Document:

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                                                                     Exhibit 4.2

                          FIRST SUPPLEMENTAL INDENTURE

         This First Supplemental Indenture, dated as of June 30, 2003 (this
"First Supplemental Indenture"), among GMB, Inc. ("GMB"), FHS, Inc. ("FHS"), R.
J. Reynolds Tobacco Co. ("Reynolds Tobacco"), Santa Fe Natural Tobacco Company,
Inc. ("Santa Fe"), RJR Packaging, LLC ("RJR Packaging"), R.J. Reynolds Tobacco
Holdings, Inc. (together with its successors and assigns, the "Company"), R. J.
Reynolds Tobacco Company ("RJRT"), RJR Acquisition Corp. ("RJRA") and The Bank
of New York, as Trustee under the Indenture referred to below.

                                   WITNESSETH:

         WHEREAS, the Company, RJRT, RJRA and the Trustee have heretofore
executed and delivered an Indenture, dated as of May 20, 2002 (as amended,
supplemented, waived or otherwise modified, the "Indenture"), providing for the
issuance from time to time of the Company's unsecured debentures, notes or other
evidences of its indebtedness to be issued in one or more series up to such
principal amount or amounts as may from time to time be authorized in accordance
with the terms of the Indenture (the "Securities");

         WHEREAS, RJRT and RJRA are existing Guarantors under the Indenture;

         WHEREAS, Section 10.05 of the Indenture provides that the Company is
required to cause each Subsidiary other than RJRT and RJRA (whether previously
existing or created or acquired by the Company) which becomes a Bank Credit
Agreement Guarantor, to execute and deliver to the Trustee a supplemental
indenture pursuant to which such Subsidiary will unconditionally guarantee, on a
joint and several basis with the other Guarantors, the full and prompt payment
of the principal of, premium, if any, and interest, on the Securities on an
unsecured and unsubordinated basis and become a party to the Indenture as a
Guarantor for all purposes of the Indenture; and

         WHEREAS, pursuant to Section 9.01 of the Indenture, the Company, the
Guarantors and the Trustee are authorized to execute and deliver this First
Supplemental Indenture to amend the Indenture, without the consent of any
Securityholder;

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto mutually covenant and agree for the equal and ratable benefit of
the holders of the Securities as follows:

                                    ARTICLE I

                                   Definitions

         SECTION 1.1 Defined Terms. As used in this First Supplemental
Indenture, terms defined in the Indenture or in the preamble or recital hereto
are used herein as therein defined, except that the term "Holders" in this First
Supplemental Indenture shall refer to the term "Holders" as defined in the
Indenture and the Trustee acting on behalf or for the benefit of such holders.
The words "herein," "hereof" and "hereby" and other words of similar import used
in this First Supplemental Indenture refer to this First Supplemental Indenture
as a whole and not to any particular section hereof.

<PAGE>

                                   ARTICLE II

                        Agreement to be Bound; Guarantee

         SECTION 2.1 Agreement to be Bound. GMB, FHS, Reynolds Tobacco, Santa Fe
and RJR Packaging each hereby becomes a party to the Indenture as a Guarantor
and as such will have all of the rights and be subject to all of the obligations
and agreements of a Guarantor under the Indenture. GMB, FHS, Reynolds Tobacco,
Santa Fe and RJR Packaging each agree to be bound by all of the provisions of
the Indenture applicable to a Guarantor and to perform all of the obligations
and agreements of a Guarantor under the Indenture.

         SECTION 2.2 Guarantee. GMB, FHS, Reynolds Tobacco, Santa Fe and RJR
Packaging each hereby fully, unconditionally and irrevocably guarantees, as
primary obligor and not merely as surety, jointly and severally with each other
Guarantor, to each Holder of the Securities and the Trustee, the full and
punctual payment when due, whether at maturity, by acceleration, by redemption,
by repurchase or otherwise, of the Obligations in accordance with Article 10 of
the Indenture.

                                   ARTICLE III

                                  Miscellaneous

         SECTION 3.1 Notices. All notices and other communications to GMB, FHS,
Reynolds Tobacco, Santa Fe or RJR Packaging shall be given as provided in the
Indenture to the Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company.

         SECTION 3.2 Parties. Nothing expressed or mentioned herein is intended
or shall be construed to give any Person, firm or corporation, other than the
Holders and the Trustee, any legal or equitable right, remedy or claim under or
in respect of this First Supplemental Indenture or the Indenture or any
provision herein or therein contained.

         SECTION 3.3 Governing Law. This First Supplemental Indenture shall be
governed by the laws of the State of New York.

         SECTION 3.4 Severability Clause. In any case any provision in this
First Supplemental Indenture 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 and such provision shall be ineffective
only to the extent of such invalidity, illegality or unenforceability.

         SECTION 3.5 Ratification of Indenture; First Supplemental Indenture
Part of Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This First Supplemental Indenture
shall form a part of the Indenture for all purposes, and every holder of Notes
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity of this First
Supplemental Indenture.

                                       2

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         SECTION 3.6 Counterparts. The parties hereto may sign one or more
copies of this First Supplemental Indenture in counterparts, all of which
together shall constitute one and the same agreement.

         SECTION 3.7 Headings. The headings of the Articles and the sections in
this First Supplemental are for convenience of reference only and shall not be
deemed to alter or affect the meaning or interpretation of any provisions
hereof.

         SECTION 3.8 Trustee. The Trustee makes no representations as to the
validity or sufficiency of this First Supplemental Indenture. The recitals and
statements herein are deemed to be those of the Company and the Guarantors and
not of the Trustee.

                                      * * *

                                       3

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         IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the date first above written.

Address:                      R.J. REYNOLDS TOBACCO HOLDINGS, INC.
401 North Main Street
Winston-Salem, NC 27102
                              By: /s/ McDara P. Folan, III
                                 -----------------------------------------------
                                 Name:  McDara P. Folan, III
                                 Title: VP, Deputy General Counsel and Secretary

Address:                      RJR ACQUISITION CORP.,
1007 N. Orange Street           as a Guarantor
Suite 1402
Wilmington, DE  19801
                              By:  /s/ McDara P. Folan, III
                                 -----------------------------------------------
                                 Name:  McDara P. Folan, III
                                 Title: VP and Assistant Secretary

Address:                      R. J. REYNOLDS TOBACCO COMPANY,
401 North Main Street           as a Guarantor
Winston-Salem, NC 27102

                              By: /s/ Lynn L. Lane
                                 -----------------------------------------------
                                 Name:  Lynn L. Lane
                                 Title: SVP and Treasurer

Address:                      GMB, INC.,
401 North Main Street           as a Guarantor
Winston-Salem, NC 27102

                              By: /s/ Daniel A. Fawley
                                 -----------------------------------------------
                                 Name:  Daniel A. Fawley
                                 Title: Treasurer

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Address:                      FHS, INC.,
1007 N. Orange Street           as a Guarantor
Suite 1402
Wilmington, DE  19801
                              By: /s/ Caroline M. Price
                                 -----------------------------------------------
                                 Name:  Caroline M. Price
                                 Title: President

Address:                      R. J. REYNOLDS TOBACCO CO.,
401 North Main Street           as a Guarantor
Winston-Salem, NC 27102

                              By: /s/ Lynn L. Lane
                                 -----------------------------------------------
                                 Name:  Lynn L. Lane
                                 Title: Treasurer

Address:                      SANTA FE NATURAL TOBACCO COMPANY, INC.,
1368 Cerrillos Road             as a Guarantor
Santa Fe, New Mexico  87505

                              By: /s/ McDara P. Folan, III
                                 -----------------------------------------------
                                 Name:  McDara P. Folan, III
                                 Title: Assistant Secretary

Address:                      RJR PACKAGING, LLC,
220 East Polo Road              as a Guarantor
Winston-Salem, NC 27102

                              By:  /s/  McDara P. Folan, III
                                 -----------------------------------------------
                                 Name:  McDara P. Folan, III
                                 Title: Secretary

THE BANK OF NEW YORK, as Trustee

By: /s/ Ming J. Ryan
   ---------------------
   Name:  Ming J. Ryan
   Title: Vice President<PAGE>

                                                                    Exhibit 10.1

                         SUBSIDIARY ASSUMPTION AGREEMENT

         SUBSIDIARY ASSUMPTION AGREEMENT, dated as of June 30, 2003 (this
"Agreement"), made by GMB, Inc., a corporation organized under the laws of the
State of North Carolina ("GMB"), FHS, Inc., a corporation organized under the
laws of the State of Delaware ("FHS"), R.J. Reynolds Tobacco Co., a corporation
organized under the laws of the State of Delaware ("Reynolds Tobacco"), Santa Fe
Natural Tobacco Company, Inc., a corporation organized under the laws of the
State of New Mexico ("Santa Fe"), and RJR Packaging, LLC, a limited liability
company organized under the laws of the State of Delaware ("RJR Packaging", and
together with GMB, FHS, Reynolds Tobacco and Santa Fe, the "New Subsidiaries",
and each a "New Subsidiary"). Except as otherwise defined herein, capitalized
terms used herein and not otherwise defined shall have the meaning assigned to
those terms in the Credit Agreement (as hereinafter defined).

                              W I T N E S S E T H :
                              - - - - - - - - - -

         WHEREAS, R.J. Reynolds Tobacco Holdings, Inc. (f/k/a/ RJR Nabisco,
Inc.), a Delaware corporation (the "Borrower"), various lending institutions
(the "Lenders") and JPMorgan Chase Bank, as Administrative Agent (the
"Administrative Agent"), are parties to a Second Amended and Restated Credit
Agreement, dated as of May 10, 2002 (as so amended and restated and as the same
may be further amended, modified, restated and/or supplemented from time to
time, the "Credit Agreement");

         WHEREAS, R.J. Reynolds Tobacco Company, RJR Acquisition Corp. and the
Administrative Agent are parties to a Third Amended and Restated Subsidiary
Guaranty Agreement, dated as of January 17, 2003 (as so amended and restated and
as the same may be further amended, modified, restated and/or supplemented from
time to time, the "Subsidiary Guaranty"); and

         WHEREAS, each New Subsidiary desires to execute and deliver this
Agreement and to become a party to the Subsidiary Guaranty in order to satisfy
the requirements set forth in Section 7.11(a) of the Credit Agreement;

         NOW, THEREFORE, IT IS AGREED:

         1. Subsidiary Guaranty. By executing and delivering this Agreement,
each New Subsidiary hereby (i) becomes a party to the Subsidiary Guaranty as a
"Guarantor" thereunder with the same force and effect as if originally named
therein as a Guarantor, (ii) expressly, irrevocably, absolutely and jointly and
severally assumes all obligations and liabilities of a "Guarantor" under the
Subsidiary Guaranty and (iii) makes each of the representations and warranties
contained in the Subsidiary Guaranty on the date hereof, after giving effect to
this Agreement. Each reference to a "Guarantor" in the Subsidiary Guaranty shall
be deemed to include each New Subsidiary. In accordance with Section 24 of the
Subsidiary Guaranty, attached as Annex I to this Agreement are executed
counterparts of the Subsidiary Guaranty with respect to each New Subsidiary.

<PAGE>

         2. Representations and Warranties; Acknowledgment; Counterparts;
Supplements; Severability; Binding Effect; Credit Document. Each New Subsidiary
represents and warrants that this Agreement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligations,
enforceable against it in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and equitable principles of general applicability. Each New Subsidiary
hereby acknowledges that it has received copies of and is familiar with the
terms of the Subsidiary Guaranty. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. Except as expressly
supplemented hereby, the Subsidiary Guaranty shall remain in full force and
effect. Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. This Agreement shall be binding upon the parties hereto and
their respective permitted successors and assigns. From and after the execution
and delivery hereof by the parties hereto, this Agreement shall constitute a
"Credit Document" for all purposes of the Credit Agreement and the other Credit
Documents.

         3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICT OF
LAWS PROVISIONS).

                                      * * *

<PAGE>

         IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed and delivered by their respective authorized officers as of
the date first above written.

                                           GMB, INC.

                                           By: /s/ Daniel A. Fawley
                                              ----------------------------------
                                              Name:  Daniel A. Fawley
                                              Title: Treasurer

                                           FHS, INC.

                                           By: /s/ Caroline M. Price
                                              ----------------------------------
                                              Name:  Caroline M. Price
                                              Title: President

                                           R.J. REYNOLDS TOBACCO CO.

                                           By: /s/ Lynn L. Lane
                                              ----------------------------------
                                              Name:  Lynn L. Lane
                                              Title: Treasurer

                                          SANTA FE NATURAL TOBACCO COMPANY, INC.

                                          By: /s/ McDara P. Folan, III
                                             -----------------------------------
                                             Name:  McDara P. Folan, III
                                             Title: Assistant Secretary

                                          RJR PACKAGING, LLC

                                          By: /s/ McDara P. Folan, III
                                             -----------------------------------
                                             Name:  McDara P. Folan, III
                                             Title: Secretary

<PAGE>

Accepted and Agreed to:

JPMORGAN CHASE BANK,
as Administrative Agent for the Lenders

By: /s/ Robert T. Sacks
    ---------------------------------------
    Name:  Robert T. Sacks
    Title: Managing Director

<PAGE>

                                                                         ANNEX I

                               SUBSIDIARY GUARANTY

                                           GMB, INC.

                                           By: /s/ Daniel A. Fawley
                                              ----------------------------------
                                              Name:  Daniel A. Fawley
                                              Title: Treasurer

                                           FHS, INC.

                                           By: /s/ Caroline M. Price
                                              ----------------------------------
                                              Name:  Caroline M. Price
                                              Title: President

                                           R.J. REYNOLDS TOBACCO CO.

                                           By: /s/ Lynn L. Lane
                                              ----------------------------------
                                              Name:  Lynn L. Lane
                                              Title: Treasurer

                                          SANTA FE NATURAL TOBACCO COMPANY, INC.

                                          By: /s/ McDara P. Folan, III
                                             -----------------------------------
                                             Name:  McDara P. Folan, III
                                             Title: Assistant Secretary

                                          RJR PACKAGING, LLC

                                          By: /s/ McDara P. Folan, III
                                             -----------------------------------
                                             Name:  McDara P. Folan, III
                                             Title: Secretary

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