As filed with the Securities and Exchange Commission on
November 26, 2008.
Registration Statement No.
333-
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form F-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
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REED ELSEVIER PLC
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REED ELSEVIER CAPITAL INC.
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REED ELSEVIER NV
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(Exact name of Registrant
as specified in its charter)
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(Exact name of Registrant
as specified in its charter)
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(Exact name of Registrant
as specified in its charter)
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England
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Delaware
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The Netherlands
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(Jurisdiction of
Incorporation)
Not Applicable
(I.R.S. Employer
Identification No.)
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(Jurisdiction of
Incorporation)
51-8365797
(I.R.S. Employer
Identification No.)
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(Jurisdiction of
Incorporation)
Not Applicable
(I.R.S. Employer
Identification No.)
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1-3 Strand
London WC2N 5JR
England
(44) 20 7166 5681
(Address and telephone
number of
Registrants principal executive offices)
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1105 Market Street
Wilmington, Delaware, 19801
302 427 9299
(Address and telephone
number of
Registrants principal executive offices)
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Radarweg 29
1043 NX Amsterdam
The Netherlands
(31) 20 485 2906
(Address and telephone
number of
Registrants principal executive
offices)
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Henry Z. Horbaczewski
Reed Elsevier Inc.
125 Park Avenue
23rd Floor
New York, NY 10017
(212) 309-5498
(Name, address and telephone
number of agent for service)
Please send copies of all
communications to:
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D. Rhett Brandon, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
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Andrew J. Pitts, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
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Approximate date of commencement of proposed sale to the
public:
From time to time after the effective
date of this Registration Statement.
If only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box.
o
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, check the
following
box.
þ
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.
o
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.
o
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.
þ
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 Securities Act,
check the following
box.
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CALCULATION
OF REGISTRATION FEES
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Proposed Maximum
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Title of Each Class of
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Amount to be
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Proposed Maximum
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Aggregate Offering
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Amount of
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Securities to be Registered
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Registered
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Offering Price per Unit
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Price
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Registration Fee
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Debt Securities
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(1)
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(1)
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(1)
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(1)(2)
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Guarantees of Debt Securities(3)
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(1)
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An indeterminate aggregate offering
price or amount of debt securities is being registered and may
from time to time be offered at indeterminate prices.
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(2)
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Pursuant to Rule 415(a)(6)
under the Securities Act of 1933, the $2,760,000,000 aggregate
principal amount of debt securities (the Previously
Registered Securities) that were registered under
registration statement no. 333-13188 initially filed on
February 21, 2001, as amended, and have not yet been issued
and sold are included in this registration statement. A filing
fee of $690,000 was paid with respect to such Previously
Registered Securities. In accordance with Rules 456(b) and
457(r) under the Securities Act, the Registrant is deferring
payment of all other registration fees.
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(3)
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Pursuant to rule 457(n), no
separate fee for the Guarantees is payable.
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This Registration Statement includes $2,760,000,000 aggregate
principal amount of debt Securities that were previously
Registered pursuant to Registration Statement No. 333-13188
initially filed by the Registrant on February 21, 2001, as
amended, and that remain unsold. Pursuant to
Rule 415(a)(6), $690,000 of filing fees previously paid in
connection with these unsold securities will continue to be
applied to such unsold securities.
PROSPECTUS
Reed Elsevier Capital
Inc.
Debt Securities
Fully and Unconditionally
Guaranteed Jointly and Severally by
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Reed
Elsevier PLC
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Reed Elsevier NV
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The
Issuer:
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Reed Elsevier Capital Inc.
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The
Guarantors:
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Reed Elsevier PLC
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Reed Elsevier NV
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The Debt
Securities and the Offering:
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This prospectus may be used to offer and sell, in one or more
offerings at various times, an indeterminate amount of debt
securities of Reed Elsevier Capital Inc.
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The debt securities may be offered as separate series, in
amounts, prices and on terms to be determined at the time of the
sale. When Reed Elsevier Capital Inc. offers debt securities it
will provide you with a prospectus supplement describing the
terms of the specific issue of debt securities.
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Reed Elsevier Capital Inc. may sell debt securities to or
through one or more underwriters for public offering and sale by
them or may sell debt securities to investors directly or
through agents.
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You should read this prospectus and any prospectus supplement
carefully before you invest.
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The
Guarantees:
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The payment of principal, premium, if any, interest and
additional amounts, if any, on the debt securities will be fully
and unconditionally guaranteed jointly and severally by Reed
Elsevier PLC and Reed Elsevier NV.
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You should read this prospectus, including the section
entitled Risk Factors on page 2, and the
applicable prospectus supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state
securities commission or other regulatory body has approved or
disapproved of these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a
criminal offense.
November 26, 2008
RISK
FACTORS
We are subject to a number of risks potentially impacting our
business, financial condition, results of operations and cash
flows. You are urged to read and consider the risk factors
described in any applicable prospectus supplement, as well as
those described in our most recent joint annual report on
Form 20-F
(Part I, Item 3: Key Information
Risk Factors), which are incorporated by reference in this
prospectus. See Where You Can Find More Information
in this prospectus.
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement that we
filed with the SEC utilizing a shelf registration
process. Under this shelf process, we may from time to time sell
an indeterminate amount of any combination of the debt
securities described in this prospectus in one or more offerings.
We provide information to you about the debt securities in the
following two documents:
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this prospectus, which contains general information, some of
which may not apply to your debt securities; and
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the accompanying prospectus supplement, which describes the
terms of your debt securities and may also add, update or change
information contained in this prospectus.
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If the terms of your debt securities vary between the
accompanying prospectus supplement and this prospectus, you
should rely on the different information in the prospectus
supplement.
You should read both this prospectus and any prospectus
supplement together with the additional information described
under the heading Where You Can Find More
Information to learn more about us and the debt securities
we are offering.
In this prospectus:
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Reed Elsevier Capital refers to Reed Elsevier
Capital Inc.; and
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guarantors refers to Reed Elsevier PLC and Reed
Elsevier NV.
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Reed Elsevier PLC and Reed Elsevier NV conduct their business
through two jointly owned companies, Reed Elsevier Group
plc and Elsevier Reed Finance BV. Reed Elsevier PLC and Reed
Elsevier NV have retained their separate legal and national
identities. Reed Elsevier is not a legal entity but a collective
reference to the separate legal entities of Reed Elsevier PLC,
Reed Elsevier NV, Reed Elsevier Group plc and Elsevier Reed
Finance BV and their respective subsidiaries, associates and
joint ventures. The businesses of all of the entities comprising
Reed Elsevier are collectively referred to in this prospectus as
Reed Elsevier, and the financial statements of the
combined businesses are referred to as the combined
financial statements. In this prospectus, references to
we, our, or us are to all of
the entities comprising Reed Elsevier.
In this prospectus, references to US dollars, $ and ¢ are
to US currency; references to sterling, £, pence or p are
to UK currency; references to euro and are to the
currency of the European Economic and Monetary Union.
ENFORCEABILITY
OF CIVIL LIABILITIES
Reed Elsevier PLC is a public limited company incorporated in
England and Reed Elsevier NV is a public limited company
incorporated under the laws of The Netherlands. Some of the
directors and executive officers of Reed Elsevier Capital and
the guarantors are non-residents of the United States, and all
or a substantial portion of the assets of the guarantors and
these persons are located outside the United States. As a
result, it may not be possible for investors to effect service
of process within the United States upon the guarantors or
these non-resident persons or to enforce against any of them in
2
U.S. courts judgments obtained in U.S. courts
predicated upon the civil liability provisions of the federal
securities laws of the United States.
Reed Elsevier PLC has been advised by counsel that there is
doubt as to the enforceability in England in original actions or
in actions for enforcement of judgments of U.S. courts, of
civil liabilities predicated upon the federal securities laws of
the United States.
Reed Elsevier NV has been advised by counsel that in the absence
of an applicable convention between the United States and The
Netherlands, a judgment rendered by a U.S. court, whether
or not predicated upon the civil liability provisions of the
federal securities laws of the United States, will not be
enforced by the courts of The Netherlands. In order to obtain a
judgment which is enforceable in The Netherlands, the claim must
be relitigated before a competent Netherlands court. A judgment
rendered by a U.S. court will, under current practice, be
confirmed by a Netherlands court if it finds that:
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the judgment results from proceedings compatible with
Netherlands concepts of due process;
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the judgment is final and conclusive; and
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the judgment does not contravene the public policy of The
Netherlands.
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If the judgment is confirmed by a Netherlands court, that court
will generally grant the same claim without re-litigation on the
merits, provided that the court may mitigate the amount of
damages awarded by a U.S. court. Each of Reed Elsevier PLC
and Reed Elsevier NV has consented to service of process in the
Borough of Manhattan, the City of New York, for claims based
upon the indenture (as described below under the heading
Description of the Debt Securities and Guarantees),
the debt securities and the guarantees.
WHERE YOU
CAN FIND MORE INFORMATION
Reed Elsevier PLC and Reed Elsevier NV are subject to the
informational requirements of the Exchange Act and therefore
file reports and other information with the SEC. You may obtain
a copy of any filing Reed Elsevier PLC and Reed Elsevier NV have
made with the SEC directly from the SEC. You may read and copy
documents referred to in this prospectus that have been filed
with the SEC at the SECs public reference room at
100 F Street, N.E., Washington, D.C. 20549.
You can obtain more information about the SECs public
reference rooms and their copy charges by calling the SEC at
1-800-SEC-0330.
You may also inspect these reports and other information without
charge at a Website maintained by SEC. The address of this site
is
http://www.sec.gov.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference in this prospectus
the information contained in those documents already filed with
the SEC. This means:
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incorporated documents are considered part of this prospectus;
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we can disclose important information to you by referring you to
those documents;
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information in this prospectus automatically updates and
supersedes information in earlier documents that are
incorporated by reference in this prospectus; and
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information that we file in the future with the SEC that we
incorporate by reference in this prospectus will automatically
update and supersede this prospectus.
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We incorporate by reference the documents listed below filed
with the SEC under the Exchange Act:
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our joint annual report on
Form 20-F
for the fiscal year ended December 31, 2007, filed on
March 20, 2008; and
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our joint report on
Form 6-K,
dated November 26, 2008.
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We also incorporate by reference each of the following documents
that will be filed with the SEC after the date of this
prospectus but before the time that all of the debt securities
covered by this prospectus have been sold:
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any joint annual report on
Form 20-F
filed by us pursuant to the Exchange Act; and
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those portions of any joint report on
Form 6-K
filed by us pursuant to the Exchange Act that indicate on the
cover page those portions that will be incorporated by reference
in this prospectus.
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You may request a copy of any filings referred to above
(excluding exhibits unless those exhibits are specifically
incorporated into the information that this prospectus
incorporates), at no cost, by contacting us at the following
address:
Reed Elsevier Capital Inc.
1105 North Market Street
Suite 501
Wilmington, DE 19801
(302) 427-9299
4
REED
ELSEVIER
We are one of the worlds leading publishers and
information providers. Our activities include science and
medical and legal publishing and the organization of trade
exhibitions. Our principal operations are in North America and
Europe.
Reed Elsevier came into existence in January 1993 when Reed
Elsevier PLC and Reed Elsevier NV contributed their businesses
to two jointly owned companies, Reed Elsevier Group plc, a UK
registered company which owns the publishing and information
businesses, and Elsevier Reed Finance BV, a Dutch registered
company which owns the financing activities. Reed Elsevier PLC
and Reed Elsevier NV have retained their separate legal and
national identities and are publicly held companies. Reed
Elsevier PLCs securities are listed in London and New
York, and Reed Elsevier NVs securities are listed in
Amsterdam and New York. Reed Elsevier Capital is incorporated in
the state of Delaware and is a wholly-owned indirect subsidiary
of Reed Elsevier Group plc, which is jointly owned by Reed
Elsevier PLC and Reed Elsevier NV.
Reed Elsevier PLC and Reed Elsevier NV each hold a 50% interest
in Reed Elsevier Group plc. Reed Elsevier PLC holds a 39%
interest in Elsevier Reed Finance BV, with Reed Elsevier NV
holding a 61% interest. Reed Elsevier PLC additionally holds a
5.8% indirect equity interest in Reed Elsevier NV, reflecting
the arrangements entered into between the two companies at the
time of the merger, which determined the equalisation ratio
whereby one Reed Elsevier NV ordinary share is, in broad terms,
intended to confer equivalent economic interests to 1.538 Reed
Elsevier PLC ordinary shares. The equalisation ratio is subject
to change to reflect share splits and similar events that affect
the number of outstanding ordinary shares of either Reed
Elsevier PLC or Reed Elsevier NV.
Under the equalisation arrangements, Reed Elsevier PLC
shareholders have a 52.9% economic interest in Reed Elsevier,
and Reed Elsevier NV shareholders (other than Reed Elsevier PLC)
have a 47.1% economic interest in Reed Elsevier. Holders of
ordinary shares in Reed Elsevier PLC and Reed Elsevier NV enjoy
substantially equivalent dividend and capital rights with
respect to their ordinary shares.
The boards of both Reed Elsevier PLC and Reed Elsevier NV have
agreed, except in exceptional circumstances, to recommend
equivalent gross dividends (including, with respect to the
dividend on Reed Elsevier PLC ordinary shares, the associated UK
tax credit), based on the equalisation ratio. A Reed Elsevier
PLC ordinary share pays dividends in sterling and is subject to
UK tax law with respect to dividend and capital rights. A Reed
Elsevier NV ordinary share pays dividends in euros and is
subject to Dutch tax law with respect to dividend and capital
rights.
The principal assets of Reed Elsevier PLC comprise its 50%
interest in Reed Elsevier Group plc, its 39% interest in
Elsevier Reed Finance BV, its indirect equity interest in Reed
Elsevier NV and certain amounts receivable from subsidiaries of
Reed Elsevier Group plc. The principal assets of Reed Elsevier
NV comprise its 50% interest in Reed Elsevier Group plc, its 61%
interest in Elsevier Reed Finance BV and certain amounts
receivable from subsidiaries of Reed Elsevier Group plc and
Elsevier Reed Finance BV. Reed Elsevier NV also owns shares,
carrying special dividend rights, in certain of the Dutch
subsidiaries of Reed Elsevier Group plc. These shares enable
Reed Elsevier NV to receive dividends from companies within its
tax jurisdiction, thereby mitigating Reed Elseviers
potential tax costs.
The principal executive offices of Reed Elsevier PLC are located
at 1-3 Strand, London WC2N 5JR, England. Tel: +44 20 7930 7077.
The principal executive offices of Reed Elsevier NV are located
at Radarweg 29, 1043 NX Amsterdam, the Netherlands. Tel: +31 20
485 2434. The principal executive office located in the US is at
125 Park Avenue, 23rd Floor, New York, New York, 10017. Tel
+1 212 309 5498. Our internet address is www.reedelsevier.com.
The information on our website is not incorporated by reference
into this prospectus.
5
RATIO OF
EARNINGS TO FIXED
CHARGES
(1)
(unaudited)
The following table sets forth the ratio of earnings to fixed
charges of Reed Elsevier for the periods indicated. You should
read this table together with Operating and Financial
Review and Prospects Operating Results
Reed Elsevier and the combined financial statements of
Reed Elsevier our joint report on
Form 6-K
dated November 26, 2008 incorporated by reference in this
prospectus supplement.
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Six Months
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Ended
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June 30,
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Year Ended December 31,
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2008
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2007
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2007
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2006
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2005
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2004
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Reed Elsevier
(continuing operations)
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In accordance with
IFRS
(2)
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4.5
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4.2
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4.4
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4.0
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4.0
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3.8
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(1)
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For the purpose of computing these
ratios of earnings to fixed charges, the term
earnings means operating profit before tax from
continuing operations before adjustment for minority interests,
plus fixed charges, and the term fixed charges means
interest on all indebtedness, including capital leases and
amortization of debt expense, plus the estimated interest
element of rental expense, plus preference dividends.
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(2)
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As permitted, following the
transition to International Financial Reporting Standards
(IFRS) on January 1, 2004, only four years of
information are presented.
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USE OF
PROCEEDS
The net proceeds from the sale of the debt securities will be
used for general corporate purposes, which may include
acquisitions and repayment of indebtedness, or as otherwise
described in any supplement to this prospectus.
DESCRIPTION
OF THE DEBT SECURITIES AND GUARANTEES
The following description sets forth the material terms and
provisions of the debt securities to which any prospectus
supplement may relate. The particular terms of the debt
securities offered by any prospectus supplement and the extent,
if any, to which the general provisions described below may
apply to the debt securities so offered will be described in the
prospectus supplement relating to those debt securities.
The debt securities and the guarantees will be issued under an
indenture, dated as of May 9, 1995, among
Reed Elsevier Capital, Reed Elsevier PLC and Reed Elsevier
NV and JPMorgan Chase Bank, N.A., formerly The Chase Manhattan
Bank, N.A., as trustee, as supplemented to date. A copy of the
indenture and any supplemental indentures are filed as exhibits
to the registration statement of which this prospectus is a part.
The following are summaries of the material provisions of the
debt securities, the guarantees and the indenture.
General
The indenture does not limit the amount of the debt securities
that can be issued and provides that debt securities may be
issued from time to time in one or more series. Any debt
securities issued under the indenture are collectively referred
to in this prospectus as debt securities. The particular terms
of each series of debt securities offered by a prospectus
supplement will be described in the prospectus supplement
relating to that series.
Each debt security and all the related obligations of Reed
Elsevier Capital will constitute direct, unconditional,
unsubordinated and unsecured obligations of Reed Elsevier
Capital, without any preference among themselves. The debt
securities will rank at least equally with all other unsecured
and unsubordinated obligations of Reed Elsevier Capital.
Please refer to the appropriate prospectus supplement for
information relating to the following:
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the designation, aggregate principal amount and authorized
denominations of the series of debt securities;
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the percentage or percentages of principal amount at which the
debt securities of the series will be issued;
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the original issue date or dates or periods during which the
debt securities may be issued and the date or dates (or manner
of determining that date or dates), on which, or the range of
dates within which, the principal of (and premium, if any, on)
the debt securities of the series is payable and the record
dates, if any, for the determination of holders of debt
securities of the series to whom principal (and premium, if any)
is payable;
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the rate or rates (or the manner of calculating that rate or
rates, including any provisions for the increase or decrease of
that rate or rates upon the occurrence of specific events) at
which the debt securities of the series will bear interest, if
any, or the discount, if any, at which any discounted securities
may be issued, the date or dates from which that interest will
accrue, the interest payment dates on which that interest will
be payable (or manner of determining those dates) and the
regular record date for the interest payable on any debt
securities on any interest payment date;
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the place or places where the principal of (and premium, if any,
on) and interest, if any, on debt securities of the series will
be payable and the place or places where any debt securities of
the series
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may be surrendered for registration of transfer, any debt
securities of the series may be surrendered for exchange, and
notices and demands to or upon Reed Elsevier Capital or either
guarantor, in respect of the debt securities of the series, may
be served;
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the period or periods within which or manner of determining
them, the price or prices at which or manner of determining
them, and the terms and conditions upon which, debt securities
of the series may be redeemed, in whole or in part, at the
option of Reed Elsevier Capital or otherwise;
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the obligation (which may be fixed or contingent upon events),
if any, of Reed Elsevier Capital to redeem, purchase or repay
debt securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a holder, and the
period or periods within which or manner of determining them,
the price or prices at which or manner of determining them, and
the terms and conditions upon which, debt securities of the
series will be redeemed, purchased or repaid, in whole or in
part, pursuant to that obligation;
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the currency, currencies or currency units in which the debt
securities will be denominated or in which payment of the
principal of and premium and interest on any of the debt
securities will be issued if other than US dollars and the
particular provisions applicable thereto, in accordance with, in
addition to or in lieu of the provisions in the indenture;
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the denominations in which any debt securities of the series
will be issuable, if other than the denomination of $1,000 and
any integral multiples thereof;
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if other than the entire principal amount, the portion of the
principal amount of debt securities of the series which will be
payable upon a declaration of acceleration of their stated
maturity;
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any additional events of default (as defined below under
Events of Default), or any additional
covenants or agreements of Reed Elsevier Capital or either
guarantor, with respect to the debt securities of the series,
whether or not those events of default or covenants or
agreements are consistent with the terms of the indenture;
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if a person other than The Bank of New York Mellon, as successor
to JPMorgan Chase Bank, N.A. is to act as trustee for the debt
securities of the series, and the name and location of the
corporate trust office of that trustee;
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if a person other than The Bank of New York Mellon as successor
to JPMorgan Chase Bank, N.A. is to act as principal paying agent
for the debt securities of the series and the name and location
of the principal office of that principal paying agent and, if
other than that principal paying agent, the identity of the
registrar for the debt securities of the series;
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if other than the terms of the indenture described below under
Satisfaction and Discharge, provisions
for the satisfaction and discharge of the indenture with respect
to the debt securities of the series;
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the date as of which any global security representing
outstanding debt securities of the series will be dated if other
than the date of original issuance of the first debt security of
the series to be issued;
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if applicable, the fact that the terms of the indenture
described under Payment of Additional
Amounts and Redemption
Optional Redemption for Tax Reasons below will not apply
with respect to the debt securities of the series;
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whether the debt securities of the series will be issued in
whole or in part in the form of a global security or securities
and, in that case, the depositary for that global security or
securities;
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whether any legends will be stamped or imprinted on all or a
portion of the debt securities of the series, and the terms and
conditions upon which any of those legends may be removed;
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the form of the debt securities of the series (including the
terms and conditions of that series of debt securities);
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if other than US dollars, provisions, if any, for the debt
securities of the series to be denominated, and payments thereon
to be made, in foreign currencies and specifying the manner and
place of payment thereon and, if other than as provided in the
indenture, the manner of determining the equivalent thereof in
US dollars;
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if other than coin or currency in which the debt securities of
that series are denominated, the coin or currency in which
payment of the principal of (and premium, if any) or interest,
if any, on the debt securities of the series shall be payable,
and the time and manner of determining the exchange rate between
the currency or currency unit in which the debt securities are
denominated or stated to be payable and the currency or currency
unit in which the debt securities are to be so payable;
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the designation of the currency determination agent, if
any; and
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any other terms of the series (which terms shall not be
inconsistent with the provisions of the indenture).
(Section 301).
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All debt securities 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 debt securities of that
series. (Section 301).
Some of the debt securities may be issued as discounted
securities (providing that upon their redemption or acceleration
of their stated maturity an amount less than their stated
principal amount will become due and payable) to be sold at a
substantial discount below their stated principal amount. Any
U.S. federal income tax consequences, U.K. tax
consequences, Netherlands tax consequences and other special
considerations applicable to any discounted securities will be
described in the applicable prospectus supplement.
Unless otherwise indicated in the prospectus supplement
relating to the debt securities of a series, the provisions of
the indenture and the debt securities do not afford holders of
the debt securities protection in the event of a highly
leveraged or other transaction, if any, involving Reed Elsevier
Capital or either guarantor which might adversely affect the
holders of the debt securities.
Denominations,
Registration and Transfer
The debt securities of a series will only be issuable as
registered securities. Debt securities of a series may be
issuable in the form of one or more global securities, as
described under Global Debt Securities
below. (Section 201). Unless otherwise provided in the
prospectus supplement with respect to the debt securities of a
series, debt securities will be issued only in denominations or
integral multiples of $1,000. (Section 302).
Registered securities of any series will be exchangeable for
other registered securities of any authorized denomination of a
like series and of a like aggregate principal amount with like
terms and conditions. (Section 305). Registered securities
(other than a global security) may be presented for registration
of transfer (with the form of transfer duly executed) at the
office of the registrar or at the office of any transfer agent
designated by Reed Elsevier Capital for that purpose with
respect to any series of debt securities and referred to in the
applicable prospectus supplement, without service charge and
upon payment of any taxes and other governmental charges as
described in the indenture. (Section 305). That transfer or
exchange will be effected after the registrar or transfer agent,
as the case may be, is satisfied with the documents of title and
identity of the person making the request. (Section 305).
Reed Elsevier Capital has initially appointed the principal
paying agent as the registrar under the indenture.
(Section 305). If a prospectus supplement refers to any
transfer agents (in addition to the registrar) initially
designated by Reed Elsevier Capital with respect to any series
of debt securities, Reed Elsevier Capital may at any time
rescind the designation of that transfer agent or approve a
change in the location through which that transfer agent acts,
except that Reed Elsevier Capital will be required to maintain a
transfer agent in each place of payment for each series. Reed
Elsevier Capital may at any time designate additional transfer
agents with respect to any series of debt securities.
9
In the event of any redemption of the debt securities of a
series in part, Reed Elsevier Capital will not be required to:
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issue, register the transfer of, or exchange any debt security
of that series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice
of redemption of debt securities of that series selected for
redemption and ending at the close of business on the day of
mailing of the relevant notice of redemption; or
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register the transfer of or exchange any debt security selected
for redemption as a whole or in part, except the unredeemed
portion of any debt security being redeemed in part.
(Section 305).
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Global
Debt Securities
The debt securities of a series may be issued in whole or in
part in the form of one or more global securities that will be
deposited with, or on behalf of, the depositary identified in
the prospectus supplement relating to that series. Unless and
until a global security is exchanged in whole or in part for
debt securities in definitive registered form, a global security
representing all or a portion of the debt securities of a series
may not be transferred except as a whole by the depositary for
that series to its nominee or vice versa or by a nominee to
another nominee of that depositary or in either case to a
successor of that depositary or a nominee of that successor.
(Section 305).
The specific terms of the depositary arrangement with respect to
a series of debt securities will be described in the prospectus
supplement relating to that series. Reed Elsevier Capital
anticipates that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a global security, the depositary or its
nominee will credit the accounts of persons held with it with
the respective principal amounts of the debt securities
represented by that global security. Those accounts will be
designated by the underwriters or agents with respect to those
debt securities or by Reed Elsevier Capital if those debt
securities are offered and sold directly by Reed Elsevier
Capital. Ownership of beneficial interests in a global security
will be limited to persons that have accounts with the
depositary or its nominee (participants) or persons
that may hold interests through participants. Ownership of
beneficial interests in global securities will be shown on, and
the transfer of that ownership will be effected only through,
records maintained by the depositary or its nominee (with
respect to interests of participants) and on the records of
participants (with respect to interests of persons other than
participants).
The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of those
securities in definitive form. Those limits and those laws may
impair the ability to transfer beneficial interests in a global
security.
So long as the depositary, or its nominee, is the registered
owner of a global security, it will be considered the sole owner
or holder of the debt securities represented by that global
security for all purposes under the indenture. Except as
provided below, owners of beneficial interests in global
securities will not be entitled to have debt securities of the
series registered in their names, will not receive or be
entitled to receive physical delivery of securities of that
series in definitive form and will not be considered the owners
or holders of those global securities under the indenture.
Any payments of principal, premium, interest and additional
amounts, if any, on debt securities registered in the name of a
depositary or its nominee will be made to it as the registered
owner of the global security representing those debt securities.
(Section 307). None of Reed Elsevier Capital, the
guarantors, the trustee, any principal paying agent or the
registrar for those debt securities will have any responsibility
or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a
global security for those debt securities or for maintaining,
supervising or reviewing any records relating to those
beneficial ownership interests. (Section 308).
Reed Elsevier Capital and the guarantors expect that the
depositary or its nominee, upon receipt of any payment of
principal, premium or interest on a debt security, will credit
participants accounts with payments in amounts
proportionate to their respective beneficial interests in the
principal amount of the debt securities of that series as shown
on the records of that depositary or its nominee.
(Section 307). Reed
10
Elsevier Capital and the guarantors also expect that payments by
participants to owners of beneficial interests in that global
security held through those participants will be governed by
standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in
bearer form or registered in street name, and will
be the responsibility of those participants.
Beneficial interests in global securities are exchangeable for
debt securities in definitive registered form in denominations
and integral multiples of $1,000 if:
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the depositary notifies Reed Elsevier Capital that it is
unwilling or unable to continue as the holder of the global
securities or ceases to be a clearing agency registered under
the Exchange Act or announces an intention permanently to cease
business or in fact does cease business and a successor to the
depositary registered as a clearing agency under the Exchange
Act is not appointed by Reed Elsevier Capital within
90 days of this notification or announcement;
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Reed Elsevier Capital in its discretion at any time determines
that global securities should be exchanged (in whole, but not in
part) for definitive securities; or
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there occurs an event of default as described below under
Events of Default.
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Any debt security that is exchangeable in the circumstances
described above is exchangeable for definitive debt securities
issuable in authorized denominations and registered in those
names as the depositary will direct. (Section 305).
Guarantees
The guarantors have agreed unconditionally and irrevocably to
jointly and severally guarantee the due and punctual payment of
the principal of, premium (if any), interest and all other
amounts in respect of the debt securities as and when they will
become due and payable, whether at the stated maturity, upon
redemption or when accelerated in accordance with the provisions
of the debt securities and the indenture, and the punctual
performance of all other obligations of Reed Elsevier Capital
under the debt securities and the indenture.
(Section 1301). The guarantees will be direct,
unconditional, unsubordinated and (subject to the provisions of
the guarantees and the indenture) unsecured, joint and several
obligations of each of the guarantors, without preference among
themselves, and will rank at least equally with all other
unsecured and unsubordinated obligations of the guarantors,
subject, in the case of insolvency, to laws of general
applicability relating to or affecting creditors rights.
(Section 1301).
The guarantees will provide that they may be enforced against
either of the guarantors, in the event of a default in payment
with respect to the debt securities issued by Reed Elsevier
Capital, without making prior demand upon or seeking to enforce
remedies against Reed Elsevier Capital, the other guarantor or
other persons. The guarantees of the guarantors will be endorsed
on each of the debt securities issued by Reed Elsevier Capital.
Payment
of Additional Amounts
All payments of principal, premium (if any) and interest in
respect of the debt securities or the guarantees will be made
free and clear of, and without withholding or deduction for, any
taxes, assessments, duties or governmental charges of whatever
nature imposed, levied or collected by or within a Relevant
Taxing Jurisdiction (as defined below), unless that withholding
or deduction is required by law.
The indenture provides that if withholding or deduction is
required by law, then Reed Elsevier Capital, Reed Elsevier
PLC or Reed Elsevier NV, as the case may be, will pay to the
holder of any debt security additional amounts as may be
necessary in order that every net payment of principal of (and
premium, if any, on) and interest, if any, on that debt security
after deduction or other withholding for or on account of any
present or future tax, assessment, duty or other governmental
charge of any nature whatsoever imposed, levied or collected by
or on behalf of the jurisdiction under the laws of which Reed
Elsevier Capital, Reed Elsevier PLC or Reed Elsevier NV, as the
case may be, is organized (or any political subdivision or
taxing authority of or in that jurisdiction having power to
tax), or any jurisdiction from or through which any
11
amount is paid by Reed Elsevier Capital, Reed Elsevier PLC or
Reed Elsevier NV, as the case may be (or any political
subdivision or taxing authority of or in that jurisdiction
having power to tax) (each a Relevant Taxing
Jurisdiction), will not be less than the amount provided
for in any debt security to be then due and payable; provided,
however, that Reed Elsevier Capital, Reed Elsevier PLC or Reed
Elsevier NV, as the case may be, will not be required to make
any payment of additional amounts for or on account of:
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any tax, assessment or other governmental charge which would not
have been imposed but for:
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the existence of any present or former connection between that
holder (or between a fiduciary, settlor, beneficiary, member of,
shareholder of, or possessor of a power over that holder, if
that holder is an estate, trust, partnership or corporation or
any person other than the holder to which that debt security or
any amount payable on that debt security is attributable for the
purpose of that tax, assessment or charge) and a Relevant Taxing
Jurisdiction, including without limitation, that holder (or
fiduciary, settlor, beneficiary, member, shareholder or
possessor or person other than the holder) being or having been
a citizen or resident of a Relevant Taxing Jurisdiction or being
or having been present or engaged in a trade or business in a
Relevant Taxing Jurisdiction, or having or having had a
permanent establishment in a Relevant Taxing
Jurisdiction; or
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the presentation of a debt security (where presentation is
required) for payment on a date more than 30 days after the
date on which payment became due and payable or the date on
which payment was duly provided for, whichever occurred later
except to the extent that the holder would have been entitled to
additional amounts on presenting that debt security for payment
on or before the thirtieth day;
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any estate, inheritance, gift, sale, transfer or personal
property tax, assessment or other governmental charge of a
similar nature;
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any tax, assessment or other governmental charge that is imposed
or withheld by reason of the failure by that holder or any other
person mentioned in the first bullet above to comply with a
request of Reed Elsevier Capital, Reed Elsevier PLC or Reed
Elsevier NV, as the case may be, addressed to that holder or
that other person to provide information concerning the
nationality, residence or identity of that holder or that other
person, or to make any declaration or other similar claim or
satisfy any reporting requirement, which is in either case
required by a statute, treaty or regulation of the Relevant
Taxing Jurisdiction, as a precondition to exemption from or
reduction of that tax, assessment or other governmental charge;
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any tax, assessment or other governmental charge imposed by
reason of that holders past or present status as a passive
foreign investment company, a controlled foreign corporation or
personal holding company with respect to the United States, or
as a corporation which accumulates earnings to avoid United
States federal income tax;
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any tax, assessment or other governmental charge imposed on
interest received by:
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a 10% shareholder (as defined in Section 871(h)(3)(B) of
the United States Internal Revenue Code of 1986, as amended (the
Code), and the regulations that may be promulgated
thereunder) of Reed Elsevier Capital; or
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a controlled foreign corporation related to Reed Elsevier
Capital within the meaning of Section 864(d)(4) of the Code;
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any tax, assessment or other governmental charge that is imposed
on a payment to an individual resident of a member state of the
European Union and is required to be made pursuant to European
Council Directive 2003/48/EC or any other directive on the
taxation of savings income implementing the conclusions of the
ECOFIN Council meeting of November
26-27,
2000
or any law (whether of a member state of the European Union or a
non-member state) implementing or complying with, or introduced
to conform to, any such directive;
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any debt security that is presented for payment by or on behalf
of an individual resident of a member state of the European
Union who would have been able to avoid any withholding or
deduction by presenting the relevant debt security to another
paying agent in a member state of the European Union; or
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any combination of the seven above items,
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nor will additional amounts be paid with respect to:
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any tax, assessment or governmental charge that is payable other
than by deduction or withholding from payments on the debt
securities; or
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any payment to any holder which is a fiduciary or a partnership
or other than the sole beneficial owner of that debt security to
the extent a beneficiary or settlor with respect to that
fiduciary or a member of that partnership or the beneficial
owner would not have been entitled to those additional amounts
had it been the holder of that debt security.
(Section 1008).
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Redemption
General.
The debt securities of a series may
provide for mandatory redemption by Reed Elsevier Capital or the
guarantors or redemption at the election of Reed Elsevier
Capital or the guarantors.
In the case of any redemption of any series of debt securities
prior to the expiration of any restriction on such redemption
provided in the terms of such debt securities or the indenture,
Reed Elsevier Capital will furnish to the trustee of debt
securities for such series an officers certificate
evidencing compliance with such restriction.
(Section 1102) Prior to the giving of any notice of
any tax redemption of any series of debt securities, Reed
Elsevier Capital will deliver to the trustee a written opinion
of independent legal counsel of recognized standing in the
appropriate jurisdiction who is reasonably acceptable to the
trustee, Reed Elsevier Capital and the guarantors stating that
Reed Elsevier Capital is entitled to effect the redemption,
together with an officers certificate of Reed Elsevier
Capital and each of the guarantors setting forth a statement of
facts showing that the conditions precedent, if any, to the
right to redeem have occurred. (Section 1108).
Unless otherwise provided in the applicable prospectus
supplement, notice of a redemption will be given not less than
30 nor more than 60 days (or, in the case of partial
redemptions, 45 days) prior to the date fixed for
redemption, if any, in accordance with the provisions described
under Notices below and pursuant to the
terms of the indenture. (Section 1104). Notice having been
given, those debt securities will become due and payable on the
redemption date and will be paid at the applicable redemption
price at the place or places of payment and in the manner
specified in those debt securities. (Section 1106).
Following the redemption date, if moneys for the redemption of
the debt securities called for redemption have been made
available, as provided in those debt securities, on the
redemption date, those debt securities will cease bearing
interest, and the only right of the holders of those debt
securities will be to receive payment of the applicable
redemption price specified in those debt securities.
(Sections 1105 and 1106).
In the event of a partial redemption of debt securities of a
series of like terms and conditions, the debt securities to be
redeemed will be selected by the trustee pursuant to the
provisions of the indenture. (Section 1103).
Reference is made to the applicable prospectus supplement
relating to each series of debt securities which are discounted
securities for the particular provisions relating to redemption
of those discounted securities.
Optional Redemption for Tax Reasons.
All of
the debt securities of any series may be redeemed, at the option
of Reed Elsevier Capital, at 100% of the principal amount (or,
in the case of discounted securities, that lesser amount as may
be provided for) and premium, if any, together with accrued but
unpaid interest, if any, to the redemption date if, as a result
of any change in, or amendment to, the laws,
13
regulations or rulings of a Relevant Taxing Jurisdiction, or any
change in official position regarding application or
interpretation of those laws, regulations or rulings (including
a holding by a court of competent jurisdiction), which change,
amendment, application or interpretation becomes effective on or
after the original issue date with respect to those debt
securities or another date as may be specified in the applicable
prospectus supplement, Reed Elsevier Capital, Reed Elsevier PLC
or Reed Elsevier NV, as the case may be, would, on the occasion
of the next payment of principal or interest in respect of the
debt securities, be obligated, in making that payment, to pay
additional amounts, as described under the heading Payment
of Additional Amounts in this prospectus and that
obligation cannot be avoided by Reed Elsevier Capital, Reed
Elsevier PLC or Reed Elsevier NV, individually or together, as
the case may be, taking reasonable measures available to them.
(Section 1108).
All of the debt securities constituting any series may also be
redeemed, at the option of Reed Elsevier Capital at the Special
Redemption Price (as defined below), if, as a result of any
change in, or amendment to, the U.S. Internal Revenue Code
of 1986, as amended, or any of its regulations, rulings or
official interpretations, which change or amendment is enacted
or adopted and becomes effective on or after the original issue
date with respect to those debt securities or another date as
may be specified in the applicable prospectus supplement, the
deductibility or timing of interest payments on the debt
securities would be affected in any manner which is then adverse
to Reed Elsevier Capital and that effect cannot be avoided by
Reed Elsevier Capital, Reed Elsevier PLC or Reed Elsevier NV,
individually or together, taking reasonable measures available
to them. (Section 1108).
The Special Redemption Price will equal the
principal amount of the debt security to be redeemed (or, in the
case of discounted securities, that lesser amount as may be
provided for with respect to those debt securities), plus
accrued and unpaid interest to, but not including, the
redemption date, plus the Redemption Premium.
The Redemption Premium at any time with respect
to any debt security equals the amount (but not less than zero)
obtained by subtracting:
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the aggregate amount of the principal being redeemed on that
redemption date with respect to that debt security (or, in the
case of discounted securities, that lesser amount as may be
provided for with respect to those debt securities) from:
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the sum of the Present Values on the redemption date of:
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the aggregate amount of principal being redeemed (assuming
principal was paid at stated maturity); and
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each amount of interest (other than accumulated interest payable
on the next interest payment date) which would have been payable
on the amount of that principal being redeemed (assuming
principal was paid at stated maturity and interest payments
pursuant to the terms of the debt securities were paid when
due). (Section 1108).
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Present Value, for any amount of principal or
interest, will be computed on a semiannual basis at a discount
rate equal to the Treasury Yield. The Treasury Yield
will be determined by reference to the most recent Federal
Reserve Statistical Release H.15 (519), Selected Interest Rates,
or any successor publication (H.15 (519)) which has
become available prior to the redemption date (or, if H.15
(519) is no longer published, any publicly available source
of similar market data), and will be the most recent yield on
actively traded U.S. Treasury securities adjusted to a
constant maturity equal to, in the case of principal, the time
(the time to maturity) between the redemption date
and the date that the principal payment would otherwise have
become due, and in the case of interest which would have been
payable on the amount of that principal being redeemed, the then
remaining weighted average life to maturity of those interest
payments. (Section 1108). If the time to maturity or the
weighted average life to maturity of those interest payments (so
computed), as the case may be, is not equal to the constant
maturity of a U.S. Treasury security for which a yield is
given, the Treasury Yield will be obtained by a linear
interpolation (calculated to the nearest one-twelfth of a year)
from the yields of U.S. Treasury securities for which those
yields are given, except that if the weighted average life to
maturity (so computed) is less
14
than one year, the yield on actively traded U.S. Treasury
securities adjusted to a constant maturity of one year will be
used. (Section 1108).
Repurchase
Subject to applicable law (including U.S. federal
securities law), Reed Elsevier Capital, either guarantor or any
subsidiary of either guarantor (as defined below under
Covenants of Reed Elsevier Capital and the
Guarantors) may at any time repurchase debt securities of
any series in any manner and at any price. Debt securities of a
series repurchased by Reed Elsevier Capital, either guarantor or
any subsidiary of either guarantor may be held, resold or
surrendered by that purchaser through Reed Elsevier Capital, to
the trustee or any paying agent appointed by Reed Elsevier
Capital with respect to those debt securities for cancellation.
Payment
and Paying Agents
Unless otherwise indicated in an applicable prospectus
supplement, payment of principal of (and premium, if any, on)
and interest, if any, on debt securities (other than a global
security) will be made at the office of that paying agent or
paying agents as Reed Elsevier Capital or the guarantors may
designate from time to time, except that, at the option of Reed
Elsevier Capital, payment of any interest may be made:
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by check mailed or delivered to the address of the person
entitled to that interest at the address that appears in the
register for debt securities of any series; or
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by wire transfer to an account maintained with a bank located in
the United States by the person entitled to that interest as
specified in that securities register.
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Unless otherwise indicated in an applicable prospectus
supplement, payment of any installment of interest on debt
securities will be made to the person in whose name that debt
security is registered at the close of business on the regular
record date for that interest payment; provided, however, that
interest, if any, payable at maturity will be payable to the
person to whom the principal is payable.
Unless otherwise indicated in an applicable prospectus
supplement, JPMorgan Chase Bank, N.A. will act as the paying
agent for each series of debt securities.
Unless otherwise indicated in an applicable prospectus
supplement, the principal office of the paying agent in The City
of New York will be designated as the sole paying agency of Reed
Elsevier Capital and the guarantors for payments with respect to
debt securities. Any other paying agents outside the
United States and any other paying agents in the United
States initially designated by Reed Elsevier Capital or either
guarantor, as the case may be, for the debt securities of a
series will be named in the related prospectus supplement. Reed
Elsevier Capital or either guarantor may at any time appoint
additional paying agents, rescind the appointment of any paying
agent or approve a change in the office through which any paying
agent acts, except that Reed Elsevier Capital and each guarantor
will be required to maintain a paying agent in each place of
payment for a series.
All moneys paid by Reed Elsevier Capital or either guarantor to
the trustee or any paying agent for the debt securities of any
series, or then held by Reed Elsevier Capital or either
guarantor, in trust for the payment of principal of (and
premium, if any, on) and interest, if any, on any debt security
or in respect of any other additional payments which remain
unclaimed at the end of two years after that principal (and
premium, if any), and interest, if any, or additional payments
will have become due and payable will (subject to applicable
laws) be repaid to Reed Elsevier Capital or either guarantor, as
the case may be, on issuer request or guarantor request or (if
then held by Reed Elsevier Capital or either guarantor) will be
discharged from that trust; and the holder of that debt security
will thereafter, as an unsecured general creditor, look only to
Reed Elsevier Capital (or to each guarantor pursuant to its
guarantees) for payment. (Section 1003).
15
Events of
Default
An event of default with respect to each series of
debt securities means any one of the following events:
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Reed Elsevier Capital defaults in payment or prepayment of all
or any part of the principal of any debt security or any
prepayment charge or interest (which default, in the case of
interest only, has continued for a period of 30 days or
more) on the debt securities when they have become due and
payable, whether at stated maturity, by acceleration, by notice
of redemption or otherwise;
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except as provided in the preceding paragraph, Reed Elsevier
Capital or either guarantor fails to perform or observe any of
its obligations under the indenture or the guarantees, as the
case may be, (other than an obligation included in the indenture
solely for the benefit of any series of debt securities other
than that series) or the debt securities of that series and that
failure continues for a period of more than 60 days after
the date on which there has been given, by registered or
certified mail, to Reed Elsevier Capital and each guarantor by
the trustee or to Reed Elsevier Capital, each guarantor and the
trustee by the holders of at least 25% in aggregate principal
amount of the outstanding debt securities of that series a
written notice specifying the default or breach and requiring it
to be remedied;
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the maturity of any Indebtedness (as defined below) of Reed
Elsevier Capital or either guarantor in an aggregate principal
amount of at least US$20,000,000 (or the equivalent in another
currency) has been accelerated because of a default or any of
that Indebtedness in an aggregate principal amount of at least
US$20,000,000 (or the equivalent in another currency) has not
been paid at final maturity (as extended by any applicable grace
period) and, with respect to Reed Elsevier Capital in any case
described in this paragraph, the obligations of Reed Elsevier
Capital under that series of debt securities have not been
assumed during the
90-day
period following that acceleration or non-payment by another
Component Company (as defined below) wholly owned by the
guarantors;
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Reed Elsevier Capital has:
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applied for or consented to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property;
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made a general assignment for the benefit of its creditors;
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commenced a voluntary case under the U.S. federal
Bankruptcy Code;
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filed a petition seeking to take advantage of any other law
providing for the relief of debtors;
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acquiesced in writing to any petition filed against it in an
involuntary case under the Bankruptcy Code;
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admitted in writing its inability to pay its debts generally as
those debts become due;
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taken any action under the laws of its jurisdiction of
incorporation analogous to any of the foregoing; or
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taken any requisite corporate action for the purpose of
effecting any of the foregoing;
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a proceeding or case has been commenced, without the application
or consent of Reed Elsevier Capital in any court of competent
jurisdiction, seeking:
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the liquidation, reorganization, dissolution, winding up, or
composition or readjustment of Reed Elsevier Capitals
debts;
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the appointment of a trustee, receiver, custodian, liquidator or
the like in respect of Reed Elsevier Capital or in respect of
all or any substantial part of its assets; or
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similar relief, under any law providing for the relief of
debtors;
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and that proceeding or case has continued undismissed, or
unstayed and in effect, for 90 days; or an order for relief
has been entered in an involuntary case under the Bankruptcy
Code against Reed Elsevier Capital and that order remains
undismissed, or unstayed and in effect, for 90 days; or
action under the laws of the jurisdiction of incorporation of
Reed Elsevier Capital analogous to any of the foregoing has been
taken with respect to Reed Elsevier Capital and has continued
undismissed, or unstayed and in effect, for 90 days; and in
any case described in this paragraph, the obligations of Reed
Elsevier Capital under that series of debt securities have not
been assumed during that
90-day
period by another Component Company wholly owned by the
guarantors;
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an order for the winding up of either of the guarantors is made
and is not set aside within 90 days of the date of that
order or pursuant to an appeal lodged within 90 days of the
date of that order, except an order for the winding up of either
of the guarantors in connection with a transaction not otherwise
prohibited under Covenants of Reed Elsevier
Capital and the Guarantors Consolidation, Merger,
Amalgamation, Sale, Lease or Conveyance of Assets below;
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an effective resolution is passed for the winding up of either
of the guarantors, except a resolution passed for the winding up
of either of the guarantors in connection with a transaction not
otherwise prohibited under Covenants of Reed
Elsevier Capital and the Guarantors Consolidation,
Merger, Amalgamation, Sale, Lease or Conveyance of Assets
below;
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either of the guarantors ceases to pay its debts or ceases to
carry on its business or a major part of its business, except
any cessation by either of the guarantors in connection with a
transaction not otherwise prohibited under
Covenants of Reed Elsevier Capital and the
Guarantors Consolidation, Merger, Amalgamation,
Sale, Lease or Conveyance of Assets below;
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an encumbrancer takes possession, or any administrative or other
receiver or any manager is appointed, of the whole or any
substantial part of the undertaking or assets of either of the
guarantors;
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a distress or execution is levied or enforced upon or sued out
against all or any substantial part of the property of either of
the guarantors, and, in each case, is not discharged within
90 days; or
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Reed Elsevier PLC is deemed unable to pay its debts within the
meaning of Section 123 of the Insolvency Act 1986, an
English statute, or Reed Elsevier NV is unable to pay its debts
within the meaning of Article 1 of The Netherlands
Bankruptcy Code of September 30, 1893;
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the guarantees with respect to either of the guarantors cease to
be in full force and effect for any reason whatsoever and new
guarantees with respect to the guarantors of substantially the
same scope as the guarantees have not come into effect or the
debt securities have not been redeemed in full or funds have not
been set aside for redemption; or
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either of the guarantors contests or denies in writing the
validity or enforceability of any of its obligations under the
guarantees; or
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any other event of default provided with respect to the debt
securities of that series. (Section 501).
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If an event of default with respect to any particular series of
debt securities occurs and is continuing, the trustee for the
debt securities of that series or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of
that series may exercise any right, power or remedy permitted by
law and will have, in particular, without limiting the
generality of the foregoing, the right to declare the entire
principal amount (or, in the case of discounted securities, that
lesser amount as may be provided for with respect to those debt
securities) of (including premium, if any, on) all the debt
securities of that series to be due and payable immediately, by
a notice in writing to Reed Elsevier Capital and each guarantor
(and to the trustee if given by holders), and upon that
declaration of acceleration that principal or that lesser
17
amount, as the case may be, including premium, if any, together
with any accrued interest and all other amounts owing will
become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which have been expressly
waived by Reed Elsevier Capital and each guarantor.
(Section 502). However, at any time after that declaration
of acceleration has been made, but before a judgment or decree
for payment of the money due has been obtained by the trustee
for the debt securities of any series, the holders of a majority
in aggregate principal amount of the outstanding debt securities
of that series may, under certain circumstances, rescind and
annul that acceleration. (Section 502).
Holders of debt securities of any series may not enforce the
indenture, the debt securities or the guarantees, except as
described in the preceding paragraph; provided, that each holder
of debt securities will have the right to institute suit for the
enforcement of payment of the principal of (and premium, if any,
on) and interest, if any, on those debt securities on their
respective stated maturities as provided in the indenture.
(Section 507). The trustee may require indemnity
satisfactory to it before it enforces the indenture, the debt
securities or the guarantees. (Section 514). Subject to
certain limitations, holders of a majority in aggregate
principal amount of the outstanding debt securities of any
series may direct the trustee in its exercise of any trust or
power. (Section 512). Reed Elsevier Capital and each
guarantor will furnish the trustee with an annual certificate of
certain of its officers certifying, to the best of their
knowledge, whether Reed Elsevier Capital or each guarantor is,
or has been, in default and specifying the nature and status of
that default. (Section 1004). The indenture provides that
the trustee will, within 90 days after the occurrence of a
default with respect to the debt securities, give to the holders
of the debt securities notice of any default, known to it,
unless that default has been cured or waived; provided, that the
trustee may withhold from holders of debt securities of any
series notice of any continuing default (except a default in
payment) if it determines in good faith that the withholding of
that notice is in the interest of the holders.
(Section 602).
Covenants
of Reed Elsevier Capital and the Guarantors
Reed Elsevier Capital and each guarantor have also agreed that,
so long as any of the debt securities are outstanding, it or
they, as the case may be, will comply with the obligations set
forth below.
Payment of Principal, Premium (if any) and
Interest.
Reed Elsevier Capital will duly and
punctually pay the principal of, premium, if any, interest, if
any, and all other amounts due on the debt securities in
accordance with their terms and the terms of the indenture.
(Section 1001).
Ownership of Reed Elsevier Capital.
The
guarantors will, either individually or together, at all times
own, directly or indirectly, all of the voting stock of Reed
Elsevier Capital. (Section 1006).
Consolidation, Merger, Amalgamation, Sale, Lease or
Conveyance of Assets.
Neither Reed Elsevier
Capital nor either of the guarantors will, directly or
indirectly, consolidate, merge or amalgamate with, or sell,
lease or otherwise dispose of substantially all its assets to
any other person unless:
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no event of default and no event which, after the giving of
notice or lapse of time or both, would become an event of
default, will exist immediately before and immediately after
that transaction;
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either:
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Reed Elsevier Capital or either guarantor is the survivor of
that transaction; or
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if Reed Elsevier Capital or either guarantor is not the
survivor, the survivor is:
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in the case of a transaction involving Reed Elsevier Capital, a
Component Company, all of whose voting stock is directly or
indirectly owned by the guarantors and which is incorporated and
existing under the laws of the United States or one of the
States and that Component Company expressly assumes, by a
supplemental indenture that is executed and delivered to the
trustee, in form reasonably satisfactory to that trustee, Reed
Elsevier Capitals obligations under the debt
securities, or
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in the case of a transaction involving either of the guarantors,
a corporation or other person which expressly assumes, by a
supplemental indenture that is executed and delivered to the
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trustee for each series of debt securities, in form reasonably
satisfactory to each of those trustees, with any amendments or
revisions necessary to take account of the jurisdiction in which
that corporation or other person is organized (if other than the
United Kingdom, in the case of Reed Elsevier PLC, or The
Netherlands, in the case of Reed Elsevier NV), the applicable
guarantors obligations under the guarantees; and
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Reed Elsevier Capital or either guarantor has delivered to the
trustee a certificate signed by two duly authorized officers of
Reed Elsevier Capital or either guarantor and an opinion of
counsel stating that the consolidation, merger, amalgamation,
sale, lease or conveyance and the supplemental indenture
evidencing the assumption by a Component Company or corporation
or other person comply with the indenture and that all
conditions precedent provided for in the indenture relating to
that transaction have been complied with. (Section 801).
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Upon any consolidation, amalgamation or merger, or any
conveyance, transfer or lease, the successor Component Company
or person will succeed to, and be substituted for, and may
exercise every right and power of, Reed Elsevier Capital or
either guarantor under the indenture with the same effect as if
that successor subsidiary or person has been named as Reed
Elsevier Capital or either guarantor, and thereafter, except in
the case of a lease, the predecessor obligor will be relieved of
all obligations and covenants under the indenture, the debt
securities or the related guarantees. (Section 802).
The guarantors may cause any Component Company, wholly owned by
the guarantors, which is a corporation organized and existing
under the laws of the United States or one of the States to be
substituted for Reed Elsevier Capital, and to assume the
obligations of Reed Elsevier Capital (or any corporation which
has previously assumed the obligations of Reed Elsevier Capital)
for the due and punctual payment of the principal of (and,
premium, if any, on) and interest, if any, on the debt
securities and the performance of every covenant of the
indenture and the debt securities on the part of Reed Elsevier
Capital to be performed or observed; provided, that:
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that Component Company will expressly assume those obligations
by a supplemental indenture, executed by that Component Company
and delivered to the trustee for each series of debt securities,
in form reasonably satisfactory to that trustee, and, if that
Component Company assumes those obligations, each guarantor
will, in that supplemental indenture, confirm that its
guarantees as guarantor will apply to that Component
Companys obligations under the debt securities and the
indenture, as so modified by that supplemental
indenture; and
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immediately after giving effect to that assumption of
obligations, no event of default with respect to any series of
debt securities and no event which, after notice or lapse of
time or both, would become an event of default, with respect to
any series of debt securities will have occurred and be
continuing. (Section 803).
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Upon that assumption of obligations, that Component Company will
succeed to, and be substituted for, and may exercise every right
and power of, Reed Elsevier Capital under the indenture with
respect to the debt securities with the same effect as if that
Component Company had been named as the issuer under
the indenture, and the former issuer, or any successor
corporation which will therefore have become Reed Elsevier
Capital in the manner prescribed in the indenture, will be
released from all liability as obligor upon the debt securities.
(Section 803).
If the guarantors cause any Component Company all of whose
voting stock is directly or indirectly owned by them to be
substituted for Reed Elsevier Capital in accordance with the
terms and conditions of the debt securities, that substitution
may constitute a deemed sale or exchange of the debt securities
for U.S. federal income tax purposes. As a result, the
holder of a debt security may recognize taxable gain or loss and
may be required to include in income different amounts during
the remaining term of that debt security than would have been
included absent that substitution. If that substitution occurs,
holders should consult their tax advisors regarding the tax
consequences.
19
Limitations on Liens.
The guarantors will not,
nor will they permit any Restricted Company to, create or assume
after the date specified for a series of debt securities in the
applicable prospectus supplement any Lien securing Indebtedness
other than:
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Liens securing Indebtedness for which either of the guarantors
or any Restricted Company is contractually obligated on that
date;
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Liens securing Indebtedness incurred in the ordinary course of
business of either of the guarantors or any Restricted Company;
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Liens securing Indebtedness incurred in connection with the
financing of receivables of either of the guarantors or any
Restricted Company;
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Liens on Property acquired or leased after that date securing
Indebtedness in amounts not exceeding the acquisition cost of
that Property (provided that the Lien is created or assumed
within 360 days after that acquisition or lease);
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in the case of real estate owned on or acquired after that date
which, on or after that date, is improved, Liens on that real
estate
and/or
improvements securing Indebtedness in amounts not exceeding the
cost of those improvements;
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Liens on Property acquired after that date securing Indebtedness
existing on that Property at the time of that acquisition
(provided that the Lien has not been created or assumed in
contemplation of that acquisition);
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Liens securing Indebtedness of a corporation at the time it
becomes a subsidiary of a Component Company (provided that the
Lien has not been created or assumed in contemplation of that
corporation becoming a subsidiary of a Component Company);
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rights of set-off over deposits of either of the guarantors or
any Restricted Company held by financial institutions;
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Liens on Property of either of the guarantors or any Restricted
Company in favor of any governmental authority of any
jurisdiction securing the obligation of that guarantor or that
Restricted Company pursuant to any contract or payment owed to
that entity pursuant to applicable laws, regulations or statutes;
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Liens securing industrial revenue, development or similar bonds
issued by or for the benefit of either of the guarantors or any
Restricted Company, provided that those industrial revenue,
development or similar bonds are nonrecourse to either guarantor
or that Restricted Company;
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Liens in favor of either of the guarantors or of any other
Component Company; and
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extensions, renewals, refinancings or replacements of any Liens
referred to above; provided, that the outstanding principal
amount of the obligation secured thereby at any time is not
increased above the outstanding principal amount at any previous
time and so long as any extension, renewal, refinancing or
replacement of any Liens is limited to the property originally
encumbered. (Section 804).
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Notwithstanding the provisions set forth above either of the
guarantors or any Restricted Company may create or assume any
Lien securing Indebtedness which would otherwise be subject to
the foregoing restrictions provided that either:
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after giving effect to the Liens, Indebtedness secured by those
Liens (not including Indebtedness secured by Liens permitted
above) then outstanding does not exceed 15 percent of
Adjusted Total of Capital and Reserves (as defined
below); or
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at the time the Lien is created or assumed, the debt securities
or the obligations of that guarantor which has created or
assumed, or the obligations of both guarantors if the Lien is
created or
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assumed by a Restricted Company, that Lien pursuant to its
guarantees are equally and ratably secured with that
Indebtedness for so long as that Indebtedness is secured.
(Section 804).
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Limitation on Sale and Leaseback
Transactions.
The guarantors will not, and will
not cause or permit any Restricted Company to, engage in any
sale and leaseback transaction (other than a sale and leaseback
transaction involving any property acquired after the date
specified for a series of debt securities in the applicable
prospectus supplement) unless:
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either of the guarantors or any Restricted Company would be
entitled (other than pursuant to the exceptions under
Limitations on Liens above) to secure
Indebtedness equal to the amount realized upon the sale or
transfer involved in that transaction without securing the debt
securities or the guarantees; or
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an amount equal to the fair value, as determined in good faith
by the board of directors or the executive board of either
guarantor or any Restricted Company, of the leased property is
applied or definitively committed within 360 days of the
effective date of the sale and leaseback transaction to:
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the acquisition or construction of property other than current
assets;
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the repayment of the debt securities pursuant to their
terms; or
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the repayment of Indebtedness of either guarantor or any
Restricted Company (other than Indebtedness owed to that
guarantor or to any other Component Company and other than
Indebtedness the payment of principal of or interest on which is
contractually subordinated to the prior payment of principal of
or interest on the debt securities). (Section 805).
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For the purpose of these covenants and the events of default the
following terms have the following respective meanings:
Adjusted Total of Capital and Reserves means:
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the amount for the time being paid up on the issued share
capital of Reed Elsevier PLC and Reed Elsevier NV; and
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the amounts standing to the credit of the reserves of Reed
Elsevier (being the elements of combined shareholders
funds other than the paid up issued share capital of Reed
Elsevier PLC and Reed Elsevier NV, including the balance
standing to the credit of profit and loss account) as shown in
the last audited combined financial statements of Reed Elsevier
after making those adjustments as in the opinion of Reed
Elsevier PLCs and Reed Elsevier NVs auditors may be
appropriate, including adjustments to take account of any
alterations to those reserves resulting from any distributions
or any issues of share capital whether for cash or other
consideration (including any transfers to share premium account)
or any payments up by capitalization from reserves of share
capital theretofore not paid up or any reductions of paid up
share capital or share premium account which may have taken
place since the date of those balance sheets, less any amounts
included in the reserves and appearing on those audited combined
financial statements as being reserved or set aside for future
taxation assessable by reference to profits earned down to the
date to which those balance sheets are made up.
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Component Company means any one of Reed Elsevier
PLC, Reed Elsevier NV, Reed Elsevier Group plc, Elsevier Reed
Finance BV and their respective direct and indirect subsidiaries
(or the successor to any of those companies).
Indebtedness, with respect to any person, means:
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any obligation of that person for borrowed money;
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any obligation incurred for all or any part of the purchase
price of Property or for the cost of Property constructed or of
improvements on the Property, other than accounts payable
included in current liabilities and incurred in respect of
Property purchased in the ordinary course of business;
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any obligation under capitalized leases (as determined in
accordance with U.K. GAAP) of that person; and
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any direct or indirect guarantees of that person of any
obligation of the type described in the preceding three
paragraphs of any other person.
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Lien means any security interest, mortgage, pledge,
lien, charge, encumbrance, lessors interest under a
capitalized lease or analogous instrument in, of or on any
Property.
person means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency
or political subdivision or any other entity.
Property means any interest in any kind of property
or asset, whether real, personal or mixed, or tangible or
intangible, including, without limitation, share capital.
Restricted Company means any Component Company,
other than one of the guarantors, substantially all of the
physical properties of which are located, or substantially all
of the operations of which are conducted, within the United
States, the United Kingdom or The Netherlands. Restricted
Company does not include any Component Company which is
principally engaged in leasing or financing installment
receivables or which is principally engaged in financing the
operations of one or more Component Companies (which includes
only those Component Companies in which more than 50% of the
capital stock having ordinary voting power to elect a majority
of the board of directors or other persons performing similar
functions is at the time directly or indirectly owned by the
guarantors).
subsidiary, with respect to any person, means any
corporation or other entity of which a majority of the capital
stock or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons
performing similar functions is at the time directly or
indirectly owned by that person. (Section 101).
Satisfaction
and Discharge
Except as may otherwise be set forth in the prospectus
supplement relating to the debt securities of any particular
series, the indenture provides that Reed Elsevier Capital will
be discharged from its obligations under the debt securities of
that series (with certain exceptions) at any time prior to the
stated maturity or redemption of those debt securities when:
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Reed Elsevier Capital has irrevocably deposited with or to the
order of the trustee for the debt securities of that series, in
trust:
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sufficient funds in the currency or currency unit in which debt
securities of that series are payable to pay and discharge the
entire indebtedness on all of the outstanding debt securities of
that series for unpaid principal (and premium, if any) and
interest, if any, to the stated maturity, or redemption date, as
the case may be; or
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that amount of Government Obligations (as defined below) as
will, together with the predetermined and certain income to
accrue on those Government Obligations (without consideration of
any reinvestment), be sufficient to pay and discharge when due
the principal (and premium, if any) and interest, if any, to the
stated maturity or any redemption date, as the case may
be; or
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that amount equal to the amount referred to in the above two
paragraphs in any combination of the currency or currency unit
in which debt securities of that series are payable or
Government Obligations;
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Reed Elsevier Capital or any guarantor has paid or caused to be
paid all other sums payable with respect to the debt securities
of that series;
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Reed Elsevier Capital has delivered to the trustee for the debt
securities of that series an opinion of counsel to the effect
that:
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Reed Elsevier Capital has received from, or there has been
published by, the U.S. Internal Revenue Service a
ruling; or
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since the date of the indenture there has been a change in
applicable U.S. federal income tax law,
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in either case to the effect that, and based thereon such
opinion of counsel will confirm that, the beneficial owners of
debt securities of that series will not recognize income, gain
or loss for U.S. federal income tax purposes as a result of
that discharge and will be subject to U.S. federal income
tax on the same amount and in the same manner and at the same
time as would have been the case if that discharge had not
occurred; and certain other conditions are met.
(Section 401).
Upon a discharge, the holders of the debt securities of that
series will no longer be entitled to the benefits of the terms
and conditions of the indenture, the debt securities and the
guarantees, if any, except for certain provisions, including
registration of transfer and exchange of those debt securities
and replacement of mutilated, destroyed, lost or stolen debt
securities of that series, and will look for payment only to
those deposited funds or obligations. (Section 401).
Government Obligations means securities which are:
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direct obligations (or certificates representing an ownership
interest in those obligations) of the government which issued
the currency in which the debt securities of a particular series
are payable (unless the currency in which the debt securities of
a particular series is unavailable due to the imposition of
exchange controls or other circumstances beyond Reed Elsevier
Capitals control, in which case the obligations shall be
issued in US dollars) for which its full faith and credit are
pledged; or
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obligations of a person controlled or supervised by, and acting
as an agency or instrumentality of, the government which issued
the currency in which the debt securities of a particular series
are payable (unless the currency in which the debt securities of
a particular series is unavailable due to the imposition of
exchange controls or other circumstances beyond Reed Elsevier
Capitals control, in which case the obligations shall be
issued in US dollars), issued in that currency the payment of
which is unconditionally guaranteed by that government as a full
faith and credit obligation of that government and are not
callable or redeemable at the option of Reed Elsevier Capital or
either of the guarantors. (Section 101).
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Supplemental
Indentures
The indenture contains provisions permitting Reed Elsevier
Capital, each guarantor and the trustee for the debt securities
of any or all series:
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without the consent of any holders of debt securities issued
under the indenture, to enter into one or more supplemental
indentures to, among other things, cure any ambiguity or
inconsistency or to make any change that does not have a
materially adverse effect on the rights of the holders of debt
securities of any particular series; and
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with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding debt securities of
each series of debt securities then outstanding and affected by
the supplemental indenture, to enter into one or more
supplemental indentures for the purpose of adding any provisions
to or changing in any manner or eliminating any of the
provisions of the indenture or of modifying in any manner the
rights of the holders of those debt securities under the
indenture.
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However, no supplemental indenture may, without the consent of
the holder of each outstanding debt security affected by the
supplemental indenture:
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change the stated maturity of the principal of, or any
installment of principal of or interest on, any debt security,
or reduce the principal amount or the rate of interest, if any,
or any premium or
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principal payable upon the redemption of that debt security, or
change any obligation of Reed Elsevier Capital to pay additional
amounts thereon or reduce the amount of the principal of a
discounted security that would be due and payable upon a
declaration of acceleration of the stated maturity, or change
any place of payment where any debt security or any interest is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the stated maturity
or the date any such payment is otherwise due and payable (or,
in the case of redemption, on or after the redemption date);
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reduce the percentage in aggregate principal amount of
outstanding debt securities of any particular series, the
consent of whose holders is required for any supplemental
indenture, or the consent of whose holders is required for any
waiver of compliance with certain provisions of the indenture or
certain defaults and their consequences provided for in the
indenture;
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change any obligation of Reed Elsevier Capital and each
guarantor to maintain an office or agency in the places and for
the purposes specified in the indenture;
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modify certain of the provisions of the indenture pertaining to
the waiver by holders of debt securities of past defaults,
supplemental indentures with the consent of holders of debt
securities and the waiver by holders of each debt security of
certain covenants, except to increase any specified percentage
in aggregate principal amount required for any actions by
holders of debt securities or to provide that certain other
provisions of the indenture cannot be modified or waived without
the consent of the holder of each debt security affected; or
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change in any manner adverse to the interests of the holders of
any outstanding debt securities the terms and conditions of the
obligations of each guarantor in respect of the due and punctual
payment of the principal (or, if the context so requires, lesser
amount in the case of discounted securities) of (and premium, if
any) and interest, if any, on or any additional amounts or any
sinking fund payments provided in respect of that debt security.
(Section 902).
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Waivers
The holders of not less than a majority in aggregate principal
amount of the outstanding debt securities of a series of debt
securities issued under the indenture and affected thereby may,
on behalf of the holders of those debt securities of that
series, waive compliance by Reed Elsevier Capital or any
guarantor with certain restrictive provisions of the indenture
as pertain to the corporate existence of Reed Elsevier Capital
and that guarantor, the maintenance of certain agencies by Reed
Elsevier Capital and that guarantor or to the covenants
described under Covenants of Reed Elsevier
Capital and the Guarantors above. The holders of not less
than a majority in aggregate principal amount of the outstanding
debt securities of any particular series may, on behalf of the
holders of all the debt securities of that series, waive any
past default under the indenture with respect to that series and
its consequences, except a default in the payment of the
principal of (and premium, if any, on) and interest, if any, on
any debt security of that series or with respect to a covenant
or a provision which under the indenture cannot be modified or
amended without the consent of the holder of each outstanding
debt security of that series affected. (Section 513).
Further
Issuances
Reed Elsevier Capital may from time to time, without notice to
or the consent of the holders of the debt securities of a
series, create and issue under the indenture further debt
securities ranking equally with those debt securities in all
respects (or in all respects except for the payment of interest
accruing prior to the issue date of those further debt
securities or except for the first payment of interest following
the issue date of those further debt securities), and those
further debt securities will be consolidated and form a single
series with those debt securities and will have the same terms
as to status, redemption or otherwise as those debt securities.
24
Notices
Notices to holders of debt securities of a series will be given
by mail to the addresses of holders as they appear in the
applicable security register for that series.
Title
Reed Elsevier Capital, any trustees and any agent of Reed
Elsevier Capital or any trustees may treat the registered owner
of any debt security as its absolute owner (whether or not that
debt security is overdue and notwithstanding any notice to the
contrary) for the purpose of making payment and for all other
purposes.
Governing
Law
The indenture, the debt securities and the guarantees will be
governed by, and construed in accordance with, the laws of the
State of New York.
Consent
to Service
Reed Elsevier Capital and each of the guarantors has designated
and appointed Henry Z. Horbaczewski, Reed Elsevier Inc., at 125
Park Avenue, 23rd floor, in the Borough of Manhattan, The
City of New York, New York 10017 as its authorized agent
upon which process may be served in any suit or proceeding
arising out of or relating to the debt securities, the
guarantees or the indenture which may be instituted in any
federal or New York State court located in the Borough of
Manhattan, City and State of New York, and has submitted (for
the purposes of any suit or proceeding) to the jurisdiction of
any court in that area in which any suit or proceeding is
instituted. Each of Reed Elsevier PLC and Reed Elsevier NV has
agreed, to the fullest extent that it lawfully may do so, that
final judgment in any suit, action or proceeding brought in a
court will be conclusive and binding upon it and may be enforced
in the courts of the United Kingdom and The Netherlands, as the
case may be (or any other courts to the jurisdiction of which it
is subject).
Notwithstanding the foregoing, any actions arising out of or
relating to the debt securities, the guarantees or the indenture
may be instituted by the trustees or the holder of any debt
security of a series in any competent court in the United
Kingdom, The Netherlands or other competent jurisdiction.
Concerning
the Trustee
The indenture provides that, except during the continuance of an
event of default, the trustee will have no obligations other
than the performance of those duties as are specifically set
forth in the indenture. If an event of default has occurred and
is continuing, the trustee will use the same degree of care and
skill in its exercise of the rights and powers vested in it by
the indenture as a prudent person would exercise under the
circumstances in the conduct of that persons own affairs.
(Section 601).
25
TAXATION
United
States Federal Income Tax Considerations
The following is a summary of certain U.S. federal income
tax consequences to you of the purchase, ownership and
disposition of debt securities as of the date hereof. Except
where noted, this summary deals only with debt securities that
are held as capital assets and does not represent a detailed
description of the U.S. federal income tax consequences
applicable to you if you are subject to special treatment under
the U.S. federal income tax laws, including if you are:
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a dealer in securities or currencies;
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a regulated investment company;
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a real estate investment trust;
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a financial institution;
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an insurance company;
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a tax-exempt organization;
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a person holding debt securities as part of a hedging,
integrated or conversion transaction, constructive sale or
straddle;
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a person who is an investor in a partnership or other
pass-through entity;
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a trader in securities that has elected the mark-to-market
method of accounting for your securities;
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a person liable for alternative minimum tax; or
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a U.S. Holder (as defined below) whose functional
currency is not the US dollar.
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In addition, it does not represent a detailed description of the
U.S. federal income tax consequences applicable to you if
you are a
Non-U.S. Holder
(as defined below) subject to special treatment under the
U.S. federal income tax laws (including if you are a
controlled foreign corporation, passive
foreign investment company or United States expatriate).
The discussion below is based upon the provisions of the
U.S. Internal Revenue Code of 1986, as amended (the
Code), and regulations, rulings and judicial
decisions as of the date of this prospectus. Those authorities
may be changed, perhaps retroactively, so as to result in
U.S. federal income tax consequences different from those
discussed below. The discussion below assumes that all debt
securities issued pursuant to this prospectus will be classified
for U.S. federal income tax purposes as indebtedness of
Reed Elsevier Capital and you should note that in the event of
an alternative characterization, the tax consequences would
differ from those discussed below. We will summarize any special
U.S. federal income tax considerations relevant to a
particular issue of the debt securities in the applicable
prospectus supplement.
If a partnership holds our debt securities, the tax treatment of
a partner will generally depend upon the status of the partner
and the activities of the partnership. If you are a partner of a
partnership holding our debt securities, you should consult your
tax advisors.
If you are considering the purchase of the debt securities,
you should consult your own tax advisors concerning the
U.S. federal income tax consequences to you and any
consequences arising under the laws of any other taxing
jurisdiction.
Consequences
to U.S. Holders
The following is a summary of certain U.S. federal income
tax consequences that will apply to you if you are a
U.S. Holder of the debt securities.
26
Certain consequences to
Non-U.S. Holders
of the debt securities, which are beneficial owners of debt
securities (other than partnerships) that are not
U.S. Holders, are described under
Consequences to
Non-U.S. Holders
below.
U.S. Holder means a beneficial owner of a debt
security that is for U.S. federal income tax purposes:
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an individual citizen or resident of the United States;
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a corporation (or any other entity treated as a corporation for
U.S. federal income tax purposes) created or organized in
or under the laws of the United States, any state thereof or the
District of Colombia;
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an estate the income of which is subject to U.S. federal
income taxation regardless of its source; or
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a trust if it (1) is subject to the primary supervision of
a court within the United States and one or more
U.S. persons have the authority to control all of its
substantial decisions or (2) has a valid election in effect
under applicable U.S. Treasury Regulations to be treated as
a U.S. person.
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Payments of Interest.
Except as set forth
below, interest on a debt security will generally be taxable to
you as ordinary income at the time it is paid or accrued in
accordance with your method of accounting for tax purposes.
Original Issue Discount.
If you own debt
securities issued with original issue discount
(OID), you will be subject to special tax accounting
rules, as described in greater detail below. You generally must
include OID in gross income in advance of the receipt of cash
attributable to that income. However, you generally will not be
required to include separately in income cash payments received
on the debt securities, even if denominated as interest, to the
extent those payments do not constitute qualified stated
interest, as defined below. Notice will be given in the
applicable prospectus supplement when we determine that a
particular debt security will be an original issue discount debt
security.
A debt security with an issue price that is less than the
stated redemption price at maturity (the sum of all
payments to be made on the debt security other than
qualified stated interest) generally will be issued
with OID if that difference is at least 0.25% of the stated
redemption price at maturity multiplied by the number of
complete years to maturity. The issue price of each
debt security in a particular offering will be the first price
at which a substantial amount of that particular offering is
sold to the public. The term qualified stated
interest means stated interest that is unconditionally
payable in cash or in property, other than debt instruments of
the issuer, and meets all of the following conditions:
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it is payable at least once per year;
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it is payable over the entire term of the debt security; and
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it is payable at a single fixed rate or, subject to certain
conditions, based on one or more interest indices.
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We will give you notice in the applicable prospectus supplement
when we determine that a particular debt security will bear
interest that is not qualified stated interest.
If you own a debt security issued with de minimis OID, which is
discount that is not OID because it is less than 0.25% of the
stated redemption price at maturity multiplied by the number of
complete years to maturity, you generally must include the de
minimis OID in income at the time principal payments on the debt
securities are made in proportion to the amount paid. Any amount
of de minimis OID that you have included in income will be
treated as capital gain.
Certain of the debt securities may contain provisions permitting
them to be redeemed prior to their stated maturity at our option
and/or
at
your option. Original issue discount debt securities containing
those features may be subject to rules that differ from the
general rules discussed herein. If you are considering the
purchase of original issue discount debt securities with those
features, you should carefully examine the applicable prospectus
supplement and should consult your own tax advisors with respect
to those features
27
since the tax consequences to you with respect to OID will
depend, in part, on the particular terms and features of the
debt securities.
If you own original issue discount debt securities with a
maturity upon issuance of more than one year, you generally must
include OID in income in advance of the receipt of some or all
of the related cash payments using the constant yield
method described in the following paragraphs. This method
takes into account the compounding of interest. The accruals of
OID on an original issue discount debt security will generally
be less in the early years and more in the later years.
The amount of OID that you must include in income if you are the
initial U.S. Holder of an original issue discount debt
security is the sum of the daily portions of OID
with respect to the debt security for each day during the
taxable year or portion of the taxable year in which you held
that debt security (accrued OID). The daily portion
is determined by allocating to each day in any accrual
period a pro rata portion of the OID allocable to that
accrual period. The accrual period for an original issue
discount debt security may be of any length and may vary in
length over the term of the debt security, provided that each
accrual period is no longer than one year and each scheduled
payment of principal or interest occurs on the first day or the
final day of an accrual period. The amount of OID allocable to
any accrual period other than the final accrual period is an
amount equal to the excess, if any, of:
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the debt securitys adjusted issue price at the
beginning of the accrual period multiplied by its yield to
maturity, determined on the basis of compounding at the close of
each accrual period and properly adjusted for the length of the
accrual period; over
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the aggregate of all qualified stated interest allocable to the
accrual period.
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OID allocable to a final accrual period is the difference
between the amount payable at maturity, other than a payment of
qualified stated interest, and the adjusted issue price at the
beginning of the final accrual period. Special rules will apply
for calculating OID for an initial short accrual period. The
adjusted issue price of a debt security at the
beginning of any accrual period is equal to its issue price
increased by the accrued OID for each prior accrual period,
determined without regard to the amortization of any acquisition
or bond premium, as described below, and reduced by any payments
previously made on the debt security other than a payment of
qualified stated interest. Under these rules, you will have to
include in income increasingly greater amounts of OID in
successive accrual periods. We are required to provide
information returns stating the amount of OID accrued on debt
securities held by persons of record other than corporations and
other exempt holders.
Floating rate debt securities are subject to special OID rules.
In the case of an original issue discount debt security that is
a floating rate debt security, both the yield to
maturity and qualified stated interest will be
determined solely for purposes of calculating the accrual of OID
as though the debt security will bear interest in all periods at
a fixed rate generally equal to the rate that would be
applicable to interest payments on the debt security on its date
of issue or, in the case of certain floating rate debt
securities, the rate that reflects the yield to maturity that is
reasonably expected for the debt security. Additional rules may
apply if
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the interest on a floating rate debt security is based on more
than one interest index; or
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the principal amount of the debt security is indexed in any
manner.
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You should refer to the discussion below under Foreign
Currency Debt Securities for additional rules applicable
to original issue discount debt securities that are denominated
in or determined by reference to a specified currency other than
the US dollar. The discussion above generally does not address
debt securities providing for contingent payments that do not
constitute qualified stated interest. You should carefully
examine the applicable prospectus supplement regarding the
U.S. federal income tax consequences of the holding and
disposition of any debt securities providing for contingent
payments that do not constitute qualified stated interest.
You may elect to treat all interest on any debt security as OID
and calculate the amount includible in gross income under the
constant yield method described above. For purposes of this
election, interest
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includes stated interest, acquisition discount, OID, de minimis
OID, market discount, de minimis market discount and unstated
interest, as adjusted by any amortizable bond premium or
acquisition premium. You must make this election for the taxable
year in which you acquired the debt security, and you may not
revoke the election without the consent of the
U.S. Internal Revenue Service (IRS). You should
consult with your own tax advisors about this election.
Short-Term Debt Securities.
In the case of
debt securities having a term of one year or less, all payments,
including all stated interest, will be included in the stated
redemption price at maturity and will not be qualified stated
interest. As a result, you will generally be taxed on the
discount instead of stated interest. The discount will be equal
to the excess of the stated redemption price at maturity over
the issue price of a short-term debt security, unless you elect
to compute this discount using tax basis instead of issue price.
In general, individual and certain other cash method
U.S. Holders of short-term debt securities are not required
to include accrued discount in their income currently unless
they elect to do so, but may be required to include stated
interest in income as the income is received. U.S. Holders
that report income for U.S. federal income tax purposes on
the accrual method and certain other U.S. Holders are
required to accrue discount on short-term debt securities (as
ordinary income) on a straight-line basis, unless an election is
made to accrue the discount according to a constant yield method
based on daily compounding. If you are not required, and do not
elect, to include discount in income currently, any gain you
realize on the sale, exchange or retirement of a short-term debt
security will generally be ordinary income to you to the extent
of the discount accrued by you through the date of sale,
exchange or retirement. In addition, if you do not elect to
currently include accrued discount in income you may be required
to defer deductions for a portion of your interest expense with
respect to any indebtedness attributable to the short-term debt
securities.
Market Discount.
If you purchase a debt
security for an amount that is less than its stated redemption
price at maturity, or, in the case of an original issue discount
debt security, its adjusted issue price, the amount of the
difference will be treated as market discount for
U.S. federal income tax purposes, unless that difference is
less than a specified de minimis amount. Under the market
discount rules, you will be required to treat any principal
payment on, or any gain on the sale, exchange, retirement or
other disposition of, a debt security as ordinary income to the
extent of the market discount that you have not previously
included in income and are treated as having accrued on the debt
security at the time of its payment or disposition. In addition,
you may be required to defer, until the maturity of the debt
security or its earlier disposition in a taxable transaction,
the deduction of all or a portion of the interest expense on any
indebtedness attributable to the debt security. You may elect,
on a
security-by-security
basis, to deduct the deferred interest expense in a tax year
prior to the year of disposition. You should consult your own
tax advisor before making this election.
Any market discount will be considered to accrue ratably during
the period from the date of acquisition to the maturity date of
the debt security, unless you elect to accrue on a constant
interest method. You may elect to include market discount in
income currently as it accrues, on either a ratable or constant
interest method, in which case the rule described above
regarding deferral of interest deductions will not apply. Your
election to include market discount in income currently, once
made, applies to all market discount obligations acquired by you
on or after the first taxable year to which your election
applies and may not be revoked without the consent of the IRS.
You should consult your own tax advisor before making this
election.
Acquisition Premium, Amortizable Bond
Premium.
If you purchase an original issue
discount debt security for an amount that is greater than its
adjusted issue price but equal to or less than the sum of all
amounts payable on the debt security after the purchase date
other than payments of qualified stated interest, you will be
considered to have purchased that debt security at an
acquisition premium. Under the acquisition premium
rules, the amount of OID that you must include in gross income
with respect to the debt security for any taxable year will be
reduced by the portion of the acquisition premium properly
allocable to that year.
If you purchase a debt security (including an original issue
discount debt security) for an amount in excess of the sum of
all amounts payable on the debt security after the purchase date
other than qualified
29
stated interest, you will be considered to have purchased the
debt security at a premium and, if it is an original
issue discount debt security, you will not be required to
include any OID in income. You generally may elect to amortize
the premium over the remaining term of the debt security on a
constant yield method as an offset to interest when includible
in income under your regular accounting method. In the case of
instruments that provide for alternative payment schedules, bond
premium is calculated by assuming that (1) you will
exercise or not exercise options in a manner that maximizes your
yield, and (2) we will exercise or not exercise options in
a manner that minimizes your yield (except that we will be
assumed to exercise call options in a manner that maximizes your
yield). If you do not elect to amortize bond premium, that
premium will decrease the gain or increase the loss you would
otherwise recognize on disposition of the debt security. Your
election to amortize premium on a constant yield method will
also apply to all debt obligations held or subsequently acquired
by you on or after the first day of the first taxable year to
which the election applies. You may not revoke the election
without the consent of the IRS. You should consult your own tax
advisor before making this election.
Sale, Exchange and Retirement of Debt
Securities.
Your tax basis in a debt security
will, in general, be your cost for that debt security, increased
by OID, market discount or any discount with respect to a
short-term debt security that you previously included in income,
and reduced by any amortized premium and any cash payments on
the debt security other than qualified stated interest. Upon the
sale, exchange, retirement or other disposition of a debt
security, you will recognize gain or loss equal to the
difference between the amount you realize upon the sale,
exchange, retirement or other disposition (less an amount equal
to any accrued qualified stated interest, which will be taxable
as interest income to the extent not previously included in
income) and the adjusted tax basis of the debt security. Except
as otherwise described herein with respect to:
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certain short-term debt securities;
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market discount;
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gain or loss attributable to changes in exchange rates as
discussed below with respect to foreign currency debt
securities; or
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contingent payment debt instruments, which this summary
generally does not discuss,
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that gain or loss will be capital gain or loss. Capital gains of
individuals derived in respect of capital assets held for more
than one year are eligible for reduced rates of taxation. The
deductibility of capital losses is subject to limitations.
Foreign
Currency Debt Securities
Payments of Interest.
If you receive interest
payments made in a foreign currency and you use the cash basis
method of accounting, you will be required to include in income
the US dollar value of the amount received, determined by
translating the foreign currency received at the spot
rate for such foreign currency on the date such payment is
received regardless of whether the payment is in fact converted
into US dollars. You will not recognize exchange gain or loss
with respect to the receipt of such payment.
If you use the accrual method of accounting, you may determine
the amount of income recognized with respect to such interest in
accordance with either of two methods. Under the first method,
you will be required to include in income for each taxable year
the US dollar value of the interest that has accrued during such
year, determined by translating such interest at the average
rate of exchange for the period or periods during which such
interest accrued. Under the second method, you may elect to
translate interest income at the spot rate on:
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the last day of the accrual period;
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the last day of the taxable year if the accrual period straddles
your taxable year; or
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the date the interest payment is received if such date is within
five days of the end of the accrual period.
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Upon receipt of an interest payment on such debt security
(including, upon the sale of such debt security, the receipt of
proceeds which include amounts attributable to accrued interest
previously included
30
in income), you will recognize ordinary gain or loss in an
amount equal to the difference between the US dollar value
of such payment (determined by translating the foreign currency
received at the spot rate for such foreign currency
on the date such payment is received) and the US dollar value of
the interest income you previously included in income with
respect to such payment.
Original Issue Discount.
OID on a debt
security that is also a foreign currency debt security will be
determined for any accrual period in the applicable foreign
currency and then translated into US dollars, in the same manner
as interest income accrued by a holder on the accrual basis, as
described above. You will recognize exchange gain or loss when
OID is paid (including, upon the sale of such debt security, the
receipt of proceeds which include amounts attributable to OID
previously included in income) to the extent of the difference
between the US dollar value of the accrued OID (determined in
the same manner as for accrued interest) and the US dollar value
of such payment (determined by translating the foreign currency
received at the spot rate for such foreign currency
on the date such payment is received). For these purposes, all
receipts on a debt security will be viewed:
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first, as the receipt of any stated interest payments called for
under the terms of the debt security;
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second, as receipts of previously accrued OID (to the extent
thereof), with payments considered made for the earliest accrual
periods first; and
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third, as the receipt of principal.
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Market Discount and Bond Premium.
The amount
of market discount on foreign currency debt securities
includible in income will generally be determined by translating
the market discount determined in the foreign currency into US
dollars at the spot rate on the date the foreign
currency debt security is retired or otherwise disposed of. If
you have elected to accrue market discount currently, then the
amount which accrues is determined in the foreign currency and
then translated into US dollars on the basis of the average
exchange rate in effect during such accrual period. You will
recognize exchange gain or loss with respect to market discount
which is accrued currently using the approach applicable to the
accrual of interest income as described above.
Bond premium on a foreign currency debt security will be
computed in the applicable foreign currency. If you have elected
to amortize the premium, the amortizable bond premium will
reduce interest income in the applicable foreign currency. At
the time bond premium is amortized, exchange gain or loss, which
is generally ordinary gain or loss, will be realized based on
the difference between spot rates at such time and
the time of acquisition of the foreign currency debt security.
If you elect not to amortize bond premium, you must translate
the bond premium computed in the foreign currency into US
dollars at the spot rate on the maturity date and
such bond premium will constitute a capital loss which may be
offset or eliminated by exchange gain.
Sale, Exchange or Retirement.
Your initial tax
basis in a foreign currency debt security will generally be the
US dollar value of the foreign currency amount paid for such
foreign currency debt security determined at the time of your
purchase. If, however, you are a cash method taxpayer and the
foreign currency debt securities are traded on an established
securities market, your initial tax basis in the foreign
currency debt security will be determined by translating the
foreign currency amount paid into US dollars on the settlement
date of the purchase. An accrual method taxpayer may elect the
same treatment with respect to foreign currency debt securities
traded on an established securities market, provided that the
election is applied consistently. If you purchased the foreign
currency debt security with previously owned foreign currency,
you will recognize exchange gain or loss at the time of the
purchase attributable to the difference at the time of purchase,
if any, between your tax basis in the foreign currency and the
fair market value of the debt security in US dollars on the date
of purchase. Such gain or loss will be ordinary income or loss.
For purposes of determining the amount of any gain or loss you
recognize on the sale, exchange, retirement or other disposition
of a foreign currency debt security, the amount realized on such
sale, exchange, retirement or other disposition will be the US
dollar value of the amount realized in foreign
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currency (other than amounts attributable to accrued but unpaid
qualified stated interest, which will be taxable as interest
income to the extent not previously included in income),
determined at the time of the sale, exchange, retirement or
other disposition. If, however, you are a cash method taxpayer
and the foreign currency debt securities are traded on an
established securities market, the amount realized is determined
by translating the foreign currency received into US dollars on
the settlement date of the sale, exchange, retirement or other
disposition. An accrual method taxpayer may elect the same
treatment with respect to foreign currency debt securities
traded on an established securities market, provided that the
election is applied consistently.
You may also recognize exchange gain or loss attributable to the
movement in exchange rates between the time of purchase and the
time of disposition (including the sale, exchange, retirement or
other disposition) of a foreign currency debt security. Such
gain or loss will be treated as ordinary income or loss. The
realization of such gain or loss will be limited to the amount
of overall gain or loss realized on the disposition of a foreign
currency debt security.
Your tax basis in foreign currency received as interest on (or
OID with respect to), or received on the sale, exchange,
retirement or other disposition of, a foreign currency debt
security will generally be the US dollar value thereof at the
spot rate at the time you receive such foreign
currency. As discussed above, however, if the foreign currency
debt securities are traded on an established securities market,
a cash basis U.S. Holder (or, upon election, an accrual
basis U.S. Holder) will determine the US dollar value of
the foreign currency received upon a sale, exchange, retirement
or other disposition of a foreign currency debt security by
translating the foreign currency received at the spot
rate on the settlement date of the sale, exchange,
retirement or other disposition. In such case, your tax basis in
the foreign currency received would be equal to the spot
rate of exchange on the settlement date. Any gain or loss
recognized by you on a sale, exchange or other disposition of
foreign currency will be ordinary income or loss and will not be
treated as interest income or expense, except to the extent
provided in Treasury Regulations or administrative
pronouncements of the IRS.
Dual Currency Debt Securities.
If so specified
in an applicable prospectus supplement relating to a foreign
currency debt security, we may have the option to make all
payments of principal and interest scheduled after the exercise
of such option in a currency other than the specified currency.
Applicable Treasury Regulations generally:
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apply the principles contained in regulations governing
contingent debt instruments to dual currency debt securities in
the predominant currency of the dual currency debt
securities; and
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apply the rules discussed above with respect to foreign currency
debt securities with OID for the translation of interest and
principal into US dollars.
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If you are considering the purchase of dual currency debt
securities, you should carefully examine the applicable
prospectus supplement and should consult your own tax advisors
regarding the U.S. federal income tax consequences of the
holding and disposition of such debt securities.
Reportable Transactions.
Treasury Regulations
issued under the Code meant to require the reporting of certain
tax shelter transactions could be interpreted to cover
transactions generally not regarded as tax shelters, including
certain foreign currency transactions. Under the Treasury
Regulations, certain transactions are required to be reported to
the IRS, including, in certain circumstances, a sale, exchange,
retirement or other taxable disposition of a foreign currency
debt security or foreign currency received in respect of a
foreign currency debt security to the extent that such sale,
exchange, retirement or other taxable disposition results in a
tax loss in excess of a threshold amount. If you are considering
the purchase of foreign currency debt securities, you should
consult with your own tax advisors to determine the tax return
obligations, if any, with respect to an investment in the debt
securities, including any requirement to file IRS Form 8886
(Reportable Transaction Disclosure Statement).
32
Consequences
to
Non-U.S.
Holders
The following is a summary of certain U.S. federal income
and estate tax consequences that will apply to you if you are a
Non-U.S. Holder
of debt securities.
U.S. Federal Withholding Tax.
The 30%
U.S. federal withholding tax will not apply to any payment
of interest, including OID, on debt securities under the
portfolio interest rule, provided that:
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interest paid on the debt securities is not effectively
connected with your conduct of a trade or business in the United
States;
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you do not actually or constructively own 10% or more of the
total combined voting power of all classes of voting stock of
Reed Elsevier Capital within the meaning of the Code and
U.S. Treasury Regulations;
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you are not a controlled foreign corporation that is related to
Reed Elsevier Capital through stock ownership;
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you are not a bank whose receipt of interest on the debt
securities is described in section 881(c)(3)(A) of the Code;
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the interest is not considered contingent interest under
section 871(h)(4)(A) of the Code and the U.S. Treasury
Regulations thereunder; and
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either (1) you provide your name and address on an IRS Form
W-8BEN
(or
successor form), and certify, under penalty of perjury, that you
are not a U.S. person or (2) you hold your debt
securities through certain foreign intermediaries or certain
foreign partnerships, and you satisfy the certification
requirements of applicable Treasury Regulations.
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Special certification rules apply to certain
Non-U.S. Holders
that are pass-through entities rather than corporations or
individuals.
If you cannot satisfy the requirements described above, payments
of interest, including OID, made to you will be subject to the
30% U.S. federal withholding tax, unless you provide us
with a properly executed:
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IRS
Form W-8BEN
(or successor form) claiming an exemption from, or reduction in,
withholding under the benefit of a tax treaty; or
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IRS
Form W-8ECI
(or successor form) stating that interest paid on the debt
securities is not subject to withholding tax because it is
effectively connected with your conduct of a trade or business
in the United States.
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U.S. federal withholding tax generally will not apply to
any payment of principal or gain that you realize on the sale,
exchange, retirement or other disposition of debt securities.
U.S. Federal Income Tax.
If you are
engaged in a trade or business in the United States and
interest, including OID, on the debt securities is effectively
connected with the conduct of that trade or business (and, if
required by an applicable tax treaty, is attributable to a
U.S. permanent establishment), you will be subject to
U.S. federal income tax on that interest, including OID, on
a net income basis (although exempt from the 30% withholding
tax, provided the certification requirements discussed above
under U.S. Federal Withholding Tax
are satisfied) in the same manner as if you were a
U.S. Holder. In addition, if you are a foreign corporation,
you may be subject to a branch profits tax equal to 30% (or
lower applicable treaty rate) of your effectively connected
earnings and profits for the taxable year, subject to
adjustments.
You will generally not be subject to U.S. federal income
tax on any gain realized on the disposition of a debt security
unless:
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the gain is effectively connected with your conduct of a trade
or business in the United States (and, if required by an
applicable tax treaty, is attributable to a U.S. permanent
establishment); or
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33
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you are an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met.
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U.S. Federal Estate Tax.
Your estate will
not be subject to U.S. federal estate tax on debt
securities beneficially owned by you at the time of your death,
provided that any payment to you on the debt securities,
including OID, would be eligible for exemption from the 30%
U.S. federal withholding tax under the portfolio
interest rule described above under
U.S. Federal Withholding Tax,
without regard to the statement requirement described in the
sixth bullet point of that section.
Information
Reporting and Backup Withholding
U.S. Holders.
In general, information
reporting requirements will apply to certain payments of
principal, interest, OID and premium paid on debt securities and
to the proceeds of sale of a debt security made to you (unless
you are an exempt recipient such as a corporation). A backup
withholding tax may apply to such payments if you fail to
provide a taxpayer identification number or a certification of
exempt status, or fail to report in full dividend and interest
income.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S. federal
income tax liability provided the required information is
furnished to the IRS.
Non-U.S. Holders.
Generally,
we must report to the IRS and to you the amount of interest
(including OID) on the debt securities paid to you and the
amount of tax, if any, withheld with respect to those payments.
Copies of the information returns reporting such interest
payments and any withholding may also be made available to the
tax authorities in the country in which you reside under the
provisions of an applicable tax treaty.
In general, you will not be subject to backup withholding with
respect to payments on the debt securities that we make to you
provided that we do not have actual knowledge or reason to know
that you are a U.S. person, and we have received from you
the statement described above in the sixth bullet point under
Consequences to
Non-U.S. Holders
U.S. Federal Withholding Tax.
In addition, information reporting and backup withholding will
not apply to the proceeds of the sale of a debt security made
within the United States or conducted through certain
U.S. related financial intermediaries, if the payor
receives the statement described above and does not have actual
knowledge or reason to know that you are a U.S. person, or
you otherwise establish an exemption.
Any amounts withheld under the backup withholding rules will be
allowed as a refund or a credit against your U.S. federal
income tax liability provided the required information is
furnished to the IRS.
United
Kingdom and Netherlands Tax Considerations
The following summaries are based on the current law and
practice of the United Kingdom and The Netherlands, which are
subject to changes that could prospectively or retrospectively
or adversely affect the stated tax consequences.
Prospective
holders of debt securities who may be in any doubt as to their
respective tax positions should consult their own professional
advisors
.
United
Kingdom Tax Considerations
Although the position is not clear, we believe, based on a
consideration of the reported cases, that any payments of
interest made by Reed Elsevier PLC under its guarantee will not
be subject to United Kingdom withholding tax. However, if there
is a United Kingdom withholding tax liability, then, assuming
each beneficial owner of a debt security is a person who
satisfies the relevant conditions for exemption from United
Kingdom tax under any applicable income tax treaty and provided
Reed Elsevier PLC has received a direction to pay gross from the
United Kingdom Centre for Non-Residents, all payments to be made
by Reed Elsevier PLC under the guarantee may be made free and
clear of and without deductions for or on account of any taxes,
levies, imposts, duties, charges, assessments, fees or
withholdings of any kind under the laws of the United Kingdom.
No direction will be given by the United Kingdom Financial
Centre for
34
Non-Residents unless relevant forms have been completed by the
relevant holder of a debt security and certified by the
appropriate tax office applicable to the holder. See
Description of the Debt Securities and
Guarantees Payment of Additional Amounts above
for a description of the circumstances under which Reed Elsevier
PLC would be required to pay additional amounts.
Netherlands
Tax Considerations
All payments by Reed Elsevier Capital or Reed Elsevier NV, as
guarantor, as the case may be, of principal of and interest on
the debt securities may be made free of withholding or deduction
of, for or on account of any taxes of whatever nature imposed,
levied, withheld or assessed by The Netherlands or any political
subdivision or taxing authority of The Netherlands.
European
Union Tax Considerations
On June 3, 2003, the European Council of Economics and
Finance Ministers adopted a directive on the taxation of savings
income under which member states will be required, if a number
of important conditions are met and from July 1, 2005, to
provide the tax authorities of other member states with details
of payments of interest (or other similar income) paid by a
person within its jurisdiction to an individual in another
member state, except that, for a transitional period, Austria,
Belgium and Luxembourg will instead impose (unless during that
period they elect otherwise) a withholding system in relation to
such payments (the ending of such transitional period being
dependent upon the conclusion of certain other agreements
relating to information exchange with certain other countries).
35
PLAN OF
DISTRIBUTION
Reed Elsevier Capital may sell all or part of the debt
securities from time to time on terms determined at the time
those debt securities are offered for sale to or through
underwriters or through selling agents, and also may sell those
debt securities directly to other purchasers. The names of those
underwriters or selling agents used in connection with the offer
and sale of any series of debt securities will be set forth in
the applicable prospectus supplement.
The distribution of the debt securities may be effected from
time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at
the time of sale, at prices related to those prevailing market
prices or at negotiated prices. If underwriters are used in the
sale of debt securities, debt securities will be acquired by the
underwriters for their own account and may be resold from time
to time in one or more transactions. Those debt securities may
be offered to the public either through underwriting syndicates
represented by managing underwriters or underwriters without a
syndicate. Unless otherwise set forth in the prospectus
supplement, the obligations of the underwriters to purchase
those debt securities will be subject to certain conditions
precedent, and the underwriters will be obligated to purchase
all of those debt securities if any of those debt securities are
purchased.
In connection with the sale of debt securities, underwriters may
receive compensation from Reed Elsevier Capital or from
purchasers of debt securities for whom they may act as agents,
in the form of discounts, concessions or commissions.
Underwriters may sell debt securities to or through dealers, and
such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters
and/or
commissions from the purchasers for whom they may act as agents.
Underwriters, dealers and agents that participate in the
distribution of debt securities may be deemed to be
underwriters, and any discounts or commissions received by them
from Reed Elsevier Capital and any profit on the resale of debt
securities by them may be deemed to be underwriting discounts
and commissions, under the Securities Act. Any compensation
received from Reed Elsevier Capital will be described in the
prospectus supplement.
Underwriters, dealers, selling agents and other persons may be
entitled, under agreements which may be entered into with Reed
Elsevier Capital, to indemnification by Reed Elsevier Capital
against certain civil liabilities, including liabilities under
the Securities Act. Underwriters, dealers, selling agents and
other persons may be customers of, engage in transactions with,
or perform services for us in the ordinary course of business.
Each series of debt securities will be a new issue of securities
with no established trading market. In the event that debt
securities of a series offered by this prospectus are not listed
on a national securities exchange, certain broker-dealers may
make a market in the debt securities, but will not be obligated
to do so and may discontinue any market making at any time
without notice. No assurance can be given that any broker-dealer
will make a market in the debt securities of any series or as to
the liquidity of the trading market for the debt securities.
In order to facilitate the offering of the debt securities, any
underwriters or agents involved in the offering of debt
securities may engage in transactions that stabilize, maintain
or otherwise affect the price of the debt securities or any
other debt securities the prices of which may be used to
determine payments on those debt securities. Specifically, the
underwriters or agents may overallot in connection with the
offering, creating a short position in debt securities for their
own account. In addition, to cover overallotments or to
stabilize the price of debt securities or other securities, the
underwriters or agents may bid for, and purchase, debt
securities or any other securities in the open market. Finally,
in any offering of debt securities through a syndicate of
underwriters, the underwriting syndicate may reclaim selling
concessions allotted to an underwriter or a dealer for
distributing any debt securities in the offering if the
syndicate repurchases previously distributed securities in
transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the debt
securities above independent market levels. The underwriters or
agents, as the case may be, are not required to engage in these
activities, and may end any of these activities at any time.
36
LEGAL
MATTERS
Certain legal matters relating to the debt securities and the
guarantees will be passed upon for Reed Elsevier Capital, Reed
Elsevier PLC and Reed Elsevier NV by Simpson Thacher &
Bartlett LLP, New York, New York and for the underwriters,
if any, by Cravath, Swaine & Moore LLP, New York, New
York. Simpson Thacher & Bartlett LLP and Cravath,
Swaine & Moore LLP will rely upon the opinions of
Freshfields Bruckhaus Deringer LLP, English solicitors for Reed
Elsevier PLC and Netherlands counsel to Reed Elsevier NV, as to
applicable matters of English law and Netherlands law,
respectively.
EXPERTS
Our combined financial statements and related financial
statement schedule for the year ended December 31, 2007 filed on
Form 6-K
on November 26, 2008, incorporated by reference in this
prospectus have been audited by Deloitte Accountants B.V.,
Amsterdam, The Netherlands, independent auditors, and
Deloitte & Touche LLP, London, United Kingdom,
independent registered public accounting firm, as stated in
their joint report, which is incorporated by reference in this
prospectus, and have been so incorporated in reliance on those
firms joint report, given upon the authority of those
respective firms as experts in accounting and auditing.
The consolidated financial statements of Reed Elsevier PLC for
the year ended December 31, 2007 filed on
Form 6-K
on November 26, 2008, incorporated by reference in this
prospectus have been audited by Deloitte & Touche LLP,
London, United Kingdom, independent registered public
accounting firm, as stated in their report, which is
incorporated by reference in this prospectus, and have been so
incorporated in reliance on that firms report, given upon
their authority as experts in accounting and auditing.
The financial statements of Reed Elsevier NV for the year ended
December 31, 2007 filed on
Form 6-K
on November 26, 2008, incorporated by reference in this
prospectus have been audited by Deloitte Accountants B.V.,
Amsterdam, The Netherlands, independent registered public
accounting firm, as stated in their report, which is
incorporated by reference in this prospectus, and have been so
incorporated in reliance upon that firms report, given
upon their authority as experts in accounting and auditing.
37
Part II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 8.
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Indemnification
of Directors and Officers
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Except as hereinafter set forth, there is no provision of the
memorandum and articles of association of Reed Elsevier PLC or
Reed Elsevier NV or any contract, arrangement or statute under
which any director or officer of Reed Elsevier PLC or Reed
Elsevier NV is insured or indemnified in any manner against any
liability that he may incur in his capacity as such.
Article 233 of Reed Elsevier PLCs Articles of
Association provides:
Subject to the provisions of the Companies Acts, but
without prejudice to any indemnity to which the person concerned
may otherwise be entitled, every director or other officer of
the Company (other than any person (whether an officer or not)
engaged by the Company as auditor) shall be indemnified out of
the assets of the Company against any liability incurred by him
for negligence, default, breach of duty or breach of trust in
relation to the affairs of the Company, provided that this
Article shall be deemed not to provide for, or entitle any such
person to, indemnification to the extent that it would cause
this Article, or any element of it, to be treated as void under
the Act or otherwise under the Companies Acts.
Section 232 of the Companies Act 2006 provides as follows:
Any provision that purports to exempt a director of a
company (to any extent) from any liability that would otherwise
attach to him in connection with any negligence, default, breach
of duty or breach of trust in relation to the company is void.
Any provision by which a company directly or indirectly provides
an indemnity (to any extent) for a director of the company, or
of an associated company, against any liability attaching to him
in connection with any negligence, default, breach of duty or
breach of trust in relation to the company of which he is a
director is void, except as permitted by:
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(a)
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purchasing and maintaining for a director of the company
insurance against any such liability,
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(b)
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from indemnifying the director against liability incurred by the
director to a person other than the company or an associated
company ( a qualifying third party indemnity
provision), or
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(c)
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from indemnifying a director of a company that is a trustee of
an occupational pension scheme against liability incurred in
connection with the companys activities as trustee of the
scheme (a qualifying pension scheme indemnity
provision).
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This section applies to any provision, whether contained in a
companys articles or in any contract with the company or
otherwise.
Nothing in this section prevents a companys articles from
making such provision as has previously been lawful for dealing
with conflicts of interest.
As permitted by Section 102(b)(7) of the Delaware General
Corporation Law, Reed Elsevier Capital Inc.s Certificate
of Incorporation eliminates a directors personal liability
for monetary damages to Reed Elsevier Capital Inc. and its
stockholders arising from a breach of a directors
fiduciary duty, except:
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for liability with respect to an illegal dividend or stock
repurchase under Section 174 of the Delaware General
Corporation Law;
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for liability for a breach of the directors duty of
loyalty to Reed Elsevier Capital Inc. or its stockholders;
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for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
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for any transaction in which the director derived an improper
personal benefit.
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II-1
The effect of this provision in the Certificate or Incorporation
is to eliminate the rights of Reed Elsevier Capital Inc. and its
stockholders (through stockholders derivative suits on
behalf of Reed Elsevier Capital Inc.) to recover monetary
damages against a director for breach of fiduciary duty as a
director (including breaches resulting from negligent or grossly
negligent behavior) except in the situations described above.
Article V of Reed Elsevier Capital Inc.s By-Laws
provides:
To the fullest extent permitted by the Delaware General
Corporation law, the Corporation shall indemnify any current or
former Director or Officer of the Corporation and may, at the
discretion of the Board of Directors, indemnify any current or
former employee or agent of the Corporation against all
expenses, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding
brought by or in the right of the Corporation or otherwise, to
which he was or is a party by reason of his current or former
position with the Corporation or by reason of the fact that he
is or was serving, at the request of the Corporation, as a
director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise.
Section 145 of the Delaware General Corporation Law permits
corporations to indemnify any director or officer of the
corporation against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person in connection with such
action, suit or proceeding if the person acted in good faith and
in a manner the 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 the persons conduct was unlawful.
Article 31.2 of the Articles of Association of Reed
Elsevier NV provides:
At the General Meeting of Shareholders at which it is
resolved to adopt the annual accounts, separate proposals can be
brought up for discussion concerning release of the Executive
Board members and of the Supervisory Board members from
liability for the performance of their respective duties,
insofar as the exercise of their duties is reflected in the
annual accounts or otherwise disclosed to the General Meeting
prior to the adoption of the annual accounts. The scope of a
granted release from liability is subject to statutory
restrictions.
Under Netherlands law, this discharge is not absolute and would
not be effective as to any matters not disclosed to the
companys shareholders.
The Articles of Association of Reed Elsevier NV contain
provisions under which the members of its executive board or the
members of its supervisory board are indemnified against
liabilities which such individuals may incur in their respective
capacities. Article 29A of the Articles of Association of
Reed Elsevier NV (the Company) provides as follows:
29A.1 To the extent permissible by law, the
Company shall indemnify and hold harmless each sitting and
former member of the executive board (the Executive
Board) and of the supervisory board (the Supervisory
Board) (each of them, for the purpose of this
Article 29A only, an Indemnified Person),
against the financial consequences of any and all liabilities,
claims, judgements, fines, expenses and penalties incurred by
the Indemnified Person as a result of any threatened, pending or
completed action, investigation or other proceeding, whether
civil, criminal or administrative (each, a Legal
Action), brought by any party other than the Company
itself or its group companies (the Group Companies),
in relation to acts or omissions of the Indemnified Person
performed or committed in that persons capacity of member
of the Executive Board or of the Supervisory Board or a capacity
relating thereto (Claims). The body of the Company
consisting of the Supervisory Board and Executive Board (the
Combined Board) may submit such indemnification and
obligation to hold harmless to reasonable conditions as to the
acts and omissions of the Indemnified Person for the purpose of
limiting damages and with respect to the provision of
information. Claims will include derivative actions brought on
behalf of the Company or its Group Companies against the
Indemnified Person and claims by the Company (or any of its
Group
II-2
Companies) itself for reimbursement for claims by third parties
on the ground that the Indemnified Person was jointly liable
toward that third party in addition to the Company.
29A.2 The Indemnified Person will not be indemnified
with respect to Claims in so far as they relate to the gaining
in fact of personal profits, advantages or remuneration to which
he was not legally entitled, or if the Indemnified Person shall
have been adjudged to be liable for wilful misconduct
(
opzet
) or intentional recklessness (
bewuste
roekeloosheid
).
29A.3 Any expenses (including reasonable
attorneys fees and litigation costs) (collectively,
Expenses) incurred by the Indemnified Person in
connection with any Legal Action shall be settled or reimbursed
by the Company, but only upon receipt of a written undertaking
by that Indemnified Person that he shall repay such Expenses if
a competent Court in an irrevocable judgement should determine
that he is not entitled to be indemnified. Expenses shall be
deemed to include any tax liability which the Indemnified Person
may be subject to as a result of his indemnification.
29A.4 Also in case of a Legal Action against the
Indemnified Person by the Company itself or its Group Companies,
the Company will settle or reimburse to the Indemnified Person
his reasonable attorneys fees and litigation costs, but
only upon receipt of a written undertaking by that Indemnified
Person that he shall repay such fees and costs if a competent
Court in an irrevocable judgement should resolve the Legal
Action in favour of the Company or the relevant Group Company
rather than the Indemnified Person.
29A.5 The indemnity contemplated by this
Article 29A shall not apply to the extent Claims and
Expenses are reimbursed by insurers.
29A.6 The Company will provide for and bear the cost
of adequate insurance covering Claims against Executive Board
members and Supervisory Board members (D&O insurance),
unless such insurance cannot be obtained at reasonable terms.
29A.7 This Article 29A can be amended without
the consent of the Indemnified Persons as such. However, the
indemnification and obligation to hold harmless provided herein
shall nevertheless continue to apply to Claims
and/or
Expenses incurred in relation to the acts or omissions by the
Indemnified Person during the periods in which this clause was
in effect.
Officers and, possibly, members or the executive board and
supervisory board or Reed Elsevier NV will, under the laws of
The Netherlands, be entitled to indemnification as subordinate
for liabilities incurred vis-à-vis third parties in the
execution and discharge of their duties unless such officer or
member of the executive board or supervisory board acted
willfully or recklessly.
Any underwriters of securities registered on this registration
statement will each agree, severally, to indemnify the directors
and officers of Reed Elsevier PLC, Reed Elsevier Capital Inc.
and Reed Elsevier NV who sign the registration statement and
their authorized representative in the United States from and
against certain civil liabilities based on information relating
to such underwriter furnished in writing by such underwriter
expressly for use herein.
In addition, Reed Elsevier PLC, Reed Elsevier Capital Inc. and
Reed Elsevier NV have each obtained directors and
officers insurance coverage, which subject to policy terms
and limitations, includes coverage to reimburse each company for
amounts that it may be required or permitted by law to pay
directors or officers.
II-3
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Exhibit
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Number
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Exhibit Description
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1
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Form of Underwriting Agreement*
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4
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.1
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Indenture dated May 9, 1995 among Reed Elsevier Capital
Inc., as Issuer, Reed International P.L.C., Elsevier N.V., as
Guarantors, and The Chase Manhattan Bank, N.A., as Trustee
(incorporated by reference to Exhibit 4(a) to the
Registration Statement on
Form F-3,
File
No. 333-6710-02,
filed with the SEC on April 1, 1997)
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4
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.2
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Supplemental Indenture No. 1 dated May 9, 1995 among
Reed Elsevier Capital Inc., as Issuer, Reed International
P.L.C., Elsevier NV, Elsevier I BV as Guarantors, and The Chase
Manhattan Bank, as Trustee (incorporated by reference to
Exhibit 4(b) to the Registration Statement on
Form F-3,
File
No. 333-13188-02,
filed with the SEC on April 16, 2001)
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4
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.3
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Supplemental Indenture No. 2 dated June 3, 1998 among
Reed Elsevier Capital Inc., as Issuer, Reed International
P.L.C., Elsevier NV, Elsevier I BV as Guarantors, and The Chase
Manhattan Bank as Trustee (incorporated by reference to
Exhibit 4(c) to the Registration Statement on
Form F-3,
File
No. 333-13188-02,
filed with the SEC on April 16, 2001)
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4
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.4
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Third Supplemental Indenture dated February 21, 2001 among
Reed Elsevier Capital Inc., as Issuer, Reed International P.L.C.
and Elsevier NV as Guarantors, and The Chase Manhattan Bank, as
Trustee (incorporated by reference to Exhibit 4(d) to the
Registration Statement on
Form F-3,
File
No. 333-13188-02,
filed with the SEC on April 16, 2001)
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4
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.5
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Fourth Supplemental Indenture dated July 31, 2001 among
Reed Elsevier Capital Inc., as Issuer, Reed International P.L.C
and Elsevier NV as Guarantors, The Chase Manhattan Bank, as
Trustee, The Chase Manhattan Bank, London Branch, as London
Paying Agent, and Chase Manhattan Bank Luxembourg S.A. as
Luxembourg Paying Agent
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4
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.6
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|
Form of Note (global registered form) (incorporated by reference
to Exhibit 4(b) to the Registration Statement on
Form F-1,
File
No. 333-91126,
filed with the SEC on May 1, 1995)
|
|
4
|
.7
|
|
Form of Note (definitive form) (incorporated by reference to
Exhibit 4(c) to the Registration Statement on
Form F-1,
File
No. 333-91126,
filed with the SEC on May 1, 1995)
|
|
4
|
.8
|
|
Calculation Agency Agreement, dated as of May 9, 1995,
among Reed Elsevier Capital Inc. Reed International P.L.C,
Elsevier NV and The Chase Manhattan Bank (incorporated by
reference to Exhibit 4(d) to the Registration Statement on
Form F-3,
File
No. 333-6710-02,
filed with the SEC on April 1, 1997)
|
|
5
|
.1
|
|
Opinion of Simpson Thacher & Bartlett LLP*
|
|
5
|
.2
|
|
Opinion of Freshfields Bruckhaus Deringer LLP as to U.K. law*
|
|
5
|
.3
|
|
Opinion of Freshfields Bruckhaus Deringer LLP as to Netherlands
law*
|
|
23
|
.1
|
|
Consent of Simpson Thacher & Bartlett LLP
|
|
23
|
.2
|
|
Consent of Freshfields Bruckhaus Deringer LLP as to U.K. law
|
|
23
|
.3
|
|
Consent of Freshfields Bruckhaus Deringer LLP as to Netherlands
law
|
|
23
|
.4
|
|
Independent registered public accounting firms
consent Reed Elsevier audited combined financial
statements
|
|
23
|
.5
|
|
Independent registered public accounting firms
consent Reed Elsevier PLC audited consolidated
financial statements
|
|
23
|
.6
|
|
Independent registered public accounting firms
consent Reed Elsevier NV audited consolidated
financial statements
|
|
24
|
.1
|
|
Powers of Attorney (included on signature pages)
|
|
25
|
.1
|
|
Statement of eligibility of Trustee
|
|
|
|
*
|
|
To be filed by amendment or as an exhibit to a report filed or
submitted pursuant to Section 13(a) or 15(d) of the U.S.
Securities Exchange Act of 1934, as amended.
|
II-4
(a) The undersigned registrant hereby undertakes:
(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 of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) (§ 230.424(b) of this chapter) if, in
the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set
forth in the Calculation of Registration Fee table
in the effective registration statement.
(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 (a)(1)(i), (a)(1)(ii)
and (a)(1)(iii) of this section 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 Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered 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 Act need not be furnished,
provided
that the registrant includes in the prospectus,
by means of a post-effective amendment, financial statements
required pursuant to this paragraph (a)(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, with respect to
registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and
information required by Section 10(a)(3) of the Act if such
financial statements and information are contained in periodic
reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the Form F-3.
(5) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant 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
II-5
Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the
Securities Act of 1933 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 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; or
(6) That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant 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 registrant will be a seller 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 registrant relating to the offering required to be
filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(7) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide
offering thereof.
(b) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act, the
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, thereunder duly authorized, in
the city of London, England on November 26, 2008.
REED ELSEVIER PLC
Registrant
|
|
|
|
By:
|
/s/
Sir
Crispin Davis
|
Sir Crispin Davis
Chief Executive Officer
POWER OF
ATTORNEY
Know all persons by these
presents,
that each person whose signature appears below
constitutes and appoints Stephen J. Cowden, Leslie Dixon and
Henry Z. Horbaczewski and each of them (with full power to each
of them to act alone) his true and lawful attorney-in-fact and
agent, with full power of substitution, and resubstitution, for
him and in his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective
amendments) to this Registration Statement or any registration
statement in connection herewith that is to be effective upon
filing pursuant to Rule 462(b) of the Securities Act of
1933, as amended, and to file the same with all exhibits thereto
and other documents in connection therewith with the Securities
and Exchange Commission granting unto said attorneys-in-fact and
agents, 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 and about the premises as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, or their substitutes, may lawfully do or cause to be done
by virtue hereof.
II-7
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following person
in the capacities indicated below on November 26, 2008.
REED
ELSEVIER PLC
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/
Sir
Crispin Davis
Sir
Crispin Davis
|
|
Chief Executive Officer (Principal Executive Officer)
and Director
|
|
|
|
/s/
Mark
Armour
Mark
Armour
|
|
Chief Financial Officer (Principal Financial and Accounting
Officer) and Director
|
|
|
|
/s/
Gerard
van de Aast
Gerard
van de Aast
|
|
Director
|
|
|
|
/s/
Mark
Elliott
Mark
Elliott
|
|
Director
|
|
|
|
/s/
Erik
Engstrom
Erik
Engstrom
|
|
Director
|
|
|
|
/s/
Johannes
Hommen
Johannes
Hommen
|
|
Chairman and Director
|
|
|
|
|
|
Director
|
|
|
|
/s/
Robert
Polet
Robert
Polet
|
|
Director
|
|
|
|
/s/
Andrew
Prozes
Andrew
Prozes
|
|
Director
|
|
|
|
/s/
David
Reid
David
Reid
|
|
Director
|
|
|
|
|
|
Director
|
|
|
|
/s/
Henry
Z. Horbaczewski
Henry
Z. Horbaczewski
|
|
Authorized U.S. Representative
|
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act, the
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, thereunder duly authorized, in
the city of London, England on November 26, 2008.
REED ELSEVIER NV
Registrant
|
|
|
|
By:
|
/s/
Sir
Crispin Davis
|
Sir Crispin Davis
Chief Executive Officer
POWER OF
ATTORNEY
Know all persons by these
presents,
that each person whose signature appears below
constitutes and appoints Stephen J. Cowden, Leslie Dixon and
Henry Z. Horbaczewski and each of them (with full power to each
of them to act alone) his true and lawful attorney-in-fact and
agent, with full power of substitution, and resubstitution, for
him and in his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective
amendments) to this Registration Statement or any registration
statement in connection herewith that is to be effective upon
filing pursuant to Rule 462(b) of the Securities Act of
1933, as amended, and to file the same with all exhibits thereto
and other documents in connection therewith with the Securities
and Exchange Commission granting unto said attorneys-in-fact and
agents, 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 and about the premises as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of
them, or their substitutes, may lawfully do or cause to be done
by virtue hereof.
II-9
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed by the following person
in the capacities indicated below on November 26, 2008.
REED
ELSEVIER NV
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/
Sir
Crispin Davis
Sir
Crispin Davis
|
|
Chief Executive Officer (Principal Executive Officer) and
Director
|
|
|
|
/s/
Mark
Armour
Mark
Armour
|
|
Chief Financial Officer (Principal Financial and Accounting
Officer) and Director
|
|
|
|
/s/
Gerard
van de Aast
Gerard
van de Aast
|
|
Director
|
|
|
|
/s/
Mark
Elliott
Mark
Elliott
|
|
Director
|
|
|
|
/s/
Erik
Engstrom
Erik
Engstrom
|
|
Director
|
|
|
|
/s/
Johannes
Hommen
Johannes
Hommen
|
|
Chairman and Director
|
|
|
|
|
|
Director
|
|
|
|
/s/
Robert
Polet
Robert
Polet
|
|
Director
|
|
|
|
/s/
Andrew
Prozes
Andrew
Prozes
|
|
Director
|
|
|
|
/s/
David
Reid
David
Reid
|
|
Director
|
|
|
|
|
|
Director
|
|
|
|
|
|
Director
|
|
|
|
/s/
Henry
Z. Horbaczewski
Henry
Z. Horbaczewski
|
|
Authorized U.S. Representative
|
II-10
Exhibit Index
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Exhibit Description
|
|
|
1
|
|
|
Form of Underwriting Agreement*
|
|
4
|
.1
|
|
Indenture dated May 9, 1995 among Reed Elsevier Capital
Inc., as Issuer, Reed International P.L.C., Elsevier N.V., as
Guarantors, and The Chase Manhattan Bank, N.A., as Trustee
(incorporated by reference to Exhibit 4(a) to the
Registration Statement on
Form F-3,
File
No. 333-6710-02,
filed with the SEC on April 1, 1997)
|
|
4
|
.2
|
|
Supplemental Indenture No. 1 dated May 9, 1995 among
Reed Elsevier Capital Inc., as Issuer, Reed International
P.L.C., Elsevier NV, Elsevier I BV as Guarantors, and The Chase
Manhattan Bank, as Trustee (incorporated by reference to
Exhibit 4(b) to the Registration Statement on
Form F-3,
File
No. 333-13188-02,
filed with the SEC on April 16, 2001)
|
|
4
|
.3
|
|
Supplemental Indenture No. 2 dated June 3, 1998 among
Reed Elsevier Capital Inc., as Issuer, Reed International
P.L.C., Elsevier NV, Elsevier I BV as Guarantors, and The Chase
Manhattan Bank as Trustee (incorporated by reference to
Exhibit 4(c) to the Registration Statement on
Form F-3,
File
No. 333-13188-02,
filed with the SEC on April 16, 2001)
|
|
4
|
.4
|
|
Third Supplemental Indenture dated February 21, 2001 among
Reed Elsevier Capital Inc., as Issuer, Reed International P.L.C.
and Elsevier NV as Guarantors, and The Chase Manhattan Bank, as
Trustee (incorporated by reference to Exhibit 4(d) to the
Registration Statement on
Form F-3,
File
No. 333-13188-02,
filed with the SEC on April 16, 2001)
|
|
4
|
.5
|
|
Fourth Supplemental Indenture dated July 31, 2001 among
Reed Elsevier Capital Inc., as Issuer, Reed International P.L.C
and Elsevier NV as Guarantors, The Chase Manhattan Bank, as
Trustee, The Chase Manhattan Bank, London Branch, as London
Paying Agent, and Chase Manhattan Bank Luxembourg S.A. as
Luxembourg Paying Agent
|
|
4
|
.6
|
|
Form of Note (global registered form) (incorporated by reference
to Exhibit 4(b) to the Registration Statement on
Form F-1,
File
No. 333-91126,
filed with the SEC on May 1, 1995)
|
|
4
|
.7
|
|
Form of Note (definitive form) (incorporated by reference to
Exhibit 4(c) to the Registration Statement on
Form F-1,
File
No. 333-91126,
filed with the SEC on May 1, 1995)
|
|
4
|
.8
|
|
Calculation Agency Agreement, dated as of May 9, 1995,
among Reed Elsevier Capital Inc. Reed International P.L.C,
Elsevier NV and The Chase Manhattan Bank (incorporated by
reference to Exhibit 4(d) to the Registration Statement on
Form F-3,
File
No. 333-6710-02,
filed with the SEC on April 1, 1997)
|
|
5
|
.1
|
|
Opinion of Simpson Thacher & Bartlett LLP*
|
|
5
|
.2
|
|
Opinion of Freshfields Bruckhaus Deringer LLP as to U.K. law*
|
|
5
|
.3
|
|
Opinion of Freshfields Bruckhaus Deringer LLP as to Netherlands
law*
|
|
23
|
.1
|
|
Consent of Simpson Thacher & Bartlett LLP
|
|
23
|
.2
|
|
Consent of Freshfields Bruckhaus Deringer LLP as to U.K. law
|
|
23
|
.3
|
|
Consent of Freshfields Bruckhaus Deringer LLP as to Netherlands
law
|
|
23
|
.4
|
|
Independent registered public accounting firms
consent Reed Elsevier audited combined financial
statements
|
|
23
|
.5
|
|
Independent registered public accounting firms
consent Reed Elsevier PLC audited consolidated
financial statements
|
|
23
|
.6
|
|
Independent registered public accounting firms
consent Reed Elsevier NV audited consolidated
financial statements
|
|
24
|
.1
|
|
Powers of Attorney (included on signature pages)
|
|
25
|
.1
|
|
Statement of eligibility of Trustee
|
|
|
|
*
|
|
To be filed by amendment or as an exhibit to a report filed or
submitted pursuant to Section 13(a) or 15(d) of the U.S.
Securities Exchange Act of 1934, as amended.
|
EXHIBIT 4.5
REED ELSEVIER CAPITAL INC.,
as Issuer,
and
REED INTERNATIONAL P.L.C. and
ELSEVIER NV,
as Guarantors,
THE CHASE MANHATTAN BANK,
as Trustee,
THE CHASE MANHATTAN BANK, LONDON BRANCH
as London Paying Agent, and
CHASE MANHATTAN BANK LUXEMBOURG S.A.
as Luxembourg Paying Agent
FOURTH SUPPLEMENTAL INDENTURE
Dated as of July 31, 2001
to
INDENTURE
Dated as of May 9, 1995
Guaranteed Debt Securities
FOURTH SUPPLEMENTAL INDENTURE, dated as of July 31, 2001 (Fourth Supplemental Indenture),
among Reed Elsevier Capital Inc., a corporation incorporated under the laws of the State of
Delaware, as issuer (the Issuer), each of Reed International P.L.C., a public limited company
incorporated in England, and Elsevier NV, a public company with limited liability incorporated
under the laws of The Netherlands, as guarantors (each individually, a Guarantor and
collectively, the Guarantors), The Chase Manhattan Bank, as trustee (the Trustee), The Chase
Manhattan Bank, London Branch, as London Paying Agent and Chase Manhattan Bank Luxembourg S.A., as
Luxembourg Paying Agent.
RECITALS
WHEREAS, the Issuer, the Guarantors and the Trustee entered into an indenture, dated as of May
9, 1995 (as amended and supplemented, the Indenture; terms not defined herein are used with the
meanings ascribed to them in the Indenture) providing for the issuance from time to time of the
Issuers Debt Securities, to be issued in one or more series as provided in the Indenture;
WHEREAS, there are presently issued and outstanding under the Indenture $150,000,000 principal
amount of 7% Notes due May 15, 2005 and $150,000,000 principal amount of 7.5% Notes due May 15,
2025, each outstanding series being guaranteed, jointly and severally, by the Guarantors, and the
Trustee has been appointed as trustee for each outstanding series;
WHEREAS, Section 901(8) of the Indenture provides that, without the consent of any Holders of
Debt Securities, the Issuer and each Guarantor, when authorized by a Board Resolution, and the
Trustee for the Debt Securities, at any time and from time to time, may enter into one or more
indentures supplemental to the Indenture in form satisfactory to such Trustee to add to the
conditions, limitations and restrictions on the form, terms or purposes of a series of Debt
Securities;
WHEREAS, the Issuer and each Guarantor desires to appoint The Chase Manhattan Bank, London
Branch as London Paying Agent hereunder and Chase Manhattan Bank Luxembourg S.A. as Luxembourg
Paying Agent hereunder and The Chase Manhattan Bank, London Branch and Chase Manhattan Bank
Luxembourg S.A. desire to accept such appointment on the terms and conditions set forth herein;
WHEREAS, the Issuer and each Guarantor have each been authorized by a duly adopted Board
Resolution to enter into this Fourth Supplemental Indenture;
WHEREAS, the Issuer and each Guarantor have delivered to the Trustee such certificates or
opinions as may be required and requested pursuant to the Indenture; and
WHEREAS, all things necessary to make this Fourth Supplemental Indenture a valid agreement of
the Issuer and each Guarantor in accordance with its terms have been done and performed.
NOW THEREFORE, in consideration of the promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Issuer,
each Guarantor and the Trustee hereby mutually covenant and agree
2
for the equal and proportionate benefit of all Holders of the Debt Securities originally issued
after the date hereof, as follows:
1.
Amendment of Section 101
.
a. The following definitions are hereby added in appropriate alphabetical sequence:
Component Currency shall mean any currency which is a component currency of any
currency unit.
Conversion Event means the unavailability of any Foreign Currency or currency unit
due to the imposition of exchange controls or other circumstances beyond the Issuers
control in each case as determined in good faith by the Issuer.
Currency Determination Agent, with respect to Debt Securities of any series, means, a
Person designated pursuant to a Board Resolution or an Officers Certificate.
Foreign Currency means a currency issued and actively maintained as a countrys
recognized unit of domestic exchange by the government of any country other than the United
States and such term shall include the euro.
Judgment Date has the meaning specified in Section 516.
London Paying Agent means The Chase Manhattan Bank, London Branch or any other Person
authorized by the Issuer to serve as London Paying Agent and to pay the principal of (and
premium, if any) or interest, if any, on any Debt Securities of any series denominated in a
Foreign Currency on behalf of the Issuer.
Luxembourg Paying Agent means Chase Manhattan Bank Luxembourg S.A. or any other
Person authorized by the Issuer to serve as Luxembourg Paying Agent so long as any Debt
Securities of any series are listed on the Luxembourg Stock Exchange and to pay the
principal of (and premium, if any) or interest, if any, on any Debt Securities of any series
in definitive form in accordance with the terms hereof.
Market Exchange Rate with respect to any Foreign Currency or currency unit on any
date means, unless otherwise specified in accordance with Section 301, the noon buying rate
in The City of New York for cable transfers in such Foreign Currency or currency unit as
certified for customs purposes by the Federal Reserve Bank of New York for such Foreign
Currency or currency unit.
Place of Payment, when used with respect to the Debt Securities of any particular
series, means the place or places where the principal of (and premium, if any) and interest,
if any, on the Securities of that series are payable, as contemplated by Section 301.
Principal Financial Center means, unless otherwise specified in accordance with
Section 301, the capital city of the country issuing the Foreign Currency or currency unit,
except that with respect to Dollars, Australian dollars, Canadian dollars, Deutsche marks,
Dutch guilders, South African rand and Swiss francs, the Principal Financial Center
3
will be The City of New York, Sydney and Melbourne, Toronto, Frankfurt, Amsterdam,
Johannesburg and Zurich, respectively.
Substitute Date has the meaning specified in Section 516.
b. Section 101 is hereby amended and supplemented by deleting the definition of Business Day
and Depositary contained therein and replacing each such definition with the following
corresponding definition:
Business Day shall mean any day, other than a Saturday or Sunday or a day on which
commercial banks are authorized or required by law, regulation or executive order to close
in The City of New York;
provided, however
, that, with respect to Debt Securities not
denominated in Dollars, the day is not (i) a day on which commercial banks are authorized or
required by law, regulation or executive order to close in London or (ii) a day on which
commercial banks are authorized or required by law, regulation or executive order to close
in the Principal Financial Center of the country issuing the Foreign Currency or currency
unit or, if the Foreign Currency or currency unit is euro, a day on which the Trans-European
Automated Real-time Gross Settlement Express Transfer (TARGET) System is closed.
Depositary means, with respect to the Debt Securities of any series issuable or
issued in the form of a Global Security, the Person designated as Depositary by the Issuer
pursuant to Section 301 (which may include a common depositary of Debt Securities on behalf
of Clearstream Banking,
société anonyme
, Luxembourg or Euroclear Bank S.A./N.V., each in its
capacity as Depositary) until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter Depositary shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more than one
such Person, Depositary as used with respect to the Debt Securities of any such series
shall mean the Depositary with respect to the Debt Securities of that series, provided, that
nothing herein shall prevent a series of Debt Securities from having more than one
Depositary.
c. Section 101 is hereby amended and supplemented by deleting the definition of U.S.
Government Obligations contained therein and replacing such definition with the following
definition:
Government Obligations means securities which are (i) direct obligations (or
certificates representing an ownership interest in such obligation) of the government which
issued the currency in which the Debt Securities of a particular series are payable (except
as provided in Section 313(b), in which case with respect to Debt Securities for which a
Conversion Event has occurred as provided in Section 313(b), such obligations shall be
issued in the currency or currency unit in which such Debt Securities are payable as a
result of such Conversion Event) or (ii) obligations of a Person controlled or supervised by
or acting as an agency or instrumentality of the government which issued the currency in
which the Debt Securities of such series are payable (except as provided in Section 313(b),
in which case with respect to Debt Securities for which a Conversion Event has occurred as
provided in Section 313(b), such obligations shall be issued in the currency or currency
unit in which such Debt Securities are payable as a result of such Conversion Event), the
payment of which is unconditionally guaranteed by such
4
government, which, in either case, are full faith and credit obligations of such government
payable in such currency and are not callable or redeemable at the option of the Issuer or
either Guarantor thereof.
2.
Amendment of Section 301
.
a. Section 301 is amended by adding the following language to the end of subsection (8)
thereof:
and the particular provisions applicable thereto, in accordance with, in addition to
or in lieu of the provisions of Section 313
b. Section 301 is amended and supplemented by deleting the word and at the end of subsection
(19), inserting the following subsections (20), (21) and (22) after subsection (19) thereof and
renumbering subsection (20) as subsection (23):
(20) if other than Dollars, provisions, if any, for the Debt Securities of the series
to be denominated, and payments thereon to be made, in Foreign Currencies and specifying the
manner and place of payment thereon and any other terms with respect thereto and, if other
than as provided herein, the manner of determining the equivalent thereof in Dollars for
purposes of the definition of Outstanding in Section 101;
(21) if other than the coin or currency in which the Debt Securities of that series are
denominated, the coin or currency in which payment of the principal of (and premium, if any)
or interest, if any, on the Debt Securities of such series shall be payable, and the time
and manner of determining the exchange rate between the currency or currency unit in which
such Debt Securities are denominated or stated to be payable and the currency or currency
unit in which such Debt Securities are to be so payable;
(22) the designation of the original Currency Determination Agent, if any; and
3.
Amendment of Section 303.
Section 303 is amended and supplemented by deleting the
existing ninth paragraph and replacing it with the following:
Each Depositary designated pursuant to Section 301 for a Global Security (other than a common
depositary of Debt Securities on behalf of Clearstream Banking,
société anonyme
, Luxembourg or
Euroclear Bank S.A./N.V.) must at the time of its designation and at all times while it serves as
such Depositary be a clearing agency registered under the Exchange Act and any other applicable
statute or regulation.
4.
Amendment of Section 307
. Section 307 is amended and supplemented by adding the
following paragraphs at the end thereof:
Notwithstanding anything to the contrary herein, a Holder of $1,000,000 or more in aggregate
principal amount of Debt Securities of any series of Global Securities (or its equivalent in a
Foreign Currency, if such Debt Securities are denominated in a Foreign Currency), whether having
identical or different terms and provisions, having the same interest payment dates will be
entitled to receive interest payments, other than at Maturity, by wire transfer of immediately
available funds if appropriate wire transfer instructions have been received in writing by the
Trustee for the Debt Securities of such series at least 15 days prior to
5
the applicable interest payment date. In addition to the foregoing, a Holder of $1,000,000 or more
in aggregate principal amount of Debt Securities of any series of Global Securities (or its
equivalent in a Foreign Currency, if such Debt Securities are denominated in a Foreign Currency),
whether having identical or different terms and provisions, having the same Maturity will be
entitled to receive payment at Maturity by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the Trustee for the Debt
Securities of such series at least 15 days prior to Maturity;
provided; however
, that such payments
shall be made subject to applicable laws and regulations;
provided; further
that the Issuer and
Guarantors shall satisfy their obligations pursuant to this Section 307 by paying to the
Depositary, or its nominee, as the case may be, such interest payments or payment at maturity by
wire transfer of immediately available funds. Any wire instructions received by the Trustee for
the Debt Securities of such series shall remain in effect until revoked in writing by the Holder.
5.
Amendment of Article Three
. Article Three is amended and supplemented by adding
the following Sections 313 and 314 at the end thereof:
Section 313. Payments on Debt Securities denominated in a Foreign Currency.
Unless otherwise specified in accordance with Section 301 with respect to any series of Debt
Securities, the following provisions shall apply:
a. Except as set forth below, the principal of, premium, if any, and interest on Debt
Securities of any series will be payable by the Issuer and the Guarantors, as the case may be, in
the currency or currency unit in which the Debt Securities of such series are denominated.
b. If a Conversion Event occurs with respect to a Foreign Currency or currency unit in which
Debt Securities of any series are payable, then with respect to each date for the payment of
principal of, premium, if any, and interest on the Debt Securities of that series occurring after
the last date on which such Foreign Currency or currency unit was used, the Issuer and the
Guarantors, as the case may be, may make such payment in Dollars. The Dollar amount to be paid by
the Issuer and the Guarantors, as the case may be, to the Trustee for the Debt Securities of such
series and by such Trustee or any Paying Agent for the Debt Securities of such series to the
Holders of such Debt Securities with respect to such payment date shall be determined by the
Currency Determination Agent on the basis of the Market Exchange Rate as of the second Business Day
preceding the applicable payment date or, if such Market Exchange Rate is not then available, on
the basis of the most recently available Market Exchange Rate, or as otherwise established pursuant
to Section 301 with respect to such series of Debt Securities. Any payment in respect of such Debt
Security made under such circumstances in Dollars will not constitute an Event of Default
hereunder.
c. Notwithstanding any other provisions of this Section 313, the following shall apply: (i)
if the official unit of any Component Currency is altered by way of combination or subdivision, the
number of units of that currency as a component shall be divided or multiplied in the same
proportion, (ii) if two or more Component Currencies are consolidated into a single currency, the
amounts of those currencies as components shall be replaced by an amount in such single currency
equal to the sum of the amounts of the consolidated Component Currencies expressed in such a single
currency, (iii) if any Component Currency is divided into two or more currencies, the amount of
that original Component Currency as a component shall be replaced by the amounts of such two or
more currencies having an aggregate value on the date of division
6
equal to the amount of the former Component Currency immediately before such division and (iv) in
the event of an official redenomination of any currency (including, without limitation, a currency
unit), the obligations of the Issuer and Guarantors to make payments in or with reference to such
currency on the Debt Securities of any series shall, in all cases, be deemed immediately following
such redenomination to be obligations to make payments in or with reference to that amount of
redenominated currency representing the amount of such currency immediately before such
redenomination.
d. All determinations referred to in this Section 313 made by the Currency Determination Agent
shall be in its sole discretion and shall, in the absence of manifest error, be conclusive for all
purposes and irrevocably binding upon the Holders of the applicable Debt Securities. The Currency
Determination Agent shall promptly give written notice to the Trustee for the Securities of such
series of any such decision or determination.
e. The Trustee for the Debt Securities of a particular series shall be fully justified and
protected in relying and acting upon information received by it from the Issuer, any Guarantor or
the Currency Determination Agent with respect to any of the matters addressed in or contemplated by
this Section 313 and shall not otherwise have any duty or obligation to determine such information
independently.
Section 314. No Commingling of Funds; Determining Principal Amount.
Subject to Section 313, each reference to any currency or currency unit in any Debt Security,
or in the Board Resolution or Officers Certificate or supplemental indenture relating thereto,
shall mean only the referenced currency or currency unit and no other currency or currency unit.
The Trustee and each Paying Agent shall segregate moneys, funds and accounts held by the
Trustee and such Paying Agent in one currency or currency unit from any moneys, funds or accounts
held in any other currencies or currency units, notwithstanding any provision herein which would
otherwise permit the Trustee or any Paying Agent to commingle such amounts.
Whenever any action or act is to be taken hereunder by the Holders of Debt Securities
denominated in a Foreign Currency or currency unit, then for purposes of determining the principal
amount of Debt Securities held by such Holders, the aggregate principal amount of the Debt
Securities denominated in a Foreign Currency or currency unit shall be deemed to be that amount of
Dollars that could be obtained for such principal amount on the basis of a spot rate of exchange
specified to the Trustee for such series in an Officers Certificate for such Foreign Currency or
currency unit into Dollars as of the date the taking of such action or act by the Holders of the
requisite percentage in principal amount of the Debt Securities is evidenced to such Trustee.
6.
Amendment of Article Four
.
a. Section 401(a)(1) is amended and supplemented by deleting the existing Section 401(a)(1)
thereof and replacing it with the following Section 401(a)(1):
7
(a) The Issuer shall be deemed to have satisfied and discharged the entire indebtedness on
all the Debt Securities of any particular series and, so long as no Event of Default shall be
continuing, the Trustee for the Debt Securities of such series, upon Issuer Request and at the
expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of
such indebtedness, when:
(1) either:
(A) the Trustee shall have received written notice from the Principal
Paying Agent for the Debt Securities of a particular series that all Debt
Securities of such series theretofore authenticated and delivered (other than
(i) any Debt Securities of such series which have been mutilated, destroyed,
lost or stolen and which have been replaced or paid as provided in Section 306
and (ii) Debt Securities of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in the last paragraph of Section 1003) have been delivered to the
Principal Paying Agent for the Debt Securities of such series for
cancellation; or
(B) except as otherwise specified with respect to the Debt Securities of
such series pursuant to Section 301, with respect to all Outstanding Debt
Securities of such series described in (A) above not theretofore so delivered
to the Principal Paying Agent for the Debt Securities of such series for
cancellation:
(i) the Issuer has deposited, or caused to be deposited, with the
Trustee for the Debt Securities of such series in trust an amount in
the currency or currency unit in which the Debt Securities of such
series are payable (except as provided in Section 313, in which case,
the deposit to be made with respect to Debt Securities for which a
Conversion Event has occurred shall be made in the currency or currency
unit in which such Debt Securities are payable as a result of such
Conversion Event) sufficient (without consideration of any reinvestment
thereof) to pay and discharge the entire indebtedness on all such
Outstanding Debt Securities of such series for unpaid principal (and
premium, if any) and interest, if any, to the Stated Maturity or any
Redemption Date as contemplated by Section 402, as the case may be; or
(ii) the Issuer has deposited, or caused to be deposited, with
such Trustee as obligations in trust such amount of Government
Obligations as will, as evidenced by a Certificate of a Firm of
Independent Public Accountants delivered to such Trustee, together with
the predetermined and certain income to accrue thereon (without
consideration of any reinvestment thereof), be sufficient to pay and
discharge when due the entire indebtedness on all such Outstanding Debt
Securities of such series for unpaid principal (and premium, if any)
and interest, if any, to the Stated
8
Maturity or any Redemption Date as contemplated by Section 402, as the
case may be; or
(iii) the Issuer has deposited, or caused to be deposited, with
such Trustee in trust an amount equal to the amount referred to in
clause (i) or (ii) in any combination of the currency or currency unit
in which the Debt Securities of such series are payable or Government
Obligations and has delivered a Certificate of a Firm of Independent
Public Accountants delivered to such Trustee verifying that such
combination of funds and Government Obligations will be sufficient to
pay and discharge the entire indebtedness on all Outstanding Debt
Securities of such series for unpaid principal (and premium, if any)
and interest, if any, to the Stated Maturity or any Redemption Date as
contemplated by Section 402, as the case may be, taking into account
the predetermined and certain income to accrue on such Government
Obligations (but without any consideration of any reinvestment thereof)
and without taking consideration of any reinvestment of any such
funds;
b. Section 402 is amended and supplemented by deleting the existing Section 402 thereof and
replacing it with the following Section 402:
Section 402. Application of Trust Money.
(a) All currency and currency units and obligations deposited with the Trustee for any series
of Debt Securities pursuant to Section 401 shall be held irrevocably in trust and shall be made
under the terms of an escrow trust agreement in form satisfactory to such Trustee. Such currency
and currency units and obligations shall be applied by such Trustee, in accordance with the
provisions of the Debt Securities, this Indenture and such escrow trust agreement, to the payment,
either directly or through any Paying Agent (including the Issuer or either Guarantor acting as its
own Paying Agent) as such Trustee may determine, to the Persons entitled thereto, of the principal
of (and premium, if any, on) and interest, if any, on the Debt Securities for the payment of which
such currency and currency units and obligations have been deposited with such Trustee. If Debt
Securities of any series are to be redeemed prior to their Stated Maturity, whether pursuant to any
optional redemption provisions or in accordance with any mandatory sinking fund requirement, the
Issuer shall make such arrangements as are satisfactory to the Trustee for any series of Debt
Securities for the giving of notice of redemption by such Trustee in the name, and at the expense,
of the Issuer.
(b) The Issuer shall pay and shall indemnify the Trustee for any series of Debt Securities
against any tax, fee or other charge imposed on or assessed against Government Obligations
deposited pursuant to Section 401 or the interest and principal received in respect of such
Government Obligations other than any such tax, fee or other charge which by law is payable by or
on behalf of Holders. The obligation of the Issuer under this Section 402(b) shall be deemed to be
an obligation of the Issuer under Section 607(2).
(c) Anything in this Article Four to the contrary notwithstanding, the Trustee for any series
of Debt Securities shall deliver or pay to the Issuer from time to time upon Issuer
9
Request any currency and currency units or Government Obligations held by it as provided in Section
401 which, as expressed in a Certificate of a Firm of Independent Public Accountants delivered to
such Trustee, are in excess of the amount thereof which would then have been required to be
deposited for the purpose for which such currency and currency units or Government Obligations were
deposited or received provided such delivery can be made without liquidating any Government
Obligations.
c. Section 404 is amended and supplemented by deleting the existing Section 404 thereof and
replacing it with the following Section 404:
Section 404. Reinstatement.
If the Trustee for any series of Debt Securities is unable to apply any of the currency and
currency units (for purposes of this Section 404, Amounts) or Government Obligations, as the case
may be, described in Section 401(a)(1)(B)(i) or (ii), respectively, in accordance with the
provisions of Section 401 by reason of any legal proceeding or any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such application, the
Issuers and each Guarantors obligations under this Indenture and the Debt Securities of such
series and the related Guarantees shall be revived and reinstated as though no deposit had occurred
pursuant to Section 401 until such time as the Trustee for such series is permitted to apply all
such Amounts or Governmental Obligations, as the case may be, in accordance with the provisions of
Section 401; provided, however, that if, due to the reinstatement of its rights or obligations
hereunder, the Issuer has made any payment of principal of (or premium, if any, on) or interest, if
any, on such Debt Securities, the Issuer shall be subrogated to the rights of the Holders of such
Debt Securities to receive payment from such Amounts or Government Obligations, as the case may be,
held by the Trustee for such series.
7.
Amendment of Article Five.
Article Five is amended and supplemented by adding the
following Section 516 at the end thereof:
Section 516. Judgment Currency.
If, for the purpose of obtaining a judgment in any court with respect to any obligation of the
Issuer and the Guarantors hereunder or under any Debt Security or any related coupon, it shall
become necessary to convert into any other currency or currency unit any amount in the currency or
currency unit due hereunder or under such Debt Security or coupon, then such conversion shall be
made by the Currency Determination Agent at the Market Exchange Rate as in effect on the date of
entry of the judgment (the Judgment Date). If pursuant to any such judgment, conversion shall be
made on a date (the Substitute Date) other than the Judgment Date and there shall occur a change
between the Market Exchange Rate as in effect on the Judgment Date and the Market Exchange Rate as
in effect on the Substitute Date, the Issuer and the Guarantors agree to pay such additional
amounts, if any, as may be necessary to ensure that the amount paid is equal to the amount in such
other currency or currency unit which, when converted at the Market Exchange Rate as in effect on
the Judgment Date, is the amount due hereunder or under such Debt Security or coupon. Any amount
due from the Issuer and the Guarantors under this Section 516 shall be due as a separate debt and
is not to be affected by or merged into any judgment being obtained for any other sums due
hereunder or in respect of any Debt Security or coupon. In no event, however, shall the Issuer and
the Guarantors be required to pay more in the currency or currency unit due hereunder or under such
Debt Security
10
or coupon at the Market Exchange Rate as in effect on the Judgment Date than the amount of currency
or currency unit stated to be due hereunder or under such Debt Security or coupon so that in any
event the Issuer and the Guarantors obligations hereunder or under such Debt Security or coupon
will be effectively maintained as obligations in such currency or currency unit, and the Issuer and
the Guarantors shall be entitled to withhold (or be reimbursed for, as the case may be) any excess
of the amount actually realized upon any such conversion on the Substitute Date over the amount due
and payable on the Judgment Date.
8.
Amendment of Article Six.
a. Section 603 is amended by adding the following language to the end thereof:
(h) The Trustee shall not be charged with knowledge of any default or Event of
Default with respect to the Debt Securities unless either (1) a Responsible Officer shall
have actual knowledge of such default or Event of Default or (2) written notice of such
Default or Event of Default shall have been given to the Trustee by the Company or by any
Holder of the Debt Securities.
(i) When the Trustee incurs expenses or renders services in connection with an Event
of Default as specified in Section 501(4) or 501(5), the expenses (including reasonable
charges and expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any Bankruptcy Law.
b. Article Six is amended and supplemented by adding the following Section 614 at the end
thereof:
Section 614. Rights afforded Trustee.
In the event that the Trustee is also acting as Paying Agent, Authenticating Agent or
Securities Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this
Article Six shall also be afforded to such Paying Agent, Authenticating Agent or Securities
Registrar.
9.
Amendment of Section 1003
. Section 1003 is amended and supplemented by deleting
the existing Section 1003 thereof and replacing it with the following Section 1003:
Section 1003. Appointment of Paying Agents; Money for Debt Securities Payments to be Held in
Trust.
a. The Issuer and each of the Guarantors agrees, for the benefit of the Holders from time to
time of the Debt Securities, that, until all of the Debt Securities of the applicable series are no
longer outstanding or until moneys for the payment of all of the principal of (and premium, if any)
and interest on all outstanding Debt Securities of such series shall have been made available at
the principal office of the Paying Agents and paid to the Holders thereof or returned to the Issuer
or to the applicable Guarantor pursuant to clause (i) of Section 1003, whichever occurs later,
there shall at all times be a Paying Agent hereunder. The Issuer and each of the Guarantors
agrees, for the benefit of the Holders from time to time of the Debt Securities of any series
denominated in a Foreign Currency, that, until all of the Debt Securities of the applicable series
are no longer outstanding or until moneys for the payment of all of the principal
11
of (and premium, if any) and interest on all outstanding Debt Securities of such series denominated
in a Foreign Currency shall have been made available at the principal office of the London Paying
Agent and paid to the holders thereof or returned to the Issuer or to the applicable Guarantor
pursuant to clause (i) of Section 1003, whichever occurs later, there shall at all times be a
London Paying Agent hereunder (and such London Paying Agent, unless otherwise specified pursuant to
Section 301, shall also act as Authenticating Agent for such series pursuant to Section 312).
Unless otherwise specified in accordance with Section 301 with respect to any series of Debt
Securities, the Issuer and Guarantors hereby appoint the Trustee, at present having an office at
450 West 33
rd
Street, New York, New York, as its Principal Paying Agent in New York to
the extent any series of Debt Securities are denominated in U.S. Dollars, and, to the extent any
series of Debt Securities are listed on the Luxembourg Stock Exchange as provided in Section 301,
Chase Manhattan Bank Luxembourg S.A., at present having an office at 5 Rue Plaetis, L-2338
Luxembourg, as its Luxembourg Paying Agent, and, to the extent any series of Debt Securities are
denominated in euros as provided in Section 301, The Chase Manhattan Bank, London Branch, at
present having an office at Trinity Tower, 9 Thomas More Street, London E1W 1YT, as its Principal
Paying Agent with respect to such series, in respect of the Debt Securities, upon the terms and
subject to the conditions herein and therein set forth, it being understood that in their capacity
as Paying Agents hereunder, The Chase Manhattan Bank, Chase Manhattan Bank Luxembourg S.A. and The
Chase Manhattan Bank, London Branch, will perform their duties exclusively through their offices in
New York, Luxembourg and London, respectively. The Paying Agents shall arrange for the payment,
from funds furnished by the Issuer or either Guarantor to the applicable Paying Agents of the
principal of (and premium, if any) and interest on each series of Debt Securities on the date such
payments become due and payable. With respect to each series of Debt Securities for which The Chase
Manhattan Bank, Chase Manhattan Bank Luxembourg S.A. and The Chase Manhattan Bank, London Branch,
serve as Paying Agents, such Paying Agent shall have the powers and authority granted to and
conferred upon them herein and in the notes or other instrument evidencing such series of Debt
Securities. Any Paying Agent, Authenticating Agent or Securities Registrar appointed herein or
otherwise specified in accordance with Section 301 with respect to any series of Debt Securities
shall be afforded the rights and protections afforded the Trustee pursuant to Article Six.
b. Each of the Paying Agents is herein referred to as an Agent and they are referred to
collectively as the Agents. Prior to issuing any series of Debt Securities, the Issuer will
cause such Agents (other than the Trustee) to execute and deliver to the Issuer (with a copy to the
Trustee unless the Trustee or the Paying Agent is also such Agent) a written instrument in which
such Agent shall agree to act as such hereunder, unless such Agent has otherwise agreed to the
provisions of such instrument as pursuant to this Section 1003. The Issuer and the Guarantors may
also serve as Paying Agent or appoint any of its affiliates to serve as Paying Agent. The Issuer
will give to the Trustee (unless the Trustee or the Paying Agent is also such Agent) written notice
of any change in the location of any office or agency of the Agents hereunder. The Issuer shall
have the right to vary or terminate the appointment of any such office or agency.
c. Each Agent accepts its obligations set forth herein upon the terms and conditions hereof
and thereof. If an Agent shall change its specified office, it shall give to the Issuer and the
Trustee (unless the Trustee or the Paying Agent is also such Agent) not less than 45 days prior
written notice to that effect giving the address of the new office.
12
d. Any notice or other communication required to be given hereunder to the Paying Agents shall
be delivered in person, sent by letter or telecopier or communicated by telephone (with prompt
written confirmation by telecopy) to the Paying Agents at the addresses specified in the written
instrument delivered to the Issuer by such Agent in accordance with Section 1003(b). Any notice
hereunder to the Paying Agents given by letter, telecopy or telex shall be deemed to have been
received when it would have been received in the ordinary course of post or transmission, as the
case may be.
e. If the Issuer or either Guarantor shall act as its own Paying Agent with respect to any
series of Debt Securities, it will, on or before each due date of the principal of (or premium, if
any) or interest on such series, set aside, segregate and hold in trust for the benefit of the
holders of the Debt Securities of such series a sum sufficient to pay such principal (and premium,
if any) or interest so becoming due. The Issuer and the Guarantors, as the case may be, will
promptly notify the Trustee of any failure to take such action.
f. Anything in this Section to the contrary notwithstanding, the Issuer may at any time, for
the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of
Debt Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums
held in trust for any such series by the Issuer and the Guarantors or any Paying Agent hereunder,
as required by this Section, such sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by the Issuer and such Guarantor or such Paying Agent.
g. In order to provide for the payment of the principal of (and premium, if any) and interest
on the Debt Securities of any series as the same shall become due and payable on any payment date,
the Issuer and the Guarantors hereby agree to pay to such account or at such offices of any
Principal Paying Agent or Principal Paying Agents of a specified series or as such Paying Agent
shall specify in writing to the Issuer not less than five Business Days prior to the payment date,
in the currency of payment with respect to the Debt Securities of such series as designated
pursuant to Section 301, on each Interest Payment Date and at Maturity of the Debt Securities of
such series (in each case determined in accordance with the terms and conditions applicable to such
series), in immediately available funds available on such Interest Payment Date or at Maturity, as
the case may be, in an aggregate amount which (together with any funds then held by the Paying
Agent and available for the purpose) shall be sufficient to pay the entire amount of the principal
of (and premium, if any) or interest, as applicable, on the Debt Securities of such series becoming
due on such Interest Payment Date or at Maturity, and the Paying Agent shall hold such amount in
trust and apply it to the payment of any such principal, premium or interest on such Interest
Payment Date or at Maturity. Unless otherwise specified as provided above in this Section 1003(g)
or Section 1003(h), such aggregate amount shall be paid to the account of the Paying Agent in
immediately available funds no later than 10:00 a.m. (Paying Agents time) on the Interest Payment
Date or at Maturity, as the case may be. In the event any Paying Agent is not also the Trustee,
the Issuer will cause such Paying Agent to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree (and by their execution hereof, the London Paying Agent and
Luxembourg Paying Agent hereby agree) with the Trustee, subject to the provisions of this Section
1003 and of Section 401, (1) that such Paying Agent shall hold all sums held by such Paying Agent
for the payment of the principal of (and premium, if any) or interest, if any, on the Debt
Securities of the applicable series in trust for the benefit of the Holders of the Debt Securities
of such series until such sums shall be paid
13
out to the Holders of the Debt Securities of such series or otherwise as herein provided, (2) that
such Paying Agent shall give to the Trustee notice of any default by the Issuer or either Guarantor
or any other obligor upon the Debt Securities of such series in the making of any deposit with such
Paying Agent for the payment of principal (and premium, if any) or interest, if any, which shall
have become payable and of any default by the Issuer or either Guarantor or any other obligor upon
the Debt Securities of such series in making any such payment, and (3) that such Paying Agent
shall, at any time during the continuance of any such default, upon the written request of the
Trustee, deliver to the Trustee all sums so held in trust by it.
h. Anything herein to the contrary notwithstanding, the Issuer and the Guarantors shall not
later than 10:00 a.m. London time on each date on which any payment of principal (and premium, if
any) or interest in respect of any of series of Debt Securities denominated in a Foreign Currency
becomes due and payable transfer to such account as the London Paying Agent may designate in
writing in advance to the Issuer and the Trustee such amount as shall be sufficient for the
purposes of the payment of principal (and premium, if any) or interest (together with any funds
then held by the London Paying Agent and available for the purpose) in immediately available funds
or in such funds and at such times (being not later than 10:00 a.m. London time on the relevant due
date, or if the due date is not a Business Day, on the immediately following Business Day). The
Issuer shall ensure that not later than the second Business Day immediately preceding the date on
which any payment is to be made to the London Paying Agent, the London Paying Agent shall receive a
copy of an irrevocable payment instruction to the bank through which the payment is to be made.
i. All moneys paid by the Issuer or either Guarantor, as the case may be, to the Trustee or
any Paying Agent for the Debt Securities of any series, or then held by the Issuer or either
Guarantor, in trust for the payment of the principal of (and premium, if any, on) and interest, if
any, on any Debt Security or in respect of any additional payments thereon which remain unclaimed
at the end of two years after such principal (and premium, if any) and interest, if any, or
additional payments shall have become due and payable shall, unless otherwise required by mandatory
provisions of applicable escheat, or abandoned or unclaimed property law, be repaid to the Issuer
or such Guarantor, as the case may be, on Issuer Request or Guarantor Request, as the case may be,
or (if then held by the Issuer or such Guarantor) shall be discharged from such trust; and the
Holder of such Debt Security will, thereafter, as an unsecured general creditor, look only to the
Issuer (or to each Guarantor pursuant to its Guarantees) for payment thereof, and all liability of
such Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer
or such Guarantor, as trustee thereof, shall thereupon cease; provided, however, that such Trustee
or such Paying Agent, before being required to make any such repayment may give notice to the
Holder of such Debt Security in the manner set forth in Section 106 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 notice, any unclaimed balance of such money then remaining will, unless otherwise
required by mandatory provisions of applicable escheat, or abandoned or unclaimed property law, be
repaid to the Issuer or such Guarantor, as the case may be; provided, further, that the Trustee or
such Paying Agent shall give written notice of any such unclaimed amounts to the Issuer and such
Guarantor within 30 days after the end of such two year period.
j. The foregoing provisions of this Section 1003 are subject to the provisions of Sections
401, 402 and 403.
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10.
Amendment of Section 1105
. Section 1105 is amended and supplemented by deleting
the existing Section 1105 thereof and replacing it with the following Section 1105:
Section 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Issuer or either Guarantor shall deposit with the
Principal Paying Agent for the Debt Securities to be redeemed (or, if the Issuer or such Guarantor
is acting as its own Paying Agent for such Debt Securities, segregate and hold in trust as provided
in Section 1003) an amount of money in the currency or currency unit in which the Debt Securities
of such series are payable sufficient to pay the principal amount (or, if the context so requires,
lesser amount in the case of Discounted Securities) of (and premium, if any, thereon), and (except
if the Redemption Date shall be an Interest Payment Date) any accrued interest on, all the Debt
Securities which are to be redeemed on the date.
11.
Amendment of Section 1108
. Section 1108 is amended and supplemented by adding the
following paragraph at the beginning thereof:
Unless otherwise specified in accordance with Section 301 with respect to any series
of Debt Securities, the following provisions shall apply:
12.
New York Law to Govern
. This Fourth Supplemental Indenture shall be governed by
and construed in accordance with the laws of the State of New York.
13.
Conflict of Any Provision of Indenture with Trust Indenture Act of 1939
. If and
to the extent that any provision of this Fourth Supplemental Indenture limits, qualifies or
conflicts with another provision included in this Fourth Supplemental Indenture or in the Indenture
which is required to be included herein or therein by any of Sections 310 to 317, inclusive, of the
Trust Indenture Act of 1939, such required provision shall control.
14.
Counterparts
. This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original but all such counterparts shall together
constitute but one and the same instrument.
15.
Effect of Fourth Supplemental Indenture
. Upon the execution of this Fourth
Supplemental Indenture, the Indenture shall be modified in accordance herewith and this Fourth
Supplemental Indenture shall form a part of the Indenture for all purposes, and except as herein
modified, all the provisions, terms and conditions of the Indenture are in all respects ratified
and confirmed and shall remain in full force and effect. The provisions of this Fourth
Supplemental Indenture shall be applicable only to Debt Securities originally issued after the date
hereof.
16.
The Trustee
. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Fourth Supplemental Indenture or for or in
respect of the recitals contained herein, all of which are made solely by the Issuer and the
Guarantors.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be
duly executed, as of the date first referenced above.
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REED ELSEVIER CAPITAL INC.,
as Issuer
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By:
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/s/ Paul Richardson
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Name:
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Title:
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REED INTERNATIONAL P.L.C.,
as Guarantor
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By:
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/s/ Mark Armour
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Name:
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Title:
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ELSEVIER NV,
as Guarantor
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By:
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/s/ Mark Armour
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Name:
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Title:
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THE CHASE MANHATTAN BANK,
as Trustee
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By:
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/s/ James M. Foley
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Name:
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James M. Foley
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Title:
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Assistant Vice President
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THE CHASE MANHATTAN BANK, LONDON BRANCH, as London Paying Agent
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By:
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/s/ Andrew Dellow
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Name:
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Andrew Dellow
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Title:
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Assistant Treasurer
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CHASE MANHATTAN BANK LUXEMBOURG S.A., as Luxembourg Paying Agent
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By:
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/s/ Andrew Dellow
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Name:
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Andrew Dellow
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Title:
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Assistant Treasurer
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