Exhibit 99.2
EXECUTION COPY
REED ELSEVIER CAPITAL INC.
U.S. $550,000,000 7.750% Notes Due 2014
U.S. $950,000,000 8.625% Notes Due 2019
Jointly and Severally Guaranteed by
REED ELSEVIER PLC
and REED ELSEVIER NV
UNDERWRITING AGREEMENT
January 13, 2009
Barclays Capital Inc.
Citigroup Global Markets Inc.
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.
As Representatives of the several Underwriters
named in Schedule 1
c/o Citigroup Global Markets Inc.
390 Greenwich St., 4
th
Floor
New York, New York 10013
Dear Ladies and Gentlemen:
Each of Reed Elsevier Capital Inc., a Delaware corporation (the “Issuer”), Reed Elsevier PLC,
a public limited company organized under the laws of England (“Reed Elsevier PLC”), and Reed
Elsevier NV, a public company incorporated in The Netherlands with limited liability (“Reed
Elsevier NV” and, together with Reed Elsevier PLC, the “Guarantors”) confirms its agreement with
each Underwriter named in Schedule 1 hereto (the “Underwriters”) with respect to the issuance and
sale by the Issuer from the date hereof of $550,000,000 in principal amount of the Issuer’s 7.750%
Notes due 2014 (the “2014 Notes”) and $950,000,000 in principal amount of the Issuer’s 8.625% Notes
due 2019 (the “2019 Notes”, and together with the 2014 Notes, the “Notes”). The Notes will be
jointly and severally guaranteed (the “Guarantees”) by the Guarantors.
The Notes will be issued under the Indenture, dated as of May 9, 1995, among the Issuer, the
Guarantors and The Bank of New York Mellon, as successor to JP Morgan Chase Bank, N.A., (formerly
The Chase Manhattan Bank, N.A.) as trustee (the “Trustee”) (as amended and supplemented, the
“Indenture”).
As used herein, the term “Reed Elsevier” means, collectively, the separate legal entities Reed
Elsevier PLC, Reed Elsevier NV, Reed Elsevier Group plc, a public limited company incorporated in
England, Elsevier Reed Finance BV, a private limited
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company organized under the laws of The Netherlands, and their respective subsidiaries. Any
reference herein to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or
the Final Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 6 of Form F-3 which were filed under the Exchange Act on or
before the Effective Date of the Registration Statement or the issue date of the Base Prospectus,
any Preliminary Prospectus or the Final Prospectus, as the case may be; and any reference herein to
the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Preliminary Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by reference. Certain
terms used herein are defined in Section 20 hereof.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
The Issuer, and each Guarantor (jointly and severally on behalf of each other and on behalf of
the Issuer), represents and warrants to each Underwriter as of the date hereof and as of the
Closing Date (as defined herein) as follows:
(a)
General.
The Issuer and the Guarantors have prepared and filed with the Commission an
automatic shelf registration statement, as defined in Rule 405 (File No. 333-155717-01) on
Form F-3, including a related Base Prospectus (the “Registration Statement”), for registration
under the Act of the offering and sale of the Notes. Such Registration Statement, including any
amendments thereto filed prior to the Execution Time, became effective upon filing. The Issuer may
have filed with the Commission, as part of an amendment to the Registration Statement or pursuant
to Rule 424(b), one or more preliminary prospectus supplements relating to the Notes, each of which
has previously been furnished to you. The Issuer and the Guarantors will file with the Commission
a final prospectus supplement relating to the Notes in accordance with Rule 424(b). As filed, such
final prospectus supplement shall contain all information required by the Act and the rules
thereunder, and, except to the extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to the Execution Time or,
to the extent not completed at the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Base Prospectus and any Preliminary
Prospectus) as the Issuer has advised you, prior to the Execution Time, will be included or made
therein. The Registration Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x).
(b)
Registration Statement, Final Prospectus and Indenture.
On the Effective Date, the
Registration Statement did, and when the Final Prospectus is first filed in accordance with
Rule 424(b) and on the Closing Date (as defined herein), the Final Prospectus (and any supplement
thereto) will, comply in all material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules thereunder; on the Effective
Date, the Registration Statement did not contain any untrue statement of a material fact or omit to
state any material fact required
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to be stated therein or necessary in order to make the statements therein not misleading; on
the Effective Date and on the Closing Date the Indenture did or will comply in all material
respects with the applicable requirements of the Trust Indenture Act and the rules thereunder; and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date, the Final Prospectus
(together with any supplement thereto) will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that the Issuer
makes no representations or warranties as to (i) that part of the Registration Statement which
shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Issuer or any of the Guarantors by or on behalf of any
Underwriter through the Representatives specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement thereto), it being understood and agreed that the only such
information furnished by or on behalf of any Underwriter consists of the information described as
such in Section 7 hereof.
(c)
Disclosure Package.
(i) The Disclosure Package and (ii) each electronic road show, when
taken together as a whole with the Disclosure Package, does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the Disclosure Package based upon and in
conformity with written information furnished to the Issuer or any of the Guarantors by any
Underwriter through the Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by or on behalf of any Underwriter consists of the
information described as such in Section 7 hereof.
(d)
Well-Known Seasoned Issuer.
(i) At the time of filing the Registration Statement, (ii)
at the time of the most recent amendment thereto for the purposes of complying with Section
10(a)(3) of the Act (whether such amendment was by post-effective amendment, incorporated report
filed pursuant to Sections 13 or 15(d) of the Exchange Act or form of prospectus), (iii) at the
time the Issuer or any person acting on its behalf (within the meaning, for this clause only, of
Rule 163(c)) made any offer relating to the Notes in reliance on the exemption in Rule 163, and
(iv) at the Execution Time (with such date being used as the determination date for purposes of
this clause (iv)), the Issuer was or is (as the case may be) a “well-known seasoned issuer” as
defined in Rule 405. The Issuer agrees to pay the fees, if any, required by the Commission
relating to the Notes within the time required by Rule 456(b)(1) without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r).
(e)
Ineligible Issuer.
(i) At the earliest time after the filing of the Registration
Statement that the Issuer or another offering participant made a
bona fide
offer (within the
meaning of Rule 164(h)(2)) of the Notes and (ii) as of the Execution Time (with such date being
used as the determination date for purposes of this clause (ii)), the Issuer was not and is not an
Ineligible Issuer (as defined in Rule 405),
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without taking account of any determination by the Commission pursuant to Rule 405 that it is
not necessary that the Issuer be considered an Ineligible Issuer.
(f)
Issuer Free Writing Prospectus and Final Term Sheet.
Each Issuer Free Writing Prospectus
and the final term sheet prepared and filed pursuant to Section 2(c) hereto does not include any
information that conflicts with the information contained in the Registration Statement, including
any document incorporated therein by reference and any prospectus supplement deemed to be a part
thereof that has not been superseded or modified. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Issuer or any of the Guarantors by any Underwriter
through the Representatives specifically for use therein, it being understood and agreed that the
only such information furnished by or on behalf of any Underwriter consists of the information
described as such in Section 7 hereof.
(g)
Due Incorporation.
Each of the Issuer and the Guarantors is a duly incorporated and
validly existing corporation under the laws of its jurisdiction of incorporation, in each case with
corporate power and authority necessary to own or hold its respective properties and to conduct the
business in which it is engaged as described in the Final Prospectus.
(h)
Ownership of Issuer.
All of the issued ordinary shares of the Issuer have been duly
authorized and validly issued and are fully paid and all of such shares are beneficially owned
directly or indirectly by the Guarantors.
(i)
Validity of Agreement.
Each of the Issuer and the Guarantors has the corporate power and
authority necessary to execute and deliver this Agreement and perform its obligations hereunder,
and this Agreement has been duly authorized, executed and delivered by the Issuer and the
Guarantors and constitutes a valid and binding agreement of each of the Issuer and the Guarantors,
respectively, enforceable in accordance with its terms, except as (i) rights to indemnity and
contribution hereunder may be limited under applicable law, (ii) the enforceability hereof may be
limited by bankruptcy, fraudulent conveyance, insolvency or other similar laws affecting creditors’
rights generally and (iii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
(j)
Validity of Indenture.
Each of the Issuer and the Guarantors has the corporate power and
authority necessary to execute and deliver the Indenture and perform its obligations thereunder and
the Indenture has been duly authorized by each of the Issuer and the Guarantors, has been duly
qualified under the Trust Indenture Act and has been executed and delivered by each of the Issuer
and the Guarantors and constitutes a valid and binding agreement of the Issuer and the Guarantors,
enforceable in accordance with its terms, except as (i) the enforceability thereof may be limited
by bankruptcy, fraudulent conveyance, insolvency or similar laws affecting creditors’ rights
generally and (ii) rights of acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability.
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(k)
Validity of Notes and Guarantees.
The Issuer has corporate power and authority necessary
to execute and deliver the Notes and perform its obligations thereunder and the Notes have been
duly authorized and, when executed and authenticated as provided in the Indenture and issued and
delivered against payment therefor as provided in this Agreement, will constitute valid and binding
obligations of the Issuer, entitled to the benefit of the Indenture, enforceable in accordance with
their terms, except as (i) the enforceability thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency or similar laws affecting creditors’ rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by equitable principles of
general applicability; and each Guarantor has corporate power and authority necessary to execute
and deliver the Guarantees and perform its obligations thereunder and the Guarantees have been duly
authorized and, upon execution, authentication, issuance and delivery of, and payment for the Notes
with the Guarantees endorsed thereon as provided in the Indenture and in this Agreement, such
Guarantees will be duly executed and delivered and will constitute valid and binding obligations of
such Guarantor, entitled to the benefits of the Indenture, enforceable in accordance with their
terms, except as (i) the enforceability thereof may be limited by bankruptcy, fraudulent
conveyance, insolvency or similar laws affecting creditors’ rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by equitable principles of
general applicability.
(l)
Status of Notes.
The Notes will, when duly executed, authenticated and delivered,
constitute direct, unconditional and, except as provided in the Indenture or the Notes, unsecured
obligations of the Issuer and will rank
pari passu
among themselves at least equally with all other
unsecured and unsubordinated indebtedness of the Issuer, whether now or hereafter outstanding and
the Guarantees will, when duly executed and delivered, constitute direct, unconditional and, except
as provided in the Indenture or the Guarantees, unsecured obligations of each Guarantor and will
rank
pari passu
among themselves and at least equally with all other unsecured and unsubordinated
indebtedness of such Guarantor, whether now or hereafter outstanding, except, in each case with
respect to (x) obligations in respect of national and local taxes, and (y) other obligations given
priority by mandatory provisions of law.
(m)
No Conflicts.
The execution, delivery and performance of this Agreement and the
Indenture, the issuance, authentication, sale and delivery of the Notes, the issuance of the
Guarantees and the endorsement thereof on the Notes and the compliance by the Issuer and the
Guarantors with the respective terms thereof, and the consummation of the transactions contemplated
hereby and thereby will not conflict with or result in a breach under any agreement or instrument
to which any of the Combined Businesses is a party or by which it is bound that is material to the
Combined Businesses taken as a whole, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-Laws of the Issuer, the Memorandum and
Articles of Association of Reed Elsevier PLC or the Articles of Association of Reed Elsevier NV or
any statute or any order, filing, rule or regulation of any court or governmental agency or
regulatory body having jurisdiction over the Combined Businesses.
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(n)
No Consents.
No consent, approval, authorization or order of, or filing or registration
or qualification with, or notification to, any court or governmental agency or body having
jurisdiction over the Issuer or either Guarantor or any of its or their respective subsidiaries or
any of its or their properties or assets is required for the execution, delivery and performance of
this Agreement and the Indenture and the consummation of the transactions contemplated hereby and
thereby by the Issuer and the Guarantors, including the issuance, authentication, sale and delivery
of the Notes, and the issuance of the Guarantees and the endorsement thereof on the Notes, and in
each such case compliance with the respective terms thereof, except (i) the registration of the
Notes and Guarantees under the Act, (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under the Trust Indenture Act, applicable United States state
securities, Blue Sky or similar laws in connection with the purchase and distribution of the Notes
by the Underwriters and (iii) such consents, approvals, authorizations, orders, filings,
registrations, qualifications or notifications as shall have been obtained or made, as the case may
be, prior to, and which will be in full force and effect on and as of, the Closing Date (as defined
herein) or, if not so obtained or made or in full force and effect, as the case may be, would not
(x) affect the validity, binding effect or enforceability of the Notes, the Indenture, this
Agreement or the Guarantees or (y) (individually or in the aggregate) materially and adversely
affect the condition (financial or otherwise) of the Combined Businesses, taken as a whole, or
impair the Issuer’s or the Guarantors’ ability to perform its or their obligations under the Notes,
the Indenture, this Agreement or the Guarantees.
(o)
Investment Company.
Neither the Issuer nor either Guarantor is an “investment company”
as defined in the United States Investment Company Act of 1940, as amended (the “Investment Company
Act”), and the offer and sale of the Notes and the Guarantees in the United States will not subject
the Issuer or either Guarantor to registration under, or result in a violation of, the Investment
Company Act.
(p)
Description.
The Notes, the Indenture and the Guarantees conform in all material
respects to the descriptions thereof contained in the Disclosure Package and the Final Prospectus.
(q)
Material Change.
Since the respective dates as of which information is given in the
Disclosure Package and the Final Prospectus, there has not been any material adverse change in, or
any adverse development which materially affects, the condition (financial or otherwise) results of
operations, business or properties of the Combined Businesses, taken as a whole, in each case other
than as set forth or contemplated in the Disclosure Package and the Final Prospectus exclusive of
any supplement thereto.
(r)
Financial Statements
. The audited financial statements incorporated by reference in the
Disclosure Package and the Final Prospectus present and will present fairly in all material
respects, as of the Closing Date (as defined herein), the financial condition, results of
operations, changes in shareholders’ equity and cash flows of the entities referred to therein in
conformity with International Financial Reporting Standards (“IFRS”) or U.S. generally accepted
accounting principles (“U.S. GAAP”), as the case
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may be, as in effect as of the date of such audited financial information, at the dates and
for the periods indicated, and have been, and will be as of the Closing Date (as defined herein),
prepared in conformity with IFRS or U.S. GAAP, as the case may be, as in effect as of the date of
such audited financial information applied on a consistent basis throughout the period or periods
involved. The unaudited interim financial statements if any, and the related notes, incorporated
by reference in the Disclosure Package and the Final Prospectus present and will present fairly in
all material respects at the Closing Date (as defined herein) the financial condition and results
of operations of the entities referred to therein at the dates and for the periods indicated in
conformity with IFRS or U.S. GAAP, as the case may be, as in effect as of the date of such
unaudited financial information (except for the absence of notes) applied on a consistent basis
throughout the periods shown, subject to normally recurring changes resulting from year-end
adjustments.
(s)
Auditors.
The auditors who have certified the financial statements and issued the
reports included in the Disclosure Package and the Final Prospectus are independent public
accountants certified by the Public Company Accounting Oversight Board as required by the Act and
Rules and Regulations.
(t)
Legal Proceedings.
Except as disclosed in the Disclosure Package and the Final
Prospectus, there are no legal or governmental proceedings pending against any of the Combined
Businesses (i) which are required to be described in the Disclosure Package and the Final
Prospectus or (ii) the ultimate resolution of which is expected by the Issuer or either Guarantor
to have a material adverse effect on the condition (financial or otherwise), results of operations,
business or properties of the Combined Businesses, taken as a whole, and, to the best of the
knowledge of the Issuer and the Guarantors, no such proceedings are threatened.
(u)
No Defaults.
None of the Combined Businesses is in violation of its corporate charter or
by-laws or in default under any agreement, indenture or instrument, the effect of which violation
or default would be material to the Combined Businesses, taken as a whole.
(v)
Rating.
The Notes have been rated by a “nationally recognized statistical rating
organization” (as that term is defined for purposes of Rule 436(g)(2) under the Act), including one
or both of Moody’s Investor Services, Inc. and Standard & Poor’s Corporation.
(w)
Doing Business with Cuba.
The Issuer confirms as of the date hereof, and each acceptance
by the Issuer of an offer to purchase Notes will be deemed to be an affirmation, that the Issuer is
in compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
An Act Relating
to Disclosure of Doing Business with Cuba
, and the Issuer further agrees that if it commences
engaging in business with the government of Cuba or with any person or affiliate located in Cuba
after the date the Registration Statement becomes or has become effective with the Commission or
with the Florida Department of Banking and Finance (the “Department”), whichever date is later, or
if the information reported in the Disclosure Package and the Final Prospectus, if
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any, concerning the Issuer’s business with Cuba or with any person or affiliate located in
Cuba changes in any material way, the Issuer will provide the Department notice of such business or
change, as appropriate, in a form acceptable to the Department.
(x)
Sarbanes Oxley Compliance.
The Issuer and the Guarantors have complied with the currently
applicable provisions of the Sarbanes Oxley Act of 2002, and to their knowledge, the Issuer’s or
Guarantors’ directors and officers named in the latest annual report of the Guarantors submitted to
the Commission on form 20-F, in their capacities as such, have complied with the currently
applicable provision, of the Sarbanes Oxley Act of 2002.
(y)
Sarbanes Oxley Compliance.
The Issuer and the Guarantors maintain a system of internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) to
provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that: (1) pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect the transactions and dispositions
of the assets of the issuer; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Issuer and the Guarantors are
being made only in accordance with authorizations of management and directors of the Issuer and
Guarantors; and (3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Issuer’s or Guarantor’s assets that could have
a material effect on the financial statements. The Issuer and the Guarantors’ internal controls
over financial reporting are effective and neither the Issuer nor the Guarantors are aware of any
material weakness in their internal controls over financial reporting.
(z)
Disclosure Controls.
The Issuer and the Guarantors maintain “disclosure controls and
procedures” (as such term is defined in Rule 13a-15(e) under the Exchange Act); such disclosure
controls and procedures are effective.
(aa)
True and Complete Documents.
The certificates delivered pursuant to paragraphs (j) and
(k) of Section 6 hereof and all other documents delivered by the Issuer and the Guarantors or their
representatives in connection with the issuance and sale of the Notes were on the dates on which
they were delivered, or will be on the dates on which they are to be delivered, true and complete
in all material respects.
(bb)
Exhibits.
There are no contracts or other documents which are required to be described
in the Disclosure Package and the Final Prospectus or filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which have not been described in the
Disclosure Package and the Final Prospectus or filed as exhibits to such Registration Statement or
incorporated therein by reference as permitted by the Act or by the Rules and Regulations or the
rules and regulations of the Commission under the Exchange Act,
as the case may be.
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(cc)
Documents Incorporated By Reference.
The documents incorporated by reference into any
Preliminary Prospectus or the Final Prospectus have been, and will be as of the Closing Date,
prepared in conformity with the applicable requirements of the Act and the Rules and Regulations
and the Exchange Act and the rules and regulations of the Commission thereunder, and none of such
documents contained, or will contain as of the Closing Date, an untrue statement of a material fact
or omitted, or will omit, to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and such documents have been, or will be, as of the
Closing Date, timely filed as required thereby.
(dd)
Form F-3.
The conditions for use of Form F-3 by the Issuer for the Registration
Statement, as set forth in the General Instructions thereto, have been satisfied, and each of the
Guarantors is a “foreign private issuer” (as defined in Rule 405 of the Rules and Regulations).
(ee)
Tax Residency of the Issuer.
The Issuer is not resident in the United Kingdom for tax
purposes and has no branch, business establishment or other fixed or permanent establishment in the
United Kingdom, and interest will not be payable out of any branch, business establishment or other
fixed or permanent establishment of the Issuer or any other property in the United Kingdom or out
of any source of income in the United Kingdom and the Notes are not secured on any property
situated in the United Kingdom and interest paid to a non-United Kingdom resident is not otherwise
generally subject to United Kingdom taxation.
(ff)
Tax Residency of Reed Elsevier PLC.
Reed Elsevier PLC is solely resident in the United
Kingdom for United Kingdom tax purposes and has no branch, business establishment or other fixed or
permanent establishment outside the United Kingdom.
(gg)
Foreign Corrupt Practices Act.
None of the Combined Businesses is aware of or has taken
any action that would result in a violation by the Combined Businesses of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”); and the
Combined Businesses and, to the knowledge of the Issuer and the Guarantors, the affiliates of the
Issuer have conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
(hh)
Money Laundering Laws.
The operations of the Combined Businesses are and have been
conducted at all times in compliance with applicable financial recordkeeping and reporting
requirements and the money laundering statutes and the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency with jurisdiction over any of the Combined Businesses (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving any of the Combined Businesses with
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respect to the Money Laundering Laws is pending or, to the best knowledge of the Issuer or the
Guarantors threatened.
(ii)
Office of Foreign Assets Control.
None of the Combined Businesses is currently subject
to any sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Combined Businesses will not directly or indirectly use the proceeds
of the offering of the Notes hereunder, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered by
OFAC.
SECTION 2. COVENANTS OF THE ISSUER AND THE GUARANTORS.
The Issuer and each of the Guarantors covenant and agree:
(a)
Delivery of Signed Registration Statement.
To furnish promptly to the Representatives
and their counsel one signed copy of the Registration Statement as originally filed and each
amendment or supplement thereto including all consents and exhibits filed therewith.
(b)
Delivery of Other Documents.
To deliver promptly to the Representatives, and in such
number as they may reasonably request, each of the following documents: (i) conformed copies of
the Registration Statement and each amendment thereto, (ii) the Base Prospectus, (iii) each
Preliminary Prospectus, (iv) the Final Prospectus and (v) each Issuer Free Writing Prospectus and
any supplement thereto as the Representatives may reasonably request. The Issuer will pay the
expenses of printing or other production of all documents relating to the offering.
(c)
Final Term Sheet.
To prepare a final term sheet, containing solely a description of
final terms of the Notes and the offering thereof, in the form approved by you and attached as
Schedule 2 hereto and to file such term sheet pursuant to Rule 433(d) within the time required by
such Rule.
(d)
Revisions to Disclosure Package — Material Changes.
If, at any time prior to the filing
of the Final Prospectus pursuant to Rule 424(b), any event occurs as a result of which the
Disclosure Package would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the circumstances under
which they were made or the circumstances then prevailing not misleading, the Issuer will (i)
notify promptly the Representatives so that any use of the Disclosure Package may cease until it is
amended or supplemented; (ii) amend or supplement the Disclosure Package to correct such statement
or omission; and (iii) supply any amendment or supplement to the Underwriters in such quantities as
they may reasonably request.
(e)
Revisions to Final Prospectus — Material Changes.
If the delivery of a prospectus is
required at any time after the Closing Date in connection with the offering or sale of the Notes or
any other securities relating thereto and if at such time
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any event has occurred as a result of which the Final Prospectus would include an untrue
statement of a material fact or omit to state any material fact necessary to make the statements
therein not misleading, or if it is necessary at any time to amend the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, to notify the Representatives
promptly, in writing, to suspend solicitation of purchases of the Notes; and to promptly advise the
Representatives by telephone (with confirmation in writing) and to promptly prepare and file with
the Commission an amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(f)
Copies of Filings with Commission.
Prior to filing with the Commission (i) any amendment
or supplement to the Registration Statement, (ii) any amendment or supplement to any prospectus or
(iii) any material document filed with the Commission pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act including but not limited to any interim or annual report of the
Guarantors submitted to the Commission on Form 6-K (“Form 6-K”) or Form 20-F (“Form 20-F”), as the
case may be, under the Exchange Act and the rules and regulations thereunder or any amendment of or
supplement to any such document, to furnish a copy to the Representatives.
(g)
Notice to Representatives of Certain Events.
To advise the Representatives immediately
(i) when any post-effective amendment to the Registration Statement relating to or covering the
Notes and Guarantees becomes effective, (ii) of any request or proposed request by the Commission,
whether written or oral, for an amendment or supplement to the Registration Statement, to the
Disclosure Package or the Final Prospectus, to any material document filed with or submitted to the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act including but not
limited to any interim or annual report of the Guarantors submitted to the Commission on Form 6-K
or Form 20-F, as the case may be, under the Exchange Act and the rules and regulations thereunder
or for any additional information, and the Issuer and the Guarantors will afford the
Representatives a reasonable opportunity to comment on any such proposed amendment or supplement,
(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any part thereof or any order directed to the Disclosure Package or
the Final Prospectus or any document incorporated therein by reference or the initiation or threat
of any stop order proceeding, (iv) of receipt by the Issuer or either Guarantor of any notification
with respect to the suspension of the qualification of the Notes and Guarantees for sale in any
jurisdiction or the initiation or threat of any proceeding for that purpose, (v) of any downgrading
in the rating of the Notes or any other debt securities of Reed Elsevier by any “nationally
recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the Act),
or if any such organization shall have informed the Issuer or the Guarantors or made any public
announcement that any such organization has under surveillance or review, or intends to or may
potentially decrease, its rating of any debt securities of Reed Elsevier (other than an
announcement with positive implications of a possible upgrading, and no implication of a possible
downgrading of such rating) as soon as the Issuer or either Guarantor is so informed or learns of
any such downgrading or public announcement and (vi) of the happening of any event which makes
untrue any statement of a material fact made in the Registration Statement, the Disclosure Package
12
or the Final Prospectus or which requires the making of a change in such Registration
Statement, Disclosure Package or Final Prospectus in order to make any material statement therein
not misleading.
(h)
Stop Orders.
If the Commission shall issue a stop order suspending the effectiveness of
the Registration Statement, to make every reasonable effort to obtain the lifting of that order at
the earliest possible time.
(i)
Earnings Statements.
As soon as practicable, but not later than 18 months after the date
of each acceptance by the Issuer of an offer to purchase Notes hereunder, to make generally
available to its security holders and to the security holders of the Guarantors, and to deliver to
the Representatives an earnings statement of the Guarantors (such earnings statement to include
information with respect to the Issuer to the same extent such information is presented in the
Registration Statement) covering a period of at least 12 months beginning after the later of
(i) the effective date of the Registration Statement, (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become effective prior to the date of
such acceptance and (iii) the date of the Guarantor’s most recent Annual Report on Form 20-F filed
with the Commission prior to the date of such acceptance which will satisfy the provisions of
Section 11(a) of the Act (including, at the option of the Guarantors, Rule 158 of the Rules and
Regulations).
(j)
Free Writing Prospectus.
The Issuer agrees that, unless it has or shall have obtained
the prior written consent of the Representatives, and each Underwriter, severally and not jointly,
agrees with the Issuer that, unless it has or shall have obtained, as the case may be, the prior
written consent of the Issuer, it has not made and will not make any offer relating to the Notes
that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free
writing prospectus” (as defined in Rule 405) required to be filed by the Issuer with the Commission
or retained by the Issuer under Rule 433 of the Act, other than a free writing prospectus
containing the information contained in the final term sheet prepared and filed pursuant to Section
2(c); provided that the prior written consent of the parties hereto shall be deemed to have been
given in respect of the free writing prospectuses included in Schedule 3 hereto and any electronic
road show. Any such Issuer Free Writing prospectus consented to by the Representatives or the
Issuer is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Issuer agrees that
(x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with
the requirements of Rules 164 and 433 applicable to any Permitted Free Writing Prospectus,
including in respect of timely filing with the Commission, legending and record keeping.
(k)
Blue Sky Qualifications.
To endeavor, in cooperation with the Representatives, to
qualify the Notes and Guarantees for offering and sale under the securities laws of such
jurisdictions within the United States as the Representatives may designate, and to maintain such
qualifications in effect for as long as may be required for the distribution of the Notes; and to
file such statements and reports as may be required by the laws of each jurisdiction in which the
Notes and Guarantees have been qualified as
13
above;
provided
that in connection therewith the Issuer and the Guarantors shall not be
required to qualify as a foreign corporation or to file a general consent to service of process in
any jurisdiction or to take any other action that would subject it to service of process in suits
in any jurisdiction other than those arising out of the offering or sale of the Notes in such
jurisdiction or to register as a dealer in securities or to become subject to taxation in any
jurisdiction.
(l)
Clearance.
To cooperate with the Representatives and use their reasonable best efforts
to permit the Notes to be eligible for clearance and settlement through the facilities of DTC.
(m)
Use of Proceeds.
To apply the net proceeds from the sale of the Notes as set forth in
the Disclosure Package and the Final Prospectus.
(n)
Issuance of Debt.
Between the date of this Agreement and the Closing Date, not to offer,
sell, guarantee, or enter into any agreement to sell, any debt securities of the Issuer, other than
borrowings under revolving credit agreements and lines of credit, borrowings from any other entity
within Reed Elsevier, the private placement of securities and issuances of commercial paper.
(o)
Stabilization or Manipulation
. Not to take, directly or indirectly, any action designed
to or that would constitute or that might reasonably be expected to cause or result in, under the
Exchange Act or otherwise, stabilization or manipulation of the price of any of its securities to
facilitate the sale or resale of the Notes.
SECTION 3. PURCHASE OF THE NOTES BY THE UNDERWRITERS.
On the basis of the representations and warranties contained in, and subject to the terms and
conditions of this Agreement, the Issuer agrees to issue and to sell to the several Underwriters,
and each of the Underwriters, severally and not jointly, agrees to purchase the principal amount of
the 2014 Notes set forth opposite that Underwriter’s name in Schedule 1 hereto at a purchase price
equal to 99.394% of the principal amount of the 2014 Notes, plus accrued interest, if any, from
January 16, 2009 and the principal amount of the 2019 Notes set forth opposite that Underwriter’s
name in Schedule 1 hereto at a purchase price equal to 99.162% of the principal amount of the 2019
Notes, plus accrued interest, if any from January 16, 2009.
The Issuer and the Guarantors shall not be obligated to deliver any of the Notes to be
delivered except upon payment for all the Notes to be purchased as provided herein.
SECTION 4. DELIVERY OF AND PAYMENT FOR THE NOTES.
Delivery of and payment for the Notes shall be made at the office of Cravath, Swaine & Moore
LLP, Worldwide Plaza, 825 Eighth Avenue, New York, NY 10019, at 10:00 A.M., New York City time, on
the fifth full Business Day following the date of this Agreement or at such other date or place as
shall be determined by agreement between the Underwriters and the Issuer. This date and time are
sometimes
14
referred to as the “Closing Date”. On the Closing Date, the Issuer shall deliver or cause to
be delivered through the facilities of The Depository Trust Company the Notes to the
Representatives for the account of each Underwriter against payment to or upon the order of the
Issuer of the purchase price by wire transfer in immediately available funds. Time shall be of the
essence (except that the Issuer will not be responsible for any delay resulting from any action or
inaction of any Underwriter) and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligations of each Underwriter hereunder. The Notes will
be evidenced by one or more global certificates in definitive form (the “Global Note”) and will be
registered in the name of Cede & Co. as nominee of The Depositary Trust Company. The Issuer shall
make the Global Note available for inspection by the Representatives in New York, New York, not
later than 2:00 P.M., New York City time, on the Business Day prior to the Closing Date.
SECTION 5. PAYMENT OF EXPENSES.
The Issuer and the Guarantors will pay or cause to be paid, (a) the costs incident to the
authorization, issuance, sale, authentication, transfer and delivery of the Notes and the
Guarantees and any taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing of the Registration Statement and any amendments and exhibits thereto, each
Preliminary Prospectus, the Final Prospectus and each Issuer Free Writing Prospectus and each
amendment or supplement to any of them and to the preparation of this Agreement and the Indenture;
(c) the costs of mailing and delivering the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each case, exhibits),
each Preliminary Prospectus, the Final Prospectus and any amendment or supplement to any of them;
(d) the costs incident to the preparation, printing, authentication, issuance and delivery of
certificates for the Notes, including any stamp duty, transfer taxes, stock exchange tax,
securities transaction tax, value-added tax or any other tax or duty payable in the U.S., England
or The Netherlands with respect to the authorization, issuance, sale and delivery of the Notes by
the Issuer or the Guarantees by either Guarantor, respectively; (e) the costs of registering the
Notes under the Exchange Act and listing the Notes on the New York Stock Exchange; (f) the fees and
expenses of qualifying the Notes and Guarantees under the securities laws of the several
jurisdictions as provided in Section 2(l) and of preparing, printing and distributing a Blue Sky
Memorandum and a Legal Investment Survey (including related reasonable fees and expenses of counsel
to the Underwriters); (g) any fees charged by rating agencies for rating the Notes; (h) the costs
of preparing the Notes and the Guarantees; (i) the costs of any filings, if any, required to be
made with the Financial Industry Regulatory Authority, including filing fees and the reasonable
fees and expenses of counsel for the Underwriters relating to such filings; (j) the cost and
charges of any transfer agent, registrar or paying agent; (k) the fees and expenses of the Trustee
and the reasonable fees and disbursements of counsel for the Trustee; (l) all advertising expenses
in connection with the offering of the Notes incurred with the consent of the Issuer or the
Guarantors; (m) the fees and disbursements of counsel and accountants to the Issuer and the
Guarantors, and (n) all other costs and expenses incident to the performance of the respective
obligations of the Issuer and the Guarantors hereunder provided that, except as provided in this
Section 5, the Underwriters shall pay their own costs and expenses and any transfer taxes on the
Notes.
15
SECTION 6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
The respective obligations of the several Underwriters under this Agreement to purchase the
Notes is subject to the accuracy of the representations and warranties of the Issuer and the
Guarantors contained herein on the Closing Date, to the accuracy of the statements of the officers
of the Issuer and the Guarantors made in any certificate furnished pursuant to the provisions
hereof, to the performance by the Issuer and the Guarantors of their obligations hereunder, and to
each of the following additional terms and conditions:
(a)
Registration Statement.
The Final Prospectus as amended or supplemented with respect to
such Notes and Guarantees shall have been filed with the Commission pursuant to Rule 424(b) under
the Act within the applicable time period prescribed for such filing by the Rules and Regulations;
the final term sheet contemplated by Section 2(c) hereto, and any other material required to be
filed by the Issuer pursuant to Rule 433(d) under the Act, shall have been filed with the
Commission within the applicable time periods prescribed for such filings by Rule 433; no stop
order suspending the effectiveness of the Registration Statement or any part thereof or any notice
objecting to its use shall have been issued and no stop order proceeding shall have been initiated
or threatened by the Commission; any request of the Commission, whether written or oral, for
inclusion of additional information in any Registration Statement or any prospectus or otherwise
shall have been complied with; and the Issuer and the Guarantors shall not have filed with the
Commission any amendment or supplement to the Registration Statement or any prospectus without the
consent of the Representatives.
(b)
No Suspension of Sale of the Notes.
No order suspending the sale of the Fixed Rate Notes
or the Floating Rate Notes in any jurisdiction designated by the Representatives pursuant to
Section 2(l) hereof shall have been issued, and no proceeding for that purpose shall have been
initiated or threatened.
(c)
Ratings Downgrade.
Since the date hereof, there shall not have occurred any downgrading
in the ratings accorded the Notes or any other securities of Reed Elsevier by any “nationally
recognized statistical rating organization” (as that term is defined by the Commission for purposes
of Rule 436(g) under the Act) and no such organization shall have informed the Issuer or the
Guarantors or made any public announcement that such organization has under surveillance or review,
or intends to or may potentially decrease, its rating of the Notes or any other securities of Reed
Elsevier (other than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating).
(d)
Opinion of Reed Elsevier PLC’s Counsel.
The Representatives shall have received on the
Closing Date an opinion of Freshfields Bruckhaus Deringer LLP, English solicitors to Reed Elsevier
PLC, dated the Closing Date, substantially in the form set forth in Exhibit A.
(e)
Opinion of Reed Elsevier NV’s Counsel.
The Representatives shall have received on the
Closing Date an opinion of Freshfields Bruckhaus Deringer LLP,
16
Dutch counsel to Reed Elsevier NV, dated the Closing Date, substantially in the form set forth
in Exhibit B.
(f)
Opinion of U.S. Counsel.
The Representatives shall have received on the Closing Date an
opinion and negative assurance letter of Simpson Thacher & Bartlett LLP, United States counsel to
the Issuer and the Guarantors, dated the Closing Date, substantially in the form set forth in
Exhibit C.
(g)
Opinion of Underwriters’ Counsel.
The Representatives shall have received on the Closing
Date an opinion and letter from Underwriters’ counsel, Cravath, Swaine & Moore LLP, dated the
Closing Date, with respect to the issuance and sale of the Notes, the Registration Statement, the
Disclosure Package, the Final Prospectus and other related matters as the Underwriters may
reasonably require, and the Issuer shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such matters.
(h)
Comfort Letters.
The Representatives shall have received a letter or letters dated the
date hereof, in form and substance satisfactory to the Representatives prepared by (i) Deloitte
Accountants B.V., Amsterdam, The Netherlands and Deloitte LLP, London, England, independent
accountants and auditors of Reed Elsevier; (ii) Deloitte LLP, London, England, independent
accountants and auditors of Reed Elsevier PLC; and (iii) Deloitte Accountants B.V., Amsterdam, The
Netherlands, independent accountants and auditors of Reed Elsevier NV. In addition, the
Representatives shall have received a letter or letters dated the Closing Date, in form and
substance satisfactory to the Representatives prepared by Deloitte & Touche LLP, Atlanta, Georgia,
independent accountants and auditors of ChoicePoint Inc.
(i)
Bring-down Comfort Letter.
With respect to the letters referred to in the preceding
paragraph (h) and delivered to the Representatives concurrently with the execution of this
Agreement (the “initial letters”), the accountants shall have furnished to the Representatives a
letter or letters (the “bring-down letters”), addressed to the Underwriters and dated the Closing
Date (i) confirming that they are independent public accountants within the meaning of the
Securities Act and are in compliance with the applicable requirements relating to the
qualifications of accountants under the rules and regulations of the Commission under the Act,
(ii) stating with respect to matters involving changes or developments since the respective dates
as of which specific financial information is given in the Final Prospectus, as of the date of the
bring-down letters, the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letters.
(j)
Issuer’s Certificate.
The Issuer shall have furnished to the Representatives on the
Closing Date a certificate, dated the Closing Date, of its President or Vice President and its
Treasurer or an Assistant Treasurer stating that:
(i) The representations, warranties and agreements of the Issuer in Section 1 hereof
are true and correct as of the Closing Date; the Issuer has
complied with all
17
of its agreements contained herein; and the conditions set forth in
Sections 6(a) and 6(b) hereof have been fulfilled; and
(ii) They have carefully examined the Registration Statement, the Disclosure Package
and the Final Prospectus and, in their opinion, (A) the Registration Statement, as of its
effective date, did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein
not misleading, (B) each of the Disclosure Package and the Final Prospectus does not
contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (C) since the date of the
most recent financial statements included in the Disclosure Package and the Final
Prospectus, there has not occurred any event required to be set forth in an amended or
supplemented prospectus which has not been so set forth.
(k)
Guarantors’ Certificate.
The Representatives shall have received on the Closing Date a
certificate, dated the Closing Date, of the chairman, chief executive officer or chief financial
officer of Reed Elsevier PLC and a certificate, dated the Closing Date, of a member of the
Executive Board of Reed Elsevier NV, each stating that:
(i) The representations, warranties and agreements of such Guarantor in Section 1
hereof are true and correct as of the Closing Date; such Guarantor has complied with all
its agreements contained herein; and the conditions set forth in Sections 6(a) and 6(b)
hereof have been fulfilled; and
(ii) They have carefully examined the Registration Statement, the Disclosure Package
and the Final Prospectus and, in their opinion, (A) each Registration Statement, as of its
effective date, did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the statements therein
not misleading, (B) each of the Disclosure Package and the Final Prospectus does not
contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, (C) since the date of the
most recent financial statements included in the Disclosure Package and the Final
Prospectus, there has not occurred any event required to be set forth in an amended or
supplemented prospectus which has not been so set forth, and (D) since the date of the most
recent financial statements included or incorporated by reference in the Registration
Statement (exclusive of any amendment or supplement to such Registration Statement filed
after the Execution Time), there has been no material adverse effect on the condition
(financial or otherwise), earnings, business or properties of the Combined Businesses taken
as a whole, except as set forth in or contemplated in the Disclosure Package and the Final
Prospectus (exclusive of any amendment or supplement thereto).
18
(l)
Additional Conditions.
There shall not have occurred since the respective dates as of
which information is given in the Disclosure Package and the Final Prospectus (i) any material
adverse change in, or any adverse development which materially affects the condition (financial or
otherwise), results of operations, business or properties of the Combined Businesses taken as a
whole other than as set forth in or contemplated by the Disclosure Package and the Final
Prospectus, or (ii) any (A)(1) suspension of trading in any securities issued by the Issuer or
either Guarantor or (2) suspension or material limitation of trading generally on or by, as the
case may be, the New York Stock Exchange, the London or Amsterdam Stock Exchanges or the United
States over-the-counter market or the establishment of minimum prices on any of such exchanges or
such market in any of the foregoing cases by the Commission or such exchange or other regulatory or
governmental body having jurisdiction, (B) declaration of a general moratorium on commercial
banking activities in New York, England or The Netherlands by either Federal, New York State,
English or The Netherlands authorities, (C) outbreak or escalation of hostilities involving the
United States or the United Kingdom or The Netherlands, declaration of a national emergency or war
by the United States or the United Kingdom or The Netherlands or any other calamity or crisis or
(D) material adverse change in the existing financial, political or general economic conditions in
the United States or the United Kingdom or The Netherlands, including any effect of international
conditions on such conditions in the United States or the United Kingdom or The Netherlands, that,
in the judgment of the Representatives, is material and adverse and (iii) in the case of any of the
events specified in clauses (ii)(A) through (ii)(D), such event singly or together with any other
such event makes it, in the judgment of the Representatives, impracticable or inadvisable to market
or sell the Notes on the terms and in the manner contemplated herein.
(m)
Other Information and Documentation.
Prior to the Closing Date, the Issuer and the
Guarantors shall have furnished to the Representatives such further information, certificates and
documents as the Representatives or counsel to the Representatives may reasonably request.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement which are not stated as being in a form previously approved by the Representatives shall
be deemed to be in compliance with the provisions hereof only if they are in the form and substance
reasonably satisfactory to counsel for the Representatives.
The documents required to be delivered by this Section 6 shall be delivered at the offices of
Cravath, Swaine & Moore LLP, counsel for the Underwriters, at Worldwide Plaza, 825 Eighth Avenue,
New York, NY 10019, on the Closing Date.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer and the Guarantors, jointly and severally, shall indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either the Act or the Exchange
Act from and against any loss, claim, damage or liability,
19
joint or several, and any action in respect thereof, to which they or any of them may become
subject, under the Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement of a material fact contained in the
registration statement for the registration of the Notes as originally filed or in any amendment
thereof, or in the Base Prospectus, any Preliminary Prospectus or any other preliminary prospectus
supplement relating to the Notes, the Final Prospectus, any Issuer Free Writing Prospectus or the
information contained in the final term sheet required to be prepared and filed pursuant to Section
2(c) hereto, or in any amendment thereof or supplement thereto, or arises out of, or is based upon,
the omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading and shall reimburse each such indemnified
person for any legal and other expenses reasonably incurred by such indemnified person in
investigating or defending or preparing to defend against any such loss, claim, damage, liability
or action, as such expenses are incurred
provided
,
however
, that the Issuer and the Guarantors
shall not be liable in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity with written
information furnished to the Issuer or any of the Guarantors by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein. The Issuer acknowledges that the
statements set forth in the fourth, fifth, sixth, eighth, ninth and tenth paragraphs under the
caption “Underwriting” in the Preliminary Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus. The foregoing
indemnity agreement is in addition to any liability which the Issuer or the Guarantors may
otherwise have to any Underwriter or any controlling person of any Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the
Issuer and the Guarantors, each of their respective directors, employees, each of the officers who
signed the Registration Statement, any person, if any, who controls any of the Issuer or the
Guarantors within the meaning of the Act or the Exchange Act, the U.S. authorized representative of
the Guarantors and any person nominated to become a director of the Issuer who signed a consent
filed with the Registration Statement from and against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which an Issuer or Guarantor or any such
controlling person may become subject under the Act, the Exchange Act, federal or state statutory
law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of the Notes as
originally filed or in any amendment thereof, or in the Base Prospectus, any Preliminary Prospectus
or any other preliminary prospectus supplement relating to the Notes, the Final Prospectus, any
Issuer Free Writing Prospectus or the information contained in the final term sheet required to be
prepared and filed pursuant to Section 2(c) hereto, or in any amendment thereof or supplement
thereto, or arises out of or is based upon the omission or alleged omission to state therein a
material fact required
20
to be stated therein or necessary to make the statements therein not misleading, in each case
to the same extent as the foregoing indemnity from the Issuer to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the Issuer or the
Guarantors by or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. The Issuer acknowledges that
the statements set forth the fourth, fifth, sixth, eighth, ninth and tenth paragraphs under the
caption “Underwriting” in the Preliminary Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for inclusion in any
Preliminary Prospectus, the Final Prospectus or any Issuer Free Writing Prospectus.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) of this
Section 7 of notice of any claim or the commencement of any action, the indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b)
of this Section 7, notify the indemnifying party in writing of the claim or the commencement of the
action; provided that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to an indemnified party otherwise than
under this Section 7. If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable to the indemnified
party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs of investigation; provided
that any indemnified party shall have the right to retain its own counsel (including local
counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest, (ii) the actual or
potential defendants in, or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. It is understood that the indemnifying party shall not, in connection
with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate counsel (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred.
Such firm shall be designated in writing by the relevant Underwriter or Underwriters in the case of
parties indemnified pursuant to paragraph (a) above and by the Issuer and the Guarantors in the
21
case of parties indemnified pursuant to paragraph (b) above. The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written consent, but if settled
with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees
to indemnify the indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by this Section 7, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying party of such
request and (ii) such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7 shall for any reason be unavailable
to or insufficient to hold harmless an indemnified party under Section 7(a) or 7(b) hereof in
respect of any loss, claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Issuer and the Guarantors on the one hand and the
relevant Underwriter on the other from the offering of the Notes or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or for any reason, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Issuer and the Guarantors on the one hand and such Underwriter on the other
with respect to the statements or omissions or actions which resulted in such loss, claim, damage
or liability, or action in respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Issuer and the Guarantors on the one hand and an Underwriter
on the other with respect to the offering of Notes shall be deemed to be in the same proportion as
the net proceeds from such offering (before deducting expenses) received by the Issuer on the one
hand, and the total underwriting discounts and commissions received by the Underwriters with
respect to the Notes purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the Notes under this Agreement, in each case as set forth in the
table on the cover page of the Final Prospectus. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the Issuer or the
Guarantors on the one hand or the Underwriter, on the other, the intent of the parties and their
respective knowledge, access to information and opportunity to correct or prevent such statement or
omission. For purposes of the preceding two sentences, the net proceeds deemed to be received by
the Issuer shall be deemed to be also for the benefit of the Guarantors and information supplied by
the Issuer shall also be deemed to have been
22
supplied by the Guarantors. The Issuer, the Guarantors and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were to be determined by
pro rata
allocation or by any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in respect thereof, referred to above
in this Section 7 shall be deemed to include, for purposes of this Section 7, any legal or other
expenses reasonably incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this Section 7, none of the
Underwriters shall be responsible for any amount in excess of the underwriting discount or
commission applicable to the Notes purchased by such Underwriter hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters’ obligations to contribute as provided in this Section 7(d) are several in proportion
to their respective underwriting obligations and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND OBLIGATIONS TO SURVIVE DELIVERY.
The respective indemnities, agreements, representations, warranties and other statements of
the Issuer and the Guarantors and the Underwriters contained in this Agreement, or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any Underwriter or any officer,
director, employee or any person controlling such Underwriter or by or on behalf of the Issuer and
the Guarantors or any person controlling the Issuer or the Guarantors, and shall survive each
delivery of and payment for any of the Notes. The provisions of Sections 7 and 11 shall survive
the termination or cancellation of this Agreement.
SECTION 9. TERMINATION.
The obligations of the Underwriters hereunder may be terminated by the Representatives by
notice given to and received by the Issuer prior to delivery of and payment for the Notes, if,
prior to that time, any of the events described in Sections 6(c) or 6(l) shall have occurred or if
the Underwriters shall decline to purchase the Notes for any reason permitted under this Agreement.
SECTION 10. DEFAULTING UNDERWRITERS.
If, on the Closing Date, any Underwriter defaults in the performance of its obligations to
purchase the Notes under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Notes which the defaulting Underwriter agreed but failed to purchase on
the Closing Date in the respective proportions which the principal amount of Notes set forth
opposite the name of each remaining non-defaulting Underwriter in Schedule 1 hereto bears to the
aggregate principal amount of Notes set forth opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1
23
hereto;
provided
,
however
, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Notes on the Closing Date if the aggregate principal amount of the
Notes which the defaulting Underwriter or Underwriters agreed but failed to purchase on such date
exceeds 9.09% of the Notes to be purchased on the Closing Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the principal amount of Notes
which it agreed to purchase on the Closing Date pursuant to the terms of Section 3. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree, shall have the right, but shall not
be obligated, to purchase, in such proportion as may be agreed upon among them, all the Notes to be
purchased on the Closing Date. If the remaining Underwriters or other underwriters satisfactory to
the Representatives do not elect to purchase the Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase on the Closing Date, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or the Issuer or either Guarantor,
except that the Issuer and the Guarantors will continue to be liable for the payment of expenses to
the extent set forth in Section 5. As used in this Agreement, the term “Underwriter” includes, for
all purposes of this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 10, purchases Notes which a defaulting Underwriter
agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have
to the Issuer or any Guarantor or any non-defaulting Underwriter for damages caused by its default.
If other underwriters are obligated or agree to purchase the Notes of a defaulting or withdrawing
Underwriter, either the Representatives or the Issuer may postpone the Closing Date for up to seven
full Business Days in order to effect any changes that in the opinion of counsel for the Issuer and
the Guarantors or counsel for the Underwriters may be necessary in any Registration Statement, the
Prospectus or in any other document or arrangement.
SECTION 11. REIMBURSEMENT OF UNDERWRITERS’ EXPENSES.
If the Issuer shall fail to tender the Notes and Guarantees for delivery to the Underwriters
by reason of any failure, refusal or inability on the part of the Issuer or any Guarantor to
perform any agreement on its part to be performed, or because any other condition of the
Underwriters’ obligations hereunder required to be fulfilled by the Issuer or any Guarantor is not
fulfilled (other than by reason of any event described in Section 6(l), except for the suspension
of trading or minimum prices of the securities of the Issuer or either Guarantor), the Issuer and
the Guarantors, jointly and severally, will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by the Underwriters
in connection with this Agreement and the proposed purchase of the Notes, and promptly following
receipt of an invoice the Issuer and the Guarantors, jointly and severally, shall pay the full
amount thereof to the Representatives. If this Agreement is terminated pursuant to Section 10 by
reason of the default of one or more Underwriters, neither the Issuer nor any Guarantor shall be
obligated to reimburse any defaulting Underwriter on account of those expenses.
24
SECTION 12. NOTICES.
Except as otherwise provided herein, all notices and other communications hereunder shall be
in writing and shall be deemed to have been given only if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed as follows: Citigroup
Global Markets Inc., Attn: General Counsel, 388 Greenwich Street, New York, NY 10013 (Fax no.:
(212) 816-7912).
Notices to the Issuer and the Guarantors shall be directed as follows: (i) Reed Elsevier
Capital Inc., Charles Durante, Secretary, Reed Elsevier Capital Inc., 1105 North Market Street,
Suite 942, Wilmington, DE 19801, Telephone No.: (302) 427-9299, Fax No.: (302) 429-7608; (ii) Reed
Elsevier PLC, 1-3 Strand, London WC2N 5JR, United Kingdom, Attention: Steve Cowden, General
Counsel, Telephone No.: 44-20-7166-5681, Fax No.: 44-20-7166-5659; and (iii) Reed Elsevier NV,
Radarweg 29, 1043 NX Amsterdam, The Netherlands, Attention: Company Secretary, Telephone No.:
31-20-485-2905, Fax No.: 31-20-485-2032.
SECTION 13. BINDING EFFECT; BENEFITS.
This Agreement shall be binding upon each Underwriter, the Issuer, the Guarantors, and their
respective successors. This Agreement and the terms and provisions hereof are for the sole benefit
of only those persons, except that (a) the representations, warranties, indemnities and agreements
of the Issuer and the Guarantors contained in this Agreement shall also be deemed to be for the
benefit of the directors, officers and employees of each Underwriter and the person or persons, if
any, who control any Underwriter within the meaning of Section 15 of the Act, and (b) the
representations, warranties, indemnities and agreements of the Underwriters contained in this
Agreement shall be deemed to be for the benefit of directors of the Issuer and the Guarantors,
officers of the Issuer and the Guarantors who have signed the Registration Statement, any person
controlling the Issuer and the Guarantors and any person nominated to become a director of the
Issuer who has signed a consent filed with the Registration Statement. Nothing in this Agreement
is intended or shall be construed to give any person, other than the persons referred to in this
Section, any legal or equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION 14. NO FIDUCIARY DUTY
The Issuer hereby acknowledges that (a) the purchase and sale of the Notes pursuant to this
Agreement is an arm’s-length commercial transaction between the Issuer, on the one hand, and the
Underwriters and any affiliate through which it may be acting, on the other, (b) the Underwriters
are acting as principal and not as an agent or fiduciary of the Issuer and (c) the Issuer’s
engagement of the Underwriters in connection with the offering and the process leading up to the
offering is as independent contractors and not in any other capacity. Furthermore, the Issuer
agrees that it is solely responsible for making its own judgments in connection with the offering
(irrespective of whether any of the Underwriters has advised or is currently advising the Issuer on
related or other
25
matters). The Issuer agrees that it will not claim that the Underwriters have rendered
advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the
Issuer, in connection with such transaction or the process leading thereto.
SECTION 15. INTEGRATION
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Issuer and the Underwriters, or any of them, with respect to the subject matter hereof.
SECTION 16. GOVERNING LAW; COUNTERPARTS.
This Agreement shall be governed by and construed in accordance with the laws of the State of
New York without application of choice of law principles. This Agreement may be executed in
counterparts and the executed counterparts shall together constitute a single instrument.
SECTION 17. WAIVER OF JURY TRIAL
The Issuer hereby irrevocably waives, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby.
SECTION 18. PARAGRAPH HEADINGS.
The paragraph headings used in this Agreement are for convenience of reference only, and are
not to affect the construction hereof or be taken into consideration in the interpretation hereof.
SECTION 19. SUBMISSION TO JURISDICTION; APPOINTMENT OF AGENT FOR SERVICE; CURRENCY INDEMNITY.
(a) The Issuer and each Guarantor agrees that any legal suit, action or proceeding brought by
any Underwriter or by each person, if any, who controls any Underwriter arising out of or based
upon this Agreement may be instituted in any U.S. Federal or New York State court in the Borough of
Manhattan, City of New York, New York, irrevocably waives any objection which it may now or
hereafter have to laying of venue in any such suit, action or proceeding in any such court and
irrevocably accepts and submits to the non-exclusive jurisdiction of such courts in any such suit,
action or proceeding. Each of the Issuer and the Guarantors hereby appoints Henry Horbaczewski, in
his capacity as general counsel to Reed Elsevier Inc., or his successor in such capacity, at 125
Park Avenue, New York, New York 10017, as its authorized agent (the “Process Agent”) upon whom
process may be served in any suit, action or proceeding based on this Agreement which may be
instituted in any U.S. Federal or New York State court in the Borough of Manhattan, City of New
York, New York, by any Underwriter or any such controlling person and expressly accepts the
jurisdiction of any such court in respect of any such action. Such appointment shall be
irrevocable. The Process Agent has agreed to act as said agent for service of process, and the
Issuer and the Guarantors agree
26
to take any and all actions, including the filing of any and all documents and instruments,
that may be necessary to continue such appointment in full force and effect as aforesaid. Service
of process upon the Process Agent shall be deemed effective service of process upon the Issuer and
the Guarantors; provided that nothing herein shall affect the right of any Underwriter or any
person controlling any Underwriter to serve process in any other manner permitted by law.
Notwithstanding the foregoing, any action against the Issuer or the Guarantors arising out of or
based upon this Agreement may also be instituted by any Underwriter or any person controlling any
Underwriter in any court in England and Wales or The Netherlands, and the Issuer and the Guarantors
expressly accept the jurisdiction of any such court in any such action. The provisions of this
Section 16 are intended to be effective upon the execution of this Agreement without further action
by the Issuer or the Guarantors and the introduction of a true copy of this Agreement into evidence
shall be conclusive and final evidence as to such matters.
The Issuer and each Guarantor hereby agrees to indemnify each Underwriter against loss
incurred by such Underwriter as a result of any judgment or order being given or made for any
amount due hereunder or under the Notes or the Guarantees and such judgment or order being
expressed and paid in a currency (the “Judgment Currency”) other than United States dollars and as
a result of any variation as between (i) the rate of exchange at which the United States dollar
amount is converted into Judgment Currency for the purpose of such judgment or order, and (ii) the
rate of exchange at which such Underwriter would have been able to purchase United States dollars
with the amount of the Judgment Currency actually received by such Underwriter if such Underwriter
had utilized such amount of Judgment Currency to purchase United States dollars as promptly as
practicable upon such Underwriter’s receipt thereof. The foregoing indemnity shall constitute a
separate and independent obligation of the Issuer and the Guarantors and shall continue in full
force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of
exchange” shall include an allowance for any customary or reasonable premiums and costs of exchange
payable in connection with the purchase of, or conversion into, the relevant currency.
SECTION 20. DEFINITIONS.
The terms that follow, when used in this Agreement, shall have the meanings indicated.
“Act” shall mean the Securities Act of 1933, as amended and the rules and regulations
of the Commission promulgated thereunder.
“Base Prospectus” shall mean the base prospectus referred to in paragraph 1(a) above
contained in the applicable Registration Statement at the Execution Time.
“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday
or a day on which banking institutions or trust companies are authorized or obligated by
law to close in New York City, London or Amsterdam.
27
“Combined Businesses” means Reed Elsevier PLC, Reed Elsevier NV, Reed Elsevier Group
plc and Elsevier Finance BV and their respective subsidiaries, associates and joint
ventures.
“Commission” shall mean the Securities and Exchange Commission.
“Disclosure Package” shall mean (i) the Base Prospectus, (ii) the Preliminary
Prospectus used most recently prior to the Execution Time, (iii) the Issuer Free Writing
Prospectuses, if any, identified in Schedule 3 hereto, (iv) the final term sheet prepared
and filed pursuant to Section 2(c) hereto, and attached as Schedule 2 hereto, and (v) any
other Free Writing Prospectus that the parties hereto shall hereafter expressly agree in
writing to treat as part of the Disclosure Package.
“Effective Date” shall mean each date and time that the applicable Registration
Statement and any post-effective amendment or amendments thereto became or becomes
effective.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission promulgated thereunder.
“Execution Time” shall mean the date and time that this Agreement is executed and
delivered by the parties hereto.
“Final Prospectus” shall mean the prospectus supplement relating to the Notes that was
first filed pursuant to Rule 424(b) after the Execution Time, together with the Base
Prospectus.
“Free Writing Prospectus” shall mean a free writing prospectus, as defined in Rule
405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as
defined in Rule 433.
“Preliminary Prospectus” shall mean any preliminary prospectus supplement to the Base
Prospectus referred to in paragraph 1(a) above which is used prior to the filing of the
Final Prospectus, together with the Base Prospectus.
“Registration Statement” shall mean the registration statement, as applicable,
referred to in paragraph 1(a) above, including exhibits and financial statements and any
prospectus supplement relating to the Notes that is filed with the Commission pursuant to
Rule 424(b) and deemed part of such registration statement pursuant to Rule 430B, as
amended on each Effective Date and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date, shall also mean such registration statement as
so amended
28
“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”, “Rule 415”, “Rule 424”,
“Rule 430B” and “Rule 433” refer to such rules under the Act.
“Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended and the
rules and regulations of the Commission promulgated thereunder.
“Well-Known Seasoned Issuer” shall mean a well-known seasoned issuer, as defined in
Rule 405.
If the foregoing correctly sets forth our agreement, please indicate your acceptance hereof in
the space provided for that purpose below.
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Very truly yours,
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REED ELSEVIER CAPITAL INC.
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By:
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/s/ Kenneth Fogarty
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Authorized Signatory
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REED ELSEVIER PLC
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By:
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/s/ Stephen Cowden
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Authorized Signatory
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REED ELSEVIER NV
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By:
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/s/ Mark Armour
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Authorized Signatory
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CONFIRMED AND ACCEPTED,
as of the date first
above written:
BARCLAYS CAPITAL INC.
CITIGROUP GLOBAL MARKETS INC.
HSBC SECURITIES (USA) INC.
J. P. MORGAN SECURITIES INC.
As Representatives of the Underwriters named in Schedule 1
By: CITIGROUP GLOBAL MARKETS INC.
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By:
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/s/ Brian D. Bednarski
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Authorized Signatory
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For itself and the other Underwriters
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named in Schedule 1 hereto
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Signature Page to Underwriting Agreement
Schedule 1
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Principal Amount of
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Underwriters
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2014 Notes
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Barclays Capital Inc.
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$
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137,500,000
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Citigroup Global Markets Inc.
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$
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137,500,000
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HSBC Securities (USA) Inc.
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$
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137,500,000
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J. P. Morgan Securities Inc.
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$
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137,500,000
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Total
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$
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550,000,000
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Principal Amount of
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Underwriters
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2019 Notes
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Barclays Capital Inc.
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$
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237,500,000
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Citigroup Global Markets Inc.
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$
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237,500,000
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HSBC Securities (USA) Inc.
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$
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237,500,000
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J. P. Morgan Securities Inc.
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$
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237,500,000
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Total
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$
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950,000,000
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Schedule 2
Form of Final Term Sheet
Filed Pursuant to Rule 433
Registration No.333-155717-01
January 13th, 2009
PRICING TERM SHEET
Reed Elsevier Capital Inc.
$550,000,000 7.750% Notes due 2014
$950,000,000 8.625% Notes due 2019
Fully and unconditionally guaranteed by
Reed Elsevier PLC & Reed Elsevier NV
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Issuer:
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Reed Elsevier Capital Inc.
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Guarantors:
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Reed Elsevier PLC & Reed Elsevier NV
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Title of Securities:
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7.750% Notes due 2014 (the “2014 Notes”)
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8.625% Notes due 2019 (the “2019 Notes”)
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Principal Amount Offered:
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$550,000,000 (2014 Notes)
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$950,000,000 (2019 Notes)
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Maturity Date:
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January 15th, 2014 (2014 Notes)
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January 15th, 2019 (2019 Notes)
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Coupon (Interest Rate):
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7.750% semi-annually (2014 Notes)
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8.625% semi-annually (2019 Notes)
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Interest Payment Dates:
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Semi-annually on January and July of
each year, beginning on July 15th, 2009
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Day Count Fraction:
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30/360
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Price to Public (Issue Price):
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99.744% of principal amount, plus
accrued interest from the expected
settlement date (2014 Notes)
99.612% of principal amount, plus
accrued interest from the expected
settlement date (2019 Notes)
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Net Proceeds to the Issuer:
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$1,488,706,000 (before offering expenses)
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Benchmark Treasury:
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1.500% due December 2013 (2014 Notes)
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3.750% due November 2018 (2019 Notes)
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Benchmark Treasury Yield:
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1.438% (2014 Notes)
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2.309% (2019 Notes)
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Spread to Benchmark Treasury:
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+ 637.5 basis points (2014 Notes)
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+ 637.5 basis points (2019 Notes)
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Yield to Maturity:
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7.813% (2014 Notes)
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8.684% (2019 Notes)
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Optional Redemption:
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Make-Whole Call at Treasury Rate, plus
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50 basis points
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Capitalization (in millions):
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As of June 30, 2008, after giving effect
to the offering of the Notes and the
other transactions described in the
prospectus supplement under the heading
“Capitalization”, on a pro forma basis
the Issuer would have had short term
borrowings of £1,185 ($1,718), long term
borrowings of £4,131 ($5,990) and total
capitalization of £5,047 ($7,318).
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Ratio of Earnings to Fixed
Charges:
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After giving effect to the offering of
the Notes and the other transactions
described in the prospectus supplement
under the heading “Ratio of Earnings to
Fixed Charges” the ratio of earnings to
fixed charges would have been 4.0x (4.3x
including RBI ) at June 30, 2008 and
4.0x (4.3x including RBI ) at December
31, 2007.
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Trade Date:
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January 13th, 2009
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Expected Settlement Date
(T+3):
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January 16th, 2009
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CUSIP:
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758202 AF2 (2014 Notes)
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758202 AG0 (2019 Notes)
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ISIN:
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US758202AF28 (2014 Notes)
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US758202AG01 (2019 Notes)
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Joint Book-Running Managers:
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Barclays Capital Inc.
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Citigroup Global Markets Inc.
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HSBC Securities (USA) Inc.
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JPMorgan Securities Inc.
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Note: A securities rating is not a recommendation to buy, sell or hold securities and may be
subject to revision or withdrawal at any time.
A-2
The issuer has filed a registration statement (including a prospectus) with the SEC for the
offering to which this communication relates. Before you invest, you should read the prospectus in
that registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering.
You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling Barclays Capital Inc. toll free at
1-888-227-2275 extension 2663, Citigroup Global Markets Inc. toll free at 1-877-858-5407, HSBC
Securities (USA) Inc. toll free at 1-866-811-8049 or J.P. Morgan Securities Inc. collect at
212-834-4533.
Any disclaimers or other notices that may appear below are not applicable to this communication and
should be disregarded. Such disclaimers or other notices were automatically generated as a result
of this communication being sent via Bloomberg or another email system.
A-3
Schedule 3
Issuer Free Writing Prospectuses
None.
Exhibit A
Opinion of Freshfields Bruckhaus Deringer LLP, UK Counsel to the Issuer
Barclays Capital Inc.
Citigroup Global Markets Inc.
HSBC Securities (USA) Inc.
J.P. Morgan Securities Inc.
As Representatives of the several Underwriters
named in Schedule 1 to the Underwriting Agreement
dated [
•
] 2009
C/o Citigroup Global Markets Inc.
390 Greenwich St., 4th Floor
New York, New York 10013
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london
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65 Fleet Street
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London EC4Y 1HS
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T
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+ 44 20 7936 4000
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Direct T
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+
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F
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+ 44 20 7832 7001
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Direct F
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+ 44 20 7936 3960
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LDE No 23
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freshfields.com
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doc id
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LON5062164
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our ref
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ETHE/CJH
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your ref
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client matter no
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103607-0014
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[
•
], 2009
Dear Sirs
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(1) Reed Elsevier Capital Inc.:
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US$[
•
]
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[
•
]% Notes due 2014
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US$[
•
]
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[
•
]% Notes due 2019
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(2) Introduction
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1. We have acted as English legal advisers to Reed Elsevier PLC (
REPLC
) in relation to joint and
several guarantees (the
Guarantees
) given by REPLC and Reed Elsevier N.V. (
RENV
) in connection with
the issue by Reed Elsevier Capital Inc. (the
Issuer
) of an aggregate of US$[
•
] [
•
]% Notes of the
Issuer due 2014 and US$[
•
] [
•
]% Notes due 2019 (the
Notes
). In this matter we have taken
instructions solely from REPLC.
2. We have been asked by REPLC pursuant to Section 6(d) of the Underwriting Agreement dated as of
[
•
], 2009 between the Issuer, REPLC, RENV and Barclays Capital Inc., Citigroup Global Markets Inc.,
HSBC Securities (USA) Inc. and J.P. Morgan Securities Inc. and the other underwriters named in
Schedule 1 thereto (together the
Underwriters
) (the
Underwriting Agreement
) to deliver our opinion
in respect of the issue of the Notes and the granting of the Guarantees endorsed thereon.
(3) Documents Reviewed
A-1
3. In connection with the issue of the Notes and the granting of the Guarantees endorsed thereon,
we have examined the documents listed in Schedule 1 to this opinion and relied upon the statements
as to factual matters contained in or made pursuant to each such document. Terms defined in
Schedule 1 have the same meaning where used in this opinion.
(4) Nature of Opinion, and Observations
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4.
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(a) This opinion is confined to matters of English law (including case law) as at the date of
this opinion, and is governed by and shall be construed in accordance with English law. We
express no opinion with regard to any system of law other than the laws of England as
currently applied by the English courts, and in particular, we express no opinion on European
Community law as it affects any jurisdiction other than England.
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(b)
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Statements relating to United Kingdom taxation and to the need for consents are based on
English law (including case law) as applied by the English courts, and on generally published
practice of H.M. Revenue & Customs (
HMRC
), as at the date of this opinion.
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(c)
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By giving this opinion, we do not assume any obligation to notify you of future changes in
law or HMRC practice which may affect the opinions expressed in this opinion, or otherwise to
update this opinion in any respect.
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(d)
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To the extent that the laws of the State of New York, the General Corporation Law of the
State of Delaware and any applicable federal laws of the United States of America (upon all of
which you have received the advice of Cravath, Swaine & Moore LLP) or the laws of the
Netherlands may be relevant, we have made no independent investigation thereof and our opinion
is subject to the effect of such laws including the matters contained in the opinions of
Simpson Thacher & Bartlett LLP and Freshfields Bruckhaus Deringer LLP, Amsterdam. We express
no views on the validity of the matters set out in such opinions.
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(e)
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We should also like to make the following observations:
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(i)
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Factual Statements:
we have not been responsible for
investigating or verifying the accuracy of the facts (including statements of
foreign law), or the reasonableness of any statement of opinion or intention,
contained in or relevant to any document referred to in this opinion, or that no
material facts have been omitted therefrom;
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(ii)
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Nature of Role:
we have not been involved in the detailed
preparation or negotiation of the Documents and have reviewed these documents
only for the limited purpose of giving this opinion in relation to the issue of
the Notes and the granting of the Guarantees. Accordingly, we express no view
as to the suitability of the Documents or of their respective
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A-2
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provisions or their respective general compliance with market practice
or any commercial aspects of such document.
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(iii)
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Formulae and Cash flows:
we have not been responsible for
verifying the accuracy or correctness of any formula or ratio (whether expressed
in words or symbols) or financial schedule contained in any of the Documents, or
any cash flow model used or to be used in connection with the Transaction, or
whether such formula, ratio, financial schedule or cash flow model appropriately
reflects the commercial arrangements between the parties;
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(iv)
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Operational Licences:
we have not investigated whether REPLC has
obtained any of the operational licences, permits and consents which it may
require for the purpose of carrying on its business (including the entry into
the Documents); and
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(v)
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Anti-trust:
we have not considered whether the entry into the
Documents complies with anti-trust, competition, public procurement or state aid
laws, nor whether any filings or clearances are required under such laws.
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(5) Opinion
5. On the basis stated in paragraph 4, and subject to the assumptions in Schedule 2, the
qualifications in Schedule 3 and any matters not disclosed to us, we are of the opinion that:
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(a)
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Corporate Existence:
REPLC has been duly incorporated in Great Britain and registered in
England and Wales, and:
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(i)
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the Company Search revealed no order or resolution for the
winding up of REPLC and no notice of appointment of a liquidator, receiver,
administrative receiver or administrator in respect of REPLC; and
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(ii)
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the Winding up Enquiry indicated that no petition for the winding
up of REPLC has been presented;
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(b)
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Corporate Capacity:
REPLC has the requisite corporate capacity to own its currently owned
property and carry on its businesses as currently operated.
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(c)
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Corporate Power:
REPLC has the requisite corporate capacity to enter into the Documents and
to perform its obligations under them;
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(d)
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Corporate Authorisation:
the execution, delivery and performance of the Documents have been
duly authorised by all necessary corporate action on the part of REPLC, and the Documents have
been duly executed by REPLC;
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(e)
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Valid/Enforceable Obligations:
on the assumption and to the extent that the obligations of
REPLC under the Documents constitute legal, valid and binding
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A-3
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obligations of REPLC enforceable
in accordance with all applicable laws (including the laws of the State of New York) other
than the laws of England, the obligations of REPLC under the Documents, when executed and
delivered by REPLC as provided in the Indenture, will be recognised by, and enforceable in,
the English courts subject to and in accordance with the provisions set out below;
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(f)
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Consents/Licences:
no consents, licences, approvals or authorisations of any governmental or
other authority or agency in the United Kingdom are required by law in connection with the
execution, delivery and performance of the Underwriting Agreement and the Indenture by REPLC
and the issue, delivery or performance of the Guarantees;
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(g)
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No Violation:
the execution, delivery and performance of the Documents by REPLC do not and
will not result in any violation by REPLC of any term of its Memorandum or Articles of
Association or of any law or regulation having the force of law in England and applicable to
REPLC as to performance;
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(h)
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Filings:
no filing or registration of any of the Documents is necessary under English law;
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(i)
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Choice of Law:
the choice of the laws of the State of New York to govern the Documents will
(subject to the qualification in paragraph (c) of Schedule 3) be recognised and upheld by the
English courts);
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(j)
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Proceedings in English courts:
under the current practice of English Courts, the holders of
the Notes with the Guarantees endorsed thereon which are natural persons located in the United
States or corporations incorporated, or partnerships organised, under the laws of any state of
the United States and the Underwriters would be entitled to commence proceedings as plaintiffs
in the English courts against REPLC, subject as is provided below, without any restrictions on
such entitlement which are not generally applicable to a resident of the United Kingdom, a
British subject or a company incorporated in the United Kingdom; any action brought against
REPLC in the English courts would be subject to the rules and procedures of the English
courts, including (i) the power of an English court to order a claimant in an action, in
certain circumstances, to provide security for costs and (ii) the requirement for the partners
of a foreign partnership with no place of business in England to sue in their own names rather
than in the name of the partnership unless the partnership is a body corporate or similar
entity under the law of the country in which it is formed, in which case it would be entitled
to sue in its own name;
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(k)
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European Union Tax Considerations:
the statements in the Prospectus under the caption
“Taxation — European Union Tax Considerations” insofar as they purport to summarise European
Council Directive 2003/48/EC regarding the taxation of
savings income of residents of member states of the European Union, constitute a fair
summary of that Directive as at the date of this opinion;
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A-4
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(l)
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Judgments by the courts of the State of New York
:
a judgment rendered by a court of the State
of New York or a Federal court of the United States in relation to the Guarantees, the
Indenture and the Underwriting Agreement for a final and conclusive judgment for debt or a
definite sum of money will be recognized and enforced in England provided that the party
against whom the judgment was given properly submitted to the jurisdiction of the courts of
the State of New York or a Federal court of the United States (which had jurisdiction under
its own laws) and none of the following circumstances apply:
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(i)
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the judgment was procured by fraud;
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(ii)
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the judgment was given contrary to the rules of natural or
substantial justice, for example where a defendant is deprived of notice of, or
an adequate opportunity to take part in, the proceedings;
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(iii)
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recognition of the judgment would be contrary to English public
policy;
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(iv)
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the judgment conflicts with an English judgment or a foreign
judgment given earlier in time;
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(v)
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enforcement of the judgment would involve the enforcement of a
foreign penal or revenue or other public law;
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(vi)
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enforcement of the judgment would contravene the Protection of
Trading Interests Act of 1980, section 5 of which precludes, among other things,
the enforcement in the United Kingdom of any judgment given by a court of an
overseas country which is a judgment for multiple damages which exceed the
compensatory element of the judgment award; or
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(vii)
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recognition or enforcement thereof would be contrary to the
terms of the Administration of Justice Act 1920, the Foreign Judgments
(Reciprocal Enforcement) Act 1933 or the Conventions;
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(m)
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Ranking
:
on the assumption that the payment obligations of REPLC under the Guarantees are
unsecured and unsubordinated, such payment obligations rank equally and rateably with all
other unsecured and unsubordinated obligations of REPLC but subject to the rights of any
person having secured rights arising by contract or preferred rights, whether such rights
arise by statute, law (or the operation thereof) or otherwise;
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(n)
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Documentary Taxes
:
no registration, stamp, capital or other similar tax or duty is payable in
England on the issue or initial delivery of the Notes or the giving of the Guarantees;
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(o)
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Withholding Taxes
:
although the position is not clear, the better view, based on a
consideration of the reported cases, is that a payment by REPLC in respect of interest owed by
the Issuer under the Underwriting Agreement will not be
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A-5
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regarded as having a United Kingdom
source for United Kingdom tax purposes. On that basis, no requirement to deduct or withhold
on account of United Kingdom income tax in respect of such payments would apply to the
Company. The existing case law authority is, however, equivocal and there remains some risk
that such payments could be treated as having a United Kingdom source in which case, subject
to any relief under an applicable double tax treaty or any applicable exemption, there might
be a requirement on such persons to deduct or withhold tax from such payments. No direction
will be given in the United Kingdom Centre for Non-Residents unless the relevant forms have
been completed by the relevant holder of a Note and certified by the appropriate tax office
applicable to the holder.
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(6) Benefit of Opinion
6. This opinion is addressed to you solely for your own benefit in relation to the Documents and,
except with our prior written consent, is not to be transmitted or disclosed to or used or relied
upon by any other person or used or relied upon by you for any other purpose except that The Bank
of New York Mellon (as successor to JPMorgan Chase Bank, N.A.) as trustee under the Indenture, may
rely on the opinions set out in paragraphs 5(a), 5(b), 5(c), 5(d) and 5(e) (insofar as paragraphs
5(c), 5(d) and 5(e) relate to the Indenture) as though this opinion was addressed to it.
(7) Conflicts of Interest
7. We have not advised you on the content of any of the Documents or assisted you in any way in
relation to their negotiation; on those matters you have been separately advised by your counsel.
We accept a duty of care to you in relation to the matters opined on in this opinion, but the
giving of this opinion is not to be taken as implying that we owe you any wider duty of care in
relation to the issue of the Notes and the granting of the Guarantees endorsed thereon or the
content of the Documents and their commercial and financial implications. Notwithstanding the
provision of this opinion, we expressly reserve the right to represent our client (if it so
requests) in relation to any matters affecting any of the Documents at any time in the future
(whether or not you retain separate advisers on any such matter), and the fact that we have
provided this opinion to you shall not be deemed to have caused us to have any conflict of interest
in relation to the giving of any such advice. We shall have no obligation to advise you on any of
the matters referred to in this opinion. The provision of this opinion to you does not create or
give rise to any client relationship between this firm and you.
Yours faithfully
A-6
SCHEDULE 1
DOCUMENTS
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(a)
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the secretarial certificate of REPLC dated [
•
] 2009 (the
Secretary’s Certificate
);
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(b)
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a copy of the prospectus and prospectus supplement relating to the Notes dated [
•
] 2009 (the
Prospectus
);
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(c)
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a copy of an executed original of the Underwriting Agreement;
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(d)
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a copy of the indenture (the
Indenture
) made between JPMorgan Bank, N.A. (formerly The Chase
Manhattan Bank), as trustee, the Issuer, REPLC and RENV and dated as of 9 May 1995 and a copy
of each supplemental indenture thereto (being the Supplemental Indenture No 1 executed and
delivered on March 2, 1998, the Supplemental Indenture No 2 executed and delivered on May 26,
1998, the Third Supplemental Indenture executed and delivered on February 21, 2001, the Fourth
Supplemental Indenture executed and delivered on July 25, 2001 and the Fifth Supplemental
Indenture executed and delivered on [
•
] 2009); and
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(e)
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a copy of the form of the Notes and the Guarantees endorsed thereon attached as Exhibits to
the Secretary’s Certificate;
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The Underwriting Agreement, the Indenture, each Note and the Guarantees are together referred to as
the
Documents
and sometimes are individually referred to as a
Document
.
A-7
SCHEDULE 2
ASSUMPTIONS
In considering the Documents and in rendering this opinion, we have (with your consent and without
any further enquiry) assumed:
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(a)
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Authenticity:
the genuineness of all signatures, stamps and seals on, and the authenticity,
accuracy and completeness of, all documents submitted to us (whether as originals or copies);
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(b)
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Copies:
the conformity to originals of all documents supplied to us as photocopies, portable
document format (PDF) copies, facsimile copies or e-mail conformed copies;
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(c)
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Secretary’s Certificate:
that each of the statements contained in the Secretary’s Certificate
is true and correct as at the date hereof and will be true and correct as at the date of issue
of the Notes and the granting of the Guarantees endorsed thereon;
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(d)
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Directors’ Duties:
that the directors of REPLC, in authorising execution of the Guarantees,
the Indenture and the Underwriting Agreement, have exercised their powers in accordance with
their duties under all applicable laws and the Memorandum and Articles of Association of
REPLC;
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(e)
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Other Parties — Corporate Capacity/Approval:
that each of the parties to the Documents (other
than REPLC) has the necessary capacity and corporate power to execute, deliver and perform the
Documents, and that the Documents have been duly authorised, executed and delivered by each of
the parties thereto in accordance with all applicable laws (other than, in the case of REPLC
in relation to the Guarantees, the Indenture and the Underwriting Agreement, the laws of
England);
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(f)
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Validity under Other Laws:
that the Documents constitute legal, valid and binding obligations
of each of the parties thereto enforceable under all applicable laws (including the laws of
the State of New York by which each of the Documents is expressed to be governed and the laws
of the State of Delaware and the Netherlands but in this regard noting any qualifications as
to enforceability of obligations set out in the opinions of Simpson Thacher & Bartlett LLP and
Freshfields Bruckhaus Deringer LLP, Amsterdam) (other than, in the case of REPLC in relation
to the Underwriting Agreement, the Indenture and the Guarantees, the laws of England) and that
insofar as the laws or regulations of any other jurisdiction may be relevant to (i) the
obligations or rights of any of the parties under any of the Documents, or (ii) any of the
transactions contemplated by any of the Documents, such laws and regulations do not prohibit,
and are not inconsistent with, the entering into and performance of any of such obligations,
rights or transactions;
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(g)
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Filings under Other Laws:
that all consents, licences, approvals, notices, filings,
recordations, publications and registrations which are necessary under any applicable laws
(other than, in the case of REPLC, the laws of England) in order to permit the execution,
delivery or performance of the Documents or to perfect, protect or preserve any of the
interests created by the Documents, have been made or obtained, or will be made or obtained
within the period permitted or required by such laws or regulations;
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A-8
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(h)
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No Escrow:
that the Documents have been delivered by the parties and are not subject to any
escrow or other similar arrangement; and that all conditions precedent contained in the
Documents have been satisfied and the Documents are unconditional in all respects;
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(i)
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Unknown Facts:
that there are no facts or circumstances (and no documents, agreements,
instruments or correspondence) which are not apparent from the face of the Documents or which
have not been disclosed to us that may affect the validity or enforceability of the Documents
or any obligation therein or otherwise affect the opinions expressed in this opinion;
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(j)
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Arm’s Length Terms:
that the Documents have been entered into for bona fide commercial
reasons and on arm’s length terms by each of the parties thereto;
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(k)
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Company Search:
that the information revealed by our search (carried out by us or by ICC
Information Ltd. on our behalf on [
•
] 2009) of the public documents of REPLC kept at Companies
House in Cardiff (the
Company Search
) (i) was accurate in all respects and has not since the
time of such searches been altered, and (ii) was complete and included any and all relevant
information which had been properly submitted to the Registrar of Companies;
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(l)
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Winding up Enquiry:
that the information revealed by our oral enquiry on [
•
] 2009 of the
Central Registry of Winding up Petitions (the
Winding up Enquiry
) was accurate in all respects
and has not since the time of such enquiry been altered;
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(m)
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FSMA:
that none of the Documents is an agreement the making or performance of which
constitutes, or is part of, a regulated activity within the meaning stated in the Financial
Services and Markets Act 2000 (the
FSMA
) carried on by any party to it, and which either:
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(i)
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is entered into by that party in the course of carrying on the
regulated activity in question in contravention of section 19 of the FSMA; or
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(ii)
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where the party is a person authorised for the purposes of the
FSMA, is entered into by that party in the course of carrying on the regulated
activity in question and in consequence of something said or done by another
person (the
third party
) in the course of a regulated activity carried on by the
third party in contravention of section 19 of the FSMA,
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and that none of the Documents is entered into by any person as a customer in consequence
of a communication in relation to which there has been a contravention of Section 21 of the
FSMA;
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(n)
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Investment activity:
that any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the FSMA) in connection with the issue or sale of the
Notes has only been communicated or caused to be communicated in circumstances in which
section 21(1) of the FSMA does not apply to REPLC. These circumstances are set out in the
Financial Services and Markers Act 2000 (Financial Promotion) Order 2005 (the Order) and
include circumstances where any such communication is made only to or may reasonably be
regarded as directed only at persons who are “investment professionals” within the meaning of
Article 19(5) of the Order or are persons falling within Article 49(2)(a) to (d) of the Order;
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A-9
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(o)
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Offer to the public:
that none of the Notes has been or will be offered to the public in the
United Kingdom except in circumstances which do not require the publication by REPLC of a
prospectus pursuant to Part VI of the FSMA;
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(p)
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Bad Faith, Fraud, Duress:
the absence of bad faith, fraud, coercion, duress or undue
influence on the part of any of the parties to the Documents and their respective directors,
employees, agents and advisers (excepting, of course, ourselves);
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(q)
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Representations:
that the representations and warranties by the respective parties in the
Documents (other than as to matters of law on which we opine in this opinion) are or were, as
applicable, true, correct, accurate and complete in all respects on the date such
representations and warranties were expressed to be made, and that the terms of the Documents
have been and will be observed and performed by the parties thereto;
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(r)
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Anti-terrorism, money laundering:
that the parties have complied (and will continue to
comply) with all applicable anti-terrorism, anti-corruption, anti-money laundering, sanctions
and human rights laws and regulations, and that performance and enforcement of the Documents
is, and will continue to be, consistent with all such laws and regulations;
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(s)
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New York law:
satisfactory evidence of the laws of the State of New York (by which each of
the Documents is expressed to be governed) which is required to be pleaded and proved as a
fact in any proceedings before the English Courts with respect to the Documents, could and
would be so pleaded and proved
;
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(t)
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Listing:
that the Notes will not be admitted to the Official List of the UK Listing
Authority
;
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(u)
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Registration of Notes:
that the Notes will not be registered in a register kept in the United
Kingdom by or on behalf of the Issuer
;
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(v)
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Control:
that neither the Issuer nor Reed Elsevier NV is controlled within the meaning of
section 840 of the Income and Corporation Taxes Act 1988, by a body corporate resident in the
United Kingdom;
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(i)
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the Issuer is not resident in the United Kingdom for tax purposes
and has no branch, business establishment or other fixed or permanent
establishment in the United Kingdom, and, except to the extent, if any,
specifically envisaged by the Documents, interest will not be payable out of any
branch, business establishment or other fixed or permanent establishment of the
Issuer or any other property in the United Kingdom or out of any source of
income in the United Kingdom and the Notes are not secured on any property
situated in the United Kingdom; and
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(ii)
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the Guarantor is solely resident in the United Kingdom for United
Kingdom tax purposes and has no branch, business establishment or other fixed or
permanent establishment outside the United Kingdom; and
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(x)
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Issuer Incorporation:
that the Issuer is not incorporated in the United Kingdom.
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A-10
SCHEDULE 3
QUALIFICATIONS
Our opinion is subject to the following qualifications:
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(a)
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Company Search:
the Company Search is not capable of revealing conclusively whether or not:
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(i)
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a winding up order has been made or a resolution passed for the
winding up of a company; or
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(ii)
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an administration order has been made; or
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(iii)
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a receiver, administrative receiver, administrator or liquidator
has been appointed; or
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(iv)
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a court order has been made under the Model Law Regulations,
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since notice of these matters may not be filed with the Registrar of Companies immediately
and, when filed, may not be entered on the public microfiche of the relevant company
immediately.
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In addition, the Company Search is not capable of revealing, prior to the making of the
relevant order or the appointment of an administrator otherwise taking effect, whether or
not a winding up petition or an application for an administration order has been presented
or notice of intention to appoint an administrator under paragraphs 14 or 22 of Schedule B1
to the Insolvency Act 1986 has been filed with the court;
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(b)
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Winding up Enquiry:
the Winding up Enquiry relates only to the presentation of: (i) a
petition for the making of a winding up order or the making of a winding up order by the
Court, (ii) an application to the High Court of Justice in London for the making of an
administration order and the making by such court of an administration order, and (iii) a
notice of intention to appoint an administrator or a notice of appointment of an administrator
filed at the High Court of Justice in London. It is not capable of revealing conclusively
whether or not such a winding up petition, application for an administration order, notice of
intention or notice of appointment has been presented or winding up or administration order
granted, because:
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(i)
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details of a winding up petition or application for an
administration order may not have been entered on the records of the Central
Registry of Winding-up Petitions immediately;
|
|
|
|
|
(ii)
|
|
in the case of an application for the making of an administration
order and such order and the presentation of a notice of intention to appoint or
notice of appointment, if such application is made to, order made by or notice
filed with, a Court other than the High Court of Justice in London, no record of
such application, order or notice will be kept by the Central Registry of
Winding-up Petitions;
|
A-11
|
|
(iii)
|
|
a winding up order or administration order may be made before
the relevant petition or application has been entered on the records of the
Central Registry, and the making of such order may not have been entered on the
records immediately;
|
|
|
|
|
(iv)
|
|
details of a notice of intention to appoint an administrator or a
notice of appointment of an administrator under paragraphs 14 and 22 of Schedule
B1 of the Insolvency Act may not be entered on the records immediately (or, in
the case of a notice of intention to appoint, at all); and
|
|
|
|
|
(v)
|
|
with regard to winding up petitions, the Central Registry of
Winding-up Petitions may not have records of winding up petitions issued prior
to1994;
|
|
(c)
|
|
Choice of Law:
the choice of New York law to govern each of the Documents would not be
recognised or upheld by the English courts where to do so would be inconsistent with the EEC
Convention on the Law Applicable to Contractual Obligations as applied by virtue of the
Contracts (Applicable Law) Act 1990;
|
|
(d)
|
|
Jurisdiction:
no opinion is given as to whether or not the chosen court will take
jurisdiction, or whether the English courts would grant a stay of any proceedings commenced in
England, or whether the English courts would grant any relief ancillary to proceedings
commenced in a foreign court;
|
|
(e)
|
|
Foreign Courts:
we express no opinion as to whether or not a foreign court (applying its own
conflict of laws rules) will act in accordance with the parties’ agreement as to jurisdiction
and/or choice of law;
|
|
(f)
|
|
Foreign Currencies:
English courts can give judgments in currencies other than sterling if,
subject to the terms of the contract, it is the currency which most fairly expresses the
claimant’s loss, but such judgments may be required to be converted into sterling for
enforcement purposes;
|
|
(g)
|
|
Security for Costs:
under the rules of procedure applicable, an English court may, in certain
circumstances, order a claimant in an action, to provide security for costs;
|
|
(h)
|
|
Unreasonable Decisions:
a determination, designation, calculation or certificate of the Banks
(as defined in the Underwriting Agreement) as to any matter provided for in the Documents
might, in certain circumstances, be held by an English court not to be final, conclusive and
binding (for example, if it could be shown to have an unreasonable or arbitrary basis or not
to have been reached in good faith), notwithstanding the provisions of the relevant Document;
|
|
(i)
|
|
Stamp Duty Indemnities:
any undertakings or indemnities in relation to United Kingdom stamp
duties given by REPLC may be void under the provisions of Section 117 of the Stamp Act 1891;
|
|
(j)
|
|
Penalties:
any provision in the Documents providing for the payment of additional moneys by
any party consequent on such party’s breach, whether expressed by way of additional interest,
liquidated damages or otherwise, would be unenforceable if such provision was held to
constitute a penalty and not a genuine and reasonable pre-estimate of the loss likely to be
suffered as a result of the breach or default in question. We
|
A-12
|
|
|
express no opinion as to whether any such provision does constitute such a genuine and
reasonable pre-estimate;
|
|
(k)
|
|
Amendments to Guaranteed Contracts:
an English court may interpret restrictively any
provision purporting to allow the beneficiary of a guarantee or other suretyship to make a
material amendment to the obligations to which the guarantee or suretyship relates without
further reference to the guarantor or surety. In relation to the Guarantees, we would advise
obtaining the confirmation of the guarantor or surety in such circumstances;
|
|
(l)
|
|
Severability:
in some circumstances an English court would not give effect to any provision
of the Documents which provides that in the event of any invalidity, illegality or
unenforceability of any provision of any such document, the remaining provisions thereof shall
not be affected or impaired, in particular if to do so would not accord with public policy or
would involve the court in making a new contract for the parties;
|
|
(m)
|
|
Enforcement Limitations:
an English court may refuse to give effect to any provision in an
agreement: (i) for the payment of expenses in respect of the costs of enforcement (actual or
contemplated) or of unsuccessful litigation brought before an English court or where the court
has itself made an order for costs; or (ii) which would involve the enforcement of foreign
revenue or penal laws; or (iii) which would be inconsistent with English public policy;
|
|
(n)
|
|
“Enforceable”:
the term “enforceable” as used in this opinion means that the obligations
assumed by the relevant party under the relevant document are of the type which the English
courts enforce. This opinion is not to be taken to imply that any obligation would
necessarily be capable of enforcement in all circumstances in accordance with its terms. In
particular:
|
|
|
(i)
|
|
an English court will not necessarily grant any remedy the
availability of which is subject to equitable considerations, or which is
otherwise in the discretion of the court. In particular, orders for specific
performance and injunctions are, in general, discretionary remedies under
English law and specific performance is not available where damages are
considered by the court to be an adequate alternative remedy;
|
|
|
|
|
(ii)
|
|
claims may become barred under the Limitation Act 1980 or the
Foreign Limitation Periods Act 1984 or may be or become subject to the defence
of set-off or to counterclaim;
|
|
|
|
|
(iii)
|
|
where obligations are to be performed in a jurisdiction outside
England, they may not be enforceable in England to the extent that performance
would be illegal under the laws, or contrary to the exchange control
regulations, of the other jurisdiction;
|
|
|
|
|
(iv)
|
|
the enforcement of obligations may be limited by the provisions
of English law applicable to agreements held to have been frustrated by events
happening after their execution;
|
|
|
|
|
(v)
|
|
where a judgement is obtained against a State, the State may,
even where it has submitted to the jurisdiction of the English courts in
relation to the substantive
|
A-13
|
|
|
|
dispute, be able to resist the enforcement of the judgment on grounds
of state immunity;
|
|
|
(vi)
|
|
it is uncertain whether the parties can agree in advance the
governing law of claims connected with the contract but which are not claims on
the contract, such as tort claims;
|
|
|
|
|
(vii)
|
|
enforcement of obligations may be invalidated by reason of
fraud; and
|
|
|
|
|
(viii)
|
|
the enforcement of obligations may be limited or excluded by the provisions of
the Human Rights Act 1998;
|
|
(o)
|
|
Informal Amendments:
we express no view on any provision in the Documents requiring
amendments or waivers to be in writing and signed by the parties, in so far as such provision
suggests that informal amendments or waivers could not be effectively agreed upon or granted
by or between the parties, or implied by the course of conduct of the parties;
|
|
|
|
(p)
|
|
Agreements to Agree:
where any provision of the Documents provides that the parties shall
agree a matter at a later date, an English court will not enforce the obligation of any party
to so agree or to negotiate with the other party, unless the subject matter of such agreement
is sufficiently certain to be capable of enforcement;
|
|
|
|
(q)
|
|
Other Contracts:
to the extent that any operative provision in a Document is reliant on a
provision in another contract, or such other contract, and such provision or such contract is
held to be void then such operative provision would also be unenforceable, to the extent of
such reliance;
|
|
|
|
(r)
|
|
Exculpatory Provisions:
the effectiveness of contractual terms exculpating a party from
liabilities or duties otherwise owed is limited by law;
|
|
|
|
(s)
|
|
Confidentiality:
provisions imposing confidentiality obligations may be overridden by the
requirement of legal process;
|
|
|
|
(t)
|
|
Insolvency:
this opinion is subject to all applicable laws relating to insolvency,
bankruptcy, administration, reorganisation, liquidation or analogous circumstances;
|
|
|
|
(u)
|
|
Entire Agreement Clauses:
an English court may not recognise the effectiveness of an entire
agreement clause, particularly in circumstances where pre-contractual representations have
been made which are alleged to be fraudulent;
|
|
|
|
(v)
|
|
Indemnity:
any indemnity obligations imposed under any of the Documents may not be legal,
valid, binding or enforceable insofar as they relate to fines and penalties arising out of
matters of civil or criminal liability;
|
|
|
|
(w)
|
|
Exercise of Statutory Powers:
any provision of the Documents which restricts the exercise of
a statutory power by a party may be ineffective;
|
|
|
|
(x)
|
|
Set-off:
we express no opinion on whether a right of set-off against contingent,
unascertained or unmatured obligations would be effective; and
|
A-14
|
(y)
|
|
Privity of Contracts:
a person who is not a party to a contract may not be able to enforce
any provisions of that contract which are expressed to be for the benefit of that person, if
and to the extent that the Contracts (Rights of Third Parties) Act 1999 has been disapplied.
|
A-15
Exhibit B
Opinion of Freshfields Bruckhaus Deringer LLP, Dutch Counsel to the Issuer
|
|
|
|
|
|
|
Barclays Capital Inc.
|
|
|
|
amsterdam
|
|
Citigroup Global Markets Inc.
|
|
|
|
Strawinskylaan 10
|
|
HSBC Securities (USA) Inc.
|
|
|
|
1077 XZ Amsterdam
|
|
J.P. Morgan Securities Inc.
|
|
T +
|
|
31 20 485 7000
|
|
As Representatives of the several Underwriters
|
|
Direct T +
|
|
31 20 485 7620
|
|
named in Schedule 1 to the Underwriting Agreement
|
|
F +
|
|
31 20 485 7001
|
|
dated [
•
] 2009
|
|
Direct F +
|
|
31 20 517 7620
|
|
C/o Citigroup Global Markets Inc.
|
|
E
|
|
thijs.flokstra@freshfields.com
|
|
390 Greenwich St., 4th Floor
|
|
W
|
|
freshfields.com
|
|
New York, New York 10013
|
|
|
|
|
|
|
|
our ref
|
|
TPF/MS
|
January [ ], 2009
Dear Sirs,
$[
•
][
•
]% notes due 200
$[
•
][
•
]% notes due 2014
Introduction
1. We have acted as legal advisers to Reed Elsevier N.V. (the
Company
) with respect to certain
matters of Netherlands law in relation to a joint and several guarantee by Reed Elsevier PLC and
the Company in connection with the issue by Reed Elsevier Capital Inc. of an aggregate of $[
•
][
•
]%
notes due 2014 and $[
•
][
•
]% notes due 2019 (together the
Notes
).
This opinion letter is delivered to you pursuant to section 6(e) of the Underwriting Agreement (as
defined in the Schedule hereto (the
Schedule
)).
We are providing this opinion to you at the request of our client, Reed Elsevier Inc., for the
purpose of enabling a condition precedent to the Underwriting Agreement to be satisfied. We have
not advised you or any other person on the content of any of the Opinion
Freshfields Bruckhaus Deringer LLP is a limited liability partnership registered
in England and Wales with registered number OC334789. It is regulated by the Solicitors Regulation Authority.
A list of the members (and of the non-members who are designated as partners) of Freshfields Bruckhaus
Deringer LLP and their qualifications is available for inspection at its registered office, 65 Fleet Street,
London EC4Y 1HS or at the above address. Any reference to a partner means a member, or a consultant or
employee with equivalent standing and qualifications, of Freshfields Bruckhaus Deringer LLP or any of
its affiliated firms or entities. Freshfields Bruckhaus Deringer LLP’s Amsterdam office includes attorneys,
civil law notaries, tax advisers and solicitors.
Freshfields Bruckhaus Deringer LLP has taken over the practice of Freshfields Bruckhaus Deringer
with effect from 1 May 2008. Please refer to www.freshfields.com/support/legalnotice for information
on the transfer of the business and regulatory information.
Bank account Stichting Derdengelden Freshfields Bruckhaus Deringer LLP 25.60.49.947
Abu Dhabi Amsterdam Bahrain Barcelona Beijing Berlin Bratislava Brussels Cologne Dubai Düsseldorf
Frankfurt am Main Hamburg Hanoi Ho Chi Minh City Hong Kong London Madrid Milan Moscow
Munich New York Paris Rome Shanghai Tokyo Vienna Washington
B-1
Documents (as defined in the Schedule hereto) or assisted you or any other person in any way in
relation to the negotiation of the Opinion Documents or the transactions contemplated thereby. The
provision of this opinion is not to be taken to imply that we owe any duty of care to any person
other than our clients in relation to the Opinion Documents and the transactions contemplated
thereby, other than our duty of care to you which is solely in relation to the contents of this
opinion, or to preclude us advising or acting on behalf of our clients in connection with any
matter arising in relation to the Opinion Documents.
2. In rendering the opinions set out below we have examined the documents listed in the Schedule
hereto.
3. Words and expressions defined in the Schedule shall, unless the context otherwise requires, bear
the same respective meaning when used in this opinion.
Limitations
|
4.
|
|
This opinion is subject to the following limitations:
|
|
(a)
|
|
This opinion is confined to the laws with general applicability (
wettelijke regels met
algemene gelding
) of the Netherlands and, insofar as they are directly applicable in the
Netherlands, the European Union, all as they stand as at the date hereof and as such laws are
currently interpreted in published authoritative case law of the courts of the Netherlands
(
Netherlands law
); accordingly, we express no opinion with regard to any other system of law
(including the law of jurisdictions other than the Netherlands in which our firm has an
office), even in cases where, in accordance with Netherlands law, any foreign law should be
applied; furthermore, we do not express any opinion on public international law or on the
rules of or promulgated under any treaty or by any treaty organisation (except as otherwise
stated above).
|
|
(b)
|
|
We express no opinion on any taxation laws of any jurisdiction (including the Netherlands),
except for the opinions expressed in paragraphs 6(m)-6(o) below.
|
|
(c)
|
|
We express no opinion on any anti-trust, competition, data protection or insider trading laws
of any jurisdiction (including the Netherlands).
|
|
(d)
|
|
We express no opinion that the future or continued performance of a party’s obligations or
the consummation of the transactions contemplated by the Opinion Documents will not contravene
Netherlands law, its application or interpretation if altered in the future.
|
|
(e)
|
|
We express no opinion as to the correctness of any representation given by any of the parties
(express or implied) under or by virtue of the Documents, save if and insofar as the matters
represented are the subject matter of a specific opinion herein.
|
|
(f)
|
|
In rendering this opinion we have exclusively examined the documents listed in the Schedule
and we have conducted such investigations of Netherlands law as we have
|
B-2
|
|
|
deemed necessary or advisable for the purpose of giving this opinion letter; as to matters
of fact we have relied on the documents listed in the Schedule and any other document we
have deemed relevant, and on statements or certificates of public officials.
|
|
(g)
|
|
We have not been responsible for investigating or verifying the accuracy of the facts (or
statements of foreign law) or the reasonableness of any statements of opinion or intention
contained in any documents, or for verifying that no material facts or provisions have been
omitted therefrom; nor have we verified the accuracy of any assumption made in this opinion
letter.
|
|
|
|
(h)
|
|
Netherlands legal concepts are expressed in English terms and not in their original Dutch
terms; the concepts concerned may not be identical to the concepts described by the same
English terms as they exist in the laws of other jurisdictions.
|
|
|
|
(i)
|
|
This opinion may only be relied upon on the express condition that any issues of the
interpretation or liability arising hereunder will be governed by Netherlands law and be
brought before a court in the Netherlands.
|
|
|
|
(j)
|
|
This opinion speaks as of the date hereof; no obligation is assumed to update this opinion or
to inform any person of any changes of law or other matters coming to our knowledge and
occurring after the date hereof, which may affect this opinion in any respect.
|
|
|
|
(k)
|
|
The opinions expressed in this opinion letter have no bearing on declarations made, opinions
expressed or statements of a similar nature made by any of the parties in the Opinion
Documents.
|
Assumptions
|
5.
|
|
In rendering this opinion we have assumed that:
|
|
(a)
|
|
all documents reviewed by us and submitted to us as originals are true, complete and
authentic; all documents reviewed by us and submitted to us as facsimile or photocopy are in
conformity with the originals and such originals are true, complete and authentic; and the
signatures on all such documents are genuine;
|
|
(b)
|
|
at the time when any Corporate Document was signed, each person who is a party to or
signatory of that Corporate Document, as applicable (i) had been validly incorporated, was
validly existing and, to the extent relevant in such party’s jurisdiction, in good standing
under the laws applicable to such party, (ii) had all requisite power, authority and legal
capacity to sign that Corporate Document and to perform all juridical acts (
rechtshandelingen
)
and other actions contemplated thereby and (iii) has validly signed that Corporate Document;
|
|
(c)
|
|
the Articles of Association have not been amended;
|
B-3
|
(d)
|
|
(i) the Company has not been declared bankrupt (
failliet verklaard
), (ii) the Company has not
been granted a suspension of payments (
surseance van betaling
), (iii) the Company has not
become subject to any of the other insolvency proceedings (together with the proceedings in
paragraph (5)(d)(i) and (5)(d)(ii) referred to as the
Insolvency Proceedings
) referred to in
Article 1(1) of Council Regulation (EC) no. 1346/2000 of 29 May 2000 on Insolvency Procedures
(the
Insolvency Regulation
), (iv) the Company has not been dissolved (
ontbonden
), (v) the
Company has not ceased to exist pursuant to a legal merger or demerger (
juridische fusie of
splitsing
), and (vi) no order for the administration (
bewind
) of the assets of the Company has
been made; the assumptions referred to in (i), (ii), (iv), (v) and (vi) are supported by our
enquiries today with the Commercial Register and the court in Amsterdam which have not
revealed any information that any such event has occurred with respect to the Company;
however, such enquiries are not conclusive evidence that no such events have occurred;
|
|
(e)
|
|
the Company has complied with its obligations under the Netherlands Works Council Act (
wet op
de ondernemingsraden
) with respect to the transactions contemplated by the Opinion Documents;
|
|
(f)
|
|
the information set forth in the Extract is accurate and complete on the date hereof;
|
|
(g)
|
|
the Resolutions have not been revoked (
ingetrokken
) or amended and have not been and will not
be declared null and void by a competent court [and the powers of attorney granted in the
[Board] Resolutions have not been, and will not be, amended, revoked (
ingetrokken
), terminated
or declared null and void by a competent court] and the statements and confirmations set out
in the Resolutions are true and correct;
|
|
(h)
|
|
none of [NAME SIGNATORIES] [or any of the [other] managing directors of the Company] (in
whatever capacity) has a conflict of interest (
tegenstrijdig belang
) with the Company in
relation to the transactions contemplated by the Opinion Documents;
|
|
(i)
|
|
the entering into the Opinion Documents and the transactions contemplated thereby are in the
corporate interest (
vennootschappelijk belang
) of the Company;
|
|
(j)
|
|
none of the Opinion Documents has since the date of its execution been amended, rescinded or
terminated by any of the parties thereto;
|
|
(k)
|
|
each of the parties to any of the Opinion Documents (other than the Company) (i) has been
validly incorporated, is validly existing and, to the extent relevant in such party’s
jurisdiction, in good standing under the laws applicable to such party, (ii) has the power,
capacity and authority to enter into, execute and deliver the Opinion Documents to which it is
a party and to exercise its rights and perform its obligations thereunder, and (iii) has duly
authorised and validly executed and, to the extent relevant, delivered all Opinion Documents
to which it is a party;
|
B-4
|
(l)
|
|
each of the Opinion Documents constitutes the legal, valid, binding and enforceable
obligations of each party thereto (other than the Company) enforceable against such party in
accordance with its terms;
|
|
(m)
|
|
under the laws of the State of New York to which the Indenture and the Underwriting Agreement
are expressed to be subject and under any other applicable laws (other than Netherlands law),
(i) the Company has validly executed and, to the extent relevant, delivered, the Indenture and
the Underwriting Agreement and (ii) each of the Indenture and the Underwriting Agreement
constitutes the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with its terms;
|
|
(n)
|
|
the submission by the Company to the jurisdiction of the U.S. Federal or New York State court
in the Borough of Manhattan, City of New York, New York with regard to any disputes under the
Underwriting Agreement is valid and binding under the laws of any applicable jurisdiction
(other than the Netherlands) and the U.S. Federal or New York State court in the Borough of
Manhattan, City of New York, New York will assume jurisdiction on the basis thereof;
|
|
(o)
|
|
under any applicable law (other than Netherlands law) all claims against the Company under
the Opinion Documents rank at least equally and rateably with any other claims against the
Company that are unsecured and not preferred by operation of law;
|
|
(p)
|
|
the Opinion Documents properly represent the intentions (
wil
) of the parties thereto formed
free of error, fraud, duress or abuse of circumstances;
|
|
(q)
|
|
the Company is not required to be licensed pursuant to the Netherlands Financial Supervision
Act (
Wet op het financieel toezicht
);
|
|
(r)
|
|
the consent, approval or authorisation (other than any consent, approval or authorisation of
the kind referred to in paragraph 6(k) below) of any person and any other step which is
required in relation to the execution and delivery of the Opinion Documents and the
performance and observance of the terms thereof by the parties has been obtained or taken at
the date of this opinion or will be taken in good time and has been or will be maintained, and
that none of those transactions will infringe the terms of, or constitute a default under, any
agreement or other instrument or obligation to which any party to the Opinion Documents is a
party, in such a manner as would entitle any other party to the Opinion Documents to assert
that its liability to perform any of its obligations under any of the Opinion Documents was
thereby diminished or impaired;
|
|
(s)
|
|
the terms of the Opinion Documents are bona fide arm’s length commercial terms and the
Opinion Documents are entered into for bona fide commercial reasons;
|
B-5
|
(t)
|
|
the appointment by the Company of Henry Horbaczewski, in his capacity as general counsel to
Reed Elsevier Inc., or his successor in such capacity, at 125 Park Avenue, New York, New York
10017 (the
Process Agent
) pursuant to Section 19 of the Underwriting Agreement as its
authorised agent upon whom documents may be served in any proceedings relating to the
Underwriting Agreement and any other documents required to be served in relation to those
proceedings constitute valid, binding and effective appointments; and
|
|
(u)
|
|
the Guarantee, taken together with any and all other relevant guarantees already given by the
Company, does not exceed the limit as determined by the board of the Company.
|
Opinion
6. On the basis of, and subject to, the foregoing and the matters set out in paragraphs 7 and 8 and
any factual matters, documents or events not disclosed to us, we are of the opinion that as at the
date hereof:
Status
|
(a)
|
|
The Company has been validly incorporated and is existing as a public company with limited
liability (
naamloze vennootschap
) under Netherlands law.
|
|
(b)
|
|
The Company has the necessary corporate power to enter into the Opinion Documents and to
perform its obligations thereunder.
|
|
(c)
|
|
The execution by the Company of the Opinion Documents and the performance by the Company of
its obligations thereunder have been duly authorised by all corporate action required to be
taken by the Company under Netherlands corporate law and the Articles of Association.
|
|
(d)
|
|
Assuming that the signature[s] appearing on the Opinion Documents on behalf of the Company
[is]/[are] the signature[s] of [NAME] the Opinion Documents have been validly executed on
behalf of the Company in accordance with Netherlands law.
|
Enforceability
|
(e)
|
|
The execution by the Company of the Opinion Documents and the performance by the Company of
its obligations thereunder do not conflict with mandatory provisions of Netherlands law or the
Articles of Association.
|
|
(f)
|
|
There is no reason under Netherlands law why the contractual obligations of the Company
expressed in the Opinion Documents would not be enforceable against the Company.
|
Jurisdiction
B-6
|
(g)
|
|
The submission by the Company in accordance with the terms of the jurisdiction provisions in
the Underwriting Agreement to the jurisdiction of any U.S. Federal or New York State court in
the Borough of Manhattan, City of New York, New York is binding upon the Company.
|
|
(h)
|
|
The choice of the laws of the State of New York as the governing law of the Indenture and the
Underwriting Agreement is a valid choice of law with respect to the obligations of the Company
thereunder and binding under the laws of the Netherlands.
|
|
(i)
|
|
In the absence of an applicable treaty between the United States of America and the
Netherlands, a judgment obtained against the Company in the U.S. Federal or New York State
court in the Borough of Manhattan, City of New York, New York in a dispute with respect to
which the parties have validly agreed in the Underwriting Agreement that such courts are to
have jurisdiction, will not be directly enforced by the courts in the Netherlands. In order to
obtain a judgement which is enforceable in the Netherlands, the claim must be relitigated
before a competent court of the Netherlands; the relevant Netherlands court has discretion to
attach such weight to a judgment of the U.S. Federal or New York State court in the Borough of
Manhattan, City of New York, New York as it deems appropriate; based on case law, the courts
of the Netherlands may be expected to recognize the binding effect of a final, conclusive and
enforceable money judgment of a court of competent jurisdiction in the United States of
America without re-examination or re-litigation of the substantive matters adjudicated
thereby, provided that (i) the relevant U.S. Federal or New York State court in the Borough of
Manhattan, City of New York, New York had jurisdiction in the matter in accordance with
standards which are generally accepted internationally; (ii) the proceedings before such court
complied with principles of proper procedure; and (iii) such judgment does not conflict with
the public policy of the Netherlands.
|
Process Agent
|
(j)
|
|
The appointment by the Company of the Process Agent pursuant to Section 19 of the
Underwriting Agreement is legal, valid and binding under the laws of the Netherlands;
|
Consents
|
(k)
|
|
No authorisation, approval, consent or order from, or filing with, any governmental authority
or court in the Netherlands is required to be made or obtained as at the date hereof in
connection with the execution by the Company of the Opinion Documents or the performance by
the Company of its obligations thereunder which, if not obtained or made, would adversely
affect the validity or enforceability of the Opinion Documents.
|
Ranking
B-7
|
(l)
|
|
In Insolvency Proceedings opened against the Company in the Netherlands, any actual and
unconditional monetary claims (
geldvorderingen
) against the Company under the Opinion
Documents will rank equally and rateably with all such other claims against the Company which
are unsecured and which are not preferred by operation of law.
|
Taxation
|
(m)
|
|
All payments by the Company under the Guarantee may be made free of withholding or deduction
of any taxes of whatever nature imposed, levied, withheld or assessed by the Netherlands or
any political subdivision or taxing authority thereof or therein.
|
|
(n)
|
|
No Netherlands registration tax, custom duty, transfer tax, capital tax, stamp duty or any
other similar documentary tax or duty, other than court fees, will be payable in the
Netherlands in respect of or in connection with the execution, delivery and/or enforcement by
legal proceedings (including the enforcement of any foreign judgement in the Courts of the
Netherlands) of the Guarantee or the performance by the Company of its obligations thereunder.
|
|
(o)
|
|
The statements in the Prospectus under the caption “Taxation – European Union Savings Tax
Directive” insofar as they purport to summarise European Council Directive 2003/48/EC
regarding the taxation of savings income of residents of member states of the European Union,
constitute a fair summary of that Directive as at the date of this opinion.
|
Qualifications
|
7.
|
|
Our opinion is subject to the following qualifications:
|
|
(a)
|
|
our opinion is subject to and limited by the provisions of any applicable bankruptcy,
insolvency, moratorium, suspension of payments, emergency and other similar rules and laws of
general application relating to or affecting generally the enforcement of creditors’ rights
and remedies from time to time in effect; no opinion is given or implied herein that if
insolvency proceedings would be opened with respect to the Company, such insolvency
proceedings would be opened in the Netherlands or be governed by Netherlands law; no opinion
is given or implied herein on the effects of any foreign laws that may apply in such
insolvency proceedings pursuant to the Insolvency Regulation or otherwise;
|
|
(b)
|
|
our opinions with respect to the validity or enforceability of the Opinion Documents or any
legal act (
rechtshandeling
) forming part thereof or contemplated thereby are subject to and
limited by the protection afforded by Netherlands law to creditors whose interests have been
adversely affected pursuant to the rules of Netherlands law relating to (x) unlawful acts
(
onrechtmatige daden
) based on Section 6:162 et seq. of the Netherlands Civil Code (
Burgerlijk
Wetboek
) and (y) fraudulent conveyance or preference (
actio pauliana
) within the meaning of
Section 3:45 of the Netherlands
|
B-8
|
|
|
Civil Code (
Burgerlijk Wetboek
) and/or Section 42
et seq.
of the Netherlands Bankruptcy Act
(
Faillissementswet
);
|
|
(c)
|
|
the terms “
enforceable
” and “
enforceability
” as used in this opinion letter indicate that the
relevant obligations are of a type for which Netherlands law generally provides a remedy; they
do not imply that the obligations and remedies provided in the Opinion Documents would always
be enforceable in accordance with their specific terms; enforcement in the courts of the
Netherlands will in any event be subject to the acceptance by such courts of jurisdiction, the
availability of defences and the nature of the remedies available in the Netherlands courts;
|
|
(d)
|
|
any enforcement of the Opinion Documents and foreign judgments in the Netherlands will be
subject to the rules of civil procedure as applied by the courts of the Netherlands; service
of process for any proceedings before the courts of the Netherlands must be performed in
accordance with Netherlands rules of civil procedure; the taking of concurrent proceedings in
more than one jurisdiction in which Council Regulation (EC) No. 44/2001 of 22 December 2000 on
Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters
(the
Council Regulation
), the Convention on Jurisdiction and the Enforcement of Judgements in
Civil and Commercial Matters of 27 September 1968 (as amended), or the 1988 Lugano Convention
on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters (together
the
Conventions
), is applicable, may be precluded by Article 27 of the Council Regulation or
Article 21 of the Conventions; as regards jurisdiction generally, the courts of the
Netherlands have powers to stay proceedings if concurrent proceedings are brought elsewhere;
furthermore, the ability of any party to assume control over another party’s proceedings
before the courts of the Netherlands may be limited by Netherlands rules of civil procedure;
|
|
(e)
|
|
the concept of “delivery” of a document is not known under Netherlands law and, therefore,
delivery of a document is not required under Netherlands law in order to render a document
valid, legally binding and enforceable;
|
|
(f)
|
|
it is uncertain under Netherlands law whether, upon the enforcement of a money judgment
expressed in a foreign currency against assets situated in the Netherlands by way of an
enforced sale (
executieverkoop
), proceeds can be obtained in such foreign currency;
|
|
(g)
|
|
if Insolvency Proceedings would be opened with respect to the Company under Netherlands law,
claims of which payment is sought from the estate (and not from the enforcement of collateral
security) in any currency other than Euro must be valued on the basis of the exchange rate
prevailing on the date on which such Insolvency Proceedings are opened;
|
|
(h)
|
|
no opinion is given herein with respect to the validity and effect of any provision in the
Opinion Documents excluding the right of any party thereto to claim the nullity or the
dissolution thereof;
|
B-9
|
(i)
|
|
the Company may in certain circumstances have to comply with reporting requirements in
connection with payments made to and by the Company under the Opinion Documents pursuant to
the Financial Foreign Relations Act 1994 (
Wet financiële betrekkingen buitenland 1994
) and the
rules promulgated thereunder;
|
|
(j)
|
|
any provision in the Opinion Documents to the effect that such agreements or any of the
provisions thereof shall be binding on the assigns (
rechtsopvolgers niet onder algemene titel
)
of any party thereto may not be enforceable in the Netherlands against any such assign in the
absence of any further agreement to that effect with any such assign;
|
|
(k)
|
|
a power of attorney (
volmacht
) or mandate (
lastgeving
) (i) can under Netherlands law only be
made irrevocable to the extent its object is the performance of juridical acts
(
rechtshandelingen
) in the interest of the representative appointed thereby or of a third
party (and subject to the power of the court to amend or disapply the provisions by which it
is made irrevocable for serious reasons (
gewichtige redenen
) and (ii) will terminate or become
ineffective upon Insolvency Proceedings being opened under Netherlands law with respect to the
issuer thereof (irrespective of the law applicable to the power of attorney);
|
|
(l)
|
|
no opinion is given herein with respect to (i) any authorisation which any of the parties to
the Opinion Documents (other than the Company) may require under the Netherlands Financial
Supervision Act (
Wet op het financieel toezicht
) or the Trust Offices Supervision Act (
Wet
toezicht trustkantoren
) in order to perform the activities and services contemplated by the
Opinion Documents or (ii) the consequences of the lack of such authorisation on any of the
Opinion Documents;
|
|
(m)
|
|
the amount of any payment under the Opinion Documents which is in the nature of a penalty or
liquidated damage payment may be mitigated by order of the court if this is manifestly
required in the interest of fairness;
|
|
(n)
|
|
we have not verified the accuracy and completeness of the information included in the
Prospectus and no opinion is given or implied herein that such information is not misleading;
we express no opinion as to whether the Prospectus contains all the information required
pursuant to the Netherlands Financial Supervision Act (
Wet op het financieel toezicht
);
|
|
(o)
|
|
with respect to the obligations of the Company under any of the Opinion Documents, the courts
of the Netherlands may (i) apply Netherlands law in a situation where those rules are
mandatory irrespective of the law otherwise applicable to that Opinion Document, (ii) give
effect to the mandatory rules or the law of any other country with which the situation has a
close connection, if and insofar as, under law of such country, those rules must be applied
whatever the law applicable to that Opinion Document, (iii) refuse the application of a rule
of the law of any country otherwise applicable to that Opinion Document, if such application
is manifestly incompatible with the public policy (“
ordre public
”) of the Netherlands and (iv)
have regard to the
|
B-10
|
|
|
laws of the country in which performance takes place as to the manner of performance and the
steps to be taken in the event of defective performance;
|
|
(p)
|
|
the opinion and other statements expressed herein relating to the Opinion Documents are
subject to the qualification that as Dutch lawyers we are not qualified or able to assess the
true meaning and purport under applicable law (other than Netherlands law) of the terms of the
Opinion Documents and the obligations thereunder of the parties thereto, and we have made no
investigation of such meaning and purport; our review of the Opinion Documents and any other
documents subject or expressed to be subject to any law other than Netherlands law has
therefore been limited to the terms of such documents as they appear to us on the basis of
such review and only in respect of any involvement of Netherlands law; and
|
|
(q)
|
|
the recognition of the submission by the Company to the jurisdiction of the U.S. Federal or
New York State court in the Borough of Manhattan, City of New York, New York with respect to
the Underwriting Agreement will be subject to the conditions and limitations of domestic
Netherlands rules of civil procedure, such as the limitation that the application for
provisional, including protective, measures which are available under the laws of a
jurisdiction may be made to the courts of such jurisdiction.
|
Benefit of opinion
8. This opinion is addressed to you solely for your own benefit in relation to the transactions
contemplated by the Opinion Documents and, except with our prior written consent, is not to be
transmitted or disclosed to or used or relied upon by any other person or used or relied upon by
you for any other purpose.
Yours faithfully,
Freshfields Bruckhaus Deringer LLP
B-11
THE SCHEDULE
|
(a)
|
|
a facsimile copy of an extract from the Commercial Register of the Amsterdam Chamber of
Commerce (the
Commercial Register
) dated 7 October 2008 relating to the Company, and confirmed
upon our request by the Commercial Register by telephone to be correct as at the date hereof
(the
Extract
);
|
|
(b)
|
|
a facsimile copy of the deed of incorporation of the Company dated 23 January 1979;
|
|
(c)
|
|
a facsimile copy of the articles of association of the Company dated 4 January 2008 which,
according to the Extract, are the Company’s articles of association currently in force and
effect (the
Articles of Association
);
|
|
|
(i)
|
|
a resolution of the managing board of directors dated [..] January
2009;
|
|
|
|
|
(ii)
|
|
a resolution of the supervisory board of directors dated [...]
January 2009;
|
|
(e)
|
|
a draft prospectus and prospectus supplement relating to the Notes (the
Prospectus
);
|
|
(g)
|
|
a form of the guarantees endorsed on the Notes, guaranteeing the Notes (the
Guarantee
);
|
|
|
(i)
|
|
the fifth supplemental indenture, between,
inter alios
, Reed
Elsevier Capital Inc. as issuer, the Company and Reed International PLC as
guarantors and The Bank of New York Mellon as trustee dated [...] January 2009 in
relation to the indenture dated as of 9 May 1995 between JPMorgan Chase Bank,
N.A. (formerly the Chase Manhattan Bank) as trustee, Reed Elsevier Capital Inc.
as issuer and the Company and Reed Elsevier NV as guarantors, together with the
first, second, third, fourth and fifth supplemental agreements thereto (the
Indenture
); and
|
|
|
|
|
(ii)
|
|
an underwriting agreement dated [...] January 2009 between,
inter
alios
, Reed Elsevier Capital Inc., the Company and Barclays Capital Inc.,
Citibank Global Markets Inc., HSBC Securities (USA) Inc. and J. P. Morgan
Securities Inc. as representatives of the underwriters named in Schedule 1
thereto (the
Underwriting Agreement
).
|
The documents referred to above in items (b) to (h) (inclusive) are herein referred to as the
Documents
; the documents referred to above in items (b) to (d) (inclusive) are herein referred to
as the
Corporate Documents
; the documents referred to above in item (d) are herein referred to as
the
Resolutions
; and the documents referred to above in item (h) are herein referred to as the
Opinion Documents
.
B-12
Exhibit C
Opinion of Simpson Thacher & Bartlett LLP, US Counsel to the Issuer
January 16, 2009
Barclays Capital Inc.
Citigroup Global Markets Inc.
HSBC Securities (USA) Inc.
J. P. Morgan Securities Inc.
As representatives of the several Underwriters
named in Schedule 1
to the Underwriting Agreement
referred to below
c/o Citigroup Global Markets Inc.
390 Greenwich Street, 4
th
Floor
New York, New York 10013
Ladies and Gentlemen:
We have acted as United States counsel to Reed Elsevier Capital Inc., a Delaware corporation
(the “Company”), Reed Elsevier PLC, an English public limited company, and Reed Elsevier NV, a
Dutch company (each of Reed Elsevier PLC and Reed Elsevier NV is referred to herein individually as
a “Guarantor” and together as the “Guarantors”), in connection with the purchase by you of [ ]
aggregate principal amount of [ ]% Notes due 2014 (the “2014 Notes”) and [ ] aggregate
principal amount of [ ] % Notes due 2019 (together with the 2014 Notes, the “Notes”), issued by
the Company, and unconditionally guaranteed by the Guarantors, pursuant to the Underwriting
Agreement dated January 13, 2009 among the Company, the Guarantors and you (the “Underwriting
Agreement”).
We have examined the Registration Statement on Form F-3 (File No. 333-155717) filed by the
Company and the Guarantors under the U.S. Securities Act of 1933, as amended (the “Securities
Act”), as it became effective under the Securities Act (the “Registration Statement”); the
Company’s and the Guarantors’ prospectus dated November 26, 2008 (the “Base Prospectus”), as
supplemented by the prospectus supplement dated January [ ], 2009 (together with the Base
Prospectus, the “Prospectus”), filed by the Company and the Guarantors pursuant to Rule 424(b) of
the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”) under
the Securities Act, which pursuant to Form F-3 incorporates by reference or is deemed to
incorporate by reference the joint Annual Report on Form 20-F of the Guarantors for the fiscal year
ended December 31, 2007, the joint reports on Form 6-K of the Guarantors filed on November 26, 2008
and on January 13, 2009, (collectively, the “Exchange Act Documents”), each as filed under the U.S.
Securities Exchange Act of 1934, as amended (the “Exchange Act”); the Company’s and the Guarantors’
preliminary prospectus supplement dated January 13, 2009 (together with the Base Prospectus, the
“Preliminary Prospectus”), filed by the Company and the Guarantors pursuant to Rule 424(b) of the
rules and regulations of the Commission under the Securities Act; the pricing term sheet, dated
January 13, 2009, relating to the Notes, as filed pursuant to Rule 433 of the rules and regulations
of the Commission under the Securities Act (together with the Preliminary Prospectus, the “Pricing
Disclosure Package”); the Indenture, dated as of May 9, 1995, among the Company, the Guarantors and
The Bank of New York Mellon (as successor to The Chase Manhattan Bank), as trustee (the “Trustee”),
as previously amended and supplemented, and as further
C-2
supplemented by the Fifth Supplemental Indenture, dated as of January 16, 2009 among the
Company, Reed Elsevier PLC, Reed Elsevier NV, the Trustee, The Bank of New York Mellon, as London
Paying Agent, and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent
(collectively, the “Indenture”), relating to the Notes; the Authorized Officers’ Certificate, dated
January 16, 2009, relating to the Notes; the global notes representing the Notes; the guarantees
annexed to the Notes (the “Guarantees”); and the Underwriting Agreement. In addition, we have
examined, and have relied as to matters of fact upon, the documents delivered to you at the closing
and upon originals, or duplicates or certified or conformed copies, of such corporate and other
records, agreements, documents and other instruments and such certificates or comparable documents
of public officials and of officers and representatives of the Company and the Guarantors and have
made such other investigations, as we have deemed relevant and necessary in connection with the
opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified or conformed copies
and the authenticity of the originals of such latter documents.
In rendering the opinions set forth in paragraphs 2, 3 and 4 below, we have also assumed that
(1) each Guarantor is validly existing and in good standing under the laws of the jurisdiction in
which it is organized, (2) each Guarantor has duly authorized, executed and delivered the
Underwriting Agreement, the Indenture and the Guarantees in
C-3
accordance with its respective articles of association and the laws of the jurisdiction in
which each of them is organized, (3) the execution, delivery and performance by each Guarantor of
the Underwriting Agreement, the Indenture and the Guarantees do not violate the laws of the
jurisdiction in which each of them is organized or any other applicable laws (except that no such
assumption is made with respect to the law of the State of New York and U.S. federal law) and (4)
the execution, delivery and performance by each Guarantor of the Underwriting Agreement, the
Indenture and the Guarantees do not and will not constitute a breach or violation of any agreement
or instrument which is binding upon each Guarantor.
Based upon the foregoing, and subject to the qualifications, assumptions and limitations
stated herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing and in good standing
as a corporation under the law of the State of Delaware and has full corporate power and
authority to conduct its business as described in the Registration Statement and the
Prospectus.
2. The Indenture has been duly authorized, executed and delivered by the Company, duly
executed and delivered in accordance with the law of the State of New York by the
Guarantors and duly qualified under the U.S. Trust Indenture Act of 1939, as amended, and,
assuming that the Indenture is the valid and legally binding obligation of the Trustee, the
Indenture constitutes a valid and legally binding obligation of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in accordance with
its terms, and the Indenture conforms in all material respects to the requirements of the
Trust Indenture Act and the applicable rules and regulations thereunder.
3. The Notes have been duly authorized, executed and issued by the Company and,
assuming due authentication thereof by the Trustee and upon payment and delivery in
accordance with the Underwriting Agreement, will constitute valid and legally binding
obligations of the Company enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture.
4. The Guarantees have been duly executed and issued in accordance with the law of the
State of New York by the Guarantors, and, assuming due
C-4
authentication of the Notes by the Trustee and upon payment for and delivery of the
Notes in accordance with the Underwriting Agreement, the Guarantees will constitute a valid
and legally binding obligation of each of the Guarantors enforceable against each of the
Guarantors in accordance with their terms and entitled to the benefits of the Indenture.
5. The statements made in each of the Pricing Disclosure Package and the Prospectus
under the captions “Description of Debt Securities and Guarantees” and “Description of the
Notes and Guarantees,” insofar as they purport to constitute summaries of certain terms of
the Indenture, the Notes and the Guarantees, constitute accurate summaries of such terms of
such documents in all material respects.
6. The statements made in the Prospectus under the caption “Taxation—United States
Federal Income Tax Considerations”, insofar as they purport to constitute summaries of
matters of U.S. federal tax law and regulations or legal conclusions with respect thereto,
constitute accurate summaries of the matters described therein in all material respects.
7. The Underwriting Agreement has been duly authorized, executed and delivered by the
Company, and duly executed and delivered in accordance with the law of the State of New
York by the Guarantors.
8. The issue and sale of the Notes by the Company, the execution, delivery and
performance by the Company of the Underwriting Agreement and the execution and delivery of
the Indenture by the Company will not breach or result in a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument identified on the
annexed schedule furnished to us by the Company and which the Company has represented lists
all material agreements and instruments to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor will such
action violate the Certificate of Incorporation or By-laws of the Company or any U.S.
federal or New York state statute or the Delaware General Corporation Law or any rule or
regulation that has been issued pursuant to any U.S. federal or New York state statute or
the Delaware General Corporation Law or any order known to us issued pursuant to any U.S.
federal or New York state statute or the Delaware General Corporation Law by any court or
governmental agency or body having jurisdiction over the Company or any of its subsidiaries
or any of their properties.
9. No consent, approval, authorization, order, registration or qualification of or
with any U.S. federal or New York state governmental agency or body or any Delaware
governmental agency or body acting pursuant to the Delaware General Corporation Law or, to
our knowledge, any U.S. federal or New York state court or any Delaware state court acting
pursuant to the Delaware General Corporation Law is required for the issue and sale of the
Notes by the
C-5
Company, the issue of the Guarantee by the Guarantors, and the compliance by the
Company and the Guarantors with the provisions of the Underwriting Agreement and the
Indenture, except for the registration under the Securities Act of the Notes, and such
consents, approvals, authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the purchase and distribution of
the Notes by the Underwriters.
10. The Registration Statement has become effective under the Securities Act; the
Prospectus was filed on January [ ], 2009 pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Securities Act; and, to our knowledge, no stop
order suspending the effectiveness of the Registration Statement has been issued or
proceeding for that purpose has been instituted or threatened by the Commission.
11. To our knowledge, there are no statutes or pending or threatened legal or
governmental proceedings required to be described in the Prospectus which are not described
as required, or any contracts or documents of a character required to be described in the
Prospectus that are not described and filed or incorporated by reference as required.
12. Neither the Company nor any Guarantor is an “investment company” within the
meaning of and subject to regulation under the U.S. Investment Company Act of 1940, as
amended.
Our opinions set forth in paragraphs 2, 3 and 4 above are subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, (ii) general equitable principles (whether
considered in a proceeding in equity or at law) and (iii) an implied covenant of good faith and
fair dealing. In addition, we express no opinion as to the validity, legally binding effect or
enforceability of Section 110 of the Indenture relating to the separability of provisions of the
Indenture.
In connection with the provisions of the Indenture, Notes and Guarantees under which the
Company and the Guarantors submit to the jurisdiction of the courts of the United States of America
located in the Borough of Manhattan, City and State of New York, we note the limitations of 28
U.S.C. §§1331 and 1332 on the subject matter jurisdiction of the U.S. federal courts. In
connection with the provisions of the Indenture
C-6
which relate to forum selection (including any waiver of any objection to venue in any court
or of any objection that a court is an inconvenient forum), we note that under NYCPLR §510 a New
York state court may have discretion to transfer the place of trial and under 28 U.S.C. §1404(a) a
United States District Court has discretion to transfer an action from one U.S. federal court to
another.
In rendering the opinion set forth in paragraph 12 above, we have relied upon the Statement of
Facts of the Company and the Guarantors attached hereto as Exhibit A.
We do not express any opinion herein concerning any law other than the law of the State of New
York and the federal law of the United States and the Delaware General Corporation Law. We
understand that, with respect to all matters governed by the laws of England or The Netherlands,
you are relying upon the opinion letters, dated the date hereof, rendered to you by Freshfields
Bruckhaus Deringer, English and Dutch counsel to the Company and the Guarantors, which are being
delivered to you pursuant to the Underwriting Agreement.
This opinion letter is rendered to you in connection with the above-described transaction.
This opinion letter may not be relied upon by you for any other purpose, or relied upon by, or
furnished to, any other person, firm or corporation without our prior written consent, except that
the Trustee may rely on the opinions set forth in paragraphs 1, 2, 3 and 4 as though this opinion
were addressed to it and contained only such numbered paragraphs.
Very truly yours,
SIMPSON THACHER & BARTLETT LLP
C-7
Exhibit 99.3
EXECUTION COPY
REED ELSEVIER CAPITAL INC.,
as Issuer,
and
REED ELSEVIER PLC and
REED ELSEVIER NV,
as Guarantors,
THE BANK OF NEW YORK MELLON, AS SUCCESSOR TO
JPMORGAN CHASE BANK, N.A.
as Trustee,
THE BANK OF NEW YORK MELLON
as London Paying Agent, and
THE BANK OF NEW YORK (LUXEMBOURG) S.A.
as Luxembourg Paying Agent
FIFTH SUPPLEMENTAL INDENTURE
Dated as of January 16, 2009
to
INDENTURE
Dated as of May 9, 1995
Guaranteed Debt Securities
FIFTH SUPPLEMENTAL INDENTURE, dated as of January 16, 2009 (“Fifth 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 Elsevier PLC, a public limited company
incorporated in England, and Reed 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 Bank of New York Mellon, as successor to JPMorgan Chase Bank,
N.A., as trustee (the “Trustee”), The Bank of New York Mellon, as London Paying Agent and The Bank
of New York (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”) providing for the issuance from time to time
of the Issuer’s 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 $250,000,000 principal
amount of floating rate notes due June 15, 2010, $550,000,000 principal amount of 6.75% notes due
August 1, 2011, $450,000,000 principal amount of 4.63% notes due June 15, 2012 and $150,000,000
principal amount of 7.50% 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(2) 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
Covenants of the Issuer or another Guarantor;
WHEREAS, the Issuer and each Guarantor have each been authorized by a duly adopted Board
Resolution to enter into this Fifth 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 Fifth 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 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
.
The following definitions are hereby added in appropriate alphabetical sequence:
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“Change of Control” means the occurrence of any of the following: (1) the consummation of any
transaction (including, without limitation, any merger or consolidation) the result of which is
that any “person” (as such term is used in Section 13(d)(3) of the Exchange Act) (other than a
Guarantor) acquires shares in each Guarantor to which attach more than 50% of the voting rights
attaching to the entire issued share capital of that Guarantor; provided that a Change of Control
shall be deemed not to have occurred if one or more new holding companies acquires the entire
issued share capital of each of the Guarantors and (A) such holding company (or companies) has (or
have, as the case may be) substantially the same shareholders as each of the Guarantors and those
shareholders acquired the shares in the holding company (or companies) in substantially the same
proportions as they hold shares in the relevant Guarantor(s) prior to the holding company (or
companies) so acquiring the share capital of each of the Guarantors and (B) each of the Guarantors
is a wholly owned (directly or indirectly) subsidiary of such holding company (or companies); (2)
the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger
or consolidation), in one or more series of related transactions, of all or substantially all of
the assets of the subsidiaries and joint ventures of the Guarantors, taken as a whole, to any
“person” (as such term is used in Section 13(d)(3) of the Exchange Act) (other than an affiliate of
either of the Guarantors); (3) the first day on which a majority of the members of the Boards of
Directors of each Guarantor are not Continuing Directors (as defined herein); or (4) the adoption
of a plan relating to the liquidation or dissolution of either Guarantor other than a plan pursuant
to which one or more new holding companies is created to hold the assets and liabilities of the
relevant Guarantor(s) and such holding company (or companies) has (or have, as the case may be)
substantially the same shareholders as the relevant Guarantor(s) and those shareholders acquired
the shares in the holding company (or companies) in substantially the same proportions as they hold
shares in the relevant Guarantor(s) prior to the holding company (or companies) so acquiring the
share capital of each of the Guarantors.
“Change of Control Triggering Event” means the occurrence of both a Change of Control and a
Rating Event (as defined herein).
“Continuing Directors” means, as of any date of determination, any member of the Board of
Directors of any Guarantor who (1) was a member of such Board of Directors on the date of the
issuance of the notes; or (2) was nominated for election, elected or appointed to such Board of
Directors with the approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination, election or appointment (either by a specific
vote or by approval of the proxy statement of the Guarantor for which such member was named as a
nominee for election as a director).
“Fitch” means Fitch Ratings Ltd. and its successors.
“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by
Moody’s, BBB- (or the equivalent) by S&P, BBB- (or the equivalent) by Fitch, and the equivalent
investment grade credit rating from any Substitute Rating Agency or Rating Agencies selected by us.
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
“Rating Agencies” means (a) each of Moody’s, S&P and Fitch; and (b) if any of the Rating
Agencies ceases to rate the Debt Securities or fails to make a rating of the Debt
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Securities publicly available for reasons outside of the Issuer’s control, a Substitute Rating
Agency.
“Rating Event” means the rating on the Debt Securities is lowered by each of the Rating
Agencies and the Debt Securities are rated below an Investment Grade Rating by each of the Rating
Agencies on any day during the period commencing 60 days prior to the first public announcement of
any Change of Control and ending 60 days following the consummation of such Change of Control
(which 60-day period shall be extended following consummation of a Change of Control for so long as
the rating of the Debt Securities is under publicly announced consideration for a possible
downgrade by any Rating Agencies).
“S&P” means Standard & Poor’s Rating Services and its successors.
“Substitute Rating Agency” means a “nationally recognized statistical rating organization”
within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by us (as certified
by a resolution of the Board of Directors of each Guarantor) as a replacement for Moody’s, S&P or
Fitch, or some or all of them, as the case may be, in accordance with the definition of “Rating
Agencies.”
Terms not defined herein are used with the meanings ascribed to them in the Indenture.
2.
Amendment of Article Ten
.
Article Ten is amended and supplemented by adding the following Sections 1009 and 1010 at the
end thereof:
Section 1009. Offer to Repurchase Upon Change of Control Triggering Event.
If a Change of Control Triggering Event occurs, unless the Issuer has exercised its right to
redeem the Debt Securities, the Issuer shall be required to make an offer to repurchase all, or, at
the option of a Holder, any part (equal to $1,000 or an integral multiple thereof), of each
Holder’s Debt Securities pursuant to the offer described below (the “Change of Control Offer”), on
the terms set forth in the Debt Securities. In the Change of Control Offer, the Issuer shall offer
payment in cash equal to 101% of the aggregate principal amount of the relevant series of Debt
Securities repurchased plus accrued and unpaid interest, if any, on such Debt Securities
repurchased, to the date of purchase, referred to as the Change of Control Payment. The Issuer
shall provide the Trustee with written notification upon the occurrence of any Change of Control
Triggering Event.
Within 30 days following any Change of Control Triggering Event or, at the option of the
Issuer, prior to any Change of Control, but after public announcement of the transaction that
constitutes or may constitute the Change of Control, the Issuer shall give written notice to the
Holders, with a copy to the Trustee, describing the transaction or transactions that constitute the
Change of Control Triggering Event and offering to repurchase the Debt Securities on the date
specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from
the date such notice is mailed, referred to as the “Change of Control Payment Date”, pursuant to
the procedures required by the Debt Securities and described in such notice.
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The notice shall, if given prior to the date of consummation of the change of control, state
that the offer to purchase is conditioned on the change of control triggering event occurring on or
prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Issuer shall be required, to the extent lawful, to:
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(1)
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accept for payment all Debt Securities or portions of Debt
Securities properly tendered pursuant to the Change of Control Offer;
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(2)
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deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Debt Securities or portions of Debt
Securities properly tendered; and
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(3)
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deliver or cause to be delivered to the Trustee the Debt
Securities properly accepted together with an Officer’s Certificate stating the
aggregate principal amount of Debt Securities or portions of Debt Securities
being purchased by the Issuer.
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The Issuer shall not be required to make a Change of Control Offer upon a Change of Control
Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by the Issuer and such third party purchases all
Debt Securities properly tendered and not withdrawn under its offer.
If 80% or more in nominal amount of the Debt Securities then outstanding of a series have been
redeemed or purchased hereunder, the Issuer may, on not less than 30 or more than 60 days’ notice
to the Holders of the Debt Securities given within 30 days after the Change of Control Payment
Date, redeem or purchase (or procure the purchase of), at its option, the remaining Debt Securities
of such series as a whole at 101% of their principal amount plus interest accrued to but excluding
the date of such redemption or purchase.
Section 1010. Interest Rate Adjustment.
The interest rate payable on the Debt Securities of each series shall be subject to
adjustments from time to time if either of Moody’s or S&P or, in either case, any Substitute Rating
Agency thereof, downgrades (or subsequently upgrades) the debt rating assigned to the Debt
Securities of that series in the manner described below.
If the rating of the Debt Securities of a series from Moody’s or any Substitute Rating Agency
thereof is decreased to a rating set forth in the immediately following table, the interest rate on
the Debt Securities of that series shall increase from the interest rate payable on the Debt
Securities of that series on the date of their initial issuance by the percentage points set forth
below opposite that rating.
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Percentage
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Moody’s Rating*
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Points
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Ba1
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0.25
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Ba2
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0.50
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Ba3
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0.75
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B1 or below
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1.00
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*
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Including the equivalent ratings of any Substitute Rating Agency.
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If the rating of the Debt Securities of a series from S&P or any Substitute Rating Agency
thereof is decreased to a rating set forth in the immediately following table, the interest rate on
the Debt Securities of that series shall increase from the interest rate payable on the Debt
Securities of that series on the date of their initial issuance by the percentage points set forth
below opposite that rating.
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Percentage
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S&P Rating*
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Points
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BB+
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0.25
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BB
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0.50
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BB-
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0.75
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B+ or below
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1.00
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*
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Including the equivalent ratings of any Substitute Rating Agency.
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If at any time the interest rate on the Debt Securities of a series has been adjusted upward
and either Moody’s or S&P (or, in either case, a Substitute Rating Agency thereof), as the case may
be, subsequently increases its rating of the Debt Securities of that series to any of the ratings
set forth in the tables above, the interest rate on the Debt Securities of that series shall be
decreased such that the interest rate for the Debt Securities of that series equals the interest
rate payable on the Debt Securities of that series on the date of their initial issuance plus the
applicable percentage points set forth opposite the ratings in the tables above in effect
immediately following the increase. If Moody’s or any Substitute Rating Agency thereof subsequently
increases its rating of the Debt Securities of a series to Baa3 (or its equivalent, in the case of
a Substitute Rating Agency) or higher and S&P or any Substitute Rating Agency thereof increases its
rating to BBB- (or its equivalent, in the case of a Substitute Rating Agency) or higher, the
interest rate on the Debt Securities of that series shall be decreased to the interest rate payable
on the Debt Securities of that series on their initial issuance date.
Each adjustment required by any decrease or increase in a rating set forth above, whether
occasioned by the action of Moody’s or S&P (or, in either case, any Substitute Rating Agency
thereof), shall be made independent of any and all other adjustments. In no event shall (1) the
interest rate on the Debt Securities of a series be reduced to below the interest rate payable on
the Debt Securities of that series on their initial issuance date or (2) the total increase in the
interest rate on the Debt Securities of a series exceed 2.00 percentage points above the interest
rate payable on the Debt Securities of that series on their initial issuance date.
No adjustments in the interest rate of the Debt Securities of a series shall be made solely as
a result of a Rating Agency ceasing to provide a rating of such series of Debt Securities. If at
any time fewer than two Rating Agencies provide a rating of the Debt Securities of a series for a
reason beyond the Issuer’s control, the Issuer shall use its commercially reasonable efforts to
obtain a rating of the Debt Securities of that series from a Substitute Rating Agency, to the
extent one exists, and if a Substitute Rating Agency exists, for purposes of determining any
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increase or decrease in the interest rate on the Debt Securities of that series pursuant to
the tables above (a) such Substitute Rating Agency shall be substituted for the last Rating Agency
to provide a rating of the Debt Securities of that series but which has since ceased to provide
such rating, (b) the relative ratings scale used by such Substitute Rating Agency to assign ratings
to senior unsecured debt shall be determined in good faith by an independent investment banking
institution of national standing appointed by the Issuer, and for purposes of determining the
applicable ratings included in the applicable table above with respect to such Substitute Rating
Agency, such ratings shall be deemed to be the equivalent ratings used by Moody’s or S&P, as
applicable, in such table and (c) the interest rate on the Debt Securities of that series shall
increase or decrease, as the case may be, such that the interest rate equals the interest rate
payable on the Debt Securities of that series on their initial issuance date plus the appropriate
percentage points, if any, set forth opposite the rating from such Substitute Rating Agency in the
applicable table above (taking into account the provisions of clause (b) above) (plus any
applicable percentage points resulting from a decreased rating by the other Rating Agency).
For so long as only one Rating Agency provides a rating of the Debt Securities of a series,
any subsequent increase or decrease in the interest rate of such series of Debt Securities
necessitated by a reduction or increase in the rating by such Rating Agency shall be twice the
percentage points set forth in the applicable table above. For so long as no Rating Agency provides
a rating of the Debt Securities of a series, the interest rate on the Debt Securities of that
series shall increase to, or remain at, as the case may be, 2.00 percentage points above the
interest rate payable on the Debt Securities of that series on their initial issuance date.
The interest rate on the Debt Securities of a series shall permanently cease to be subject to
any adjustment described in this Section (notwithstanding any subsequent decrease in the ratings by
either or both Rating Agencies) if the Debt Securities of that series become rated A3 and A— (or
its equivalent, in the case of a Substitute Rating Agency) or higher by Moody’s and S&P,
respectively (or, in either case, any Substitute Rating Agency thereof), or one of these ratings if
the Debt Securities of that series are only rated by one Rating Agency.
Any interest rate increase or decrease described in this Section shall take effect from the
first day of the interest period during which a rating change requires an adjustment in the
interest rate. If Moody’s or S&P or any Substitute Rating Agency thereof changes its rating of the
Debt Securities of a series more than once during any particular interest period, the last change
by such agency during such period shall control for purposes of any interest rate increase or
decrease with respect to the Debt Securities of such series relating to such Rating Agency’s
action.
If the interest rate payable on the Debt Securities of a series is increased as described
above, the term “interest,” as used with respect to the Debt Securities of that series, shall be
deemed to include any such additional interest unless the context otherwise requires.
The Issuer shall deliver to the Trustee, and the Principal Paying Agent, if the Trustee shall
not then be acting as the Principal Paying Agent, within ten calendar days after either Moody’s or
S&P or any Substitute Rating Agency thereof downgrades, or subsequently upgrades, the rating
assigned to the Debt Securities as described by this Section, written notice stating (i) that the
rating downgrade, or subsequent upgrade, as the case may be, has occurred
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and (ii) the current rating or ratings upon which the interest rate payable on the Debt
Securities shall be based.
3.
New York Law to Govern
. This Fifth Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
4.
Conflict of Any Provision of Indenture with Trust Indenture Act of 1939
. If and to
the extent that any provision of this Fifth Supplemental Indenture limits, qualifies or conflicts
with another provision included in this Fifth 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.
5.
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.
6.
Effect of Fifth Supplemental Indenture
. Upon the execution of this Fifth
Supplemental Indenture, the Indenture shall be modified in accordance herewith and this Fifth
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 Fifth Supplemental
Indenture shall be applicable only to Debt Securities originally issued after the date hereof.
7.
The Trustee
. The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Fifth Supplemental Indenture or for or in respect
of the recitals contained herein, all of which are made solely by the Issuer and the Guarantors.
8.
Luxembourg Paying Agent.
The parties hereto hereby acknowledge that The Bank of New
York (Luxembourg) S.A. has acquired the entire corporate trust agency business of J.P. Morgan Bank
Luxembourg S.A. and agree to deem The Bank of New York (Luxembourg) S.A. as the successor
Luxembourg Paying Agent under the Indenture pursuant to terms of the Indenture, as supplemented.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth 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/
Kenneth Fogarty
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Name: Kenneth Fogarty
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Title: President,
Treasurer and Assistant Secretary
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REED ELSEVIER PLC,
as Guarantor
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By
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/s/
Stephen Cowden
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Name: Stephen Cowden
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Title: Secretary
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REED ELSEVIER NV,
as Guarantor
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By
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/s/
Mark Armour
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Name: Mark Armour
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Title: Chief Financial
Officer
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THE BANK OF NEW YORK MELLON, AS
SUCCESSOR TO JPMORGAN CHASE BANK, N.A.
as Trustee
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By
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/s/
Karen A. Trachtenberg
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Name: Karen A. Trachtenberg
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Title: Vice President
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THE BANK OF NEW YORK MELLON, as London
Paying Agent
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By
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/s/
Karen A. Trachtenberg
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Name: Karen A. Trachtenberg
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Title: Vice President
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THE BANK OF NEW YORK (LUXEMBOURG) S.A.,
as Luxembourg Paying Agent
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By
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/s/
Véronique Cridel
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Name: Véronique Cridel
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Title: Vice President
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Exhibit 99.4
THIS DEBT SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE THEREOF. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE
DEPOSITARY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE OR TO THE DEPOSITARY BY A NOMINEE
OF THE DEPOSITARY AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (“DTC”) (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
Reed Elsevier Capital Inc.
7.750% Note due 2014
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Principal Amount
$[ • ]
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No. R-[ • ]
CUSIP: 758202 AF2
ISIN: US758202AF28
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Reed Elsevier Capital Inc.
, a corporation incorporated under the laws of the state of Delaware
(herein called the “
Company
,” which term includes any successor corporation under the
Indenture referred to below), for value received, hereby promises to pay Cede & Co., or its
registered assigns, the principal sum of $[• ] dollars on January 15, 2014 (the “
Stated
Maturity
”), and to pay interest thereon from the most recent Interest Payment Date to which
interest has been paid or duly provided for, or, if no interest has been paid or duly provided for,
from January 16, 2009, payable semiannually in arrears on January 15 and July 15 of each year (each
an “
Interest Payment Date
”), commencing on July 15, 2009, and at Maturity, at the rate of
7.750% per annum, until the principal hereof is paid or duly provided for. Each payment of
interest in respect of an Interest Payment Date shall include interest accrued through the day
prior to such Interest Payment Date. The interest, if any, on this Debt Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name this Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest payment, which shall be the
January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date, at the office or agency of the Company maintained for such purpose in The
City of New York, New York. Interest shall be computed on the basis of a 360-day year consisting
of twelve 30-day months.
Except as otherwise provided in the Indenture, any such interest which is due and payable, but
is not punctually paid or duly provided for, on any Interest Payment Date (the “
Defaulted
Interest
”) shall cease to be payable to the registered Holder on the relevant Regular
2
Record Date, and the Defaulted Interest may be paid by the Company as follows. The Company
may elect to make payment of any Defaulted Interest to the Persons in whose names this Debt
Security (or the respective Predecessor Security) is registered at the close of business on the
Special Record Date. The Company shall notify the Trustee in writing at least 30 days prior to the
date of the proposed payment of the amount of Defaulted Interest proposed to be paid on this Debt
Security and the date of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment. Then the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be no more than 15 days and not less than 10 days prior to
the date of the proposed payment. The Trustee shall promptly notify the Company and the Principal
Paying Agent of the Special Record Date and shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date to be mailed to each Holder of this Debt Security at
the address as it appears in the Securities Register no less than seven days prior to such Special
Record Date.
If any Interest Payment Date, Redemption Date or Stated Maturity of this Debt Security shall
not be a Business Day at any Place of Payment, then payment of principal of (and premium, if any)
and interest, if any, with respect to this Debt Security need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at the Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity; provided that no interest shall accrue for the period from and after the Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
Payment of the principal of (and premium, if any) and interest on this Debt Security at
Maturity shall be made upon presentation of this Debt Security at the office or agency of the
Company. Payment of the principal of (and premium, if any) and interest on this Debt Security
shall be payable in immediately available funds; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register or by transfer to a bank account maintained by
the payee. Payment of the principal of (and premium, if any) and interest, if any, on this Debt
Security, as aforesaid, shall be made in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and private debts. Interest
payable on any Interest Payment Date will be paid to DTC with respect to the portion of this Debt
Security held for its account by Cede & Co. or a successor depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in respect of this Debt
Security to the accounts of the beneficial owners hereof.
This Debt Security is one of a duly authorized issue of senior debt securities of the Company
known as the Company’s 7.750% Notes due 2014, initially in the aggregate principal amount
of $550,000,000 (herein called the “
Debt Securities
”), issued under an Indenture
dated as of May 9, 1995 (such Indenture as originally executed and delivered and hereafter
supplemented or amended by Supplemental Indenture No. 1, dated as of March 6, 1998, Supplemental
Indenture No. 2, dated as of June 3, 1998, the Third Supplemental Indenture, dated as of February
21, 2001, the Fourth Supplemental Indenture, dated as of July 31, 2001 and the Fifth Supplemental
Indenture, dated as of January 16, 2009 together with the Board Resolutions adopted on
January 14, 2009 authorizing the issuance of this Debt Security and the Officer’s
Certificate, dated January 16, 2009 setting forth certain terms of this Debt Security and
delivered to the Trustee by the Company pursuant to Section 301 of such Indenture, being herein
called the “
Indenture
”) among the Company, Reed Elsevier PLC and Reed Elsevier NV, as
Guarantors, The
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Bank of New York Mellon (as successor to The Chase Manhattan Bank), as trustee (herein called
the “
Trustee
,” which term includes any other successor trustees under the Indenture), to
which Indenture, all indentures supplemental thereto and all Board Resolutions and Officers’
Certificates relating thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee
and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. This Debt Security is subject to additional issuances as the
Company may determine or as provided for in the Indenture. The acceptance of this Debt Security
shall be deemed to constitute the consent and agreement of the Holder hereof to all of the terms
and provisions of the Indenture. In the event of any inconsistency in the terms and provisions of
the Indenture and this Debt Security, the terms and provisions of the Indenture shall prevail.
If an Event of Default with respect to this Debt Security shall occur and be continuing, the
principal of this Debt Security may be declared due and payable in the manner and with the effect
provided in the Indenture.
This Debt Security does not have the benefit of any sinking fund obligations.
The Company’s obligations under this Debt Security and under the covenants provided in the
Indenture are subject to discharge as provided in the Indenture.
Reference is made to the further provisions of this Debt Security set forth on the reverse
hereof, which provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Principal Paying
Agent by manual or facsimile signature, this Debt Security and the Guarantees set forth hereon
shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
All capitalized terms used in this Debt Security which are not defined herein shall have the
meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
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REED ELSEVIER CAPITAL INC.
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By:
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Name:
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Title:
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Attested:
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Name:
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Title:
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This is one of the Debt Securities of the series designated in, and issued under, the
Indenture described herein.
Dated:
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THE BANK OF NEW YORK MELLON as
Principal Paying Agent
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By:
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Authorized Officer
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Signature Page to the 2014 Global Fixed Rate Note
Reverse of Note
Reed Elsevier Capital Inc.
7.750% Note due 2014
Payment of Additional Amounts
All payments of principal, premium (if any) and interest in respect of this Debt Security 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.
If withholding or deduction is required by law, then the Company or either Guarantor, as the
case may be, will pay to the Holder of this Debt Security additional amounts (“
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 this 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
the Company or either Guarantor, 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 amount is paid by the Company or either Guarantor, 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 neither the Company nor either
Guarantor, as the case may be, will be required to make any payment of Additional Amounts for or on
account of:
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(a)
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any tax, assessment or other governmental charge which would not have been
imposed but for:
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(i)
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the existence of any present or former connection between the Holder
of this Debt Security (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 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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(ii)
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the presentation of this 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 this Debt Security for payment on or
before the thirtieth day;
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(b)
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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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(c)
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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 (a) above to
comply with a request of the Company or either Guarantor, 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 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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(d)
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any tax, assessment or other governmental charge imposed by reason of such
Holder’s past or present status as a passive foreign investment company, a controlled
foreign corporation, a personal holding company or foreign 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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(e)
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any tax, assessment or other governmental charge imposed on interest received
by:
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(i)
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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 the Company; or
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(ii)
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a controlled foreign corporation with respect to the Company within
the meaning of the Code;
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(f)
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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 any European Union directive on the taxation of savings income
implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or
any law implementing or complying with, or introduced to conform to, that directive;
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(g)
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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 be able to avoid
any withholding or deduction by presenting the Debt Security to another Paying Agent
in a member state of the European Union; or
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(h)
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any combination of items (a) through (g) above,
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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 this Debt Security; 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 this Debt Security to the extent a beneficiary or settlor
with respect to that fiduciary or a member of that partnership or the beneficial owner
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would not have been entitled to those Additional Amounts had it been the Holder of this
Debt Security.
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Optional Redemption
This Debt Security may be redeemed, in whole or in part, at the option of the Company, at any
time or from time to time, on notice given not more than 60 days, if this Debt Security is being
redeemed in full, or 45 days, if this Debt Security is being redeemed in part, nor less than 30
days prior to the date of redemption at the greater of:
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100% of the principal amount and premium, if any, together with accrued but
unpaid interest, if any, to, but not including, the Redemption Date of the Debt
Securities; and
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the sum of the present values of the Remaining Scheduled Payments,
discounted, on a semi-annual basis, assuming a 360-day year consisting of twelve
30-day months, at the Treasury Rate, plus 50 basis points.
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Tax Redemption
This Debt Security may be redeemed, at the option of the Company in whole, but not in part, at
100% of the principal amount thereof (and premium, if any, thereon) together with accrued but
unpaid interest, if any, thereon to, but not including, the Redemption Date if, as a result of any
change in, or amendment to, the laws of a Relevant Taxing Jurisdiction, or any change in official
position regarding application or interpretation of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction) which change, amendment, application or
interpretation becomes effective on or after January 16, 2009, the Company, or either of
the Guarantors, as the case may be, would, on the occasion of the next payment of principal or
interest in respect of this Debt Security be obligated, in making such payment itself, to pay
Additional Amounts and such obligation cannot be avoided by the Company or either of the
Guarantors, individually or together, taking reasonable measures available to them.
This Debt Security may also be redeemed, at the option of the Company in whole, but not in
part, at the Special Redemption Price, if, as a result of any change in, or amendment to, the U.S.
Internal Revenue Code of 1986, as amended, or any regulation or ruling thereunder or in the
official interpretation thereof, which change or amendment is enacted or adopted and becomes
effective on or after January 16, 2009, the deductibility of interest payments on this
Debt Security or the timing thereof would be affected in any manner then adverse to the Company and
such effect cannot be avoided by the Company or either Guarantor, individually or together, taking
reasonable measures available to them.
Prior to the giving of any notice of redemption of this Debt Security pursuant to the
foregoing two paragraphs, the Company shall deliver to the Trustee an Opinion of Counsel to the
Company and the Guarantors stating that the Company is entitled to effect such redemption, together
with an Officers’ Certificate of the Company and each of the Guarantors setting forth a statement
of facts showing that the conditions precedent, if any, to the right so to redeem have occurred.
Change of Control — Offer to Repurchase Upon Change of Control Triggering Event
If a Change of Control Triggering Event occurs, unless the Company has exercised its right to
redeem this Debt Security, the Company will be required to make an offer to repurchase
all, or, at the option of a Holder, any part (equal to $1,000 or an integral multiple
thereof), of each Holder’s Debt Securities pursuant to the offer described below (the “Change of
Control Offer”), on the terms set forth below. In the Change of Control Offer, the Company shall
offer payment in cash equal to 101% of the aggregate principal amount of the Debt Securities
repurchased plus accrued and unpaid interest, if any, on such Debt Securities repurchased, to the
date of purchase, referred to as the Change of Control Payment. The Company shall provide the
Trustee with written notification upon the occurrence of any Change of Control Triggering Event.
Within 30 days following any Change of Control Triggering Event or, at the option of the
Company, prior to any Change of Control, but after public announcement of the transaction that
constitutes or may constitute the Change of Control, the Company shall give written notice to the
Holders, with a copy to the Trustee, describing the transaction or transactions that constitute the
Change of Control Triggering Event and offering to repurchase the Debt Securities on the date
specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from
the date such notice is mailed, referred to as the “Change of Control Payment Date”, pursuant to
the procedures required by the Debt Securities and described in such notice.
The notice shall, if given prior to the date of consummation of the Change of Control, state
that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or
prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Company shall, to the extent lawful:
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accept for payment all Debt Securities or portions of Debt Securities properly tendered
pursuant to the Change of Control Offer;
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deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of
all Debt Securities or portions of Debt Securities properly tendered; and
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deliver or cause to be delivered to the Trustee the Debt Securities properly accepted
together with an Officer’s Certificate stating the aggregate principal amount of Debt Securities or
portions of Debt Securities being purchased by the Company.
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The Company shall not be required to make a Change of Control Offer upon a Change of Control
Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by the Company and such third party purchases
all Debt Securities properly tendered and not withdrawn under its offer.
If 80% or more in nominal amount of the Debt Securities then outstanding have been redeemed or
purchased hereunder, the Company may, on not less than 30 or more than 60 days’ notice to the
Holders given within 30 days after the Change of Control Payment Date, redeem or purchase (or
procure the purchase of), at its option, the remaining Debt Securities as a whole at 101% of their
principal amount plus interest accrued to but excluding the date of such redemption or purchase.
Interest Rate Adjustment
The interest rate payable on the Debt Securities shall be subject to adjustments from time to
time if either of Moody’s or S&P or, in either case, any Substitute Rating Agency thereof,
downgrades (or subsequently upgrades) the debt rating assigned to the Debt Securities in the manner
described below.
If the rating of the Debt Securities from Moody’s or any Substitute Rating Agency thereof is
decreased to a rating set forth in the immediately following table, the interest rate on the Debt
Securities shall increase from the interest rate payable on the Debt Securities on the date of
their initial issuance by the percentage points set forth below opposite that rating.
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Percentage
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Moody’s Rating*
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Points
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Ba1
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0.25
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Ba2
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0.50
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Ba3
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0.75
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B1 or below
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1.00
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*
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Including the equivalent ratings of any Substitute Rating Agency.
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If the rating of the Debt Securities from S&P or any Substitute Rating Agency thereof is
decreased to a rating set forth in the immediately following table, the interest rate on the Debt
Securities shall increase from the interest rate payable on the Debt Securities on the date of
their initial issuance by the percentage points set forth below opposite that rating.
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Percentage
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S&P Rating*
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Points
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BB+
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0.25
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BB
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0.50
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BB-
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0.75
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B+ or below
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1.00
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*
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Including the equivalent ratings of any Substitute Rating Agency.
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If at any time the interest rate on the Debt Securities has been adjusted upward and either
Moody’s or S&P (or, in either case, a Substitute Rating Agency thereof), as the case may be,
subsequently increases its rating of the Debt Securities to any of the ratings set forth in the
tables above, the interest rate on the Debt Securities shall be decreased such that the interest
rate for the Debt Securities equals the interest rate payable on the Debt Securities on the date of
their initial issuance plus the applicable percentage points set forth opposite the ratings in the
tables above in effect immediately following the increase. If Moody’s or any Substitute Rating
Agency thereof subsequently increases its rating of the Debt Securities to Baa3 (or its equivalent,
in the case of a Substitute Rating Agency) or higher and S&P or any Substitute Rating Agency
thereof increases its rating to BBB- (or its equivalent, in the case of a Substitute Rating Agency)
or higher, the interest rate on the Debt Securities shall be decreased to the interest rate payable
on the Debt Securities on their initial issuance date.
Each adjustment required by any decrease or increase in a rating set forth above, whether
occasioned by the action of Moody’s or S&P (or, in either case, any Substitute Rating Agency
thereof), shall be made independent of any and all other adjustments. In no event shall (1) the
interest rate on the Debt Securities be reduced to below the interest rate payable on the Debt
Securities on their initial issuance date or (2) the total increase in the interest rate on the
Debt Securities exceed 2.00 percentage points above the interest rate payable on the Debt
Securities on their initial issuance date.
No adjustments in the interest rate of the Debt Securities shall be made solely as a result of
a Rating Agency ceasing to provide a rating of Debt Securities. If at any time fewer than two
Rating Agencies provide a rating of the Debt Securities for a reason beyond the Company’s
control, the Company shall use its commercially reasonable efforts to obtain a rating of the Debt
Securities from a Substitute Rating Agency, to the extent one exists, and if a Substitute Rating
Agency exists, for purposes of determining any increase or decrease in the interest rate on the
Debt Securities pursuant to the tables above (a) such Substitute Rating Agency shall be substituted
for the last Rating Agency to provide a rating of the Debt Securities but which has since ceased to
provide such rating, (b) the relative ratings scale used by such Substitute Rating Agency to assign
ratings to senior unsecured debt shall be determined in good faith by an independent investment
banking institution of national standing appointed by the Company, and for purposes of determining
the applicable ratings included in the applicable table above with respect to such Substitute
Rating Agency, such ratings shall be deemed to be the equivalent ratings used by Moody’s or S&P, as
applicable, in such table and (c) the interest rate on the Debt Securities shall increase or
decrease, as the case may be, such that the interest rate equals the interest rate payable on the
Debt Securities on their initial issuance date plus the appropriate percentage points, if any, set
forth opposite the rating from such Substitute Rating Agency in the applicable table above (taking
into account the provisions of clause (b) above) (plus any applicable percentage points resulting
from a decreased rating by the other Rating Agency).
For so long as only one Rating Agency provides a rating of the Debt Securities, any subsequent
increase or decrease in the interest rate of Debt Securities necessitated by a reduction or
increase in the rating by such Rating Agency shall be twice the percentage points set forth in the
applicable table above. For so long as no Rating Agency provides a rating of the Debt Securities,
the interest rate on the Debt Securities shall increase to, or remain at, as the case may be, 2.00
percentage points above the interest rate payable on the Debt Securities on their initial issuance
date.
The interest rate on the Debt Securities shall permanently cease to be subject to any
adjustment described in this Section (notwithstanding any subsequent decrease in the ratings by
either or both Rating Agencies) if the Debt Securities become rated A3 and A— (or its equivalent,
in the case of a Substitute Rating Agency) or higher by Moody’s and S&P, respectively (or, in
either case, any Substitute Rating Agency thereof), or one of these ratings if the Debt Securities
are only rated by one Rating Agency.
Any interest rate increase or decrease described in this Section shall take effect from the
first day of the interest period during which a rating change requires an adjustment in the
interest rate. If Moody’s or S&P or any Substitute Rating Agency thereof changes its rating of the
Debt Securities more than once during any particular interest period, the last change by such
agency during such period shall control for purposes of any interest rate increase or decrease with
respect to the Debt Securities relating to such Rating Agency’s action.
If the interest rate payable on the Debt Securities is increased as described above, the term
“interest,” as used with respect to the Debt Securities, shall be deemed to include any such
additional interest unless the context otherwise requires.
The Company shall deliver to the Trustee, and the Principal Paying Agent, if the Trustee shall
not then be acting as the Principal Paying Agent, within ten calendar days after either Moody’s or
S&P or any Substitute Rating Agency thereof downgrades, or subsequently upgrades, the rating
assigned to the Debt Securities as described by this Section, written notice stating (i) that the
rating downgrade, or subsequent upgrade, as the case may be, has occurred and (ii) the current
rating or ratings upon which the interest rate payable on the Debt Securities shall be based.
General
The Indenture permits, with certain exceptions as thereby provided, the Trustee 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 Debt Securities, in any such case, with the consent of the Holders of not
less than a majority in aggregate principal amount of all Outstanding Debt Securities affected by
such supplemental indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each of the Outstanding Debt Securities affected thereby, affect
certain rights of such Holders as more fully described in the Indenture.
No reference herein to the Indenture and no provision of this Debt Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of (and premium, if any) and interest, if any, on this Debt Security at the
times, place and rate, in the coin or currency, and in the manner, herein prescribed.
These Debt Securities are issuable only in registered form, without coupons, in denominations
of $1,000, and in book-entry form.
Initially, The Bank of New York Mellon will be the Security Registrar, Principal Paying Agent
and Transfer Agent for this Debt Security. The Company reserves the right at any time to remove
any Paying Agent, Transfer Agent or Security Registrar without notice, to appoint additional or
other Paying Agents, other Transfer Agents and other Security Registrars without notice and to
approve any change in the office through which any Paying Agent, Transfer Agent or Security
Registrar acts. None of the Company, the Trustee, any Paying Agent or the Security Registrar will
have any responsibility or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in this Debt Security in global form or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to this Debt Security in
global form or impair, as between such depositary and owners of beneficial interests in such global
Debt Security, the operation of customary practices governing the exercise of the rights of such
depositary (or its nominee) as Holder of such global Debt Security.
THE INDENTURE AND THE DEBT SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
No recourse shall be had for the payment of the principal of (or premium, if any, on), or
interest, if any, on this Debt Security or the Guarantees, as the case may be, or for any claim
based thereon, or upon any obligation, covenant or agreement under the Indenture or any indenture
supplemental thereto, or any Debt Security, or because of any indebtedness evidenced thereby,
against any incorporator, stockholder, officer or director, as such, past, present or future, of
the Company or either Guarantor or of any predecessor or successor corporation of the Company or
such Guarantor, either directly or indirectly through the Company or such Guarantor or any
predecessor or successor corporation of the Company or such Guarantor, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that under the Indenture, this Debt Security
and the Guarantees are solely corporate obligations, and that no personal liability whatsoever
shall attach to, or is incurred by, any incorporator, stockholder, officer or director, past,
present or future, of the Company or such Guarantor or of any predecessor or successor corporation
of the Company or such Guarantor, either directly or indirectly through the Company or such
Guarantor or any predecessor or successor corporation of the Company or such Guarantor, because
this Debt Security hereby authorized or under or by reason of any of the obligations, covenants or
agreements contained in the Indenture or this Debt Security or the Guarantees, or to be implied
herefrom or therefrom; and that all such personal liability is hereby expressly released and waived
as a condition of, and as part of the consideration for, the execution of the Indenture and the
issuance of the Debt Securities and the Guarantees.
Definitions
All capitalized terms used in this Debt Security which are not defined herein shall have the
meanings assigned to them in the Indenture.
“
Business Day
” means any day other than a Saturday or Sunday or any other day on which
commercial banks are authorized or required by law, regulation or executive order to close in The
City of New York and any London banking day.
“
Change of Control
” means the occurrence of any of the following: (1) the consummation
of any transaction (including, without limitation, any merger or consolidation) the result of which
is that any “person” (as such term is used in Section l3(d)(3) of the Exchange Act) (other than a
Guarantor) acquires shares in each Guarantor to which attach more than 50% of the voting rights
attaching to the entire issued share capital of that Guarantor; provided that a Change of Control
shall be deemed not to have occurred if one or more new holding companies acquires the entire
issued share capital of each of the Guarantors and (A) such holding company (or companies) has (or
have, as the case may be) substantially the same shareholders as each of the Guarantors and those
shareholders acquired the shares in the holding company (or companies) in substantially the same
proportions as they hold shares in the relevant Guarantor(s) prior to the holding company (or
companies) so acquiring the share capital of each of the Guarantors and (B) each of the Guarantors
is a wholly owned (directly or indirectly) subsidiary of such holding company (or companies); (2)
the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger
or consolidation), in one or more series of related transactions, of all or substantially all of
the assets of the subsidiaries and joint ventures of the Guarantors, taken as a whole, to any
“person” (as such term is used in Section 13(d)(3) of the Exchange Act) (other than an affiliate of
either of the Guarantors); (3) the first day on which a majority of the members of the Boards of
Directors of each Guarantor are not Continuing Directors; or (4) the adoption of a plan relating to
the liquidation or dissolution of either Guarantor other than a plan pursuant to which one or more
new holding companies is created to hold the assets and liabilities of the relevant Guarantor(s)
and such holding company (or companies) has (or have, as the case may be) substantially the same
shareholders as the relevant Guarantor(s) and those shareholders acquired the shares in the holding
company (or companies) in substantially the same proportions as they hold shares in the relevant
Guarantor(s) prior to the holding company (or companies) so acquiring the share capital of each of
the Guarantors.
“
Change of Control Triggering Event
” means the occurrence of both a Change of Control
and a Rating Event.
“
Comparable Treasury Issue
” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the Debt
Securities to be redeemed.
“
Comparable Treasury Price
” means with respect to any Redemption Date for the Debt
Securities:
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the average of four Reference U.S. Treasury Dealer Quotations for that
Redemption Date, after excluding the highest and lowest of such Reference U.S.
Treasury Dealer Quotations; or
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if the Trustee obtains fewer than four Reference U.S. Treasury Dealer
Quotations, the average of all quotations obtained by the Trustee.
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“
Continuing Directors
” means, as of any date of determination, any member of the Board
of Directors of any Guarantor who (1) was a member of such Board of Directors on the date of the
issuance of the Debt Securities; or (2) was nominated for election, elected or appointed to such
Board of Directors with the approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination, election or appointment (either by a
specific vote or by approval of the proxy statement of the Guarantor for which such member was
named as a nominee for election as a director).
“
Fitch
” means Fitch Ratings Ltd and its successors.
“
Independent Investment Banker
” means one of the Reference U.S. Treasury Dealers, to
be appointed by the Company in its sole discretion.
“
Investment Grade Rating
” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s, BBB- (or the equivalent) by S&P, BBB- (or the equivalent) by Fitch, and the
equivalent investment grade credit rating from any Substitute Rating Agency or Rating Agencies
selected by the Company.
“
Moody’s
” means Moody’s Investors Service, Inc and its successors.
“
Rating Agencies
” means (a) each of Moody’s, S&P and Fitch; and (b) if any of the
Rating Agencies ceases to rate the Debt Securities or fails to make a rating of the Debt Securities
publicly available for reasons outside of the Company’s control, a Substitute Rating Agency.
“
Rating Event
” means the rating on the Debt Securities is lowered by each of the
Rating Agencies and the Debt Securities are rated below an Investment Grade Rating by each of the
Rating Agencies on any day during the period commencing 60 days prior to the first public
announcement of any Change of Control and ending 60 days following the consummation of such Change
of Control (which 60-day period shall be extended following consummation of a Change of Control for
so long as the rating of the Debt Securities is under publicly announced consideration for a
possible downgrade by any Rating Agencies).
“
Redemption Premium
” means the amount (but not less than zero) obtained by
subtracting:
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the aggregate amount of the principal being redeemed on the Redemption Date
with respect to this Debt Security from:
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the sum of the present values of the Remaining Scheduled Payments, discounted
on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at
the Treasury Rate.
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“
Reference U.S. Treasury Dealer
” means each of Barclays Capital Inc., Citigroup Global
Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer, referred to here as a “Primary Treasury Dealer,” the Company will
substitute therefor another nationally recognized investment banking firm that is a Primary
Treasury Dealer.
“
Reference U.S. Treasury Dealer Quotations
” means, with respect to each Reference U.S.
Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its
principal amount, quoted in writing to the Trustee by such Reference U.S. Treasury Dealer at 3:30
p.m., New York City time, on the third Business Day preceding such Redemption Date.
“
Remaining Scheduled Payments
” means, with respect to the Debt Security to be
redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would
be due after the related Redemption Date but for such redemption; provided, however, that, if such
Redemption Date is not an Interest Payment Date with respect to such Debt Security, the amount of
the next succeeding scheduled interest payment thereon will be deemed to be reduced by that amount
of interest accrued thereon to such Redemption Date.
“
Special Redemption Price
” means the principal amount of the Debt Security to be
redeemed, plus accrued and unpaid interest to, but not including, the Redemption Date, plus the
Redemption Premium.
“
S&P
” means Standard & Poor’s Rating Services and its successors.
“
Substitute Rating Agency
” means a “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by us
(as certified by a resolution of the Board of Directors of each Guarantor) as a replacement for
Moody’s, S&P or Fitch, or some or all of them, as the case may be, in accordance with the
definition of “Rating Agencies.”
“
Treasury Rate
” means, with respect to any Redemption Date for the Debt Securities the
rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for that Redemption Date.
The Treasury Rate will be calculated on the third business day preceding the Redemption Date.
GUARANTEES
FOR VALUE RECEIVED,
Reed Elsevier PLC
, a public limited company incorporated in England
(“
Reed Elsevier PLC
”), and
Reed Elsevier NV
, a public company with limited liability
incorporated under the laws of The Netherlands (“
Reed Elsevier NV
”) (each of Reed Elsevier
PLC and Reed Elsevier NV a “
Guarantor
” and collectively, the “
Guarantors
”) hereby
jointly and severally unconditionally and irrevocably guarantee to each Holder due and punctual
payment of the principal of (and premium, if any) and interest, if any, on this Debt Security
(including any Additional Amounts payable in accordance with the terms of this Debt Security and
the Indenture), whether at the Stated Maturity, by declaration of acceleration, call for
redemption, repayment at the option of the Holder or otherwise, in accordance with the terms of
this Debt Security and of the Indenture. In case of failure of the Company punctually to make any
such payment of principal (or premium, if any) or interest, if any (including any Additional
Amounts), each of the Guarantors hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, repayment at the option of the Holder or otherwise, and as if
such payment were made by the Company.
Each of the Guarantors hereby agrees that its obligations hereunder shall be as if it were
principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of
the validity, regularity or enforceability of this Debt Security or the Indenture, the absence of
any action to enforce the same, any waiver or consent by the Holder of this Debt Security or by the
Trustee or the Principal Paying Agent with respect to any provisions of this Debt Security or the
Indenture, any release of any other guarantor, the recovery of any judgment against the Company or
any action to enforce the same or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of any Guarantor. Each Guarantor hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Company, protest or notice with respect to any Debt Security and all demands
whatsoever, and covenants that its Guarantees will not be discharged except by complete performance
of all of the obligations of such Guarantor contained in the Indenture and this Debt Security and
in the Guarantees. If the Trustee or the Holder of any Debt Security is required by any court or
otherwise to return (and does so return) to the Company or to any Guarantor, or any custodian,
receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the
Company or such Guarantor, any amount paid to the Trustee or such Holder in respect of that Debt
Security or the Guarantees, to the extent theretofore discharged, shall be reinstated in full force
and effect. Each Guarantor further agrees, to the fullest extent that it lawfully may do so, that,
as between it, on the one hand, and the Holder of this Debt Security and the Trustee, on the other
hand, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Article
Five of the Indenture for the purposes of these Guarantees, notwithstanding any stay, injunction or
other prohibition extant under any applicable Bankruptcy Law preventing such acceleration in
respect of the obligations guaranteed hereby.
The Guarantees of each Guarantor constitute direct, unconditional, unsubordinated and (except
as provided in the Indenture) unsecured obligations of each Guarantor without preference among
themselves and will rank at least equally with all other unsecured and unsubordinated obligations
of the Guarantor (including unsecured and unsubordinated guarantees by such Guarantor of
Indebtedness of others), subject, in the event of insolvency, to laws of general applicability
relating to or affecting creditors’ rights. Each of the Guarantors hereby agrees that its
obligations hereunder may be enforced against either of the Guarantors, in the event of a default
in payment with respect to this Debt Security by the Company, without making prior
demand upon or seeking to enforce remedies against the Company, the other Guarantors or other
persons.
Each Guarantor shall be subrogated to all rights of the Holder of this Debt Security against
the Company in respect of any amounts paid to such Holder by such Guarantor pursuant to these
Guarantees; provided, however, that no Guarantor shall be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation until the principal of (and
premium, if any) and interest, if any, on this Debt Security shall have been paid in full.
The Holder of the Debt Security on which these Guarantees are endorsed is entitled to the
further benefits relating thereto set forth in the Debt Security and the Indenture. No reference
herein to the Indenture and no provision of these Guarantees or of the Indenture shall alter or
impair the Guarantee of any Guarantor, which is absolute and unconditional, of the due and punctual
payment of the principal of (and premium, if any) and interest, if any, and Additional Amounts, if
any, on the Debt Security upon which these Guarantees are endorsed.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THESE GUARANTEES SET FORTH IN SAID DEBT
SECURITY AND IN THE INDENTURE, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT
AS IF SET FORTH AT THIS PLACE.
These Guarantees shall not be valid or obligatory for any purpose until the certificate of
authentication on the within Debt Security has been executed by the principal Paying Agent,
directly or through an Authenticating Agent, by manual or facsimile signature of an authorized
signatory.
All capitalized terms used in these Guarantees which are not defined herein shall have the
meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, each Guarantor has caused this instrument to be duly executed.
Dated:
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REED ELSEVIER PLC
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By:
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Name:
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Mark Armour
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Title:
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Chief Financial Officer
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Attested:
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Name:
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Stephen Cowden
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Title:
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Company Secretary
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REED ELSEVIER NV
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By:
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Name:
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Mark Armour
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Title:
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Chief Financial Officer
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Attested:
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Name:
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Jans van der Woude
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Title:
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Secretary
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Signature Page to Guarantees to the 2014 Global Fixed Rate Note
Exhibit 99.5
THIS DEBT SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE THEREOF. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF THE
DEPOSITARY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE OR TO THE DEPOSITARY BY A NOMINEE
OF THE DEPOSITARY AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (“DTC”) (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER ENTITY AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
Reed Elsevier Capital Inc.
8.625% Note due 2019
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Principal Amount
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No. R-[•]
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$ [•]
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CUSIP: 758202 AG0
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ISIN: US758202AG01
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Reed Elsevier Capital Inc.
, a corporation incorporated under the laws of the state of Delaware
(herein called the “
Company
,” which term includes any successor corporation under the
Indenture referred to below), for value received, hereby promises to pay Cede & Co., or its
registered assigns, the principal sum of $[• ] dollars on January 15, 2019 (the “
Stated
Maturity
”), and to pay interest thereon from the most recent Interest Payment Date to which
interest has been paid or duly provided for, or, if no interest has been paid or duly provided for,
from January 16, 2009, payable semiannually in arrears on January 15 and July 15 of each year (each
an “
Interest Payment Date
”), commencing on July 15, 2009, and at Maturity, at the rate of
8.625% per annum, until the principal hereof is paid or duly provided for. Each payment of
interest in respect of an Interest Payment Date shall include interest accrued through the day
prior to such Interest Payment Date. The interest, if any, on this Debt Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name this Debt Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest payment, which shall be the
January 1 or July 1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date, at the office or agency of the Company maintained for such purpose in The
City of New York, New York. Interest shall be computed on the basis of a 360-day year consisting
of twelve 30-day months.
Except as otherwise provided in the Indenture, any such interest which is due and payable, but
is not punctually paid or duly provided for, on any Interest Payment Date (the “
Defaulted
Interest
”) shall cease to be payable to the registered Holder on the relevant Regular
2
Record Date, and the Defaulted Interest may be paid by the Company as follows. The Company
may elect to make payment of any Defaulted Interest to the Persons in whose names this Debt
Security (or the respective Predecessor Security) is registered at the close of business on the
Special Record Date. The Company shall notify the Trustee in writing at least 30 days prior to the
date of the proposed payment of the amount of Defaulted Interest proposed to be paid on this Debt
Security and the date of the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment. Then the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be no more than 15 days and not less than 10 days prior to
the date of the proposed payment. The Trustee shall promptly notify the Company and the Principal
Paying Agent of the Special Record Date and shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date to be mailed to each Holder of this Debt Security at
the address as it appears in the Securities Register no less than seven days prior to such Special
Record Date.
If any Interest Payment Date, Redemption Date or Stated Maturity of this Debt Security shall
not be a Business Day at any Place of Payment, then payment of principal of (and premium, if any)
and interest, if any, with respect to this Debt Security need not be made at such Place of Payment
on such date, but may be made on the next succeeding Business Day at the Place of Payment with the
same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity; provided that no interest shall accrue for the period from and after the Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
Payment of the principal of (and premium, if any) and interest on this Debt Security at
Maturity shall be made upon presentation of this Debt Security at the office or agency of the
Company. Payment of the principal of (and premium, if any) and interest on this Debt Security
shall be payable in immediately available funds; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register or by transfer to a bank account maintained by
the payee. Payment of the principal of (and premium, if any) and interest, if any, on this Debt
Security, as aforesaid, shall be made in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and private debts. Interest
payable on any Interest Payment Date will be paid to DTC with respect to the portion of this Debt
Security held for its account by Cede & Co. or a successor depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in respect of this Debt
Security to the accounts of the beneficial owners hereof.
This Debt Security is one of a duly authorized issue of senior debt securities of the Company
known as the Company’s 8.625% Notes due 2019, initially in the aggregate principal amount of
$950,000,000 (herein called the “
Debt Securities
”), issued under an Indenture dated as of May
9, 1995 (such Indenture as originally executed and delivered and hereafter supplemented or amended
by Supplemental Indenture No. 1, dated as of March 6, 1998, Supplemental Indenture No. 2, dated as
of June 3, 1998, the Third Supplemental Indenture, dated as of February 21, 2001, the Fourth
Supplemental Indenture, dated as of July 31, 2001 and the Fifth Supplemental Indenture, dated as of
January 16, 2009 together with the Board Resolutions adopted on January 14, 2009 authorizing the
issuance of this Debt Security and the Officer’s Certificate, dated January 16, 2009 setting forth
certain terms of this Debt Security and delivered to the Trustee by the Company pursuant to Section
301 of such Indenture, being herein called the “
Indenture
”) among the Company, Reed
Elsevier PLC and Reed Elsevier NV, as Guarantors, The Bank of New York Mellon (as successor to The
Chase Manhattan Bank), as trustee (herein called the
3
“
Trustee
,” which term includes any other successor trustees under the Indenture), to
which Indenture, all indentures supplemental thereto and all Board Resolutions and Officers’
Certificates relating thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the Guarantors, the Trustee
and the Holders of the Debt Securities and of the terms upon which the Debt Securities are, and are
to be, authenticated and delivered. This Debt Security is subject to additional issuances as the
Company may determine or as provided for in the Indenture. The acceptance of this Debt Security
shall be deemed to constitute the consent and agreement of the Holder hereof to all of the terms
and provisions of the Indenture. In the event of any inconsistency in the terms and provisions of
the Indenture and this Debt Security, the terms and provisions of the Indenture shall prevail.
If an Event of Default with respect to this Debt Security shall occur and be continuing, the
principal of this Debt Security may be declared due and payable in the manner and with the effect
provided in the Indenture.
This Debt Security does not have the benefit of any sinking fund obligations.
The Company’s obligations under this Debt Security and under the covenants provided in the
Indenture are subject to discharge as provided in the Indenture.
Reference is made to the further provisions of this Debt Security set forth on the reverse
hereof, which provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Principal Paying
Agent by manual or facsimile signature, this Debt Security and the Guarantees set forth hereon
shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
All capitalized terms used in this Debt Security which are not defined herein shall have the
meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
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REED ELSEVIER CAPITAL INC.
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By:
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Name:
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Title:
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Attested:
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Name:
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Title:
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This is one of the Debt Securities of the series designated in, and issued under, the
Indenture described herein.
Dated:
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THE BANK OF NEW YORK MELLON as
Principal Paying Agent
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By:
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Authorized Officer
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Signature Page to the 2019 Global Fixed Rate Note
Reverse of Note
Reed Elsevier Capital Inc.
8.625% Note due 2019
Payment of Additional Amounts
All payments of principal, premium (if any) and interest in respect of this Debt Security 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.
If withholding or deduction is required by law, then the Company or either Guarantor, as the
case may be, will pay to the Holder of this Debt Security additional amounts (“
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 this 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
the Company or either Guarantor, 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 amount is paid by the Company or either Guarantor, 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 neither the Company nor either
Guarantor, as the case may be, will be required to make any payment of Additional Amounts for or on
account of:
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(a)
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any tax, assessment or other governmental charge which would not have been
imposed but for:
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(i)
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the existence of any present or former connection between the Holder
of this Debt Security (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 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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(ii)
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the presentation of this 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 this Debt Security for payment on or
before the thirtieth day;
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(b)
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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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(c)
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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 (a) above to
comply with a request of the Company or either Guarantor, 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 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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(d)
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any tax, assessment or other governmental charge imposed by reason of such
Holder’s past or present status as a passive foreign investment company, a controlled
foreign corporation, a personal holding company or foreign 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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(e)
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any tax, assessment or other governmental charge imposed on interest received
by:
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(i)
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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 the Company; or
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(ii)
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a controlled foreign corporation with respect to the Company within
the meaning of the Code;
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(f)
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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 any European Union directive on the taxation of savings income
implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 or
any law implementing or complying with, or introduced to conform to, that directive;
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(g)
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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 be able to avoid
any withholding or deduction by presenting the Debt Security to another Paying Agent
in a member state of the European Union; or
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(h)
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any combination of items (a) through (g) above,
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nor will Additional Amounts be paid with respect to:
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•
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any tax, assessment or governmental charge that is payable other than by
deduction or withholding from payments on this Debt Security; or
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•
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any payment to any Holder which is a fiduciary or a partnership or other than
the sole beneficial owner of this Debt Security to the extent a beneficiary or settlor
with respect to that fiduciary or a member of that partnership or the beneficial owner
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would not have been entitled to those Additional Amounts had it been the Holder of this
Debt Security.
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Optional Redemption
This Debt Security may be redeemed, in whole or in part, at the option of the Company, at any
time or from time to time, on notice given not more than 60 days, if this Debt Security is being
redeemed in full, or 45 days, if this Debt Security is being redeemed in part, nor less than 30
days prior to the date of redemption at the greater of:
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•
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100% of the principal amount and premium, if any, together with accrued but
unpaid interest, if any, to, but not including, the Redemption Date of the Debt
Securities; and
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•
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the sum of the present values of the Remaining Scheduled Payments,
discounted, on a semi-annual basis, assuming a 360-day year consisting of twelve
30-day months, at the Treasury Rate, plus 50 basis points.
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Tax Redemption
This Debt Security may be redeemed, at the option of the Company in whole, but not in part, at
100% of the principal amount thereof (and premium, if any, thereon) together with accrued but
unpaid interest, if any, thereon to, but not including, the Redemption Date if, as a result of any
change in, or amendment to, the laws of a Relevant Taxing Jurisdiction, or any change in official
position regarding application or interpretation of such laws, regulations or rulings (including a
holding by a court of competent jurisdiction) which change, amendment, application or
interpretation becomes effective on or after January 16, 2009, the Company, or either of the
Guarantors, as the case may be, would, on the occasion of the next payment of principal or interest
in respect of this Debt Security be obligated, in making such payment itself, to pay Additional
Amounts and such obligation cannot be avoided by the Company or either of the Guarantors,
individually or together, taking reasonable measures available to them.
This Debt Security may also be redeemed, at the option of the Company in whole, but not in
part, at the Special Redemption Price, if, as a result of any change in, or amendment to, the U.S.
Internal Revenue Code of 1986, as amended, or any regulation or ruling thereunder or in the
official interpretation thereof, which change or amendment is enacted or adopted and becomes
effective on or after January 16, 2009, the deductibility of interest payments on this Debt
Security or the timing thereof would be affected in any manner then adverse to the Company and such
effect cannot be avoided by the Company or either Guarantor, individually or together, taking
reasonable measures available to them.
Prior to the giving of any notice of redemption of this Debt Security pursuant to the
foregoing two paragraphs, the Company shall deliver to the Trustee an Opinion of Counsel to the
Company and the Guarantors stating that the Company is entitled to effect such redemption, together
with an Officers’ Certificate of the Company and each of the Guarantors setting forth a statement
of facts showing that the conditions precedent, if any, to the right so to redeem have occurred.
Change of Control — Offer to Repurchase Upon Change of Control Triggering Event
If a Change of Control Triggering Event occurs, unless the Company has exercised its right to
redeem this Debt Security, the Company will be required to make an offer to repurchase
all, or, at the option of a Holder, any part (equal to $1,000 or an integral multiple
thereof), of each Holder’s Debt Securities pursuant to the offer described below (the “Change of
Control Offer”), on the terms set forth below. In the Change of Control Offer, the Company shall
offer payment in cash equal to 101% of the aggregate principal amount of the Debt Securities
repurchased plus accrued and unpaid interest, if any, on such Debt Securities repurchased, to the
date of purchase, referred to as the Change of Control Payment. The Company shall provide the
Trustee with written notification upon the occurrence of any Change of Control Triggering Event.
Within 30 days following any Change of Control Triggering Event or, at the option of the
Company, prior to any Change of Control, but after public announcement of the transaction that
constitutes or may constitute the Change of Control, the Company shall give written notice to the
Holders, with a copy to the Trustee, describing the transaction or transactions that constitute the
Change of Control Triggering Event and offering to repurchase the Debt Securities on the date
specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from
the date such notice is mailed, referred to as the “Change of Control Payment Date”, pursuant to
the procedures required by the Debt Securities and described in such notice.
The notice shall, if given prior to the date of consummation of the Change of Control, state
that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or
prior to the Change of Control Payment Date.
On the Change of Control Payment Date, the Company shall, to the extent lawful:
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accept for payment all Debt Securities or portions of Debt Securities properly tendered
pursuant to the Change of Control Offer;
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•
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deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of
all Debt Securities or portions of Debt Securities properly tendered; and
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deliver or cause to be delivered to the Trustee the Debt Securities properly accepted
together with an Officer’s Certificate stating the aggregate principal amount of Debt Securities or
portions of Debt Securities being purchased by the Company.
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The Company shall not be required to make a Change of Control Offer upon a Change of Control
Triggering Event if a third party makes such an offer in the manner, at the times and otherwise in
compliance with the requirements for an offer made by the Company and such third party purchases
all Debt Securities properly tendered and not withdrawn under its offer.
If 80% or more in nominal amount of the Debt Securities then outstanding have been redeemed or
purchased hereunder, the Company may, on not less than 30 or more than 60 days’ notice to the
Holders given within 30 days after the Change of Control Payment Date, redeem or purchase (or
procure the purchase of), at its option, the remaining Debt Securities as a whole at 101% of their
principal amount plus interest accrued to but excluding the date of such redemption or purchase.
Interest Rate Adjustment
The interest rate payable on the Debt Securities shall be subject to adjustments from time to
time if either of Moody’s or S&P or, in either case, any Substitute Rating Agency thereof,
downgrades (or subsequently upgrades) the debt rating assigned to the Debt Securities in the manner
described below.
If the rating of the Debt Securities from Moody’s or any Substitute Rating Agency thereof is
decreased to a rating set forth in the immediately following table, the interest rate on the Debt
Securities shall increase from the interest rate payable on the Debt Securities on the date of
their initial issuance by the percentage points set forth below opposite that rating.
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Percentage
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Moody’s Rating*
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Points
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Ba1
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0.25
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Ba2
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0.50
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Ba3
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0.75
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B1 or below
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1.00
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*
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Including the equivalent ratings of any Substitute Rating Agency.
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If the rating of the Debt Securities from S&P or any Substitute Rating Agency thereof is
decreased to a rating set forth in the immediately following table, the interest rate on the Debt
Securities shall increase from the interest rate payable on the Debt Securities on the date of
their initial issuance by the percentage points set forth below opposite that rating.
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Percentage
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S&P Rating*
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Points
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BB+
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0.25
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BB
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0.50
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BB-
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0.75
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B+ or below
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1.00
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*
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Including the equivalent ratings of any Substitute Rating Agency.
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If at any time the interest rate on the Debt Securities has been adjusted upward and either
Moody’s or S&P (or, in either case, a Substitute Rating Agency thereof), as the case may be,
subsequently increases its rating of the Debt Securities to any of the ratings set forth in the
tables above, the interest rate on the Debt Securities shall be decreased such that the interest
rate for the Debt Securities equals the interest rate payable on the Debt Securities on the date of
their initial issuance plus the applicable percentage points set forth opposite the ratings in the
tables above in effect immediately following the increase. If Moody’s or any Substitute Rating
Agency thereof subsequently increases its rating of the Debt Securities to Baa3 (or its equivalent,
in the case of a Substitute Rating Agency) or higher and S&P or any Substitute Rating Agency
thereof increases its rating to BBB- (or its equivalent, in the case of a Substitute Rating Agency)
or higher, the interest rate on the Debt Securities shall be decreased to the interest rate payable
on the Debt Securities on their initial issuance date.
Each adjustment required by any decrease or increase in a rating set forth above, whether
occasioned by the action of Moody’s or S&P (or, in either case, any Substitute Rating Agency
thereof), shall be made independent of any and all other adjustments. In no event shall (1) the
interest rate on the Debt Securities be reduced to below the interest rate payable on the Debt
Securities on their initial issuance date or (2) the total increase in the interest rate on the
Debt Securities exceed 2.00 percentage points above the interest rate payable on the Debt
Securities on their initial issuance date.
No adjustments in the interest rate of the Debt Securities shall be made solely as a result of
a Rating Agency ceasing to provide a rating of Debt Securities. If at any time fewer than two
Rating Agencies provide a rating of the Debt Securities for a reason beyond the Company’s
control, the Company shall use its commercially reasonable efforts to obtain a rating of the Debt
Securities from a Substitute Rating Agency, to the extent one exists, and if a Substitute Rating
Agency exists, for purposes of determining any increase or decrease in the interest rate on the
Debt Securities pursuant to the tables above (a) such Substitute Rating Agency shall be substituted
for the last Rating Agency to provide a rating of the Debt Securities but which has since ceased to
provide such rating, (b) the relative ratings scale used by such Substitute Rating Agency to assign
ratings to senior unsecured debt shall be determined in good faith by an independent investment
banking institution of national standing appointed by the Company, and for purposes of determining
the applicable ratings included in the applicable table above with respect to such Substitute
Rating Agency, such ratings shall be deemed to be the equivalent ratings used by Moody’s or S&P, as
applicable, in such table and (c) the interest rate on the Debt Securities shall increase or
decrease, as the case may be, such that the interest rate equals the interest rate payable on the
Debt Securities on their initial issuance date plus the appropriate percentage points, if any, set
forth opposite the rating from such Substitute Rating Agency in the applicable table above (taking
into account the provisions of clause (b) above) (plus any applicable percentage points resulting
from a decreased rating by the other Rating Agency).
For so long as only one Rating Agency provides a rating of the Debt Securities, any subsequent
increase or decrease in the interest rate of Debt Securities necessitated by a reduction or
increase in the rating by such Rating Agency shall be twice the percentage points set forth in the
applicable table above. For so long as no Rating Agency provides a rating of the Debt Securities,
the interest rate on the Debt Securities shall increase to, or remain at, as the case may be, 2.00
percentage points above the interest rate payable on the Debt Securities on their initial issuance
date.
The interest rate on the Debt Securities shall permanently cease to be subject to any
adjustment described in this Section (notwithstanding any subsequent decrease in the ratings by
either or both Rating Agencies) if the Debt Securities become rated A3 and A— (or its equivalent,
in the case of a Substitute Rating Agency) or higher by Moody’s and S&P, respectively (or, in
either case, any Substitute Rating Agency thereof), or one of these ratings if the Debt Securities
are only rated by one Rating Agency.
Any interest rate increase or decrease described in this Section shall take effect from the
first day of the interest period during which a rating change requires an adjustment in the
interest rate. If Moody’s or S&P or any Substitute Rating Agency thereof changes its rating of the
Debt Securities more than once during any particular interest period, the last change by such
agency during such period shall control for purposes of any interest rate increase or decrease with
respect to the Debt Securities relating to such Rating Agency’s action.
If the interest rate payable on the Debt Securities is increased as described above, the term
“interest,” as used with respect to the Debt Securities, shall be deemed to include any such
additional interest unless the context otherwise requires.
The Company shall deliver to the Trustee, and the Principal Paying Agent, if the Trustee shall
not then be acting as the Principal Paying Agent, within ten calendar days after either Moody’s or
S&P or any Substitute Rating Agency thereof downgrades, or subsequently upgrades, the rating
assigned to the Debt Securities as described by this Section, written notice stating (i) that the
rating downgrade, or subsequent upgrade, as the case may be, has occurred and (ii) the current
rating or ratings upon which the interest rate payable on the Debt Securities shall be based.
General
The Indenture permits, with certain exceptions as thereby provided, the Trustee 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 Debt Securities, in any such case, with the consent of the Holders of not
less than a majority in aggregate principal amount of all Outstanding Debt Securities affected by
such supplemental indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each of the Outstanding Debt Securities affected thereby, affect
certain rights of such Holders as more fully described in the Indenture.
No reference herein to the Indenture and no provision of this Debt Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of (and premium, if any) and interest, if any, on this Debt Security at the
times, place and rate, in the coin or currency, and in the manner, herein prescribed.
These Debt Securities are issuable only in registered form, without coupons, in denominations
of $1,000, and in book-entry form.
Initially, The Bank of New York Mellon will be the Security Registrar, Principal Paying Agent
and Transfer Agent for this Debt Security. The Company reserves the right at any time to remove
any Paying Agent, Transfer Agent or Security Registrar without notice, to appoint additional or
other Paying Agents, other Transfer Agents and other Security Registrars without notice and to
approve any change in the office through which any Paying Agent, Transfer Agent or Security
Registrar acts. None of the Company, the Trustee, any Paying Agent or the Security Registrar will
have any responsibility or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in this Debt Security in global form or for maintaining,
supervising or reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depositary, as a Holder, with respect to this Debt Security in
global form or impair, as between such depositary and owners of beneficial interests in such global
Debt Security, the operation of customary practices governing the exercise of the rights of such
depositary (or its nominee) as Holder of such global Debt Security.
THE INDENTURE AND THE DEBT SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
No recourse shall be had for the payment of the principal of (or premium, if any, on), or
interest, if any, on this Debt Security or the Guarantees, as the case may be, or for any claim
based thereon, or upon any obligation, covenant or agreement under the Indenture or any indenture
supplemental thereto, or any Debt Security, or because of any indebtedness evidenced thereby,
against any incorporator, stockholder, officer or director, as such, past, present or future, of
the Company or either Guarantor or of any predecessor or successor corporation of the Company or
such Guarantor, either directly or indirectly through the Company or such Guarantor or any
predecessor or successor corporation of the Company or such Guarantor, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or penalty or
otherwise; it being expressly agreed and understood that under the Indenture, this Debt Security
and the Guarantees are solely corporate obligations, and that no personal liability whatsoever
shall attach to, or is incurred by, any incorporator, stockholder, officer or director, past,
present or future, of the Company or such Guarantor or of any predecessor or successor corporation
of the Company or such Guarantor, either directly or indirectly through the Company or such
Guarantor or any predecessor or successor corporation of the Company or such Guarantor, because
this Debt Security hereby authorized or under or by reason of any of the obligations, covenants or
agreements contained in the Indenture or this Debt Security or the Guarantees, or to be implied
herefrom or therefrom; and that all such personal liability is hereby expressly released and waived
as a condition of, and as part of the consideration for, the execution of the Indenture and the
issuance of the Debt Securities and the Guarantees.
Definitions
All capitalized terms used in this Debt Security which are not defined herein shall have the
meanings assigned to them in the Indenture.
“
Business Day
” means any day other than a Saturday or Sunday or any other day on which
commercial banks are authorized or required by law, regulation or executive order to close in The
City of New York and any London banking day.
“
Change of Control
” means the occurrence of any of the following: (1) the consummation
of any transaction (including, without limitation, any merger or consolidation) the result of which
is that any “person” (as such term is used in Section l3(d)(3) of the Exchange Act) (other than a
Guarantor) acquires shares in each Guarantor to which attach more than 50% of the voting rights
attaching to the entire issued share capital of that Guarantor; provided that a Change of Control
shall be deemed not to have occurred if one or more new holding companies acquires the entire
issued share capital of each of the Guarantors and (A) such holding company (or companies) has (or
have, as the case may be) substantially the same shareholders as each of the Guarantors and those
shareholders acquired the shares in the holding company (or companies) in substantially the same
proportions as they hold shares in the relevant Guarantor(s) prior to the holding company (or
companies) so acquiring the share capital of each of the Guarantors and (B) each of the Guarantors
is a wholly owned (directly or indirectly) subsidiary of such holding company (or companies); (2)
the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger
or consolidation), in one or more series of related transactions, of all or substantially all of
the assets of the subsidiaries and joint ventures of the Guarantors, taken as a whole, to any
“person” (as such term is used in Section 13(d)(3) of the Exchange Act) (other than an affiliate of
either of the Guarantors); (3) the first day on which a majority of the members of the Boards of
Directors of each Guarantor are not Continuing Directors; or (4) the adoption of a plan relating to
the liquidation or dissolution of either Guarantor other than a plan pursuant to which one or more
new holding companies is created to hold the assets and liabilities of the relevant Guarantor(s)
and such holding company (or companies) has (or have, as the case may be) substantially the same
shareholders as the relevant Guarantor(s) and those shareholders acquired the shares in the holding
company (or companies) in substantially the same proportions as they hold shares in the relevant
Guarantor(s) prior to the holding company (or companies) so acquiring the share capital of each of
the Guarantors.
“
Change of Control Triggering Event
” means the occurrence of both a Change of Control
and a Rating Event.
“
Comparable Treasury Issue
” means the United States Treasury security selected by an
Independent Investment Banker as having a maturity comparable to the remaining term of the Debt
Securities to be redeemed.
“
Comparable Treasury Price
” means with respect to any Redemption Date for the Debt
Securities:
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the average of four Reference U.S. Treasury Dealer Quotations for that
Redemption Date, after excluding the highest and lowest of such Reference U.S.
Treasury Dealer Quotations; or
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•
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if the Trustee obtains fewer than four Reference U.S. Treasury Dealer
Quotations, the average of all quotations obtained by the Trustee.
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“
Continuing Directors
” means, as of any date of determination, any member of the Board
of Directors of any Guarantor who (1) was a member of such Board of Directors on the date of the
issuance of the Debt Securities; or (2) was nominated for election, elected or appointed to such
Board of Directors with the approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination, election or appointment (either by a
specific vote or by approval of the proxy statement of the Guarantor for which such member was
named as a nominee for election as a director).
“
Fitch
” means Fitch Ratings Ltd and its successors.
“
Independent Investment Banker
” means one of the Reference U.S. Treasury Dealers, to
be appointed by the Company in its sole discretion.
“
Investment Grade Rating
” means a rating equal to or higher than Baa3 (or the
equivalent) by Moody’s, BBB- (or the equivalent) by S&P, BBB- (or the equivalent) by Fitch, and the
equivalent investment grade credit rating from any Substitute Rating Agency or Rating Agencies
selected by the Company.
“
Moody’s
” means Moody’s Investors Service, Inc and its successors.
“
Rating Agencies
” means (a) each of Moody’s, S&P and Fitch; and (b) if any of the
Rating Agencies ceases to rate the Debt Securities or fails to make a rating of the Debt Securities
publicly available for reasons outside of the Company’s control, a Substitute Rating Agency.
“
Rating Event
” means the rating on the Debt Securities is lowered by each of the
Rating Agencies and the Debt Securities are rated below an Investment Grade Rating by each of the
Rating Agencies on any day during the period commencing 60 days prior to the first public
announcement of any Change of Control and ending 60 days following the consummation of such Change
of Control (which 60-day period shall be extended following consummation of a Change of Control for
so long as the rating of the Debt Securities is under publicly announced consideration for a
possible downgrade by any Rating Agencies).
“
Redemption Premium
” means the amount (but not less than zero) obtained by
subtracting:
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the aggregate amount of the principal being redeemed on the Redemption Date
with respect to this Debt Security from:
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•
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the sum of the present values of the Remaining Scheduled Payments, discounted
on a semi-annual basis, assuming a 360-day year consisting of twelve 30-day months, at
the Treasury Rate.
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“
Reference U.S. Treasury Dealer
” means each of Barclays Capital Inc., Citigroup Global
Markets Inc., HSBC Securities (USA) Inc. and J.P. Morgan Securities Inc. and their respective
successors, provided, however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer, referred to here as a “Primary Treasury Dealer,” the Company will
substitute therefor another nationally recognized investment banking firm that is a Primary
Treasury Dealer.
“
Reference U.S. Treasury Dealer Quotations
” means, with respect to each Reference U.S.
Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and
asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its
principal amount, quoted in writing to the Trustee by such Reference U.S. Treasury Dealer at 3:30
p.m., New York City time, on the third Business Day preceding such Redemption Date.
“
Remaining Scheduled Payments
” means, with respect to the Debt Security to be
redeemed, the remaining scheduled payments of the principal thereof and interest thereon that would
be due after the related Redemption Date but for such redemption; provided, however, that, if such
Redemption Date is not an Interest Payment Date with respect to such Debt Security, the amount of
the next succeeding scheduled interest payment thereon will be deemed to be reduced by that amount
of interest accrued thereon to such Redemption Date.
“
Special Redemption Price
” means the principal amount of the Debt Security to be
redeemed, plus accrued and unpaid interest to, but not including, the Redemption Date, plus the
Redemption Premium.
“
S&P
” means Standard & Poor’s Rating Services and its successors.
“
Substitute Rating Agency
” means a “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by us
(as certified by a resolution of the Board of Directors of each Guarantor) as a replacement for
Moody’s, S&P or Fitch, or some or all of them, as the case may be, in accordance with the
definition of “Rating Agencies.”
“
Treasury Rate
” means, with respect to any Redemption Date for the Debt Securities the
rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its
principal amount) equal to the Comparable Treasury Price for that Redemption Date.
The Treasury Rate will be calculated on the third business day preceding the Redemption Date.
GUARANTEES
FOR VALUE RECEIVED,
Reed Elsevier PLC
, a public limited company incorporated in England
(“
Reed Elsevier PLC
”), and
Reed Elsevier NV
, a public company with limited liability
incorporated under the laws of The Netherlands (“
Reed Elsevier NV
”) (each of Reed Elsevier
PLC and Reed Elsevier NV a “
Guarantor
” and collectively, the “
Guarantors
”) hereby
jointly and severally unconditionally and irrevocably guarantee to each Holder due and punctual
payment of the principal of (and premium, if any) and interest, if any, on this Debt Security
(including any Additional Amounts payable in accordance with the terms of this Debt Security and
the Indenture), whether at the Stated Maturity, by declaration of acceleration, call for
redemption, repayment at the option of the Holder or otherwise, in accordance with the terms of
this Debt Security and of the Indenture. In case of failure of the Company punctually to make any
such payment of principal (or premium, if any) or interest, if any (including any Additional
Amounts), each of the Guarantors hereby agrees to cause any such payment to be made punctually when
and as the same shall become due and payable, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, repayment at the option of the Holder or otherwise, and as if
such payment were made by the Company.
Each of the Guarantors hereby agrees that its obligations hereunder shall be as if it were
principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of
the validity, regularity or enforceability of this Debt Security or the Indenture, the absence of
any action to enforce the same, any waiver or consent by the Holder of this Debt Security or by the
Trustee or the Principal Paying Agent with respect to any provisions of this Debt Security or the
Indenture, any release of any other guarantor, the recovery of any judgment against the Company or
any action to enforce the same or any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of any Guarantor. Each Guarantor hereby waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency
or bankruptcy of the Company, protest or notice with respect to any Debt Security and all demands
whatsoever, and covenants that its Guarantees will not be discharged except by complete performance
of all of the obligations of such Guarantor contained in the Indenture and this Debt Security and
in the Guarantees. If the Trustee or the Holder of any Debt Security is required by any court or
otherwise to return (and does so return) to the Company or to any Guarantor, or any custodian,
receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the
Company or such Guarantor, any amount paid to the Trustee or such Holder in respect of that Debt
Security or the Guarantees, to the extent theretofore discharged, shall be reinstated in full force
and effect. Each Guarantor further agrees, to the fullest extent that it lawfully may do so, that,
as between it, on the one hand, and the Holder of this Debt Security and the Trustee, on the other
hand, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Article
Five of the Indenture for the purposes of these Guarantees, notwithstanding any stay, injunction or
other prohibition extant under any applicable Bankruptcy Law preventing such acceleration in
respect of the obligations guaranteed hereby.
The Guarantees of each Guarantor constitute direct, unconditional, unsubordinated and (except
as provided in the Indenture) unsecured obligations of each Guarantor without preference among
themselves and will rank at least equally with all other unsecured and unsubordinated obligations
of the Guarantor (including unsecured and unsubordinated guarantees by such Guarantor of
Indebtedness of others), subject, in the event of insolvency, to laws of general applicability
relating to or affecting creditors’ rights. Each of the Guarantors hereby agrees that its
obligations hereunder may be enforced against either of the Guarantors, in the event of a default
in payment with respect to this Debt Security by the Company, without making prior
demand upon or seeking to enforce remedies against the Company, the other Guarantors or other
persons.
Each Guarantor shall be subrogated to all rights of the Holder of this Debt Security against
the Company in respect of any amounts paid to such Holder by such Guarantor pursuant to these
Guarantees; provided, however, that no Guarantor shall be entitled to enforce or to receive any
payments arising out of, or based upon, such right of subrogation until the principal of (and
premium, if any) and interest, if any, on this Debt Security shall have been paid in full.
The Holder of the Debt Security on which these Guarantees are endorsed is entitled to the
further benefits relating thereto set forth in the Debt Security and the Indenture. No reference
herein to the Indenture and no provision of these Guarantees or of the Indenture shall alter or
impair the Guarantee of any Guarantor, which is absolute and unconditional, of the due and punctual
payment of the principal of (and premium, if any) and interest, if any, and Additional Amounts, if
any, on the Debt Security upon which these Guarantees are endorsed.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THESE GUARANTEES SET FORTH IN SAID DEBT
SECURITY AND IN THE INDENTURE, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT
AS IF SET FORTH AT THIS PLACE.
These Guarantees shall not be valid or obligatory for any purpose until the certificate of
authentication on the within Debt Security has been executed by the principal Paying Agent,
directly or through an Authenticating Agent, by manual or facsimile signature of an authorized
signatory.
All capitalized terms used in these Guarantees which are not defined herein shall have the
meanings assigned to them in the Indenture.
IN WITNESS WHEREOF, each Guarantor has caused this instrument to be duly executed.
Dated:
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REED ELSEVIER PLC
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|
By:
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Name:
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Mark Armour
|
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Title:
|
|
Chief Financial Officer
|
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|
Attested:
|
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|
|
|
Name:
|
|
Stephen Cowden
|
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Title:
|
|
Company Secretary
|
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|
REED ELSEVIER NV
|
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|
By:
|
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Name:
|
|
Mark Armour
|
|
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|
Title:
|
|
Chief Financial Officer
|
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Attested:
|
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|
|
Name:
|
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Jans van der Woude
|
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Title:
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Secretary
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Signature Page to Guarantees to the 2019 Global Fixed Rate Note
