its reasonable opinion be contrary to any law of any state or jurisdiction (including but not limited to the United States of America or any jurisdiction forming a part of it and England and Wales) or any directive or regulation of any agency of any such state or jurisdiction and may without liability do anything which is, in its reasonable opinion, necessary to comply with any such law, directive or regulation. The Trustee and Agents agree to notify the Issuer of the relevant series of Notes, to the extent permitted by applicable law and regulation, of the circumstances which may cause the Trustee or Agents to refrain from acting, as soon as reasonably practicable following such circumstances arising.
SECTION 6.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may make loans to, accept deposits from, perform services for or otherwise deal with the Issuer of the relevant series of Notes or any Affiliate thereof with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest within the meaning of TIA §310(b)(1), it must eliminate such conflict within 90 days or resign; provided, however, that there shall be excluded from the operation of TIA §310(b)(1) any indenture or indentures under which other securities or certificates of interest of participation in other securities of the Issuer of the relevant series of Notes are outstanding if the requirements for such exclusion set forth in TIA §310(b) (1) are met, other than the fact that such indentures are not described herein.
Any Agent may do the same with like rights. The Trustee is subject to Section 6.09.
SECTION 6.04. Trustee’s and Agent’s Disclaimers. The recitals contained herein and in the Notes, except any certificates issued by an Authentication Agent, shall be taken as the statements of the Issuers, and neither the Trustee nor any Authentication Agent assumes responsibility for their correctness. Neither the Trustee nor any Authentication Agent makes
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representations as to the validity, sufficiency or adequacy of this Indenture or of the Notes. Neither the Trustee nor the Authentication Agent shall be accountable for the use or application by any Issuer of Notes or the proceeds thereof. The Trustee shall not be responsible to make any calculation with respect to any matter under this Indenture. The Trustee represents that it is duly authorized to execute and deliver this Indenture and perform its obligations hereunder, as applicable. Each Agent represents that it is duly authorized to execute and deliver this Indenture, authenticate the Notes and perform its obligations hereunder, as applicable. Neither the Trustee nor any Agent shall have a duty to monitor or investigate any Issuer’s compliance with or the breach of, or cause to be performed or observed, any representation, warranty or covenant made in this Indenture.
SECTION 6.05. Notice of Defaults. Within 90 days after the occurrence thereof, and if known to the Trustee, the Trustee shall give to the Holders of the Notes of a series notice of each Default or Event of Default with respect to the Notes of such series known to the Trustee, by transmitting such notice to Holders at their addresses as the same shall then appear on the register of the Notes kept by the applicable Registrar, unless such Default shall have been cured or waived before the giving of such notice. Except in the case of a Default or Event of Default in payment of the principal of, premium, if any, or interest on any of the Notes of a series when and as the same shall become payable, or to make any payment as to Notes of a series pursuant to a redemption or repurchase of the Notes pursuant to the provisions of this Indenture, the Trustee shall be protected in withholding such notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Holders.
SECTION 6.06. Compensation and Indemnity. (a) The Issuer of the relevant series of Notes shall pay to the Trustee and Agents from time to time such compensation for their services hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as shall be agreed upon in writing. The Issuer of the relevant series of Notes shall reimburse the Trustee and Agents upon written request for all reasonable disbursements, expenses and advances incurred or made by them in connection with the Trustee’s duties under this Indenture, including the compensation and reasonable disbursements and expenses of the Trustee’s agents and external counsel, except any such expense, disbursement or advance as may be attributable to its wilful misconduct, bad faith or negligence.
(b) The Issuer of the relevant series of Notes shall fully indemnify each of the Trustee and its officers, agents and employees and any predecessor Trustee (each, an “Indemnified Party”, and, collectively, the “Indemnified Parties”) for, and hold each of them harmless against, any and all loss, damage, claim, liability or expense, including, without limitation, reasonable and documented attorneys’ fees and expenses incurred by each of them in connection with the acceptance or performance of its duties under this Indenture, including the reasonable and documented costs and expenses of enforcing this Indenture against the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof (including this Section 6.06) and defending itself against any claim (whether asserted by such Issuer, or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder (including, without limitation, settlement costs). The Trustee shall notify the Issuer of the relevant series of Notes in writing promptly of any claim of which a Responsible
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Officer of the Trustee has received written notice at its Corporate Trust Office asserted against an Indemnified Party for which such Indemnified Party may seek indemnity; provided that the failure by the Trustee to so notify such Issuer shall not relieve such Issuer of its obligations hereunder. The Issuer of the relevant series of Notes need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. Any settlement which affects an Indemnified Party may not be entered into without the consent of such Indemnified Party, unless such Indemnified Party is given a full and unconditional release from liability with respect to the claims covered thereby and such settlement does not include a statement or admission of fault, culpability, or failure to act by or on behalf of such Indemnified Party. Any Indemnified Party may have separate counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Issuer of the relevant series of Notes and the Indemnified Party shall have mutually agreed in writing to the retention of such counsel, (ii) the named parties to any such proceeding include both such Issuer and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual differing interests between or among them, or (iii) such Issuer fails to retain counsel reasonably satisfactory to the Indemnified Party, in which case such Issuer shall pay the reasonable and documented fees and expenses of such counsel.
(c) Notwithstanding the foregoing, the Issuer of the relevant series of Notes need not reimburse the Trustee for any expense or indemnify it against any loss or liability to have been incurred by the Trustee through its own wilful misconduct, bad faith or negligence.
(d) To secure the payment obligations of the Issuer of the relevant series of Notes in this Section 6.06, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee and such money or property held in trust to pay principal of and interest on particular Notes.
(e) The obligations of the Issuer of the relevant series of Notes under this Section 6.06 to compensate and indemnify the Trustee, Agents and each predecessor Trustee and to pay or reimburse the Trustee, Agents and each predecessor Trustee for expenses, disbursements and advances shall be the liability of such Issuer and the lien provided for under this Section 6.06 and shall survive the resignation or removal of the Trustee and the satisfaction, discharge or other termination of this Indenture for any reason, including any termination or rejection hereof under any Bankruptcy Law.
(f) In addition to, but without prejudice to its other rights under this Indenture, when the Trustee incurs expenses or renders services after an Event of Default specified in Section 5.01(g), (h) or (i) occurs, the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law.
(g) For purposes of this Section 6.06, the term “Trustee” shall include any predecessor Trustee; provided, however, that the negligence, wilful misconduct or bad faith of any Trustee hereunder shall not affect the rights or any other Trustee hereunder.
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SECTION 6.07. Replacement of Trustee. (a) A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 6.07.
(b) The Trustee may resign at any time by so notifying the Issuer of the relevant series of Notes in writing no later than 30 calendar days prior to the date of the proposed resignation. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by notifying the Issuer of the relevant series of Notes and the removed Trustee in writing no later than 30 calendar days prior to the date of the proposed removal and may appoint a successor Trustee with such Issuer’s written consent, which consent shall not be unreasonably withheld. The Issuer of the relevant series of Notes may remove the Trustee at its election if:
(1) the Trustee fails to comply with Section 6.09;
(2) the Trustee is adjudged bankrupt or insolvent or an order for relief entered with respect to the Trustee under Bankruptcy Law;
(3) a receiver or other public officer takes charge of the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuer of the relevant series of Notes shall promptly appoint a successor Trustee.
(d) If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuer of the relevant series of Notes or the Holders of at least 10% in principal amount of the outstanding Notes may petition at the expense of such Issuer any court of competent jurisdiction, in the case of the Trustee, for the appointment of a successor Trustee.
(e) If the Trustee fails to comply with Section 6.09, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer of the relevant series of Notes. Immediately following such delivery, the retiring Trustee shall, subject to the lien and its rights under Section 6.06, transfer all property held by it as Trustee to the successor Trustee, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall transmit notice of its succession to each Holder. Notwithstanding replacement of the Trustee pursuant to this Section 6.07, the lien and the obligations of the Issuer of the relevant series of Notes under Section 6.06 shall continue for the benefit of the retiring Trustee.
SECTION 6.08. Successor Trustee by Consolidation, Merger, etc. Any Person into which the Trustee or any successor to it in the trusts created by this Indenture shall be
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merged or converted, or any Person with which it or any successor to it shall be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Trustee or any such successor to it shall be a party, or any Person to which the Trustee or any successor to it shall sell or otherwise transfer all or substantially all of the corporate trust business of the Trustee, shall be the successor Trustee under this Indenture without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such Person shall be otherwise qualified and eligible under this Article VI. In case at the time such successor to the Trustee (if acting as the Authentication Agent) shall succeed to the trusts created by this Indenture with respect to one or more series of Notes, any of such Notes shall have been authenticated but not delivered by the Trustee (if acting as the Authentication Agent) then in office, any successor to such Trustee (if acting as the Authentication Agent) may adopt the certificate of authentication of any predecessor Trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor Trustee; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee (if acting as the Authentication Agent) or authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.
SECTION 6.09. Eligibility; Disqualification. There will at all times be a Trustee hereunder that is a Person organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities. The Trustee (together with its corporate parent) shall have a combined capital and surplus of at least $100.0 million as set forth in the most recent applicable published annual report of condition.
The Trustee shall not be deemed to have a conflict of interest under or in respect of its duties under this Indenture except and to the extent provided for in TIA §310(b)(1); provided, however, that there shall be excluded from the operation of TIA §310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer of the relevant series of Notes are outstanding if the requirements for such exclusion set forth in TIA §310(b)(1) are met, other than the fact that such indentures are not described herein.
SECTION 6.10. Reports by Trustee to Holders. If required by TIA §313(a), within 60 days after (i) the first anniversary of the first date of issuance of Notes hereunder and (ii) each anniversary of such date, the Trustee shall transmit to each Holder a brief report dated as of such date that complies with TIA § 313(a) (but if no event described in TIA §313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA §313(b)(2). The Trustee shall also transmit all reports as required by TIA §313(c) and comply with TIA §313(d).
SECTION 6.11. Preferential Collection of Claims Against Issuers. The Trustee shall comply with TIA § 311(a). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.
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Amendment, Supplement and Waiver
SECTION 7.01. Without Consent of Holders. The Issuer of the relevant series of Notes, any Guarantors thereof, if applicable, and the Trustee may, without the consent of any Holder of a Note of such series, from time to time and at any time, enter into a supplemental indenture amending or supplementing this Indenture, the relevant Notes or, if applicable, the relevant Guarantees in order to:
(a) convey, transfer, assign, mortgage or pledge to the Holders of the Notes of such series or any person acting on their behalf as security for the Notes of such series any property or assets;
(b) evidence the succession of another person to the Issuer of such series or, if applicable, any Guarantor thereof, as the case may be, or successive successions, and the assumption by the successor person(s) of the covenants, agreements and obligations of such Issuer or any such Guarantor, as the case may be, pursuant to this Indenture;
(c) evidence and provide for the acceptance of appointment of a successor or successors to the Trustee and/or the applicable Paying Agent, Transfer Agent, Calculation Agent and Registrar, as applicable;
(d) add to the covenants of, or the restrictions, conditions or provisions applicable to, the Issuer of such series and, if applicable, any Guarantor thereof, as the case may be, such further covenants, restrictions, conditions or provisions as such Issuer and any such Guarantor, as the case may be, shall consider to be for the protection of the Holders of the Notes of such series issued pursuant to this Indenture, including to eliminate one or both prongs of the release provision under Section 9.07(b) thereof, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default under this Indenture permitting the enforcement of all or any of the several remedies provided in this Indenture; provided that, in respect of any such additional covenant, restriction, condition or provision, such supplemental indenture may provide for a particular period of grace after default (which may be shorter or longer than that allowed in the case of other defaults) or may limit the remedies available to the Trustee upon such an Event of Default;
(e) modify the restrictions on, and procedures for, resale and other transfers of the Notes of such series pursuant to law, regulation or practice relating to the resale or transfer of restricted securities generally;
(f) cure any ambiguity or to correct or supplement any provision contained in this Indenture, the relevant Notes, or, if applicable, the relevant Guarantees which may be defective or inconsistent with any other provision contained therein or to make such other provision in regard to matters or questions arising under this Indenture, the relevant Notes or, if applicable, the relevant Guarantees as the Issuer or any Guarantor of such series or the Trustee may deem necessary or desirable and which will not, in the opinion of such Issuer, adversely affect the interests of the Holders of the Notes of such series in any material respect;
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(g) issue an unlimited aggregate principal amount of Notes under this Indenture or to “reopen” the applicable series of Notes and create and issue additional notes having substantially identical terms and conditions as the Notes of such series (or in all respects except as to issue price, denomination, rate of interest, Maturity Date and the date from which interest, if any, shall accrue, and except as may otherwise be provided in or pursuant to such Officer’s Certificate or supplemental indenture relating thereto) so that the additional notes are consolidated and form a single series with the outstanding Notes of such series; and
(h) evidence the addition of any new Guarantor of the relevant Notes and this Indenture, or the release of any Guarantor from its obligations with respect to a particular series of Notes and this Indenture pursuant to the terms of this Indenture.
Upon the written request of the Issuer of the relevant series of Notes accompanied by a Board Resolution authorizing the execution of any such supplemental indenture and upon receipt by the Trustee of the documents described in Section 7.05, the Trustee shall join with the Issuer of such series of Notes and, if applicable, the Guarantors thereof in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture, in which case the Trustee may, but shall not be obligated to, enter into such supplemental indenture.
SECTION 7.02. With Consent of Holders. (a) The Issuer of the relevant series of Notes, if applicable, the Guarantors thereof and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of all series of the Notes affected by such supplemental indenture (voting as one class) at the time outstanding under this Indenture (including consents obtained in connection with a tender offer or exchange offer for the applicable Notes), from time to time and at any time, may enter into a supplemental indenture for the purpose of amending, waiving or otherwise modifying the provisions of this Indenture, the relevant Notes and, if applicable, the relevant Guarantees, or adding any provisions to or changing in any manner or eliminating any of the provisions of the applicable Notes or of modifying in any manner the rights of the Holders of the applicable Notes; provided, that no such supplemental indenture may, without the consent of the Holder of each of the Notes so affected:
(1) change the Stated Maturity of the applicable Note of, or the date for payment of any principal of, or installment of interest on, any applicable Note, or reduce the amount of principal of an Original Issue Discount Note that would be due and payable upon a declaration of acceleration of the maturity thereof pursuant to Section 5.02;
(2) reduce the principal amount of or the rate or amount of interest on any applicable Note or Additional Amounts payable with respect thereto or reduce the amount payable thereon in the event of redemption or default or change the method for determining the interest rate thereon;
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(3) change the currency of payment of principal of or interest on any applicable Note or Additional Amounts payable with respect thereto or change the obligation of the Issuer of the relevant series of Notes or, if applicable, any Guarantor thereof, as the case may be, to pay Additional Amounts (except as otherwise permitted by such applicable Note);
(4) impair the right to institute suit for the enforcement of any such payment on or with respect to any applicable Note;
(5) reduce the percentage of the aggregate principal amount of the applicable Notes outstanding the consent of whose Holders is required for any such supplemental indenture; or
(6) reduce the aggregate principal amount of any applicable Note outstanding necessary to modify or amend this Indenture or any such Note or to waive any future compliance or past default or reduce the quorum requirements or the percentage of aggregate principal amount of any applicable Notes outstanding required for the adoption of any action at any meeting of Holders of such Notes or to reduce the percentage of the aggregate principal amount of such Notes outstanding necessary to rescind or annul any declaration of the principal of, or all accrued and unpaid interest on, any Note to be due and payable;
provided that no consent of any Holder of any applicable Note shall be necessary to permit the Trustee, the Issuer of the relevant series of Notes and, if applicable, the Guarantors thereof to execute supplemental indentures as described under Section 7.01.
(b) In determining whether the Holders of the required principal amount of a series of Notes have concurred in any direction, notice, waiver or consent, Notes owned by the Issuer of the relevant series of Notes or any subsidiary of such Issuer, or by any Affiliate of such Issuer will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in conclusively relying on any such direction, notice, waiver or consent, only Notes that a Responsible Officer of the Trustee actually knows are so owned will be so disregarded.
(c) It is not necessary for the consent of the Holders under this Section 7.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment that requires the consent of the Holders of the affected Notes becomes effective, the Issuer of the relevant series of Notes shall transmit to each registered Holder of the affected Notes pursuant to Section 10.01 a notice briefly describing such amendment. However, the failure to give such notice to all Holders of such Notes, or any defect therein, shall not impair or affect the validity of the amendment.
Upon the written request of the Issuer of the relevant series of Notes accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and upon
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the receipt by the Trustee of evidence of the consent of the Holders as aforesaid and upon receipt by the Trustee of the documents described in Section 7.05, the Trustee shall join with such Issuer and, if applicable, the relevant Guarantors in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties, liabilities or immunities under this Indenture, in which case the Trustee may, but shall not be obligated to, enter into such supplemental indenture.
SECTION 7.03. Revocation and Effect of Consents. After an amendment, supplement, waiver or other action becomes effective, a consent to it by a Holder of a Note is a continuing consent conclusive and binding upon such Holder and every subsequent Holder of the same Note or portion thereof, and of any Note issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder, whether or not they have consented to such action or were present at the meeting at which such action was taken and every subsequent Holder of the same Note or portion thereof, and of any Note issued upon the transfer thereof or in exchange therefor or in place thereof, even if notation of the consent is not made on any such Note.
The Issuer of the relevant series of Notes may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement, or waiver. If a record date is fixed, then, notwithstanding the preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only such Persons, shall be entitled to consent to such amendment, supplement, or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date unless the consent of the requisite number of Holders has been obtained.
SECTION 7.04. Notation on or Exchange of Notes. If an amendment, supplement, or waiver changes the terms of a Note, the applicable Paying Agent (in accordance with the specific written direction of the Issuer of the relevant series of Notes) shall request the Holder of the Note (in accordance with the specific written direction of the relevant Issuer) to deliver it to such Paying Agent. In such case, such Paying Agent shall place an appropriate notation (in accordance with a specific written direction from such Issuer) on the Note about the changed terms and return it to the Holder. Alternatively, if the Issuer of the relevant series of Notes so determines, such Issuer in exchange for the Note shall issue and the applicable Authentication Agent shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.
SECTION 7.05. Trustee To Sign Amendments, etc. The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article VII if the amendment, supplement or waiver does not affect the rights, duties, liabilities or immunities of the Trustee. If it does affect the rights, duties, liabilities or immunities of the Trustee, the Trustee may, but need not, sign such
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amendment, supplement or waiver. In signing or refusing to sign such amendment, supplement or waiver the Trustee shall be entitled to receive and, subject to Section 6.01, shall be fully protected in relying upon an Officer’s Certificate and an Opinion of Counsel stating, in addition to the matters required by Section 10.02, that such amendment, supplement or waiver is authorized or permitted by this Indenture, and, in the case of the Opinion of Counsel, that such amendment or supplemental indenture is valid and binding on the Issuer of the relevant series of Notes and, if applicable, the Guarantors thereof in accordance with its terms.
Satisfaction and Discharge of Indenture; Defeasance
SECTION 8.01. Satisfaction and Discharge of Liability on Notes; Defeasance. (a) This Indenture will be discharged and will cease to be of further effect with respect to any Notes or any series of Notes (except as to rights of registration of transfer or exchange of Notes and rights to receive principal of and premium, if any, and interest on such Notes) as to all outstanding Notes of such series issued hereunder when:
(1) either:
(A) all the Notes of such series that have been authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has been deposited in trust or segregated and held in trust by the Issuer of such series and thereafter repaid to such Issuer or discharged from this trust) have been delivered to the applicable Paying Agent for cancellation; or
(B) all Notes of such series not delivered to such Paying Agent for cancellation otherwise (i) have become due and payable; (ii) will become due and payable within one year; or (iii) have been called for redemption within one year pursuant to the provisions described in the form of notes of such series and, in any case, the Issuer of such series or, if applicable, any Guarantor thereof has irrevocably deposited or caused to be deposited with the Trustee as trust funds, in trust solely for the benefit of the Holders of such Notes, (x) money in the currency in which payment of the Notes of such series is to be made in an amount; (y) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of money in the currency in which payment of the Notes of such series is to be made in an amount; or (z) a combination thereof, that is sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire indebtedness (including all principal and accrued interest) on the Notes of such series not theretofore delivered to such Paying Agent for cancellation;
(2) the Issuer of such series or, if applicable, any Guarantor thereof has paid all sums payable by it with respect to such series under this Indenture; and
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(3) the Issuer of such series has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of the Notes of such series at maturity or on the Redemption Date, as the case may be.
In addition, the Issuer of such series must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that all conditions precedent to satisfaction and discharge have been complied with.
(b) Subject to clause (c) of this Section 8.01 and Section 8.02, the Issuer of the relevant series of Notes may, at its option and at any time, elect to have its obligations and, if applicable, the obligations of the Guarantors thereof discharged with respect to the outstanding Notes of a series (“Legal Defeasance”). Legal Defeasance means that the Issuer of the relevant series of Notes and, if applicable, the Guarantors of such series shall be deemed to have paid and discharged the entire indebtedness represented by the Notes of such series and, if applicable, the related Guarantees, and this Indenture shall cease to be of further effect as to all outstanding Notes of such series and, if applicable, the related Guarantees, on the 91st day after the applicable conditions described in Section 8.02 have been satisfied, except as to:
(1) the rights of Holders of such series of Notes issued under this Indenture to receive payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due solely out of the trust created pursuant to this Indenture;
(2) such Issuer’s obligations with respect to such series Notes concerning issuing temporary Notes under Section 2.11, registration of Notes under Section 2.04, mutilated, destroyed, lost or stolen Notes under Section 2.08, and the maintenance of an office or agency for payment under Section 2.04 and money for security payments held in trust under Section 2.05;
(3) the rights, powers, trust, duties, and immunities of the Trustee, and such Issuer’s obligation in connection therewith; and
(4) the applicable provisions of this Article VIII.
In addition, the Issuer of the relevant series of Notes may, at its option and at any time, elect to have its obligations and, if applicable, the obligations of the Guarantors thereof released with respect to (A) their respective obligations under Sections 4.09 and 4.10 with respect to the outstanding Notes of a series and (B) the operation of Section 5.01 (“Covenant Defeasance”) on and after the conditions in Section 8.02 with respect to Covenant Defeasance are satisfied, and thereafter any omission to comply with such obligations shall not constitute a Default or Event of Default with respect to such Notes. Such Issuer may exercise its Legal Defeasance option regardless of whether it previously exercised Covenant Defeasance.
(c) If the Issuer of the relevant series of Notes exercises its Legal Defeasance option, payment of the Notes of such series may not be accelerated because of an Event of Default with respect thereto.
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(d) Upon satisfaction of the conditions set forth herein and upon request of the Issuer of the relevant series of Notes, the Trustee shall acknowledge in writing the discharge of those obligations that such Issuer terminates.
(e) Notwithstanding clauses (a) and (b) of this Section 8.01, the obligations of the Issuer of the relevant series of Notes in Sections 2.04, 2.06, 2.07, 2.08, 6.06, 8.05 and 8.06 shall survive with respect to such series of Notes until such time as the Notes of such series have been paid in full. Thereafter, such Issuer’s obligations in Sections 6.06, 8.05 and 8.06 shall survive.
SECTION 8.02. Conditions to Defeasance. In order to exercise either Legal Defeasance or Covenant Defeasance with respect to the Notes of any series:
(a) the Issuer of such series must irrevocably deposit with the Trustee, as trust funds, in trust solely for the benefit of the Holders of the Notes of such series (i) money in the currency in which payment of the Notes of such series is to be made in an amount, (ii) Government Obligations with respect to such series, maturing as to principal and interest at such times and in such amounts as will ensure the availability of money in the currency in which payment of the Notes of such series is to be made in an amount or (iii) a combination thereof, that will be sufficient (without consideration of any reinvestment of interest) in the opinion of a certified public accounting firm of national reputation selected by such Issuer, to pay the principal of and interest on the Notes of such series on the stated date for payment or on the Redemption Date of the principal or installment of principal of, or interest on such series of Notes;
(b) in the case of Legal Defeasance, the Issuer of such series shall have delivered to the Trustee an Opinion of Counsel to the effect that the beneficial owners of Notes of such series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred, which opinion must be based either on a change in the applicable U.S. federal income tax laws or regulations occurring after the date hereof or such Issuer having received a ruling from, or published by, the Internal Revenue Service to that effect;
(c) in the case of Covenant Defeasance, the Issuer of such series shall have delivered to the Trustee an Opinion of Counsel to the effect that the beneficial owners of Notes of such series will not recognize income, gain or loss for U.S. federal income tax purposes solely as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit; and
(e) the Issuer of such series shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been complied with.
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If the funds deposited with the Trustee to effect Covenant Defeasance are insufficient to pay the principal of and interest on the Notes of the applicable series when due, then the obligations of the Issuer and, if applicable, the Guarantors thereof under this Indenture will be revived with respect to such series and no such defeasance will be deemed to have occurred.
SECTION 8.03. Deposited Money and Government Obligations To Be Held in Trust; Other Miscellaneous Provisions. All money and Government Obligations (including the proceeds thereof) deposited with the Trustee pursuant to Section 8.02(a) in respect of the outstanding Notes of a series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment to the Holders of such Notes, of all sums due and to become due thereon in respect of principal, premium, if any, and accrued interest, but such money need not be segregated from other funds except to the extent required by law.
The Issuer of the relevant series of Notes shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the Government Obligations deposited pursuant to Section 8.02(a) or the principal, premium, if any, and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuer of the relevant series of Notes from time to time upon a request of such Issuer any money or Government Obligations held by it as provided in Section 8.02(a) which, in the opinion of a certified public accounting firm of national reputation selected by such Issuer expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.04. Reinstatement. If the Trustee is unable to apply any money or Government Obligations in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Issuer of the relevant series of Notes under this Indenture and the applicable Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee is permitted to apply all such money or Government Obligations in accordance with Section 8.01; provided that if such Issuer has made any payment of principal of, premium, if any, or accrued interest on any Notes because of the reinstatement of its obligations, such Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee.
SECTION 8.05. Moneys Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture, all moneys then held by any Paying Agent under the provisions of this Indenture shall, upon written demand of the Issuer of the relevant series of
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Notes, be paid to the Trustee, or if sufficient moneys have been deposited with the Trustee pursuant to Section 8.02(a), any excess funds to such Issuer upon a request of such Issuer, and thereupon the applicable Paying Agent shall be released from all further liability with respect to such moneys.
SECTION 8.06. Moneys Held. Subject to any applicable abandoned property laws, any money deposited with the Trustee or a Paying Agent, or then held by the Issuer of the relevant series of Notes, for the payment of the principal of (and premium, if any) or interest on the Notes of a series and remaining unclaimed for two years after such principal (and premium, if any) or interest has become due and payable shall be paid to such Issuer on Company Order, or (if then held by such Issuer) shall be discharged; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to such Issuer for payment thereof, and all liability of the Trustee or the relevant Paying Agent with respect to such money, and all liability of such Issuer as trustee thereof, shall thereupon cease; provided, however, that the Trustee or the such Paying Agent, before being required to make any such repayment, may at the expense of such Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to such Issuer.
Guarantees
SECTION 9.01. Guarantee. (a) The Parent hereby fully and unconditionally guarantees the Notes issued by BATCAP and BATIF (the “Subsidiary Issuers”) under this Indenture and the obligations of the Subsidiary Issuers hereunder and thereunder, and guarantees to each Holder of a Note issued by a Subsidiary Issuer and authenticated and delivered by the applicable Authentication Agent, and to the Trustee on behalf of such Holder, that (i) the principal of (and premium, if any) and interest on such Notes will be paid in full when due, whether at Stated Maturity, by acceleration or otherwise (including, without limitation, the amount that would become due but for the operation of any automatic stay provision of any Bankruptcy Law), together with interest on the overdue principal, if any, and all other obligations of the relevant Subsidiary Issuer to the Holders or the Trustee hereunder or thereunder will be paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any such Notes or of any such other obligations, the same will be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 9.03.
The Parent hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of Notes with respect to any provisions hereof or thereof, any release of any other Guarantor, the recovery of any judgment against any of the Subsidiary Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of the Parent.
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(b) The Parent hereby waives (to the extent permitted by law) the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of a Subsidiary Issuer, any right to require a proceeding first against the relevant Subsidiary Issuer or any other Person, protest, notice and all demands whatsoever and covenants that, subject to Section 9.05, the Guarantee of the Parent shall not be discharged as to any series of Notes of the Subsidiary Issuers, unless paid or provided for in accordance with the obligations contained in such series of Notes, this Indenture and such Guarantee. The Parent acknowledges that the Guarantee is a guarantee of payment and not of collection. The Parent hereby agrees that, in the event of a default in payment of principal (or premium, if any) or interest on such Note, whether at its Stated Maturity, by acceleration, purchase or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Note, subject to the terms and conditions set forth in this Indenture, directly against the Parent to enforce the Parent’s Guarantee without first proceeding against the relevant Subsidiary Issuer or, if applicable, any other Guarantor. The Parent agrees that if, after the occurrence and during the continuance of an Event of Default in respect of a series of Notes of a Subsidiary Issuer, the Trustee or any of the Holders of such Notes are prevented by applicable law from exercising their respective rights to accelerate the maturity of the Notes, to collect interest on the Notes, or to enforce or exercise any other right or remedy with respect to the Notes, the Parent will pay to the Trustee for the account of the relevant Holders, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Trustee or any of such Holders.
(c) If any Holder of a Note issued by a Subsidiary Issuer or the Trustee is required by any court or otherwise to return to the relevant Subsidiary Issuer or the Parent, or any custodian, trustee, liquidator or other similar official acting in relation to either such Subsidiary Issuer or the Parent, any amount paid by any of them to the Trustee or such Holder, the Parent’s Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. The Parent further agrees that, as between the Parent, on the one hand, and the Holders and the Trustee, on the other hand, (x) subject to this Article IX, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article V for the purposes of the Parent’s Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article V, such obligations (whether or not due and payable) shall forthwith become due and payable by the Parent for the purpose of its Guarantee.
(d) The Parent’s Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the relevant Subsidiary Issuer for liquidation or reorganization, should such Subsidiary Issuer become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of such Subsidiary Issuer’s assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the relevant Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on such Notes, whether as a “voidable preference”, “fraudulent transfer” or otherwise, all as though such payment or
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performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, such Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
SECTION 9.02. Severability. In case any provision of the Parent’s Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 9.03. Limitation of Liability. The Parent and by its acceptance hereof each Holder of a Note issued by a Subsidiary Issuer confirms that it is the intention of all such parties that the guarantee by the Parent pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law or the provisions of its local law relating to fraudulent transfer or conveyance. To effectuate the foregoing intention, such Holders and the Parent hereby irrevocably agree that the obligations of the Parent under its Guarantee shall be limited to the maximum amount that will not, after giving effect to all other contingent and fixed liabilities of the Parent and, if applicable, after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to this Article IX, result in the obligations of the Parent under its Guarantee constituting such fraudulent transfer or conveyance.
SECTION 9.04. Subrogation. The Parent shall be subrogated to all rights of Holders of the Notes issued by the Subsidiary Issuers against the relevant Subsidiary Issuer in respect of any amounts paid by the Parent pursuant to the provisions of Section 9.01; provided, however, that if an Event of Default has occurred and is continuing, the Parent shall not be entitled to enforce or receive any payments arising out of, or based upon, such right of subrogation until all amounts then due and payable by the Parent under this Indenture or the Notes issued by the Subsidiary Issuers shall have been paid in full.
SECTION 9.05. Reinstatement. The Parent hereby agrees that the Guarantee provided for in Section 9.01 shall continue to be effective or be reinstated, as the case may be, if at any time, payment, or any part thereof, of any obligations or interest thereon is rescinded or must otherwise be restored by a Holder of a Note issued by the Subsidiary Issuers to the relevant Subsidiary Issuer upon the bankruptcy or insolvency of such Subsidiary Issuer or the Parent.
SECTION 9.06. Benefits Acknowledged. The Parent acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that its Guarantee is knowingly made in contemplation of such benefits.
SECTION 9.07. Additional Guarantors. The Parent will guarantee the Notes issued by BATCAP and BATIF, and one or more of BATCAP (if it is not the Issuer), BATIF (if it is not the Issuer), BATNF and RAI may guarantee any series of Notes issued under this Indenture (each of them and any other Guarantor that is a subsidiary of the Parent (a “Subsidiary Guarantor”). The terms of Sections 9.01 through 9.06 will be applicable, mutatis mutandi, to any Subsidiary Guarantor and its Guarantee unless otherwise
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set out in the applicable Officer’s Certificate or supplemental indenture establishing any series of Notes. If there is more than one Guarantor for a particular series of Notes (including when the Parent is one of such Guarantors), the following provisions will apply:
(a) Contribution: In order to provide for just and equitable contribution among the Guarantors of such series of Notes, such Guarantors will agree, inter se, that in the event any payment or distribution is made by any Guarantor under a Guarantee, such Guarantor will be entitled to a contribution from any other Guarantor in a pro rata amount based on the net assets of each Guarantor determined in accordance with IFRS.
(b) Release: Without the consent of the Trustee or the relevant Holders, any Subsidiary Guarantor, other than BATCAP, BATIF and BATNF, will automatically and unconditionally be released from all obligations under its Guarantee, and such Guarantee shall thereupon terminate and be discharged and of no further force or effect, in the event that (i) its guarantee of all then outstanding notes issued under the EMTN Programme is released; or (ii) at substantially the same time its Guarantee of the Notes is terminated, the Subsidiary Guarantor is released from all obligations in respect of indebtedness for borrowed money for which such Subsidiary Guarantor is an obligor (as a guarantor or borrower). For purposes of this Section 9.07(b), the amount of a Subsidiary Guarantor’s indebtedness for borrowed money shall not include (a) the Notes issued pursuant to this Indenture; (b) any other debt the terms of which permit the termination of such Subsidiary Guarantor’s guarantee of such debt under similar circumstances, as long as such Subsidiary Guarantor’s obligations in respect of such other debt are terminated at substantially the same time as its guarantee of the Notes; (c) any debt that is being refinanced at substantially the same time that the guarantee of the Notes is being released; provided that any obligations of the relevant Subsidiary Guarantor in respect of the debt that is incurred in the refinancing shall be included in the calculation of the relevant Subsidiary Guarantor’s indebtedness for borrowed money; and (d) for the avoidance of doubt, any debt in respect of which such Subsidiary Guarantor is an obligor (as a guarantor or borrower) (A) between or among the Parent and any subsidiary or subsidiaries thereof; or (B) between or among any subsidiaries of the Parent.
Miscellaneous
SECTION 10.01. Notices. Except for notice or communications to Holders, any notice or communication shall be given in writing and is duly given when received if delivered in person, when receipt is acknowledged if sent by facsimile, on the next Business Day if timely
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delivered by a nationally recognized courier service that guarantees overnight delivery or if mailed by first-class mail guaranteeing next day delivery, postage prepaid, addressed as follows:
If to any Issuer:
British American Tobacco p.l.c.
Globe House
4 Temple Place
London WC2R 2PG United Kingdom
Facsimile: +44 (0)20 7845 0555
Attention: Company Secretary
With a copy (which shall not constitute notice) to:
Cravath, Swaine & Moore LLP
CityPoint
1 Ropemaker Street
London EC2Y 9HR United Kingdom
Facsimile: +44 (0)20 7860 1150
Attention: Alyssa K. Caples
If to the Trustee:
Mailing Address:
Citibank, N.A. Agency & Trust
388 Greenwich Street
New York, NY 10013
Facsimile: (347) 394-0960
Attention: Kerry Hehir
If to the Authentication Agent, Registrar, Transfer Agent, Paying Agent and Calculation Agent:
Mailing Address:
Citibank, N.A. Agency & Trust
388 Greenwich Street
New York, NY 10013
Facsimile: (347) 394-0960
Attention: Kerry Hehir
Such notices or communications shall be effective and sufficiently given if so given within the manner and time prescribed in this Indenture; provided, however, that notwithstanding the foregoing, no notice or communication to the Trustee, any Agent, any Issuer or any Guarantor shall be deemed duly given until actually received by the Trustee, such Agent, any Issuer or any Guarantor, as applicable.
The Issuers, the Guarantors (if any), the Trustee or the Agents by written notice to the others may designate additional or different addresses for subsequent notices or communications.
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The Trustee and each Agent shall have the right, but shall not be required, to rely upon and comply with instructions and directions sent by email, facsimile and other similar unsecured electronic methods by persons believed by the Trustee and each Agent, as applicable, to be authorized to give instructions and directions on behalf of any Issuer. The Trustee and each Agent, as applicable, shall have no duty or obligation to verify or confirm that the person who sent such instructions or directions is, in fact, a person authorized to give instructions on behalf of such Issuer; and the Trustee and each Agent, as applicable, shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by any Issuer as a result of such reliance upon or compliance with such instructions or directions; provided that such reliance was in good faith. Each Issuer agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee or any Agent, as applicable, including without limitation the risk of the Trustee or such Agent acting on unauthorized instructions, and all the risk of interception and misuse by third parties.
Notices to holders of Notes will be given by first-class mail postage prepaid to the last addresses of such holders as they appear in the Notes register. Such notices will be deemed to have been given on the date of such mailing; provided, no such mailing will be required so long as any Global Notes representing the Notes are held in their entirety on behalf of the Depositary or a clearing system, or any of its participants. In such case, there may be substituted for the mailing of notice to holders of Notes described above the delivery of the relevant notices to the Depositary or a clearing system, and (if applicable) its participants, for communication by them to the entitled accountholders. Any such notice shall be deemed to have been given on the day on which the said notice was given to the Depositary or a clearing system, and (if applicable) its participants.
Failure to transmit a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication to a Holder is transmitted in the manner provided above, it shall be deemed duly given, whether or not the addressee receives it.
If the Issuer of the relevant series of Notes transmits a notice or communication to Holders, it will transmit a copy to the Trustee and each Agent at the same time.
In case by reason of the suspension of regular mail service, or by reason of any other cause, it shall be impossible to mail any notice as required by this Indenture, then such method of notification as shall be made with the consultation of the Trustee shall constitute a sufficient mailing of such notice.
SECTION 10.02. Certificate and Opinion as to Conditions Precedent. Upon any request or application by any Issuer to the Trustee to take any action under this Indenture, if so requested by the Trustee, such Issuer shall furnish to the Trustee:
(a) an Officer’s Certificate (which must include the statements set forth in Section 10.03) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and
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(b) an Opinion of Counsel (which must include the statements set forth in Section 10.03) stating that, in the opinion of such counsel, all such conditions precedent have been complied with.
SECTION 10.03. Statements Required in Certificate and Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include (other than a certificate provided pursuant to Section 4.12):
(a) a statement that the Person making such certificate or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.
SECTION 10.04. Communications by Holders with Other Holders. Holders may communicate pursuant to TIA §312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer of the relevant series of Notes, the Trustee, the applicable Registrar and anyone else shall have the protection of TIA §312(c).
SECTION 10.05. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The applicable Registrar or the applicable Paying Agent may make reasonable rules and set reasonable requirements for its functions.
SECTION 10.06. No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee or stockholder of any Issuer, past, present or future, will have any liability for any of such Issuer’s obligations under the Notes or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.
SECTION 10.07. Governing Law; Waiver of Jury Trial; Jurisdiction. THE INTERNAL LAW OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW OR ANY SUCCESSOR TO SUCH STATUTE) WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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EACH PARTY HEREBY, AND EACH HOLDER OF A NOTE BY ITS ACCEPTANCE THEREOF, WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, OR IN CONNECTION WITH THIS INDENTURE.
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS INDENTURE AND ANY ACTION FOR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF MAY BE BROUGHT IN THE COURTS OF THE STATE IN ANY STATE OR FEDERAL COURT IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS INDENTURE, EACH OF THE PARTIES HERETO HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND APPELLATE COURTS FROM ANY THEREOF. THE COMPANY HERETO IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS ADDRESS REFERRED TO IN SECTION 10.01. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE BROUGHT IN THE COURTS REFERRED TO ABOVE AND TO THE FULLEST EXTENT IT MAY DO SO UNDER APPLICABLE LAW HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED IN ANY OTHER JURISDICTION.
SECTION 10.08. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of any Issuer or its respective subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 10.09. Successors. All agreements of each Issuer in this Indenture and the Notes will bind its successors. All agreements of the Trustee and each Agent in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 9.07(b).
SECTION 10.10. Separability. In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.
SECTION 10.11. Counterpart Originals; Effectiveness. The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them
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together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or electronic format (i.e., “pdf” or “tif”) transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or electronic format (i.e., “pdf” or “tif”) shall be deemed to be their original signatures for all purposes. This Indenture shall become effective as of the date on the cover page of this Indenture upon the execution and delivery hereof by the parties hereto as contemplated hereby.
SECTION 10.12. Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.
SECTION 10.13. Benefits of Indenture. Nothing in this Indenture expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or to give to, any Person other than the parties hereto and their successors and the Holders of the Notes any benefit or any right, remedy or claim under or by reason of this Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all covenants, conditions, stipulations, promises and agreements in this Indenture contained shall be for the sole and exclusive benefit of the parties hereto and their successors and of the Holders of the Notes.
SECTION 10.14. Appointment of Agent for Service. Each of BAT, BATIF and, if applicable, any other non-U.S. Guarantors hereby irrevocably designates [ ], as its agent for service of process in any related proceeding arising out of or relating to the performance of its obligations under this Indenture and the Notes brought in any state or federal court in the Borough of Manhattan, The City of New York, and agrees that service of process in any such related proceeding may be made upon it at the office of such agent [and [ ] hereby accepts such designation]. Each Issuer waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. Each Issuer agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.
| BRITISH AMERICAN TOBACCO P.L.C., | ||
| by |
| |
| Name: | ||
| Title: | ||
| B.A.T CAPITAL CORPORATION, | ||
| by |
| |
| Name: | ||
| Title: | ||
| B.A.T. INTERNATIONAL FINANCE P.L.C., | ||
| by |
| |
| Name: | ||
| Title: | ||
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| CITIBANK, N.A., as Trustee | ||
| by |
| |
| Name: | ||
| Title: | ||
| CITIBANK, N.A., as Authentication Agent, Paying Agent, Transfer Agent, Registrar and Calculation Agent | ||
| by |
| |
| Name: | ||
| Title: | ||
Exhibit 5.1
July 1, 2022
British American Tobacco p.l.c.
B.A.T Capital Corporation
B.A.T. International Finance p.l.c.
Form F-3 Registration Statement
Ladies and Gentlemen:
We have acted as U.S. counsel to British American Tobacco p.l.c. (“BAT”), a public limited company organized under the laws of England and Wales, B.A.T Capital Corporation, a Delaware corporation (“BATCAP”), B.A.T. International Finance p.l.c., a public limited company organized under the laws of England and Wales (“BATIF”, and together with BAT and BATCAP, the “Issuers”), and each of the guarantors listed on Annex A to this opinion (the “Guarantors”), in connection with the filing by the Issuers and the Guarantors with the Securities and Exchange Commission (the “Commission”) of a registration statement on Form F-3 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), relating to the registration under the Act and the proposed issuance and sale from time to time pursuant to Rule 415 under the Act of an undetermined principal amount of debt securities of the Issuers in one or more series (the “Debt Securities”) and the guarantees of the Debt Securities by the Guarantors (the “Guarantees”).
The Debt Securities are to be issued pursuant to one of (i) the indenture, dated as of August 15, 2017, by and among BATCAP, as issuer, the applicable Guarantors, Wilmington Trust, National Association, as trustee, and Citibank, N.A., London Branch, as authentication agent, paying agent, transfer agent, registrar, and calculation agent (as amended or supplemented from time to time, the “2017 Indenture”); (ii) the indenture, dated as of September 6, 2019, by and among BATCAP as issuer, the applicable Guarantors and Citibank, N.A. (“Citibank”) as trustee, authentication agent, initial paying agent, registrar, transfer agent and calculation agent (as amended or supplemented from time to time, the “2019 Indenture”); (iii) the indenture, dated as of September 25, 2020, by and among BATIF as issuer, the applicable Guarantors and Citibank (as amended or supplemented from time to time, the “2020 Indenture”); or (iv) an indenture by and among BAT, BATCAP and BATIF as issuers, BAT as Guarantor and Citibank, N.A. as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time notes are first issued thereunder (the “2022 Indenture” and, together with the 2017 Indenture, the 2019 Indenture and the 2020 Indenture, the “Indentures”). The Debt Securities are to be guaranteed by the relevant Guarantors on the terms of and subject to the conditions set forth in the relevant Indenture.
In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including, without limitation: (a) the Amended and Restated Certificate of Incorporation of BATCAP, as adopted on September 8, 2008; (b) the Amended and Restated By-laws of BATCAP, as adopted on July 27, 2007; (c) the unanimous consent of the Board of Directors of BATCAP on June 29, 2022; (d) the Registration Statement; (e) the 2017 Indenture; (f) the 2019 Indenture; (g) the 2020 Indenture; and (h) the form of the 2022 Indenture. We have relied, with respect to certain factual matters, on representations and warranties of directors and officers of the Issuers.
In expressing the opinions set forth herein, we have assumed, with your consent and without independent investigation or verification, the genuineness of all signatures, the legal capacity and competency of all natural persons, the due incorporation and valid existence of BATIF and the Guarantors (other than BATCAP), the authenticity of all documents submitted to us as originals and the conformity to authentic original documents of all documents submitted to us as duplicates or copies. We have also assumed, with your consent, that the choice of New York law contained in each Indenture is legal and valid under the laws of England and Wales, the Netherlands and North Carolina and that insofar as any obligation under each Indenture is to be performed in, or by a party organized under the laws of, any jurisdiction outside the State of New York or the State of Delaware, its performance will not be illegal or ineffective in any such jurisdiction by virtue of the law of that jurisdiction. We have also assumed, with your consent, that the Indentures (including the Guarantees therein) have been or, in the case of the 2022 Indenture, prior to the time notes are first issued thereunder, will be duly authorized, executed and delivered by the Trustee and the Guarantors and that the forms of the Debt Securities will conform to that included in each Indenture.
We do not purport to express an opinion on or address all matters of U.S. law that may be of relevance with respect to the filing of the Registration Statement. This letter is strictly limited to the matters presented in it and does not extend, by implication or otherwise, to any matters not referenced herein.
Based upon and subject to the foregoing, and assuming that (i) the Registration Statement and any supplements and amendments thereto (including post-effective amendments) will have become effective and will comply with all applicable laws; (ii) the Registration Statement and any supplements and amendments thereto (including post-effective amendments) will be effective and will comply with all applicable laws at the time the Debt Securities and Guarantees are offered or issued as contemplated by the Registration Statement; (iii) a prospectus supplement will have been prepared and filed with the Commission describing the Debt Securities and Guarantees offered thereby and will comply with all applicable laws; (iv) all Debt Securities and Guarantees will be issued and sold in compliance with all applicable Federal and state securities laws and in the manner stated in the Registration Statement and the appropriate prospectus supplement; (v) none of the terms of any Debt Security or Guarantee to be established subsequent to the date hereof, nor the issuance and delivery of such Debt Security or Guarantee, nor the compliance by the relevant Issuer and Guarantors with the terms of such Debt Security or Guarantee will violate any applicable law or will result in a violation of any provision of any instrument or agreement then binding upon the relevant Issuer and Guarantors or any restriction imposed by any court or governmental body having jurisdiction over the relevant Issuer and Guarantors; and (vi) a definitive purchase, underwriting or similar agreement and any other necessary agreement with respect to any Debt Securities or Guarantees offered or issued will have been duly authorized and validly executed and delivered by the relevant Issuer and Guarantors and the other parties thereto, we are of opinion that:
1. When the Debt Securities have been duly authorized by the relevant Issuer and executed, authenticated, issued and delivered in accordance with the provisions of the relevant Indenture, including any supplemental indenture related thereto, the applicable definitive purchase, underwriting or similar agreement approved by the relevant Issuer and the Guarantors upon payment of the consideration therefor provided for therein, such Debt Securities will be validly issued and constitute valid and binding obligations of such Issuer, enforceable against such Issuer in accordance with their terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors’ rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law).
2. When the Guarantees have been duly authorized and issued by the Guarantors and the Debt Securities underlying such Guarantees have been executed, authenticated, issued and delivered in accordance with the provisions of the relevant Indenture, including any supplemental indentures related thereto, the applicable definitive purchase, underwriting or similar agreement approved by the relevant Issuer and the Guarantors upon payment of the consideration therefor provided for therein, each Guarantee will constitute the valid and binding obligation of the Guarantors, enforceable against the Guarantors in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors’ rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law).
2
We are admitted to practice in the State of New York, and we express no opinion as to matters governed by any laws other than the laws of the State of New York and the General Corporation Law of the State of Delaware. In particular, we do not purport to pass on any matter governed by the laws of England and Wales, the Netherlands or the State of North Carolina.
We hereby consent to the filing of this opinion with the Commission as Exhibit 5.1 to the Registration Statement. We also consent to the reference to our firm under the caption “Legal Matters” in the prospectus constituting a part of the Registration Statement. In giving such consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission.
| Very truly yours, |
| /s/ Cravath, Swaine & Moore LLP |
British American Tobacco p.l.c.
Globe House
4 Temple Place
London WC2R 2PG
United Kingdom
B.A.T Capital Corporation
103 Foulk Road, Suite 120
Wilmington, Delaware 19803
United States
B.A.T. International Finance p.l.c.
Globe House
4 Temple Place
London WC2R 2PG
United Kingdom
3
ANNEX A
Guarantors
British American Tobacco p.l.c., a public limited company organized under the laws of England and Wales (with respect to Debt Securities issued by BATCAP and BATIF)
B.A.T. Netherlands Finance B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands (other than under the 2022 Indenture, unless a party thereto pursuant to a supplemental indenture)
Reynolds American Inc., a North Carolina corporation (other than under the 2022 Indenture, unless a party thereto pursuant to a supplemental indenture)
B.A.T Capital Corporation, a Delaware corporation (with respect to Debt Securities issued under the 2020 Indenture (and, if a party thereto as a Guarantor pursuant to a supplemental indenture, the 2022 Indenture))
B.A.T. International Finance p.l.c., a public limited company organized under the laws of England and Wales (with respect to Debt Securities issued under the 2017 Indenture and the 2019 Indenture (and, if a party thereto as a Guarantor pursuant to a supplemental indenture, the 2022 Indenture))
British American Tobacco Holdings (The Netherlands) B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of the Netherlands (with respect to Debt Securities issued by BATCAP under the 2017 Indenture)
4
Exhibit 5.2
| Linklaters LLP One Silk Street London EC2Y 8HQ Telephone (+44) 20 7456 2000 Facsimile (+44) 20 7456 2222 DX Box Number 10 CDE |
| To: | British American Tobacco p.l.c. |
Globe House
4 Temple Place
London WC2R 2PG
1 July, 2022
Our Ref EXM/BB/UB
Shelf registration statement on Form F-3 filed with the U.S. Securities and Exchange Commission (the “SEC”) on 1 July 2022 relating to the registration and proposed issuance of Debt Securities by B.A.T Capital Corporation (“BATCAP”), B.A.T. International Finance p.l.c. (“BATIF”) and British American Tobacco p.l.c. (“British American Tobacco”) (together with BATCAP and BATIF, the “Issuers” and each an “Issuer”) and guaranteed by Reynolds American Inc. (“RAI”), B.A.T. Netherlands Finance B.V. (“BATNF”), BATCAP (in the case of Debt Securities issued by BATIF or British American Tobacco), BATIF (in the case of Debt Securities issued by BATCAP or British American Tobacco) and British American Tobacco (in the case of Debt Securities issued by BATCAP or BATIF) (the “Guarantors”)
| 1 | We have acted as English legal advisers to the Issuers and the Guarantors in connection with the filing on 1 July 2022 of the shelf registration statement, in respect of Debt Securities to be issued by the Issuers (the “Programme”) and the giving of the guarantees in respect of the Debt Securities and have taken instructions solely from the Issuers and the Guarantors. |
| 2 | This opinion is limited to English law as applied by the English courts and in effect on the date of this opinion. It is given on the basis that it, and all matters relating to it, will be governed by, and that it (including all terms used in it) will be construed in accordance with, English law. In particular, we express no opinion herein with regard to any system of law (including, for the avoidance of doubt, the federal laws of the United States of America and the laws of the State of New York) other than the laws of England as currently applied by the English courts. |
| 3 | For the purpose of this opinion we have examined the documents listed and, where appropriate, defined in the Schedule to this opinion. |
| 4 | We have assumed that: |
| 4.1 | all copy documents conform to the originals and all originals are genuine and complete |
| 4.2 | each signature is the genuine signature of the individual concerned |
| 4.3 | (except in the case of BATIF and British American Tobacco) all relevant documents are within the capacity and powers of, and have been validly authorised by, each party |
| 4.4 | (in the case of each party) all relevant documents have been or (in the case of the Debt Securities) will be validly executed and delivered by the relevant party |
| 4.5 | each of the meetings of the Board of Directors of British American Tobacco and BATIF held on 24 May 2022 and 29 June 2022, respectively, (in respect of which a certified extract of each of the Minutes has been supplied to us) was duly convened, constituted and quorate and the resolutions referred to in each of the Minutes were validly passed and remain in full force and effect without modification and |
| 4.6 | each of the documents which are the subject of this opinion is valid and binding on each party under the law to which it is expressed to be subject where that is not English law and that words and phrases used in those documents have the same meaning and effect as they would if those documents were governed by English law. |
| 5 | References in this opinion to: |
| 5.1 | the “Programme Documents” are to the Registration Statement and the Indentures; and |
| 5.2 | the “Debt Securities” are to the debt securities which may be issued by the Issuers under the Programme up to a maximum aggregate principal amount of US$20,000,000,000 (or its equivalent). |
| 6 | Based on the documents referred to, and assumptions made, in paragraphs 3 and 4 above and subject to the qualifications in paragraphs 7 to 9 below and to any matters not disclosed to us, we are of the following opinion: |
| 6.1 | BATIF has been incorporated and is existing as a company with limited liability under the laws of England. |
| 6.2 | BATIF has corporate power to enter into and to perform its obligations under the Programme Documents and the Debt Securities and has taken all necessary corporate action to authorise its execution, delivery and performance of the Programme Documents and the Debt Securities. |
| 6.3 | British American Tobacco has been incorporated and is existing as a company with limited liability under the laws of England. |
| 6.4 | British American Tobacco has corporate power to enter into and to perform its obligations under the Programme Documents and the Debt Securities and has taken all necessary corporate action to authorise its execution, delivery and performance of the Programme Documents and the Debt Securities. |
| 7 | This opinion is subject to the following: |
| 7.1 | It should be understood that we have not been responsible for investigating or verifying the accuracy of the facts, including statements of foreign law, or the reasonableness of any statements of opinion, contained in the Registration Statement, or that no material facts have been omitted from it. |
| 7.2 | We express no opinion as to compliance or otherwise with any financial limitations on borrowings or the giving of guarantees by BATIF contained in BATIF’s Articles of Association or any financial limitations on borrowings or the giving of guarantees by British American Tobacco contained in British American Tobacco’s Articles of Association. |
Page 2 of 5
| 7.3 | We express no opinion as to compliance or otherwise with the limitation on the maximum aggregate principal amount of the Debt Securities which have been authorised by the Issuers with respect to the Programme. |
| 7.4 | We express no opinion as to the effect of any sanctions or other similar restrictive measures in relation to any party to the Programme Documents or the Debt Securities or any transaction contemplated thereby. |
| 7.5 | To the extent it relates to United Kingdom stamp duties any undertaking or indemnity given by BATIF or British American Tobacco may be void under Section 117 of the Stamp Act 1891. |
| 7.6 | An English court may refuse to give effect to any contractual provision concerning payment of the costs of enforcement or litigation brought before an English court. |
| 7.7 | An English court may, or may be required to, stay proceedings or decline jurisdiction in certain circumstances - for example, if proceedings are brought elsewhere. |
| 7.8 | Effect may be given to the overriding mandatory provisions of the law of the country where the obligations arising out of a contract have to be or have been performed, in so far as those provisions render the performance of the contract unlawful. In such circumstances, the relevant obligations may not be enforceable. |
| 7.9 | The English courts may have regard to the law of the country in which performance takes place in relation to the manner of performance and the steps to be taken in the event of defective performance. |
| 7.10 | The English courts may not be restricted from applying overriding provisions of English law and if there is a provision of New York law that is manifestly incompatible with English public policy, it is possible that the English courts may not apply it. |
| 8 | Furthermore, the English courts may not accept jurisdiction to determine the matter or may stay or strike out proceedings in certain circumstances, including where there is some other forum with competent jurisdiction which is more appropriate for the trial of the action, where proceedings involving the same cause of action and between the same parties are pending in another jurisdiction or where merits of the issues in dispute have already been judicially determined or should have been raised in previous proceedings between the parties. |
| 9 | This opinion is given on the basis that there will be no amendment to or termination or replacement of the documents, authorisations, consents and opinions referred to in the Schedule to this opinion. This opinion is also given on the basis that we undertake no responsibility to notify any addressee of this opinion of any change in English law after the date of this opinion. |
| 10 | This opinion is addressed to you solely for your benefit in connection with the filing of the Registration Statement. It is not to be transmitted to anyone else nor is it to be relied upon by anyone else or for any other purpose or quoted or referred to in any public document or filed with anyone without our express consent. |
| 11 | We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to the reference to us made under the heading “Legal Matters” in the prospectus constituting a part of, the Registration Statement. In giving this consent we do not admit that we are within the category of persons whose consent is required within section 7 of the United States Securities Act of 1933 or the rules and regulations of the SEC thereunder. |
Page 3 of 5
Yours faithfully
/s/ Linklaters LLP
Linklaters LLP
Page 4 of 5
SCHEDULE
| 1 | A certified copy of the Memorandum and Articles of Association of BATIF. |
| 2 | A certified extract of the Minutes of a Meeting of the Board of Directors of BATIF held on 29 June 2022. |
| 3 | A certified copy of the Memorandum and Articles of Association of British American Tobacco. |
| 4 | A certified extract from the Minutes of a Meeting of the Board of Directors of British American Tobacco held on 24 May 2022. |
| 5 | An indenture dated 15 August 2017 between BATCAP, as issuer, the applicable Guarantors, Wilmington Trust, National Association, as trustee, and Citibank, N.A., London Branch, as authentication agent, paying agent, transfer agent, registrar and calculation agent (the “BATCAP 2017 Indenture”). |
| 6 | An indenture dated 6 September 2019 between BATCAP, as issuer, the applicable Guarantors, Citibank, N.A., as trustee, as initial paying agent, authentication agent, transfer agent, registrar and calculation agent (the “BATCAP 2019 Indenture”). |
| 7 | An indenture filed with the SEC on 25 September 2020 by and among BATIF, the applicable Guarantors and Citibank, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent (the “BATIF 2020 Indenture”). |
| 8 | A form of indenture filed with the SEC on 1 July 2022 by and among BATIF, BATCAP and British American Tobacco, as issuers, and Citibank, N.A., as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the notes are first issued (the “2022 Indenture” and together with the BATCAP 2017 Indenture, the BATCAP 2019 Indenture and the BATIF 2020 Indenture, the “Indentures”). |
| 9 | Registration Statement dated 1 July 2022 including the form of prospectus relating to Debt Securities issued by the Issuers under the Programme (the “Registration Statement”). |
Page 5 of 5
Exhibit 5.3
|
Amsterdam Brussels Dubai London Luxembourg New York |
| British American Tobacco p.l.c. B.A.T Capital Corporation B.A.T. International Finance p.l.c.
B.A.T. Netherlands Finance B.V. and British American Tobacco Holdings (The Netherlands) B.V. Handelsweg 53A 1181 ZA Amsterdam |
Stibbe N.V. Advocaten en notarissen Beethovenplein 10 P.O. Box 75640 1070 AP Amsterdam The Netherlands T +31 20 546 0 606 F +31 20 546 0 123
www.stibbe.com
Date 1 July 2020 |
Shelf Programme – Form F-3 Registration Statement
Ladies and Gentlemen,
| (1) | We have acted as counsel with respect to matters of the laws of the Netherlands to British American Tobacco p.l.c. (“BAT”), B.A.T Capital Corporation (“BATCAP”), B.A.T. International Finance p.l.c. (“BATIF”), B.A.T. Netherlands Finance B.V. (“BATNF”), British American Tobacco Holdings (The Netherlands) B.V. (“BATHTN”) and Reynolds American Inc. in connection with the registration statement on Form F-3 under the Securities Act of 1933 of the United States dated 1 July 2022 (the “Registration Statement”) in relation to the registration of the offer and sale, from time to time, of debt securities by BATIF, BATCAP and BAT. |
This opinion is furnished to you in order to be filed as an exhibit to the Registration Statement with the United States Securities and Exchange Commission.
| (2) | For the purpose of this opinion, we have examined and exclusively relied upon photocopies or copies received by fax or by electronic means, or originals if so expressly stated, of the following documents: |
| (a) | the Registration Statement; |
| (b) | the form of underwriting agreement for debt securities issued by BATIF; |
| (c) | the form of underwriting agreement for debt securities issued by BATCAP; |
| (d) | the form of underwriting agreement for debt securities issued by BAT; |
| (e) | the indenture, dated 15 August 2017 between BATCAP as issuer, the guarantors party thereto (including BATNF and BATHTN), Wilmington Trust, National Association as trustee, and Citibank, N.A., London Branch, as authentication agent, paying agent, transfer agent, registrar and calculation agent (the “2017 Indenture”); |
Stibbe N.V. is registered with the Dutch Chamber of Commerce under number 34198700. Any services performed are carried out under an agreement for services (‘overeenkomst van opdracht’) with Stibbe N.V., which is governed exclusively by Dutch law. The general conditions of Stibbe N.V., which include a limitation of liability, apply and are available on www.stibbe.com/generalconditions or upon request.
| (f) | the indenture, dated 6 September 2019 between BATCAP as issuer, the guarantors party thereto (including BATNF) and Citibank, N.A. as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent (the “2019 Indenture”); |
| (g) | the indenture, dated 25 September 2020 between BATIF as issuer, the guarantors party thereto (including BATNF) and Citibank, N.A. as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent (the “2020 Indenture”); |
| (h) | the form of indenture between BATIF, BATCAP and BAT as issuers, the guarantors party thereto and Citibank, N.A. as trustee, authentication agent, transfer agent, registrar, calculation agent and initial paying agent; |
| (i) | extracts from the Trade Register of the Chamber of Commerce (Kamer van Koophandel, afdeling Handelsregister) relating to BATNF dated 6 September 2019 (the “2019 Extract”) and dated 25 September 2020 (the “2020 Extract”) and relating to each of the Dutch Companies (as defined below) dated 15 August 2017 (the “2017 Extracts”) and dated the date hereof (the “Current Extracts” and together with the 2017 Extracts, the 2019 Extract and the 2020 Extract, the “Extracts”); |
| (j) | the deed of incorporation of BATNF dated 23 April 2014 including its articles of association (statuten), which according to the relevant Current Extract are the articles of association of BATNF as currently in force; |
| (k) | the deed of incorporation of BATHTN dated 24 February 1992 and its articles of association (statuten) as amended on 15 March 2013, which according to the relevant Current Extract are the articles of association of BATHTN as currently in force; |
| (l) | the minutes of a meeting of the managing board of BATNF held on 31 July 2017 reflecting resolutions approving, inter alia, the execution by BATNF of the 2017 Indenture and the performance of its obligations thereunder; |
| (m) | the minutes of a meeting of the managing board of BATHTN held on 31 July 2017 reflecting resolutions approving, inter alia, the execution by BATHTN of the 2017 Indenture and the performance of its obligations thereunder; |
| (n) | the minutes of a meeting of the managing board of BATNF held on 12 June 2019 reflecting resolutions approving, inter alia, the execution by BATNF of the 2019 Indenture and the performance of its obligations thereunder; |
| (o) | the minutes of a meeting of the managing board of BATNF held on 21 September 2020 reflecting resolutions approving, inter alia, the execution by BATNF of the 2020 Indenture and the performance of its obligations thereunder; |
(2)
| (p) | the minutes of a meeting of the managing board of BATNF held on 13 June 2022 reflecting resolutions approving, inter alia, the execution by BATNF of the Agreements (as defined below) (other than the 2017 Indenture, 2019 Indenture and 2020 Indenture) and the performance of its obligations thereunder; and |
| (q) | the minutes of a meeting of the managing board of BATHTN held on 13 June 2022 reflecting resolutions approving, inter alia, the execution by BATHTN of the Agreements (other than the 2017 Indenture, 2019 Indenture and 2020 Indenture) and the performance of its obligations thereunder. |
| (3) | BATNF and BATHTN are hereinafter collectively also referred to as the “Dutch Companies” and individually a “Dutch Company”. In respect of each of the Dutch Companies to the extent it is a party thereto, the documents listed in paragraphs (2)(a) – (h) (inclusive) are hereinafter collectively also referred to as the “Agreements”. The resolutions included in the minutes listed in paragraphs (2)(l) – (q) (inclusive) are hereinafter collectively also referred to as the “Resolutions”. |
References to the Civil Code, the Bankruptcy Act, the Code of Civil Procedure, the Financial Supervision Act and any other Codes or Acts are references to the Burgerlijk Wetboek, the Faillissementswet, the Wetboek van Burgerlijke Rechtsvordering, the Wet op het financieel toezicht and such other Codes or Acts of the Netherlands, as amended. In this opinion, “the Netherlands” refers to the European part of the Kingdom of the Netherlands and “EU” refers to the European Union.
| (4) | In rendering this opinion we have assumed: |
| (a) | the genuineness and authenticity of all signatures on, and the authenticity and completeness of, all documents submitted to us as copies of drafts, originals or execution copies and the exact conformity to the originals of all documents submitted to us as photocopies or copies transmitted by facsimile or by electronic means; |
| (b) | in relation to any signature other than a wet-ink signature (i) that the signing method used is sufficiently reliable, taking into consideration the purpose for which the electronic signature was used and all other relevant circumstances, within the meaning of section 3:15a of the Civil Code or (ii) that such signature is a qualified electronic signature (elektronische gekwalificeerde handtekening) within the meaning of Regulation (EU) 910/2014; |
| (c) | (i) the power, capacity and authority of all parties thereto other than the Dutch Companies to enter into and execute the Agreements; (ii) that the Agreements have been duly authorised by all parties thereto other than the Dutch Companies; and (iii) that the Agreements have been validly executed and delivered (where such concept is legally relevant) by each of the parties thereto (including but not limited to the Dutch Companies) under all applicable laws, including the laws by which the Agreements are expressed to be governed, other than the laws of the Netherlands; |
(3)
| (d) | that any and all authorisations and consents of, or other filings with or notifications to, any public authority or other relevant body or person in or of any jurisdiction which may be required (other than under the laws of the Netherlands) in respect of the execution or performance of the Agreements have been or will be duly obtained or made, as the case may be; |
| (e) | that the information set forth in the Extracts was and is complete and accurate on their respective dates and was and is consistent with the information contained in the files kept by the Trade Register with respect to each of the Dutch Companies; |
| (f) | that the Resolutions have not been annulled, revoked or rescinded and are in full force and effect as at the date hereof; |
| (g) | that none of the Dutch Companies has been declared bankrupt (failliet verklaard), granted suspension of payments (surseance van betaling verleend) or dissolved (ontbonden), nor has ceased to exist due to merger (fusie) or demerger (splitsing) and that no out of court restructuring plan (onderhands akkoord) procedure is being prepared or has been commenced involving any of the Dutch Companies; although not constituting conclusive evidence, this assumption is supported by the contents of the Current Extracts and by our online search of the Central Insolvency Register of the courts in the Netherlands (Centraal Insolventieregister) (as regards the out of court restructuring plan (onderhands akkoord) procedure, a search can be performed with respect to a public procedure only) on the date hereof, which did not reveal any information which would render this assumption to be untrue; |
| (h) | that none of the insolvency proceedings listed in Annex A, as amended, to Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings has been declared applicable to any of the Dutch Companies by a court in one of the member states of the EU (with the exception of Denmark), other than the Netherlands; although not constituting conclusive evidence, this assumption is supported by our online search of the section on EU Registrations of the Central Insolvency Register (Centraal Insolventieregister) on the date hereof, which did not reveal any information which would render this assumption to be untrue; and |
| (i) | that none of the members of the managing board of any of the Dutch Companies has a conflict of interests within the meaning of section 2:239 of the Civil Code with the relevant Dutch Company with respect to the Agreements or the transactions contemplated thereby. |
| (5) | We have not investigated the laws of any jurisdiction other than the Netherlands. This opinion is limited to matters of the laws of the Netherlands as they presently stand. We do not express any opinion with respect to (i) any public international law or the rules of or promulgated under any treaty or by any treaty organisation, other than any provisions of EU law having direct effect, (ii) matters of competition law, (iii) data protection law and (iv) matters of taxation. |
(4)
| (6) | Based upon and subject to the foregoing and to the further qualifications, limitations and exceptions set forth herein, and subject to any factual matters not disclosed to us and inconsistent with the information revealed by the documents reviewed by us in the course of our examination referred to above, we are as at the date hereof of the following opinion: |
| (a) | each of the Dutch Companies has been duly incorporated and is validly existing under the laws of the Netherlands as a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) and has the necessary corporate capacity and power to enter into the Agreements and to exercise its rights and perform its obligations thereunder; |
| (b) | all corporate action required to be taken by each of the Dutch Companies to authorise the execution of the Agreements by it or on its behalf and the performance of its obligations thereunder has been duly taken; and |
| (c) | the Registration Statement has been duly executed on behalf of each of the Dutch Companies. |
| (7) | This opinion is subject to the following qualifications: |
| (a) | we express no opinion as to the accuracy of any representations given by the Dutch Companies or any other party (express or implied) under or by virtue of any of the Agreements; |
| (b) | the opinions expressed above are limited and may be affected by any applicable bankruptcy (faillissement), suspension of payments (surseance van betaling), insolvency, out of court restructuring plan (onderhands akkoord) procedure, moratorium, reorganisation, liquidation, fraudulent conveyance, or similar rules and laws affecting the enforceability of rights of creditors generally (including rights of set-off) in any relevant jurisdiction including but not limited to section 3:45 of the Civil Code and section 42 of the Bankruptcy Act concerning fraudulent conveyance, as well as by any sanctions or measures under the Sanctions Act 1977 (Sanctiewet 1977) or by EU or other international sanctions and Regulation (EC) No 2271/96; |
| (c) | no opinion is given as to whether any legal act (rechtshandeling) performed by any of the Dutch Companies in entering into the Agreements or exercising its rights or performing its obligations thereunder is not contrary to the corporate interest of that Dutch Company for purposes of section 2:7 of the Civil Code in which case the relevant legal act of the relevant Dutch Company might be held invalid and/or the obligations of that Dutch Company thereunder might be held unenforceable in whole or in part; and |
| (d) | the concepts of “trust” and of “delivery of documents” as known in common law jurisdictions are not known as such under the laws of the Netherlands. |
(5)
| (8) | In this opinion, Netherlands legal concepts are expressed in English terms and not in their original Dutch terms. The concepts concerned may not be identical to the concepts described by the same English terms as they exist under the laws of other jurisdictions. This opinion is given by Stibbe N.V. and may only be relied upon under the express condition that (i) any issues of interpretation or liability arising hereunder will be governed by the laws of the Netherlands and will be brought exclusively before a court of the Netherlands, and (ii) such liability, if any, shall be limited to Stibbe N.V. only, to the exclusion of any of its directors, partners, employees, shareholders and advisors or its or their affiliates and to the aggregate of the amount paid under Stibbe N.V.’s professional insurance in the particular instance and any applicable deductible payable by Stibbe N.V. |
| (9) | We assume no obligation to update this opinion or to inform any person of any changes of law or other matters coming to our knowledge occurring after the date hereof which may affect this opinion in any respect. This opinion is addressed to you and given for your sole benefit for the purposes of the Agreements only and may not be disclosed or quoted to any person other than to your legal advisers or relied upon by any person or be used for any other purpose, without our prior written consent in each instance. |
| (10) | We hereby consent to the filing of this opinion as exhibit to the Registration Statement and to the reference to our firm under the caption “Legal Matters” in the prospectus constituting a part of the Registration Statement. In giving such consent, we do not thereby admit or imply that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the United States Securities and Exchange Commission. |
Yours faithfully,
| Stibbe N.V. |
| /s/ Rein van Helden Rein van Helden |
| /s/ Jeroen Smits Jeroen Smits |
(6)
Exhibit 5.4
|
| |
| July 1, 2022
Reynolds American Inc. |
| |
| Re: Registration Statement on Form F-3 |
||
Ladies and Gentlemen:
We have acted as special North Carolina counsel to Reynolds American Inc., a North Carolina corporation (“RAI”), in connection with the filing with the U.S. Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), of the above-referenced Registration Statement on Form F-3 (the “Registration Statement”) relating to the public offering by B.A.T Capital Corporation, a Delaware corporation (“BATCAP”), B.A.T. International Finance p.l.c., a private limited company under the laws of England and Wales (“BATIF”), and/or British American Tobacco p.l.c., a public limited company under the laws of England and Wales (“BAT”, and each of BATCAP, BATIF, and BAT, an “Issuer”, and collectively, the “Issuers”), of an indeterminate amount of debt securities of any Issuer (the “Debt Securities”). The Debt Securities issued by BATCAP will be issued under (i) the indenture, dated as of September 6, 2019, by and among BATCAP, as Issuer, the guarantors party thereto (including RAI), Citibank, N.A., as trustee, registrar, transfer agent, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the Debt Securities are first issued (the “BATCAP 2019 Indenture”); (ii) the indenture, dated as of August 15, 2017, by and among BATCAP, as Issuer, the guarantors party thereto (including RAI), Wilmington Trust, National Association, as trustee, and Citibank, N.A., as authentication agent, paying agent, transfer agent, registrar, and calculation agent (as supplemented by the Supplemental Indenture No. 1, dated as of September 28, 2018, the “BATCAP 2017 Indenture”); or (iii) an indenture to be entered into by and among BATIF, BATCAP, and BAT, as Issuers, the guarantors party thereto, and Citibank, N.A., as trustee, registrar, transfer agent, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the Debt Securities are first issued (the “2022 Indenture” and together with the BATCAP 2019 Indenture, and the BATCAP 2017 Indenture, the “BATCAP Indentures”). The Debt Securities issued by BATIF will be issued under (i) the indenture, dated as of September 25, 2020, by and among BATIF, as Issuer, the guarantors party thereto (including RAI), and Citibank, N.A., as trustee, registrar, transfer agent, calculation agent and initial paying agent, unless another paying agent is appointed prior to the time the Debt Securities are first issued (the “BATIF 2020 Indenture” and collectively with the BATCAP Indentures, the “Indentures”); or (ii) the 2022 Indenture. The Debt Securities issued by BAT will be issued under the 2022 Indenture. The Registration Statement also relates to the offering by the guarantors under the Indentures from time to time of their guarantees of the Debt Securities (“Guarantees”), including the guarantees by RAI (the “RAI Guarantees”). The offering of the Debt Securities and Guarantees will be made as set forth in the prospectus contained in the Registration Statement (the “Prospectus”), as that Prospectus is supplemented by one or more prospectus supplements from time to time or amended by one or more post-effective amendments to the Registration Statement from time to time.
Womble Bond Dickinson (US) LLP is a member of Womble Bond Dickinson (International) Limited, which consists of independent and autonomous law firms providing services in the US, the UK, and elsewhere around the world. Each Womble Bond Dickinson entity is a separate legal entity and is not responsible for the acts or omissions of, nor can bind or obligate, another Womble Bond Dickinson entity. Womble Bond Dickinson (International) Limited does not practice law. Please see www.womblebonddickinson.com/us/legal-notice for further details.
| July 1, 2022 Page 2 |
|
In rendering the opinions set forth herein, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents, corporate records and other instruments: (i) the Amended and Restated Articles of Incorporation of RAI filed with the North Carolina Secretary of State on July 25, 2017; (ii) the Second Amended and Restated Bylaws of RAI; (iii) the unanimous written consent of the board of directors of RAI dated June 27, 2022; and (iv) the certificate of existence of RAI issued by the North Carolina Secretary of State dated June 27, 2022 (the “Certificate of Existence”). As to any facts relevant to our opinions, we have relied upon a certificate from an officer of RAI.
Subject to the assumptions and other matters set forth below, it is our opinion that as of the date hereof:
| 1. | RAI is a corporation in existence under the laws of the State of North Carolina. |
| 2. | RAI has the corporate power to enter into and perform its obligations under the RAI Guarantees. |
In our examination, we have assumed the legal capacity of all natural persons, the incumbency of all persons designated as officers, directors or similar representatives of legal persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as certified, conformed, facsimile, electronic or photostatic copies. We have also assumed that the parties (other than RAI) had or will have the power, corporate or other, to enter into and perform all obligations in connection with the matters addressed by this opinion, and that they have or will have duly authorized by all requisite action, corporate or other, such obligations. We have further assumed that all parties have or will have duly executed and delivered all agreements and documents related to the matters addressed by this opinion and that the obligations thereunder are or will be valid and binding against all parties undertaking them.
Moreover, we have assumed that: (i) the Registration Statement and any amendments thereto (including any post-effective amendments) will have become and remain effective, will not be subject to any stop order and will comply with all applicable laws; (ii) a prospectus supplement will have been prepared and filed with the Commission, or a post-effective amendment will have been prepared and filed and become effective with the Commission, in either case describing the Debt Securities to be offered for sale thereby and any Guarantees offered thereby in accordance with all applicable laws; (iii) all Debt Securities and any Guarantees will be issued and sold in compliance with all applicable federal and state securities laws and in the manner stated in the Registration Statement and the applicable prospectus supplement or post-effective amendment; and (iv) a definitive underwriting or similar agreement with respect to the Debt Securities and any Guarantees offered will have been duly authorized and validly executed and delivered by the relevant Issuer, the guarantors party thereto and the other parties thereto.
Finally, we have assumed that: (i) the execution and delivery by RAI of the Indentures and any RAI Guarantees pursuant thereto, including the terms thereof, and the performance of RAI’s obligations thereunder have been or will be duly authorized by all necessary corporate action; (ii) the Debt Securities will have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indentures; and (iii) the Guarantees will conform to the description thereof in the Registration Statement.
The opinions set forth herein are limited to matters governed by the laws of the State of North Carolina, and no opinion is expressed herein as to the laws of any other jurisdiction. We express no opinion concerning any matter respecting or affected by any laws other than laws that a lawyer in North Carolina
| July 1, 2022 Page 3 |
|
exercising customary professional diligence would reasonably recognize as being directly applicable to RAI, the issuance of Debt Securities or both. Without limitation, we express no opinion regarding the enforceability of the RAI Guarantees. Our opinions expressed herein are as of the date hereof, and we undertake no obligation to advise you of any changes in applicable law or any other matters that may come to our attention after the date hereof that may affect our opinions expressed herein. In rendering our opinion numbered 1 above, we have relied solely upon the Certificate of Existence.
This opinion is furnished to you in connection with the filing of the Registration Statement and in accordance with the requirements of the Securities Act. This opinion may not be relied upon for any other purpose, except that Cravath, Swaine & Moore LLP may rely upon it in connection with the filing of its own opinion as to the Debt Securities and Guarantees as an exhibit to the Registration Statement.
We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the heading “Legal Matters” in the Prospectus. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.
| Very truly yours, |
| /s/ Womble Bond Dickinson (US) LLP |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the use of our report dated February 10, 2022, with respect to the consolidated financial statements of British American Tobacco p.l.c. and the effectiveness of internal control over financial reporting, incorporated herein by reference and to the reference to our firm under the heading “Experts” in the prospectus.
/s/ KPMG LLP
London, United Kingdom
July 1, 2022
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
| ☒ | CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |
Citibank, N.A.
| A National Banking Association | 13-5266470 | |
| (Jurisdiction of Incorporation or organization if not a U.S. national bank) |
(I.R.S. Employer Identification No.) | |
| 388 Greenwich St., New York, NY | 10013 | |
| (Address of principal executive office) | (Zip Code) | |
British American Tobacco p.l.c.
B.A.T Capital Corporation
B.A.T. International Finance p.l.c.
| England and Wales | 98-0207762 | |
| Delaware | 61-0986865 | |
| England and Wales | 98-0402606 | |
| (Jurisdiction of Incorporation or | (I.R.S. Employer | |
| organization if not a U.S. national bank) | Identification No.) |
Globe House
4 Temple Place
London WC2R 2PG United Kingdom
+44 (0)20 7845 1000
103 Foulk Road Suite 120
Wilmington, Delaware 19803
U.S.A.
+1 (302) 691 6323
(Address, including zip code and telephone number, including area code, of registrant’s principal executive offices)
Debt Securities
| 1. | General information. Furnish the following information as to the Trustee: |
| (a) | Name and address of each examining or supervising authority to which it is subject. |
| Name |
Address | |
| Comptroller of the Currency | Washington, D.C. | |
| Federal Reserve Bank of New York | 33 Liberty Street, New York, NY | |
| Federal Deposit Insurance Corporation | Washington, D.C. |
| (b) | Whether it is authorized to exercise corporate trust powers. |
Yes.
| 2. | Affiliations with Obligor. |
If the obligor is an affiliate of the trustee, describe each such affiliation.
None.
| Items 3-15. | Not Applicable |
| Item 16. | LIST OF EXHIBITS |
List below all exhibits filed as a part of this Statement of Eligibility.
Exhibit 1 – Copy of the Articles of Association of the Trustee, as now in effect – attached hereto as Exhibit 1 of Form T-1.
Exhibit 2 – Copy of the certificate of authority of the Trustee to commence business – attached hereto as Exhibit 2 of Form T-1.
Exhibit 3 – Copy of the authorization of the Trustee to exercise corporate trust powers – attached hereto as Exhibit 2 of Form T-1.
Exhibit 4 – Copy of the existing By-Laws of the Trustee – attached hereto as Exhibit 4 of Form T-1.
Exhibit 5 – Copy of each indenture referred to in item 4, if the obligor is in default – not applicable.
Exhibit 6 – The consent of the Trustee required by Section 321 (b) of the Trust Indenture Act of 1939 – attached hereto as Exhibit 6 of Form T-1.
Exhibit 7 – Copy of the latest Report of Condition of Citibank, N.A. (as of December 31, 2021) published pursuant to law or the requirements of its supervising or examining authority – attached hereto as Exhibit 7 of Form T-1.
Exhibit 8 – Copy of any order pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act – not applicable.
Exhibit 9 – Consent to serve of process of Form F-X – not applicable.
-2-
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the trustee, Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this Statement of Eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 1st day of July, 2022.
| CITIBANK, N.A., | ||
| by | /s/ William Keenan | |
| Name: William Keenan | ||
| Title: Senior Trust Officer | ||
-3-
Exhibit 1
Articles of Association
As amended effective November 18, 2015
CITIBANK, N.A.
Charter No. 1461
Articles of Association
AS AMENDED EFFECTIVE NOVEMBER 18, 2015
FIRST. The name and title of this Association shall be Citibank, N.A.; the Association in conjunction with its said legal name may also continue to use, as a trade name, its former name First National City Bank.
SECOND. The Head Office shall be in the City of Sioux Falls, State of South Dakota. The general business of this Association, and its operations of discount and deposit, shall be conducted at its Head Office and its legally established branches.
THIRD. Subject to the terms of any series of Preferred Stock, the Board of Directors shall consist of such number of individuals, not less than five nor more than twenty-five, as from time to time shall be determined by a majority of the votes to which the holders of Common Stock are at the time entitled.
FOURTH. The regular annual meeting of the shareholders for the election of directors and the transaction of whatever other business may be brought before said meeting shall be held at the Head Office, or such other place as the Board of Directors may designate, on the day of each year specified therefor in the By-Laws of the Association, but if no election shall be held on that day it may be held on any subsequent day according to the provisions of law; and all elections shall be held according to such lawful regulations as may be prescribed by the Board of Directors.
FIFTH. A. Designation.
The total number of shares of all classes of capital stock which the Association shall have the authority to issue is Forty One Million Five Hundred and One Thousand (41,501,000) shares of which (a) Forty One Million Five Hundred Thousand (41,500,000) shares shall be designated as shares of Common Stock, par value of Twenty Dollars ($20) per share (the “Common Stock”) and (b) One Thousand (1,000) shares shall be designated as shares of Preferred Stock, par value of one dollar ($1.00) per share (the “Preferred Stock”).
All of the shares of this Association’s Common Stock, which constitute all of the outstanding shares of this Association’s capital stock as of the effectiveness of these Articles, shall continue as shares of Common Stock of this Association following the filing hereof. Except as set forth in the terms of any series of Preferred Stock, no shares of any class or series of capital stock of this Association shall have any preemptive or special rights or privilege to acquire any shares of capital stock of the Association under any circumstances whatsoever.
The Board of Directors (and any authorized Committee thereof) is authorized, subject to any limitations prescribed by law and without the approval of the holders of Common Stock, to provide for the issuance of shares of Preferred Stock in one or more series, to be set forth in a certificate filed with the Office of the Comptroller of the Currency, as an exhibit to these Articles, (such certificate being hereinafter referred to as a “Preferred Stock Designation”), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then-outstanding shares of capital stock of the Association entitled to vote thereon, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required pursuant to the terms of any Preferred Stock Designation.
Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Association for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to these Articles of Association (including any Preferred Stock Designation relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to these Articles of Association (including any Preferred Stock Designation relating to any series of Preferred Stock).
The Association, at any time and from time to time, may authorize and issue debt obligations whether or not subordinated without the prior approval of shareholders.
2
SIXTH. The Board of Directors (a majority of whom shall be a quorum to do business) shall appoint one of its members to be Chairman of the Association, who shall perform such duties as may be designated by it. The Board of Directors shall have the power to appoint one of its members to be President of this Association, who shall perform such duties as may be designated by it. The Board of Directors shall have the power to appoint such other officers and employees as in its judgment may be required to transact the business of the Association.
The Board of Directors shall have the power to define the duties of the officers and employees of the Association; to fix the salaries to be paid to them; to dismiss them; to require bonds from them and to fix the penalty thereof; to regulate the manner in which any increase of the capital of the Association shall be made; to manage and administer the business and affairs of the Association; to make all by-laws that it may be lawful for them to make; and generally to do and perform all acts that it may be legal for a board of directors to do and perform.
The Board of Directors, without the approval of the shareholders, shall have the power to change the location of the Head Office and of any branch or branches of the Association subject to such limitations as from time to time may be provided by law.
SEVENTH. The Association shall have succession from the date of its organization certificate until such time as it may be dissolved by the affirmative vote of the holders of two-thirds of the voting power of the stock of the Association entitled to vote thereon (this vote being in addition to any vote required by the terms of any series of Preferred Stock), or until its franchise becomes forfeited by reason of violation of law, or until terminated by either a general or a special Act of Congress or until its affairs be placed in the hands of a receiver and finally wound up by him.
EIGHTH. The Board of Directors, or the holders of not less than ten per centum of the Common Stock of the Association, may call a special meeting of shareholders at any time: provided, however, that unless otherwise provided by law, not less than ten days prior to the date fixed for any such meeting, a notice of the time, place and purpose of the meeting shall be given by first-class mail, postage prepaid, to all shareholders of record at their respective addresses as shown upon the books of the Association.
NINTH. (1) The Association shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Association) by reason of the fact that he is or was a director or officer of the Association, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Association, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
| (2) | The Association shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Association to procure a judgment in its favor by reason of the fact that he is or was a director or officer of the Association, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Association unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. |
| (3) | The Association may indemnify any person who is or was an employee of the Association, or is or was serving at the request of the Association as a director, officer or employee of another corporation, partnership, joint venture, trust or other enterprise to the extent and under the circumstances provided by paragraphs 1 and 2 of this Article NINTH with respect to a person who is or was a director or officer of the Association. |
| (4) | Any indemnification under paragraphs 1, 2 and 3 of this Article NINTH (unless ordered by a court) shall be made by the Association only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because he has met the applicable standard of conduct set forth therein. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum (as defined in the By-Laws of the Association) consisting of directors who were not parties to such action, suit or proceeding, or (b) if such quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders. |
| (5) | Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the Association in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Association as authorized in this Article NINTH. |
3
| (6) | The indemnification provided by this Article NINTH shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. |
| (7) | By action of its Board of Directors, notwithstanding any interest of the directors in the action, the Association may purchase and maintain insurance, in such amounts as the Board of Directors deems appropriate, on behalf of any person who is or was a director, officer, employee or agent of the Association, or of any corporation a majority of the voting stock of which is owned by the Association, or is or was serving at the request of the Association as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Association would have the power or would be required to indemnify him against such liability under the provisions of this Article NINTH; PROVIDED, HOWEVER, that the Association may not purchase or maintain insurance which would cover final orders assessing civil money penalties arising out of administrative actions or proceedings instituted by an appropriate bank regulatory agency. |
| (8) | Notwithstanding any right or authority granted in subparagraphs (1)-(7) of this Article, no person shall be indemnified or reimbursed for expenses, penalties, or other payments incurred in an administrative proceeding or action instituted by an appropriate bank regulatory agency if such proceeding or action results in a final order assessing a civil money penalty or requiring affirmative action by an individual or individuals in the form of payments to the Association. |
TENTH. Except as provided in these Articles of Association, and subject to the terms of any series of Preferred Stock, these Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the Common Stock, unless the vote of the holders of a greater amount of Common Stock is required by law, and in that case by the vote of the holders of such greater amount.
ELEVENTH. Any action which requires a vote of the shareholders, but that does not specifically require a meeting of this Association, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of all outstanding shares entitled to vote thereon and shall be delivered to this Association by delivery to its registered office in the State of New York, its principal place of business, or an officer or agent of the Association having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to the Association’s registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each shareholder who signs the consent.
STATE OF NEW YORK)
COUNTY OF NEW YORK)
The undersigned duly qualified Assistant Secretary of Citibank, N.A., a national banking association (“Citibank”), hereby certifies that (i) on November 18, 2015 holders of all of the voting shares of Citibank, by unanimous written consent, adopted the Articles of Association as amended effective November 18, 2015 of Citibank and (ii) the foregoing is a true and complete copy of the Articles of Association as amended November 18, 2015.
4
| ||||
| Paula F. Jones | ||||
| Assistant Secretary | ||||
| Subscribed and sworn before me | November 19, 2015 | |||
| (Date) | ||||
|
| ||||
| (Notary Public) | ||||
| JACQUELINE WOOD Notary Public, State of New York No. 01WO6188144 Qualified in New York County Commission Expires June 2, 2016 | ||||
5
EXHIBIT 2
|
Office of the Comptroller of the Currency | |
| Washington, DC 20219 |
CERTIFICATE OF CORPORATE EXISTENCE AND FIDUCIARY POWERS
I, Joseph Otting, Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324, et seq, as amended, and 12 USC 1, et seq, as amended, has possession, custody, and control of all records pertaining to the chartering, regulation, and supervision of all national banking associations.
2. “Citibank, N.A.,” Sioux Falls, South Dakota (Charter No. 1461), is a national banking association formed under the laws of the United States and is authorized thereunder to transact the business of banking and exercise fiduciary powers on the date of this certificate.
|
IN TESTIMONY WHEREOF, today, July 2, 2019, I have hereunto subscribed my name and caused my seal of office to be affixed to these presents at the U.S. Department of the Treasury, in the City of Washington, District of Columbia.
| |
|
| ||
| Comptroller of the Currency |
EXHIBIT 4
By-Laws
As amended effective October 22, 2015
CITIBANK, N.A.
BY-LAWS
AS AMENDED EFFECTIVE OCTOBER 22, 2015
INDEX
TO
BY-LAWS
OF
CITIBANK, N.A.
INDEX
TO
BY-LAWS
OF
CITIBANK, N.A.
| Pages | ||||||
| Article I – Meetings of Shareholders |
1 | |||||
| Section 1. |
Annual Meeting | 1 | ||||
| Section 2. |
Special Meetings | 1 | ||||
| Section 3. |
Inspector of Election | 1 | ||||
| Section 4. |
Quorum and Action by Consent | 1 | ||||
| Article II – Directors |
1 | |||||
| Section 1. |
Board of Directors | 1 | ||||
| Section 2. |
Number | 1 | ||||
| Section 3. |
Organization Meeting | 1 | ||||
| Section 4. |
Regular Meetings | 1 | ||||
| Section 5. |
Special Meetings | 1 | ||||
| Section 6. |
Notice | 2 | ||||
| Section 7. |
Quorum and Manner of Acting | 2 | ||||
| Section 8. |
Vacancies | 2 | ||||
| Section 9. |
Directors’ Fees | 2 | ||||
| Article III – Committees of the Board |
2 | |||||
| Section 1. |
Executive Committee: Powers | 2 | ||||
| Section 2. |
Executive Committee: Membership; Meetings; Quorum | 2 | ||||
| Section 3. |
Other Committees | 2 | ||||
| Article IV – Officers and Agents |
2 | |||||
| Section 1. |
Chairman | 2 | ||||
| Section 2. |
Chief Executive Officer | 3 | ||||
| Section 3. |
President | 3 | ||||
| Section 4. |
Vice Chairmen | 3 | ||||
| Section 5. |
Executive Vice Presidents | 3 | ||||
| Section 6. |
Senior Vice Presidents | 3 | ||||
| Section 7. |
Secretary | 3 | ||||
| Section 8. |
Treasurer | 3 | ||||
| Section 9. |
Chief Auditor | 3 | ||||
| Section 10. |
Vice Presidents | 3 | ||||
| Section 11. |
Other Officers | 3 | ||||
| Section 12. |
Attorneys-in-Fact | 4 | ||||
| Section 13. |
Tenure of Office | 4 | ||||
i
| Pages | ||||||
| Article V – Domestic Branches |
4 | |||||
| Section 1. |
Location | 4 | ||||
| Section 2. |
Management | 4 | ||||
| Article VI – Foreign Branches |
4 | |||||
| Section 1. |
Establishment | 4 | ||||
| Section 2. |
Management | 4 | ||||
| Section 3. |
Custody of Funds | 4 | ||||
| Section 4. |
Books, Reports, and Fiscal Periods | 4 | ||||
| Article VII – Fiduciary Powers |
4 | |||||
| Section 1. |
Assignment of Fiduciary Powers | 4 | ||||
| Section 2. |
Authentication and Signature of Instruments | 5 | ||||
| Article VIII – Stock and Stock Certificates |
5 | |||||
| Section 1. |
Transfers | 5 | ||||
| Section 2. |
Stock Certificates | 5 | ||||
| Section 3. |
Record Date and Closing Transfer Books | 5 | ||||
| Article IX – Corporate Seal |
5 | |||||
| Article X – Miscellaneous Provisions |
5 | |||||
| Section 1. |
Fiscal Year | 5 | ||||
| Section 2. |
Execution of Instruments | 6 | ||||
| Section 3. |
Records | 6 | ||||
| Section 4. |
Banking Hours | 6 | ||||
| Section 5. |
Corporate Governance Procedures | 6 | ||||
| Article XI – By-Laws |
6 | |||||
| Section 1. |
Inspection | 6 | ||||
| Section 2. |
Amendments | 6 | ||||
| Section 3. |
Reference to Gender | 6 | ||||
ii
CITIBANK, N.A.
BY-LAWS
ARTICLE I
Meetings of Shareholders
Section 1. Annual Meeting. The regular annual meeting of the shareholders, for the election of directors and the transaction of whatever other business may come before the meeting, shall be held at the Head Office of the Association, 701 East 60th Street North, Sioux Falls, South Dakota, County of Minnehaha, or such other place as the Board of Directors may designate, on such date and at such time as may be fixed by resolution of the Board of Directors. Notice of such meeting may be waived in writing before, after, or at such meeting.
Section 2. Special Meetings. The Board of Directors, or the holders of not less than ten per centum of the Common Stock of the Association, may call a special meeting of shareholders at any time. Every such special meeting, unless otherwise provided by law, shall be called by mailing, postage prepaid, not less than ten days prior to the date fixed for such meeting, to each shareholder at his address appearing on the books of the Association, a notice stating the purpose of the meeting. Such notice may be waived in writing before, after, or at, such meeting.
Section 3. Inspector of Election. If the Board of Directors shall so determine, any election of directors shall be managed by one or more inspectors of election, who shall be appointed by the Chairman of the meeting, and who, before entering upon the discharge of their duties shall be duly sworn faithfully to execute the duties of inspector(s) of election with strict impartiality, and according to the best of their ability. The inspector(s) of election shall hold and conduct the election at which they are appointed to serve; and, after the election, they shall file with the Secretary a certificate under their hands, certifying the result thereof and the names of the directors elected. The inspector(s) of election, at the request of the Chairman of the meeting, shall act as tellers of any other vote by ballot taken at such meeting, and shall certify the result thereof.
Section 4. Quorum and Action by Consent. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law; but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association. Any action which requires a vote of the shareholders, but does not specifically require a meeting of this Association, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of all outstanding shares entitled to vote thereon and shall be delivered to this Association by delivery to its registered office in the State of South Dakota, its principal place of business, or an officer or agent of the Association having custody of the book in which proceedings of meetings of shareholders are recorded. Delivery made to the Association’s registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of signature of each shareholder who signs the consent.
ARTICLE II
Directors
Section 1. Board of Directors. The Board of Directors shall have power to manage and administer the business and affairs of the Association. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by said Board.
Section 2. Number. The Board of Directors shall consist of such number, not less than five nor more than twenty-five, as from time to time shall be determined by a majority of the votes to which all shareholders are at the time entitled.
Section 3. Organization Meeting. The Secretary, upon receiving the certificate of the inspector(s), of the result of any election, shall notify the directors-elect of their election and of the time at which they are required to meet at the Head Office of the Association, or such other place as the Board of Directors may designate, for the purpose of organizing the new Board and electing and appointing officers of the Association for the succeeding year. Such meeting shall be appointed to be held on the day of the election or as soon thereafter as practicable. If, at the time fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting, from time to time, until a quorum is obtained. Any business which may properly be transacted by the Board of Directors may be transacted at any organization meeting thereof.
Section 4. Regular Meetings. A regular meeting of the Board of Directors shall be held at least quarterly, unless the Board of Directors shall otherwise determine, at the Head Office of the Association, with notice to the directors of the date and time of such meeting, or, may be held at such other time and place as the Board shall have ordered at any previous meeting.
Section 5. Special Meetings. A special meeting of the Board of Directors may be called at any time by the Chairman, the Chief Executive Officer, or the President, or on the written request of any three members of the Board such meeting shall be called by one of said officers or by the Secretary.
1
Section 6. Notice. Notice of any special meeting, specifying the time and place of such meeting, or of the time and place or the cancellation of any regular meeting of the Board of Directors may be given in writing, either by mailing the same to each director, at his address appearing on the books of the Association on or before the second day preceding the meeting, or by telegraphing the same to each director at such address, or delivering the same to each director personally, or leaving the same at his place of business, or at his residence, or by telephone on or before the day preceding the meeting. Notice need not be given to any director if waived by each director in writing. Attendance of a director at any meeting of the Board of Directors shall constitute a waiver of notice of such meeting, except when the director attends such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because such meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors or any committee thereof need be specified in any written waiver of notice.
Section 7. Quorum and Manner of Acting. At every meeting of the Board of Directors, a majority shall constitute a quorum, and, except as otherwise required by law, the vote of a majority of the directors present at any such meeting at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum, a majority of the directors present may adjourn any meeting from time to time until a quorum is present. No notice of any adjourned meeting need be given other than by announcement at the meeting that is being adjourned. Members of the Board of Directors may participate in meetings through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another.
Section 8. Vacancies. When any vacancy occurs among the directors, the remaining members of the Board may appoint a director to fill such vacancy at any regular meeting of the Board, or at a special meeting called for that purpose.
Section 9. Directors’ Fees. The Board of Directors shall have authority to determine from time to time, the amount of compensation which shall be paid to any of its members, provided however that no such compensation be paid to any director who is a salaried officer or employee of the Association or any of its subsidiaries. Directors shall receive transportation and other expenses of attendance.
ARTICLE III
Committees of the Board
Section 1. Executive Committee: Powers. The Board of Directors may appoint an Executive Committee of the Board of Directors which shall be constituted as provided in Section 2 of this Article. The Executive Committee shall have and may exercise, when the Board is not in session, all the powers of the Board that may lawfully be delegated. The Executive Committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the Board of Directors at which a quorum is present, and any action taken by the Board with respect thereto shall be entered in the minutes of the Board. All acts done and powers conferred by the Executive Committee from time to time shall be deemed to be, and may be certified as being, done or conferred under authority of the Board.
Section 2. Executive Committee: Membership; Meetings; Quorum. The Executive Committee shall hold a regular meeting without notice at the time and place appointed for each regular meeting of the Board of Directors at which a quorum of the Board shall not be in attendance at said time and place, unless such regular meeting of the Board is cancelled as provided in Article II, Section 6. The directors present at such time and place, if there be not less than three, shall constitute the Executive Committee for such regular meeting, and the vote of a majority of the Committee as so constituted shall suffice for the transaction of business. A special meeting of the Executive Committee may be called at any time by the Chairman, the Chief Executive Officer or the President. Notice of any such special meeting shall be given to each director in the manner provided in Article II, Section 6, for the giving of notice, or the waiver thereof, of a special meeting of the Board of Directors and shall be sufficient even though such notice refers only to a meeting of the Board of Directors. The directors who shall attend at the time and place fixed in such notice, if there be not less than three, shall constitute the Executive Committee for such special meeting, and the vote of a majority of the Committee as so constituted shall suffice for the transaction of business. Executive Committee meetings may be held through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another.
Section 3. Other Committees. The Board of Directors may appoint, from time to time, from its own members, committees of one or more persons, for such purposes and with such powers as the Board may determine. Members of such committees may participate in meetings of those committees through use of conference telephone or similar communications equipment, so long as all members participating in such meetings can hear one another. Each such committee shall keep minutes of its meetings, and such minutes shall be submitted at the next regular meeting of the Board of Directors, and any action taken by the Board with respect thereto shall be entered into the minutes of the Board. Committees composed of non-members of the Board may also be appointed to consult with the members regularly or from time to time under such rules as the Board may determine but in no event may such Committees have the power of final decision in matters concerning the business of the Association.
ARTICLE IV
Officers and Agents
Section 1. Chairman. The Board of Directors shall appoint one of its members to be Chairman of the Association. The Chairman shall have general executive powers as well as the specific powers conferred by these By-Laws. He shall preside at meetings of the shareholders and, in the absence of the Chief Executive Officer and the President, at the meetings of the Board of Directors and the Executive Committee.
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Section 2. Chief Executive Officer. The Board of Directors may appoint a Chief Executive Officer of the Association. The Chief Executive Officer shall preside at all meetings of the Board of Directors and the Executive Committee and have general executive powers as well as the specific powers conferred by these By-Laws. The Chief Executive Officer shall also have such powers and duties as may from time to time be assigned by the Board of Directors. In the absence of the Chairman, the Chief Executive Officer shall exercise their respective powers and duties and shall preside at meetings of the shareholders.
Section 3. President. The Board of Directors may appoint a President of the Association. The President shall have general executive powers as well as the specific powers conferred by these By-Laws. In the absence of the Chief Executive Officer, the President shall exercise the powers and duties of the Chief Executive Officer of the Association, including the powers and duties related to meetings of the Board of Directors and the Executive Committee.
Section 4. Vice Chairmen. The Board of Directors may appoint one or more Vice Chairmen of the Association. In the absence of the Chairman, the Chief Executive Officer and the President, and, in the order of their appointment to the office, the Vice Chairmen shall exercise the powers and duties of the Chief Executive Officer related to meetings of the Board of Directors and the Executive Committee and the powers and duties of the Chairman related to meetings of the shareholders. Each Vice Chairman shall have general executive powers as well as the specific powers conferred by these By- Laws. Each of them shall also have such powers and duties as may from time to time be assigned by the Board of Directors, the Chairman, the Chief Executive Officer or the President.
Section 5. Executive Vice Presidents. The Board of Directors may appoint one or more Executive Vice Presidents of the Association, each of whom shall have supervision of such major group or other administrative unit of the Association, or such other primary responsibilities, as may from time to time be established and defined by the Board of Directors, the Chairman, the Chief Executive Officer, the President, or any Vice Chairman. Each Executive Vice President shall have general executive powers as well as the specific powers conferred by these By-Laws. Each Executive Vice President shall also have such further powers and duties as may from time to time be assigned by the Board of Directors, the Chairman, the Chief Executive Officer, the President, or any Vice Chairman.
Section 6. Senior Vice Presidents. The Board of Directors may appoint one or more Senior Vice Presidents of the Association. Each Senior Vice President shall have general executive powers as well as the specific powers conferred by these By-Laws. They shall also have such further powers and duties as may from time to time be assigned by the Board of Directors, the Chairman, the Chief Executive Officer, the President, or any Vice Chairman.
Section 7. Secretary. The Board of Directors shall appoint a Secretary who shall keep accurate minutes of meetings of the Board of Directors and the Executive Committee of the Board. The Secretary shall attend to the giving of all notices required by these By-Laws to be given. The Secretary shall be custodian of the corporate seal, records, documents, and papers of the Association. The Secretary shall have and may exercise any and all other powers and duties pertaining by law or regulation to the office of Secretary, or imposed by these By-Laws. The Secretary shall also have such further powers and duties as may from time to time be assigned by the Board of Directors, the Chairman, the Chief Executive Officer, the President, or any Vice Chairman. The Secretary may appoint one or more Assistant Secretaries with such powers and duties as the Board of Directors, the Chairman, the Chief Executive Officer, the President, any Vice Chairman, or the Secretary shall, from time to time, determine.
Section 8. Treasurer. The Treasurer shall have the powers attendant to the office of Treasurer. The Treasurer shall also have such further powers and duties as may from time to time be assigned by the Board of Directors, the Chairman, the Chief Executive Officer, the President, or any Vice Chairman.
Section 9. Chief Auditor. The Board of Directors shall appoint a Chief Auditor who shall be the chief auditing officer of the Association. The Chief Auditor shall continuously examine the affairs of the Association, and shall report to the Board of Directors. The Chief Auditor shall have and may exercise the powers and duties as from time to time may be conferred upon, or assigned by the Board of Directors. Subject to the authority granted to the Chief Auditor by the Board of Directors, the Chief Auditor may also appoint, dismiss, and fix the salaries of one or more Assistant Vice Presidents, Managers, and Assistant Managers, and such other officers in the Chief Auditor’s Division as, from time to time, appear to be required or desirable.
Section 10. Vice Presidents. The Board of Directors may appoint one or more Vice Presidents of the Association. In addition, the Board of Directors may delegate to officers of the rank of Senior Vice President or higher, as designated by the Chairman, the Chief Executive Officer, the President, or any Vice Chairman, authority to appoint, dismiss and fix salaries to be paid Vice Presidents within the respective officers’ areas of supervision. Each Vice President shall have specific powers conferred by these By-Laws and such further powers and duties as may from time to time be assigned by the Board of Directors, the Chairman, the Chief Executive Officer, the President, or any Vice Chairman.
Section 11. Other Officers. The Board of Directors may establish senior officer positions equivalent to and having duties and powers the same as those officers mentioned in the preceding Sections of this Article IV. The Board of Directors may also appoint a one or more Assistant Vice Presidents, Managers, Assistant Managers, and such other officers as, from time to time, may appear to the Board of Directors to be required or desirable to transact the business of the Association. In addition, the Board of Directors may delegate to officers of the rank of Vice President or higher, as designated by the Chairman, the Chief Executive Officer, the President, any Vice Chairman, any Executive Vice President, or any Senior Vice President, the authority to appoint, dismiss, and to fix the salaries to be paid to any such officers other than officers in the Chief Auditor’s Division, within the respective officer’s area of supervision. The officers so appointed shall have such powers and duties as may, from time to time, be conferred upon or assigned to them by the Board of Directors, the Chairman, the Chief Executive Officer, the President, any Vice Chairman, or the appointing officer.
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Section 12. Attorneys-in-Fact. The Board of Directors may appoint one or more attorneys-in-fact as, from time to time, may appear to the Board of Directors to be required or desirable to transact the business of the Association. Subject to the authority of the Board of Directors, the Chairman, the Chief Executive Officer, the President, any Vice Chairman, any Executive Vice President or any Senior Vice President may appoint, dismiss and fix the compensation to be paid to such attorneys-in-fact (including third-party attorneys-in-fact who are not employed by the Association or by any affiliated corporate entity). In the case of any Vice President designated as Citigroup Country Officer (“CCO”), said CCO may appoint, dismiss and fix the compensation to be paid to such attorneys-in-fact in accordance with, and limited to, the powers granted to them pursuant to their respective CCO Powers of attorney. The attorneys-in-fact appointed pursuant to this Section 12 shall exercise such powers and perform such duties as may, from time to time, be conferred upon them by Power of Attorney.
Section 13. Tenure of Office. All officers appointed by the Board of Directors, or under its authority, shall hold office at the pleasure of the Board.
ARTICLE V
Domestic Branches
Section 1. Location. The Board of Directors shall have plenary power to establish, to discontinue, or, from time to time to change the location of, any domestic branch, subject to such limitations as from time to time may be provided by law.
Section 2. Management. Subject to the general supervision and control of the Board of Directors, the Chairman, the Chief Executive Officer, the President, any Vice Chairman, any Executive Vice President, and any Senior Vice President, the affairs of the domestic branches shall be under the immediate supervision and control of such officer as the Board, the Chairman, the Chief Executive Officer, or the President may designate and subject to such rules and regulations as such officer shall promulgate from time to time; and such officer is authorized to assign to any domestic branch such officers, agents, and employees as he may deem necessary to conduct the business thereof, and to reassign them as he may find proper and to discontinue, or, from time to time to change the location of, any domestic branch, subject to such limitations as from time to time may be provided by law.
ARTICLE VI
Foreign Branches
Section 1. Establishment. The Board of Directors shall have plenary power to establish, to discontinue, or, from time to time, to change the location of, any branch or representative office in a foreign country or in a dependency of the United States of America, subject to such limitations as from time to time may be provided by law.
Section 2. Management. Subject to the general supervision and control of the Board of Directors, the Chairman, the Chief Executive Officer, the President, any Vice Chairman, any Executive Vice President, and any Senior Vice President, the affairs of the foreign branches shall be under the immediate supervision and control of such officer as the Board, the Chairman, the Chief Executive Officer, or the President may designate and subject to such rules and regulations as such officer shall promulgate from time to time; and such officer is authorized to assign to any foreign branch such officers, agents, and employees as he may deem necessary to conduct the business thereof, and to reassign them as he may find proper and to discontinue, or, from time to time to change the location of, any foreign branch, subject to such limitations as from time to time may be provided by law.
Section 3. Custody of Funds. The funds of each branch shall be kept in the custody of the officer, manager, or other agent-in-charge thereof, or in such depositories as such person may select, subject to the approval of such officer as may have supervision over the foreign branches of the Association.
Section 4. Books, Reports, and Fiscal Periods. At each branch, the officer, manager or other agent-in-charge thereof shall keep or cause to be kept, full and regular books of account, which shall at all times be open to inspection by the Association, through its proper officers or accountants or by the proper officers of the Government of the United States of America. All the transactions of the Association at the several branches shall be reported promptly to the Association by the officer, manager or other agent-in-charge thereof. Such officer as may have supervision over the foreign branches of the Association, may from time to time specify with respect to each branch the fiscal periods for ascertainment or remittance of profits and, generally, for its accounting purposes.
ARTICLE VII
Fiduciary Powers
Section 1. Assignment of Fiduciary Powers. All fiduciary powers of the Association shall be exercised, subject to such regulations as the Office of the Comptroller of the Currency shall from time to time establish, by one or more directors, officers, employees or committees as the Board of Directors shall from time to time determine.
4
Section 2. Authentication and Signature of Instruments. All authentications or certificates by the Association, as Trustee under any mortgage, deed of trust or other instrument securing bonds, debentures, notes, or other obligations of any corporation, and all certificates as Registrar or Transfer Agent and all certificates of deposit for stocks and bonds, and interim certificates and trust certificates, may be signed or countersigned in behalf of the Association by the Chairman, the Chief Executive Officer, the President, any Vice Chairman, any Executive Vice President, any Senior Vice President, the Secretary, any Vice President, or anyone holding a position equivalent to the foregoing pursuant to provisions of these By-Laws, any Assistant Vice President, any Manager, any Senior Trust Officer, any Assistant Manager, any Trust Officer, or any officer with rank equivalent to any of the foregoing as may be designated by the Secretary, or by any other person appointed for that purpose by the Board of Directors or pursuant to these By-Laws. Any such signature or countersignature may be manual or facsimile.
ARTICLE VIII
Stock and Stock Certificates
Section 1. Transfers. Shares of stock shall be transferable on the books of the Association, and transfer books shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all the rights and liabilities of the prior holder of such shares. The Board of Directors may, in its discretion, appoint responsible banks or trust companies in such city or cities as the Board may deem advisable, from time to time, to act as transfer agents or co-transfer agents and registrars or co-registrars of the stock of the Association.
Section 2. Stock Certificates. Certificates of stock shall bear the signature of either the Chairman, the Chief Executive Officer, President, Chief Financial Officer or Treasurer (which may be engraved, printed or impressed) and shall either (a) bear the engraved, printed or impressed signature of the Secretary, be countersigned manually by a duly authorized transfer agent or co-transfer agent of the stock of the Association and be registered by a duly appointed registrar or co-registrar of the stock of the Association, or (b) be signed manually by the Secretary or by any Assistant Secretary or officer designated as an Authorized Officer of the Association and countersigned by any other Assistant Secretary or officer designated as an Authorized Officer, and, in either case the seal of the Association shall be engraved, printed or impressed thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the Association by the holder thereof or his attorney, upon surrender of the certificate properly endorsed.
Section 3. Record Date and Closing Transfer Books. The Board of Directors may prescribe a period of not more than thirty days during which no transfer of shares of stock on the books of the Association may be made or in lieu thereof may fix a record date and hour, for the purpose of determining the shareholders entitled to any dividend or distribution, or to notice respecting any meeting of the shareholders or any matter as to which the consent or dissent of shareholders may effectively be expressed without a meeting, and to vote or otherwise act at such meeting or concerning such matter. Any record date thus fixed shall not be prior to the date of declaration of such dividend or distribution or giving notice to the shareholders respecting such meeting or matter, nor shall it be more than thirty days prior to the date fixed for such meeting or expression of such consent or dissent.
ARTICLE IX
Corporate Seal
The Secretary or any Assistant Secretary, or other officer thereunto designated by the Secretary, shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form and be effective as of January 1, 2016. The previous corporate seal shall remain effective until 11:59 p.m. on December 31, 2015.
ARTICLE X
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Association shall be the calendar year.
5
Section 2. Execution of Instruments. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents, may be signed, executed, acknowledged, verified, delivered or accepted in behalf of the Association by the Chairman, the Chief Executive Officer, the President, any Vice Chairman, or any Executive Vice President, or or any Senior Vice President, or the Secretary, or the Chief Auditor, or any Vice President, or anyone holding a position equivalent to the foregoing pursuant to provisions of these By-Laws, or, if in connection with the exercise of any of the fiduciary powers of the Association, by any of said officers or by any Senior Trust Officer. Any such instruments may also be executed, acknowledged, verified, delivered or accepted in behalf of the Association in such other manner and by such other officers as the Board of Directors may from time to time direct. The provisions of this Section 2 are supplementary to any other provisions of these By-Laws.
Section 3. Records. The Articles of Association, the By-Laws and the proceedings of all meetings of the shareholders, the Board of Directors, the Executive Committee, and other standing committees of the Board, shall be recorded in appropriate minute books provided for the purpose. The minutes of each meeting shall be signed by the Secretary or other officer appointed to act as Secretary of the meeting.
Section 4. Banking Hours. The Head Office of the Association and its branch offices shall be open for business on such days and during such hours as the Association shall establish from time to time consistent with applicable law.
Section 5. Corporate Governance Procedures. To the extent not inconsistent with applicable federal banking statutes, the Association has elected to follow the corporate governance procedures contained in the Delaware General Corporation Law.
ARTICLE XI
By-Laws
Section 1. Inspection. A copy of the By-Laws, with all amendments thereto, shall at all times be kept in a convenient place at the Head Office of the Association, and shall be open for inspection to all shareholders, during banking hours.
Section 2. Amendments. These By-Laws may be amended, altered or repealed, at any meeting of the Board of Directors, by a vote of a majority of the whole number of the directors.
Section 3. Reference to Gender. A reference in these By-Laws to one gender, masculine, feminine, or neuter includes the other two; and the singular includes the plural and vice versa unless the context otherwise requires.
6
EXHIBIT 6
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended, Citibank, N.A. hereby consents that reports of examinations by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon requests therefor.
| CITIBANK, N.A. | ||||||
| Dated: July 1, 2022 | By: | /s/ William Keenan | ||||
| Name: Name: William Keenan | ||||||
| Title: Senior Trust Officer | ||||||
EXHIBIT 7 – CONSOLIDATED BALANCE SHEET
| Citigroup Inc. and Subsidiaries |
||||||||
| December 31, | ||||||||
| In millions of dollars | 2021 | 2020 | ||||||
| Assets |
||||||||
| Cash and due from banks (including segregated cash and other deposits) |
$ | 27,515 | $ | 26,349 | ||||
| Deposits with banks, net of allowance |
234,518 | 283,266 | ||||||
| Securities borrowed and purchased under agreements to resell (including $216,466 and $185,204 as of December 31, 2021 and 2020, respectively, at fair value), net of allowance |
327,288 | 294,712 | ||||||
| Brokerage receivables, net of allowance |
54,340 | 44,806 | ||||||
| Trading account assets (including $133,828 and $168,967 pledged to creditors at December 31, 2021 and 2020, respectively) |
331,945 | 375,079 | ||||||
| Investments: |
||||||||
| Available-for-sale debt securities (including $9,226 and $5,921 pledged to creditors as of December 31, 2021 and 2020, respectively), net of allowance |
288,522 | 335,084 | ||||||
| Held-to-maturity debt securities (including $1,460 and $547 pledged to creditors as of December 31, 2021 and 2020, respectively), net of allowance |
216,963 | 104,943 | ||||||
| Equity securities (including $1,032 and $1,066 as of December 31, 2021 and 2020, respectively, at fair value) |
7,337 | 7,332 | ||||||
|
|
|
|
|
|||||
| Total investments |
$ | 512,822 | $ | 447,359 | ||||
| Loans: |
||||||||
| Consumer (including $12 and $14 as of December 31, 2021 and 2020, respectively, at fair value) |
271,236 | 288,839 | ||||||
| Corporate (including 6,070 and 6,840 as of December 31, 2021 and 2020, respectively, at fair value) |
396,531 | 387,044 | ||||||
|
|
|
|
|
|||||
| Loans, net of unearned income |
$ | 667,767 | $ | 675,883 | ||||
| Allowance for credit losses on loans (ACLL) |
(16,455 | ) | (24,956 | ) | ||||
|
|
|
|
|
|||||
| Total loans, net |
$ | 651,312 | $ | 650,927 | ||||
| Goodwill |
21,299 | 22,162 | ||||||
| Intangible assets (including MSRs of $404 and $336 as of December 31, 2021 and 2020, respectively, at fair value) |
4,495 | 4,747 | ||||||
| Other assets (including $12,342 and $14,613 as of December 31, 2021 and 2020, respectively, at fair value), net of allowance |
125,879 | 110,683 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 2,291,413 | $ | 2,260,090 | ||||
The following table presents certain assets of consolidated variable interest entities (VIEs), which are included on the Consolidated Balance Sheet above. The assets in the table below include those assets that can only be used to settle obligations of consolidated VIEs, presented on the following page, and are in excess of those obligations. In addition, the assets in the table below include third-party assets of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation.
| December 31, | ||||||||
| In millions of dollars | 2021 | 2020 | ||||||
| Assets of consolidated VIEs to be used to settle obligations of consolidated VIEs |
||||||||
| Cash and due from banks |
$ | 260 | $ | 281 | ||||
| Trading account assets |
10,038 | 8,104 | ||||||
| Investments |
844 | 837 | ||||||
| Loans, net of unearned income |
||||||||
| Consumer |
34,677 | 37,561 | ||||||
| Corporate |
14,312 | 17,027 | ||||||
|
|
|
|
|
|||||
| Loans, net of unearned income |
$ | 48,989 | $ | 54,588 | ||||
| Allowance for credit losses on loans (ACLL) |
(2,668 | ) | (3,794 | ) | ||||
|
|
|
|
|
|||||
| Total loans, net |
$ | 46,321 | $ | 50,794 | ||||
| Other assets |
1,174 | 43 | ||||||
|
|
|
|
|
|||||
| Total assets of consolidated VIEs to be used to settle obligations of consolidated VIEs |
$ | 58,637 | $ | 60,059 | ||||
|
|
|
|
|
|||||
Statement continues on the next page.
(Continued)
| December 31, | ||||||||
| In millions of dollars, except shares and per share amounts | 2021 | 2020 | ||||||
| Liabilities |
||||||||
| Non-interest-bearing deposits in U.S. offices |
$ | 158,552 | $ | 126,942 | ||||
| Interest-bearing deposits in U.S. offices (including $879 and $879 as of December 31, 2021 and 2020, respectively, at fair value) |
543,283 | 503,213 | ||||||
| Non-interest-bearing deposits in offices outside the U.S. |
97,270 | 100,543 | ||||||
| Interest-bearing deposits in offices outside the U.S. (including $787 and $1,079 as of December 31, 2021 and 2020, respectively, at fair value) |
518,125 | 549,973 | ||||||
|
|
|
|
|
|||||
| Total deposits |
$ | 1,317,230 | $ | 1,280,671 | ||||
| Securities loaned and sold under agreements to repurchase (including $56,694 and $60,206 as of December 31, 2021 and 2020, respectively, at fair value) |
191,285 | 199,525 | ||||||
| Brokerage payables (including $3,575 and $6,835 as of December 31, 2021 and 2020, respectively, at fair value), including allowance |
61,430 | 50,484 | ||||||
| Trading account liabilities |
161,529 | 168,027 | ||||||
| Short-term borrowings (including $7,358 and $4,683 as of December 31, 2021 and 2020, respectively, at fair value) |
27,973 | 29,514 | ||||||
| Long-term debt (including $82,609 and $67,063 as of December 31, 2021 and 2020, respectively, at fair value) |
254,374 | 271,686 | ||||||
| Other liabilities |
74,920 | 59,983 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
$ | 2,088,741 | $ | 2,059,890 | ||||
| Stockholders’ equity |
||||||||
| Preferred stock ($1.00 par value; authorized shares: 30 million), issued shares: 759,800 as of December 31, 2021 and 779,200 as of December 31, 2020, at aggregate liquidation value |
$ | 18,995 | $ | 19,480 | ||||
| Common stock ($0.01 par value; authorized shares: 6 billion), issued shares: 3,099,651,835 as of December 31, 2021 and 3,099,633,160 as of December 31, 2020 |
31 | 31 | ||||||
| Additional paid-in capital |
108,003 | 107,846 | ||||||
| Retained earnings |
184,948 | 168,272 | ||||||
| Treasury stock, at cost: 1,115,296,641 shares as of December 31, 2021 and 1,017,543,951 shares as of December 31, 2020 |
(71,240 | ) | (64,129 | ) | ||||
| Accumulated other comprehensive income (loss) (AOCI) |
(38,765 | ) | (32,058 | ) | ||||
|
|
|
|
|
|||||
| Total Citigroup stockholders’ equity |
$ | 201,972 | $ | 199,442 | ||||
| Noncontrolling interests |
700 | 758 | ||||||
|
|
|
|
|
|||||
| Total equity |
$ | 202,672 | $ | 200,200 | ||||
|
|
|
|
|
|||||
| Total liabilities and equity |
$ | 2,291,413 | $ | 2,260,090 | ||||
|
|
|
|
|
|||||
The following table presents certain liabilities of consolidated VIEs, which are included on the Consolidated Balance Sheet above. The liabilities in the table below include third-party liabilities of consolidated VIEs only and exclude intercompany balances that eliminate in consolidation. The liabilities also exclude amounts where creditors or beneficial interest holders have recourse to the general credit of Citigroup.
| December 31, | ||||||||
| In millions of dollars | 2021 | 2020 | ||||||
| Liabilities of consolidated VIEs for which creditors or beneficial interest holders do not have recourse to the general credit of Citigroup |
||||||||
| Short-term borrowings |
$ | 8,376 | $ | 9,278 | ||||
| Long-term debt |
12,579 | 20,405 | ||||||
| Other liabilities |
694 | 463 | ||||||
|
|
|
|
|
|||||
| Total liabilities of consolidated VIEs for which creditors or beneficial interest holders do not have recourse to the general credit of Citigroup |
$ | 21,649 | $ | 30,146 | ||||
|
|
|
|
|
|||||
The Notes to the Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.