As filed with the Securities and Exchange Commission on June 14, 1999
REGISTRATION STATEMENT NO. 333-59563
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NIELSEN MEDIA RESEARCH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1450569
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
299 PARK AVENUE
NEW YORK, NEW YORK 10171
(212) 708-7500
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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STEPHEN J. BOATTI, ESQ.
SENIOR VICE PRESIDENT AND CHIEF LEGAL OFFICER
NIELSEN MEDIA RESEARCH, INC.
299 PARK AVENUE, 22ND FLOOR
NEW YORK, NEW YORK 10171
(212) 708-7004
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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With Copies to:
MICHAEL D. NATHAN, ESQ. ROBERT E. BUCKHOLZ, JR., ESQ.
SIMPSON THACHER & BARTLETT SULLIVAN & CROMWELL
425 LEXINGTON AVENUE 125 BROAD STREET
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10004
(212) 455-2538 (212) 558-3876
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
PROSPECTUS (Subject to Completion)
Issued May June __, 1999
$150,000,000
NIELSEN MEDIA RESEARCH
__% NOTES DUE 2009
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Interest payable on _______ and _______
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NIELSEN MEDIA RESEARCH, INC. MAY REDEEM ANY OF THE NOTES AT THE REDEMPTION
PRICES DESCRIBED IN THIS PROSPECTUS. SEE "DESCRIPTION OF THE NOTES".
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PRICE __% AND ACCRUED INTEREST, IF ANY
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS COMPANY
Per Note .......... % % %
Total ............. $ $ $
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
The Underwriters expect to deliver the Notes to purchasers on June __, 1999.
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MORGAN STANLEY DEAN WITTER CHASE SECURITIES INC.
June __, 1999
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
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TABLE OF CONTENTS
PAGE
The Company ............................................................. 3
Use of Proceeds ......................................................... 10
Capitalization .......................................................... 11
Selected Financial Data and Pro Forma
Information ........................................................... 12
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ............................................................ 15
Factors That May Affect Future Results;
Forward Looking Statements ............................................ 20
Description of the Notes ................................................ 21
Underwriters ............................................................ 30
Validity of the Notes ................................................... 31
Experts ................................................................. 31
You should rely only on the information contained or incorporated by
reference in this Prospectus. We have not authorized anyone to provide you with
information different from that contained or incorporated by reference in this
Prospectus. We are offering to sell the Notes, and seeking offers to buy the
Notes, only in jurisdictions where offers and sales are permitted. The
information contained or incorporated by reference in this Prospectus is
accurate only as of the date of this Prospectus, regardless of the time of
delivery of this Prospectus or any sales of the Notes.
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, we filed a Registration
Statement (No. 333-59563) relating to the Notes offered by this Prospectus with
the Securities and Exchange Commission. This Prospectus is a part of that
Registration Statement, which includes additional information.
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. You can also request copies of the documents upon payment of
a duplicating fee, by writing the Public Reference Section of the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. These SEC filings are also available to the public from the SEC's web
site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Prospectus. We incorporated by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934:
o Annual Report on Form 10-K for the year ended December 31, 1998, filed
with the SEC on March 29, 1999; and
o Quarterly Report on Form 10-Q for the quarter ended March 31, 1999,
filed with the SEC on May 17, 1999.
All documents we file pursuant to Section 13(a), 13(c), 14 or 14(d) of the
Securities Exchange Act of 1934 after the date of this Prospectus and before the
later of (1) the completion of the offering of the Notes and (2) the date we
stop offering the Notes pursuant to this Prospectus shall be incorporated by
reference in this Prospectus from the date of filing of such documents.
Information that we file later with the SEC will automatically update
information in this Prospectus. In all cases, you should rely on the later
information over different information included in this Prospectus.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Chief Legal Officer
Nielsen Media Research, Inc.
299 Park Avenue
New York, New York 10171
(212) 708-7004
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THE COMPANY
GENERAL
Nielsen Media Research, Inc. (the "Company" or "Nielsen Media Research") is
the leading source of television audience measurement and related services in
the United States and Canada. Customers have used Nielsen Media Research's
television audience research information in the United States for nearly 50
years. Through its core ratings business, the Company estimates television
audience size and demographics and reports this and related information to a
diverse customer base on a subscription basis. Customers include advertisers,
advertising agencies, broadcast networks, cable networks, program syndicators,
cable operators, sports organizations, television stations and station
representatives. The Company's ratings serve as the "currency" for national and
local television advertising. In 1998, advertisers spent approximately $44
billion in the United States on national and local television advertising,
according to McCann-Erickson Worldwide, to bring a variety of advertising
messages to approximately 99 million U.S. television households. The Company
offers rating services in four principal areas: (i) National Ratings Services;
(ii) Local Ratings Services; (iii) U.S. Hispanic Ratings Services; and (iv)
Canadian Ratings Services. The Company also offers services that enable
advertisers to manage their media spending by linking television ratings to
commercial occurrences, and that provide Internet and Web page usage analysis to
the expanding interactive media industry.
Until June 30, 1998, the business of Nielsen Media Research was operated as
part of Cognizant Corporation ("Cognizant") which also included the business of
IMS Health Incorporated ("IMS Health"). On June 30, 1998, Cognizant (which is
now the Company) distributed to all holders of its common stock the shares of
IMS Health, which was a wholly-owned subsidiary of Cognizant and became an
independent public company (the "Distribution"). As a result of the
Distribution, the sole business of the Company is the business of Nielsen Media
Research. Because of the relative significance of IMS Health's business to
Cognizant, IMS Health was treated as the "accounting successor" to Cognizant and
the financial statements of the Company have been prepared on a stand-alone
basis. In connection with the Distribution, the Company incurred $300 million of
indebtedness from third parties, the proceeds of which were used by Cognizant to
repay existing intercompany liabilities to certain entities included in IMS
Health.
Prior to November 1, 1996, Cognizant was owned by The Dun & Bradstreet
Corporation ("D&B"). D&B had acquired the Company as a part of A.C. Nielsen
Company in 1984. Cognizant began operating as an independent public company on
November 1, 1996 as a result of its spin-off from D&B. For additional
information on the relationship between Nielsen Media Research and IMS Health,
see Part I--Item 1-- "Relationship between the Company and IMS Health" in the
Company's 1998 Annual Report on Form 10-K.
STRATEGY
The Company's strategic goal is to be the acknowledged worldwide leader in
satisfying the media industry's needs for high quality information which defines
the value of media and for services which enable its customers and the
marketplace to operate more effectively.
The Company's strategy has two components: first, to realize the potential
of its existing businesses, both national and local; and second, to optimize its
market strengths and capabilities into realizing new opportunities in adjacent
markets and new businesses.
o Nielsen Media Research intends to realize the potential of its core
businesses by enhancing quality in its operations, enhancing
productivity, anticipating environmental and marketplace changes and
competitive threats, responding with fast moving and flexible
capabilities and decision support solutions, adding derivative
products and services, and providing value-added solutions. Central to
this strategy are its investments in data collection and processing
technology, as well as in data and sample quality.
o Nielsen Media Research intends to optimize its capabilities and
infrastructure into new high-potential opportunities by providing
services that not only enable its customers to make
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better decisions but allow them to better anticipate their own
futures. Nielsen Media Research's most significant initiatives in this
area include Monitor-Plus, New Media Services, Nielsen Interactive
Services (including Nielsen//NetRatings) and New Millennium, which are
described below.
NATIONAL SERVICES
Through its U.S. national services, which accounted for approximately 46%
of 1998 revenues, the Company serves the television audience measurement needs
of seven national television broadcast networks, over 50 national and regional
cable networks, more than 100 program syndicators, and more than 150 national
advertising agencies and advertisers. Audience measurement data are collected
nationally through Nielsen People Meters installed in approximately 5,000
randomly selected households across the U.S. Audience estimates are produced and
delivered to subscribers daily. People Meters not only collect television set
tuning data (which channel the set is tuned to) but also the demographics of the
audience (who in the household is watching).
Three national services are offered in the United States:
o Nielsen Television Index (NTI) provides daily audience total and
demographic estimates for all national broadcast network television
programs to broadcast networks and agencies. This service was
established in 1950.
o Nielsen Homevideo Index (NHI) provides audience estimates of cable and
pay cable television. This service was established in 1980.
o Nielsen Syndication Service (NSS) provides reports and services on
both the local and national levels to the program syndication segment
of the television industry. This service was established in 1985.
LOCAL SERVICES
The Company's primary local service, Nielsen Station Index (NSI), which
accounted for approximately 42% of 1998 revenues, serves the television audience
measurement needs of more than 1,000 television stations and over 2,000
national, regional and local advertising agencies and advertisers in over 200
local television markets throughout the United States. This service was
established in 1954. The Company currently provides metered service in 46 of the
nation's largest markets representing about 64% of television households in the
United States. The Company has announced that two additional markets are
scheduled to be metered by mid-2000, which will bring the total number of local
metered markets to 48. Television set tuning data are collected electronically
using a Nielsen Media Research set meter. Household audience (as opposed to
persons) estimates are delivered daily to subscribers. In these markets, written
diaries also are used during designated measurement periods to collect audience
demographic estimates for integration with the metered tuning data. Diaries are
used in the balance of local markets to collect both tuning and persons-viewing
information during designated periods.
U.S. HISPANIC SERVICES
The Company's Hispanic Services provide both national and local television
audience measurement of U.S. Hispanic households.
o Nielsen Hispanic Television Index (NHTI) provides viewing estimates of
national Hispanic audiences. Begun in 1992, the NHTI service remains
the first and only metered national Hispanic audience measurement
service. Based on a sample of approximately 800 Hispanic households
across the U.S., it uses the same methodology as the other national
services (the Nielsen People Meter) to collect Hispanic audience data.
o Nielsen Hispanic Station Index (NHSI) uses a language-stratified
sample to reflect the unique characteristics of each local Hispanic
market. Also begun in 1992, the NHSI service provides
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advertisers, agencies, networks and syndicators viewing information in
15 television markets with significant Hispanic population. One
additional market is scheduled to be added during 1999. The data are
collected using People Meter, set meter and diary methodologies in the
various markets.
CANADIAN SERVICES
In Canada, the Company has offered national people meter service since 1989
to Canadian national and regional broadcasters, cable networks, agencies and
advertisers. The Company has also provided local People Meter service in
Canada's two largest English-language markets, Toronto (since 1995) and
Vancouver (begun in the fall of 1997) to local broadcasters, agencies and
advertisers.
OTHER SERVICES
o Monitor-Plus. Nielsen Media Research's Monitor-Plus service provides
commercial occurrence data and tracks "share of spending" and "share
of voice" (the proportion of all advertising within a product category
attributable to a brand or advertiser) by company, by brand, and by
product category across 15 monitored media. These include print,
outdoor, radio and free-standing inserts as well as television, for
which Monitor-Plus also reports at the creative execution and campaign
level. This service offers the data and tools necessary for
advertisers and their agencies to actively manage their media spending
by enabling them to understand their own performance and that of their
competitors. Customers use the data to determine competitive
advertising trends and performance within markets of interest. The
media also use this service for sales planning and targeting.
Monitor-Plus currently collects television advertising data in 75
markets. At the end of 1998, the Company deployed new digital data
collection and processing technology for the Monitor-Plus service.
o New Media Services (NMS). NMS is a successor to a service formed in
1980 that provides custom research and start-up services for newly
developed syndicated products, both national and local. This includes
measurement performance of non-traditional research such as
place-based media and out-of-home studies. The automated tracking of
the use of video news releases and the measuring of media exposure in
airports and in-flight are two more examples of NMS research services.
o Nielsen Interactive Services. In 1995, Nielsen Media Research formed a
separate service to develop research products and services for the
Internet and other interactive media.
In October 1998, the Company announced a strategic alliance with
NetRatings, Inc. to measure Internet usage and advertising. The
definitive agreements governing the alliance are in the process of
being completed. Under the arrangement, Nielsen Media Research sample
recruitment and research expertise are combined with NetRatings'
Internet measurement software, which is capable of providing detailed
reporting on usage and advertising. The Company believes the
NetRatings technology is unique in its method of tracking Internet
banner advertising. The joint service, Nielsen//Net Ratings, was
launched in March 1999 and currently serves over 100 customers with
weekly reports.
Additional offerings in the interactive/Internet area include the
Nielsen CommerceNet Internet Demographics Study (a periodic study that
profiles the size and audience composition of on-line users) and the
Home Technology Report, a survey that provides data on consumer
interest and use of various technologies in the home.
DATA COLLECTION
PEOPLE METER
The heart of the Nielsen Media Research national and Hispanic services in
the United States and all services in Canada is an electronic measurement system
called the Nielsen People Meter. These meters
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are placed in a sample of approximately 5,000 households in the U.S.,
approximately 800 U.S. Hispanic households and over 2,000 households in Canada,
randomly selected and recruited by Nielsen Media Research. The meters enable the
measurement of what channel is being tuned, what time and for how long the
tuning activity occurs, and who is watching.
The U.S. national sample is a multi-stage stratified area probability
sample of U.S. housing units with each housing unit having a known chance of
selection. The current sampling frame is developed based on 1990 Census data
with updates each year based on residential new construction from building
permits as collected and reported by the Census Bureau.
A set meter, which records what channel is being tuned, is installed on
each television set in a sample home along with a device to record who is
watching the television. Each member of the household is assigned a personal
viewing button identified by name or symbol on the people meter that the viewer
can use to enter his or her viewing status. Each button is linked to the age and
gender of a person in the household. Additional buttons on the meter enable
visitors to a sample household to record when they watch television by entering
their age and gender and pushing a visitor button.
The Nielsen Media Research metering system stores half-minute by
half-minute records of television receiver tuning activity and of People Meter
audience data entries in sample households. The U.S. tuning records are
automatically transmitted by phone to Nielsen Media Research's central computer
facility in Dunedin, Florida where the data are matched with program line-up
information and processed to create ratings estimates each day.
SET METER
In 46 of the largest local markets in the U.S., a set metering system
provides household television ratings information on a daily basis. In each of
these markets, approximately 300-550 households (or approximately 18,500
households across the U.S.) are recruited to participate in samples distinct
from the national People Meter sample. Electronic meters are attached to each
television set in each sample home. Homes recruited for local samples are not
equipped with People Meter attachments, so that the information is limited to
identification of the channel to which the set is tuned. The metered market
samples of television households are used to obtain audience estimates with
measurable reliability of television programs for stations which originated in
or are assigned for reporting purposes to Nielsen Media Research's Designated
Market Areas ("DMAs").
The metered household samples are either area probability samples of
housing units in the applicable DMA (12 markets) or samples from a file of
telephone numbers including both listed and unlisted households (34 markets).
This file, known as a total telephone frame ("TTF"), is maintained by Nielsen
Media Research and updated three times each year.
DIARIES
In addition to set meters, Nielsen Media Research uses diaries in local
markets (over 200 DMAs in the U.S.) to collect viewing data during at least four
designated measurement periods each year. The sample frame in all markets is the
TTF. Diary measurement is used to collect viewing information from sample homes
in every local television market across the United States in November, February,
May and July (known as "sweeps" months) of each year. The diary provides both
tuning and demographics data in the smaller non-metered markets and demographic
data for the metered markets. In addition to the four sweeps months, in some
larger markets diaries are used to provide viewer information in as many as
three additional months (October, January, and March). Diaries returned to
Nielsen Media Research are examined and edited using established procedures.
Audience estimates are then computed separately for each quarter hour of viewing
recorded in the diary.
SERVICE AND PRODUCT DEVELOPMENT
The Company maintains an active investment program to enhance existing
services and develop new services in response to the rapidly changing media
marketplace, as well as to develop the technology
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necessary to succeed in the emerging television environment. Nielsen Media
Research will need to make significant capital expenditures over the next
several years, particularly in light of the rapid technological changes
affecting its business. The majority of the investment effort and spending is
dedicated to improving the quality and efficiency of existing services;
realizing the full potential of those services by adding new, value-added or
derivative products, especially new software products; developing a
next-generation data collection capability and infrastructure; and creating new
services and businesses.
The Company's most significant investment initiatives include the Universal
Metering Initiative ("UMI"); new client-server based data processing and
delivery software development; the local metered market expansion; and new
business development, notably Nielsen Interactive Services (including
Nielsen//NetRatings) and New Millennium.
As part of its UMI program, Nielsen Media Research is developing a
next-generation metering system, known as the Active/Passive, or ("A/P")
metering system, to enable measurement of program viewing in the emerging
digital television environment. This new system uses codes, which are
imperceptible to the viewer, inserted in the audio and/or video portions of
programs and commercials that can be detected by metering equipment installed in
the sample households. This encoding approach builds upon Nielsen Media
Research's experience in developing and using its highly successful program
video code technology used in today's analog television environment, which has
received permanent authorization from the Federal Communications Commission (the
"FCC"). The system also will have a passive signature-recognition back-up
capability in the event that the codes are not available. While preliminary
testing of the A/P metering system has been successful, there can be no
assurance that the coding used by the new system will be adopted by the
television industry, be approved by the FCC, or be compatible with signal
compression techniques implemented by the industry in the future.
Nielsen Media Research began changing its technology and software systems
in 1993 to provide the television industry with flexible, richer analysis of
large amounts of data. This new "client-server" architecture has enabled Nielsen
Media Research to begin to introduce a range of integrated software systems that
will enable customers to compare daily, demographic-level ratings data across
all national and local television sources, as well as do special analyses at
their desktops.
The Company has introduced electronic measurement through set meters in a
significant number of local markets over the last two years to provide more
detailed and valuable information on local audiences. Eleven metered markets
were added since 1997, and the Company has announced that two additional markets
are scheduled to be metered by mid-2000, which will bring the total number of
local metered markets to 48.
New Millennium is an agency buying system that the Company believes will be
superior in design and concept to any existing competitive product. It is being
designed to give advertising agencies the ability to perform pre-buy analyses,
track negotiations and scheduling of ad time, evaluate overall performance in
terms of delivery and cost, and finally, perform the reconciliation and
subsequent accounting functions. By automating tasks now done manually at
agencies, the system may substantially reduce agency costs.
TECHNOLOGY AND COMPETITION
The Company operates in businesses that require sophisticated data
collection and processing systems, software and other technology. The technology
underlying the media industry continues to undergo rapid change and the Company
will need to continue to develop and refine techniques for data collection and
processing to accommodate such changes, including digital television, and for
interactive television transmission and Internet usage. There can be no
guarantee that the Company will be able to develop and refine new techniques for
data collection and processing or that it will be able to do so as quickly or
cost-effectively as its competition.
Nielsen Media Research has maintained a strong leadership position in the
television ratings measurement industry. The Company's ratings systems have been
from time to time criticized by various participants in the television industry.
This criticism, in part, has increased the likelihood of additional
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competition in its business. In particular, a television ratings project
originally funded by the Committee on Nationwide Television Audience Measurement
("CONTAM") and designed and operated by Statistical Research, Inc. ("SRI"),
operated a 500-household sample in Philadelphia as a national television ratings
laboratory from 1996 until 1999. Funding of the laboratory was contributed
primarily by the ABC, CBS and NBC broadcast networks, which together through
CONTAM contributed $40 million from 1994 to 1996. In addition, Fox Broadcasting
as well as four cable networks, 15 major advertising agencies and buying
services, one program syndicator and five of the nation's largest advertisers
agreed to support and participate in the testing phase. In early 1999, SRI
announced that it planned to replace its 500-household Philadelphia laboratory
with a 50-home laboratory panel in New Jersey, and had begun sample selection as
"the first stage in creating a national meter panel." SRI also announced in
early 1999 that it had received "letters of intent backing a new national TV
ratings service . . . from 22 industry companies, including 13 major agencies
and other top advertisers." However, on May 27, 1999, SRI announced that it was
"concluding its . . . TV metering project" and that "while it is obviously
disappointing that the necessary funding for a national rollout has not been
forthcoming, SRI is still pursuing options and remains ready to serve the
industry."
On the local level, ADcom Information Services offers individual cable
system measurement. It is believed to be collecting and issuing local cable
measurement data in Jacksonville, Florida, and has announced an expansion to San
Francisco and Dallas with the support of a major cable system operator. ADcom is
believed to be seeking cable operator support to roll out a local cable
measurement service in multiple markets in the U.S. Arbitron, a radio audience
measurement firm and a former competitor, discontinued its local syndicated
broadcast and cable television service as of December 31, 1993. Arbitron,
however, continues to develop its passive personal metering technology, which is
believed to be capable of measuring television as well as radio audiences.
Indirectly, on both a national and local basis, competition stems from other
marketing research services offering product movement and television audience
data and services.
In Canada, BBM Bureau of Management, an established media research
organization, has joined with Taylor Nelson/AGB, a U.K.-based media research
company, to provide a competing metered service in Vancouver and has announced
plans to provide metered ratings services in Ontario (including Toronto) and
Quebec by September 2000. BBM, alone or with Taylor Nelson/AGB, could offer
other competitive services in Canada.
The Company's Monitor-Plus service has significant competition from
Competitive Media Reporting, a subsidiary of VNU, a Netherlands-based media
company, which has long been the major participant in this market.
The Nielsen//NetRatings Internet audience measurement service faces
significant competition from Media Metrix, Inc., which has been providing
Internet audience measurement since 1996.
Furthermore, there can be no assurance that additional competition will not
develop in the future for the Company's existing core services or that the
Company will not have significant competition in its other services.
INTELLECTUAL PROPERTY
The Company owns and controls a number of patents, trade secrets,
confidential information, trademarks, trade names, copyrights and other
intellectual property rights which, in the aggregate, are of material importance
to its business. Management believes that the "Nielsen Media Research" name and
related names, marks and logos are of material importance to Nielsen Media
Research. Nielsen Media Research is licensed to use certain technology and other
intellectual property rights owned and controlled by others, and similarly,
other companies are licensed to use certain technology and other intellectual
property rights owned and controlled by Nielsen Media Research.
Pursuant to the Intellectual Property Agreement dated as of October 28,
1996 between the Company, D&B and ACNielsen Corporation ("ACNielsen") (the "D&B
IP Agreement"), Nielsen Media Research has exclusive and unrestricted rights to
the "Nielsen Media Research" name worldwide; however, Nielsen
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Media Research's use of the "Nielsen" name, standing alone and as part of a name
describing new products and services to be offered, is subject to certain
limitations. In addition, the D&B IP Agreement provided for the establishment of
a limited liability company jointly owned by the Company and ACNielsen, to which
certain trademarks incorporating or relating to the "Nielsen" name in various
countries were assigned. This company is obligated to license such trademarks on
a royalty-free basis to Nielsen Media Research or ACNielsen for use in a manner
consistent with the D&B IP Agreement and for purposes of conducting their
respective businesses, and is responsible for preserving the quality of those
trademarks and minimizing any risk of possible confusion. Pursuant to the TAM
Master Agreement dated as of October 28, 1996 between the Company and ACNielsen,
the Company granted a non-exclusive license to ACNielsen to use certain
trademarks, technology and related intellectual property rights in the conduct
of the television audience measurement business in certain countries outside of
the United States and Canada for a period of at least five years. Except for the
restrictions described above on the use of the "Nielsen" name, these agreements
do not restrict Nielsen Media Research from doing business outside the United
States and Canada.
The technology and other intellectual property rights licensed by Nielsen
Media Research are of importance to its business, although management of Nielsen
Media Research believes that, with the exception of the trademarks incorporating
or relating to the "Nielsen" name, the business, as a whole, is not dependent
upon any one intellectual property or group of such properties.
The names of Nielsen Media Research's and its subsidiaries' products and
services referred to herein are trademarks, service marks, registered trademarks
or registered service marks owned by or licensed to Nielsen Media Research or
one of its subsidiaries.
LITIGATION AND CONTINGENCIES
On July 29, 1996, Information Resources, Inc. ("IRI") filed a complaint in
the United States District Court for the Southern District of New York, naming
as defendants D&B, A.C. Nielsen Company (a subsidiary of ACNielsen), and a
predecessor of IMS Health (the "IRI Action"). The complaint alleges, among other
things, various violations of the antitrust laws and damages in excess of $350
million, which amount IRI has asked to be trebled under the antitrust laws. IRI
also seeks punitive damages in an unspecified amount. In light of the
potentially significant liabilities which could arise from the IRI Action and in
order to facilitate the D&B spin-off (as defined below) in 1996, D&B, ACNielsen
and Cognizant entered into an Indemnity and Joint Defense Agreement (the
"Indemnity and Joint Defense Agreement") pursuant to which ACNielsen agreed to
be responsible for any potential liabilities which may ultimately be incurred by
D&B or Cognizant as a result of such action, up to a maximum amount to be
determined by an independent investment bank if and when any such liabilities
are incurred. The determination of such maximum amount will be based on
ACNielsen's ability to satisfy such liabilities and remain financially viable,
subject to certain assumptions and limitations. However, Cognizant and D&B
agreed that to the extent that ACNielsen is unable to satisfy any such
liabilities in full and remain financially viable, Cognizant and D&B will each
be responsible for 50% of the difference between the amount, if any, which may
be payable as a result of such litigation and the maximum amount which ACNielsen
is then able to pay as determined by such investment bank. Under the terms of
the Distribution Agreement dated as of October 28, 1996, among Cognizant, D&B
and ACNielsen (the "1996 Distribution Agreement"), pursuant to which shares of
Cognizant and ACNielsen were distributed to the stockholders of D&B (the "D&B
spin-off"), as a condition to the Distribution, IMS Health and the Company were
required to undertake to be jointly and severally liable to D&B and ACNielsen
for Cognizant's obligations under the 1996 Distribution Agreement. However,
pursuant to the Distribution Agreement dated as of June 30, 1998, between
Cognizant and IMS Health, IMS Health and the Company agreed that, as between
themselves, IMS Health will assume 75%, and the Company will assume 25%, of any
payments to be made in respect of the IRI Action under the Indemnity and Joint
Defense Agreement or otherwise, including any legal fees and expenses related
thereto incurred in 1999 or thereafter. IMS Health agreed to be fully
responsible for any legal fees and expenses incurred during 1998.
9
<PAGE>
Under the terms of the 1996 Distribution Agreement, Nielsen Media Research
and IMS Health are also jointly and severally liable to D&B for taxes and
accrued interest arising from certain tax assessments that may be levied by the
Internal Revenue Service ("IRS") related to certain D&B tax planning strategies.
Pursuant to the Distribution Agreement, Nielsen Media Research is liable to pay
25% of any payments made by D&B to the IRS, net of any related tax benefits, in
excess of the first $397 million that is payable by D&B and/or IMS Health.
The IRS is currently reviewing D&B's utilization of certain capital losses
during 1989 and 1990. D&B has stated that it intends to vigorously defend its
position against any assessment that may be made in the future regarding this
transaction. However, if an assessment is paid and should the IRS prevail, in
the opinion of the Company's management the impact of this transaction would not
have a material effect on the results of operations, cash flows or financial
position of Nielsen Media Research.
In accordance with the Distribution Agreement, Nielsen Media Research's
aggregate liability to IMS Health for payments in respect of the IRI Action and
its share of any future D&B tax and interest payments relating to the tax
uncertainties referred to in the paragraphs above shall not exceed $125 million
and is not payable until 2001.
Management is unable to predict at this time the final outcome of the IRI
Action, the amount of the aggregate future D&B tax and interest payments and
whether the resolution of such matters could materially affect Nielsen Media
Research's results of operations, cash flows or financial position.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the Notes offered hereby
(before deducting estimated expenses of approximately $500,000 payable by the
Company) will be approximately $ million. The net proceeds from the Offering
will be used by the Company to repay approximately $150 million of indebtedness.
This indebtedness was part of $300 million of indebtedness that the Company had
incurred under facilities provided by third parties. The facilities were
established by Cognizant to provide funds for the repayment by Cognizant at the
time of the Distribution of existing intercompany liabilities to certain
entities included in IMS Health and for general corporate purposes. At June 14,
1999, approximately $225 million was outstanding under these facilities. The
weighted average interest rate on the $150 million indebtedness being repaid was
5.50% on June 14, 1999 and approximately $100 million of such indebtedness is
scheduled to mature in December 1999; the balance is scheduled to mature in June
2001. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources."
10
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company (i) at
March 31, 1999 on a historical basis and (ii) at March 31, 1999 as adjusted to
give effect to the offering of the Notes and draw-down of $50 million under the
Three-Year tranche of the Revolving Credit Facility, and the use of the proceeds
therefrom. After giving effect to the offering, the Company will have $50
million outstanding under the Three-Year tranche of the Revolving Credit
Facility and unused availability under the Three-Year tranche of $50 million.
The following data are qualified in their entirety by the consolidated financial
statements of the Company and other information contained elsewhere in this
Prospectus or incorporated by reference herein.
<TABLE>
<CAPTION>
MARCH 31, 1999
(UNAUDITED)
--------------------------
HISTORICAL AS ADJUSTED
---------- -----------
(DOLLAR AMOUNTS IN THOUSANDS)
<S> <C> <C>
Cash and Cash Equivalents ....................................... $ 6,054 $ 6,054
========= =========
Short-Term Debt ................................................. $ 200,000 $ 0
========= =========
Long-Term Debt
Revolving Credit Facility (Three-Year tranche) ................. $ 0 $ 50,000
Other Long-Term Debt ........................................... 25,000 25,000
__% Notes offered hereby ....................................... 0 150,000
Shareholders' Equity:
Preferred Stock, par value $.01 per share,
authorized--10,000,000 shares; outstanding--none .............. $ 0 $ 0
Series Common Stock, par value $.01 per
share, authorized--10,000,000 shares; outstanding--none ....... 0 0
Common Stock, par value $.01 per share,
authorized--400,000,000 shares; issued
57,033,524 shares ............................................. 570 570
Treasury Stock--89,840 shares .................................. (1,843) (1,843)
Distribution in Excess of Net Book Value ....................... (163,542) (163,542)
Retained Earnings .............................................. 36,985 36,985
Cumulative Translation Adjustment .............................. 994 994
--------- ---------
Total Equity .................................................... (126,836) (126,836)
--------- ---------
Total Capitalization ............................................ $(101,836) $ 98,164
========= =========
Total Capitalization and Short-term Debt ........................ $ 98,164 $ 98,164
========= =========
</TABLE>
11
<PAGE>
SELECTED FINANCIAL DATA AND PRO FORMA INFORMATION
The following data are qualified in their entirety by the financial
statements of the Company and other information contained elsewhere in this
Prospectus or incorporated by reference herein. The financial data as of
December 31, 1998, 1997 and 1996 and for the years ended December 31, 1998,
1997, 1996 and 1995, have been derived from the audited financial statements of
the Company. The financial data as of March 31, 1999 and 1998, and December 31,
1994 and for the three months ended March 31, 1999 and 1998 and for the year
ended December 31, 1994 are unaudited. Because of the relative significance of
IMS Health's business to Cognizant, IMS Health was treated as the "accounting
successor" to Cognizant and the financial statements of the Company have been
prepared on a stand-alone basis. The following financial data should be read in
conjunction with the information set forth under "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
Prospectus or incorporated by reference herein.
The pro forma statements of income information give effect to (i) the
impact of pro forma interest expense for the six months ended June 30, 1998
related to the borrowing by the Company of $300 million of third-party debt to
repay existing intercompany liabilities to IMS Health in connection with the
Distribution as if such borrowing was made on the first day of such period and
(ii) actual interest incurred for the six months ended December 31, 1998 on a
weighted average balance of approximately $275 million of such debt and actual
interest incurred for the three months ended March 31, 1999 on a weighted
average balance of $237.5 million of such debt, in each case of clause (ii), as
adjusted to give pro forma effect to the increase in interest expense relating
to the issuance of the Notes and the borrowings under the Three-Year tranche of
the Revolving Credit Facility as if such issuance and borrowings had occurred on
the first day of each such period. The pro forma data are for informational
purposes only and may not necessarily reflect future results of operations or
what the results of operations would have been had the Company incurred such
borrowings on the first day of each such period.
12
<PAGE>
SELECTED FINANCIAL DATA AND PRO FORMA INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
ACTUAL
PRO FORMA ------------------------------------------------------
1998 1998 1997 1996 1995 1994
--------- --------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
OPERATING REVENUE ................... $ 401,932 $ 401,932 $358,594 $319,404 $288,652 $250,303
Operating Costs and Selling
and Administrative
Expenses ........................... 276,168 276,168 239,670 212,214 194,741 176,752
Depreciation and
Amortization ....................... 31,385 31,385 28,663 25,229 24,343 21,628
--------- --------- -------- -------- -------- --------
OPERATING INCOME .................... 94,379 94,379 90,261 81,961 69,568 51,923
Interest Expense .................... (18,356) (8,156) 0 0 0 0
Other Income ........................ 8,008 8,008 0 0 0 0
Income Before Provision
for Income Taxes .................. 84,031 94,231 90,261 81,961 69,568 51,923
--------- --------- -------- -------- -------- --------
Provision for Income Taxes .......... 35,209 39,483 37,786 34,356 29,156 21,808
--------- --------- -------- -------- -------- --------
NET INCOME .......................... $ 48,822 $ 54,748 $ 52,475 $ 47,605 $ 40,412 $ 30,115
========= ========= ======== ======== ======== ========
EARNINGS PER SHARE:
Basic ............................... $ 0.89 $ 0.99 $ 0.95 $ 0.84 $ 0.72 N/A
Diluted ............................. 0.82 0.92 0.92 0.84 0.72 N/A
OTHER DATA:
Capital Investment
Expenditures(1) ................... $ 65,782 $ 65,782 $ 49,676 $ 38,551 $ 30,817 $ 28,594
EBITDA(2) ........................... $ 125,764 $ 125,764 $118,924 $107,190 $ 93,911 $ 73,550
Fixed Charge Coverage
Ratio(3) ........................... 4.65 8.34 21.24 20.59 16.93 13.06
BALANCE SHEET DATA
(AT PERIOD END):
Current Assets ...................... $ 68,283 $ 68,283 $ 62,530 $ 55,475 $ 35,175 $ 47,314
Property, Plant and
Equipment--Net ..................... 68,286 68,286 55,050 44,310 39,677 38,413
Capitalized Computer
Software ........................... 50,575 50,575 43,093 35,653 27,601 19,625
Deferred Charges
and Intangibles .................... 22,234 22,234 10,649 11,686 12,299 14,968
Other Assets ........................ 22,787 22,787 21,112 23,207 19,769 18,522
--------- --------- -------- -------- -------- --------
TOTAL ASSETS ..................... $ 232,165 $ 232,165 $192,434 $170,331 $134,521 $138,842
========= ========= ======== ======== ======== ========
Current Liabilities
(Other Than Short-Term
Debt) ............................. $ 72,816 $ 72,816 $ 44,612 $ 33,338 $ 30,528 $ 23,836
Short-Term Debt ..................... 25,000 225,000 0 0 0 0
Long-Term Debt ...................... 225,000 25,000 0 0 78 244
Other Long-Term Liabilities ......... 57,211 57,211 46,239 37,640 33,041 26,869
--------- --------- -------- -------- -------- --------
TOTAL LIABILITIES ................ 380,027 380,027 90,851 70,978 63,647 50,949
--------- --------- -------- -------- -------- --------
Shareholders'/Divisional
Equity ............................. (147,862) (147,862) 101,583 99,353 70,874 87,893
--------- --------- -------- -------- -------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS'/
DIVISIONAL EQUITY ............... $ 232,165 $ 232,165 $192,434 $170,331 $134,521 $138,842
========= ========= ======== ======== ======== ========
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
--------------------------------------
PRO FORMA ACTUAL
--------- -----------------------
1999 1999 1998
--------- --------- --------
(DOLLARS IN THOUSANDS, EXCEPT RATIOS
AND PER SHARE AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C>
INCOME STATEMENT DATA:
OPERATING REVENUE ............................................... $ 109,175 $ 109,175 $ 96,064
Operating Costs and Selling and Administrative Expenses ......... 74,816 74,816 67,625
Depreciation and Amortization ................................... 8,894 8,894 7,122
--------- --------- --------
OPERATING INCOME ................................................ 25,465 25,465 21,317
Interest Expense ................................................ (3,896) (3,296) 0
Other Income .................................................... 0 0 3,185
--------- --------- --------
Income Before Provision for Income Taxes ........................ 21,569 22,169 24,502
Provision for Income Taxes ...................................... 9,037 9,289 10,256
--------- --------- --------
NET INCOME ...................................................... $ 12,532 $ 12,880 $ 14,246
========= ========= ========
EARNINGS PER SHARE:
Basic ........................................................... $ 0.22 $ 0.23 $ 0.26
Diluted ......................................................... 0.20 0.21 0.25
OTHER DATA:
Capital Investment Expenditures(1) .............................. $ 9,812 $ 9,812 $ 14,226
EBITDA(2) ....................................................... $ 34,359 $ 34,359 $ 28,439
Fixed Charge Coverage Ratio(3) .................................. 5.00 5.63 22.40
BALANCE SHEET DATA (AT PERIOD END):
Current Assets .................................................. $ 70,099 $ 70,099 $ 62,085
Property, Plant and Equipment--Net .............................. 67,483 67,483 58,023
Capitalized Computer Software ................................... 49,062 49,062 45,724
Deferred Charges and Intangibles ................................ 16,406 16,406 12,085
Other Assets .................................................... 22,865 22,865 21,728
--------- --------- --------
TOTAL ASSETS ................................................... $ 225,915 $ 225,915 $199,645
========= ========= ========
Current Liabilities (Other than Short-Term Debt) ................ $ 66,024 $ 66,024 $ 43,539
Short-Term Debt(4) .............................................. 0 200,000 0
Long-Term Debt(4) ............................................... 225,000 25,000 0
Other Long-Term Liabilities ..................................... 61,727 61,727 48,969
--------- --------- --------
TOTAL LIABILITIES .............................................. 352,751 352,751 92,508
--------- --------- --------
Shareholders'/Divisional Equity ................................. (126,836) (126,836) 107,137
--------- --------- --------
TOTAL LIABILITIES AND SHAREHOLDERS'/DIVISIONAL EQUITY .......... $ 225,915 $ 225,915 $199,645
========= ========= ========
</TABLE>
- ----------
(1) Includes additions to property, plant and equipment, software additions and
additions to intangibles.
(2) EBITDA represents earnings before interest, taxes, depreciation,
amortization and other income. EBITDA is presented because the Company
believes that investors use it as a financial indicator of a company's
ability to service or incur debt. EBITDA is not a measurement of operating
performance computed in accordance with generally accepted accounting
principles and should not be considered a substitute for operating income,
net income, cash flows from operations or other statement of operations or
cash flow data prepared in conformity with generally accepted accounting
principles, or as a measure of profitability or liquidity. In addition,
EBITDA may not be comparable to similarly titled measures of other
companies. EBITDA may not be indicative of the historical operating results
of the Company, nor is it meant to be predictive of future results of
operations or cash flows.
(3) For the purpose of determining the ratio of earnings to fixed charges,
earnings include pre-tax income plus fixed charges. Fixed charges consist
of interest on all indebtedness plus that portion of operating lease
rentals representative of the interest factor (deemed to be one-third of
operating lease rentals). The Company's historical statements for the years
ended December 31, 1997, 1996, 1995 and 1994 and for the three months ended
March 31, 1998 do not reflect the $300 million of indebtedness incurred in
connection with the Distribution and, accordingly, the historical ratios of
earnings to fixed charges for these periods do not reflect any interest for
this indebtedness. Actual interest expense incurred (other than in the pro
forma column) is reflected for the six months ended December 31, 1998 and
the three months ended March 31, 1999.
(4) See "Capitalization."
14
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
In 1984, D&B acquired Nielsen Media Research as part of the acquisition of
A.C. Nielsen Company. In November 1996, D&B spun-off Cognizant which included
Nielsen Media Research. On June 30, 1998, Cognizant (which is now the Company)
distributed to all holders of its common stock the shares of IMS Health. As a
result of the Distribution, the sole business of the Company is the business of
Nielsen Media Research. Because of the relative significance of IMS Health's
business to Cognizant, IMS Health was treated as the "accounting successor" to
Cognizant. The financial statements of the Company and the following discussion
have been prepared on a stand-alone basis. References to Cognizant, in the
discussion below, refer to the accounting successor of Cognizant, IMS Health.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1999 Compared with Three Months Ended March
31, 1998
Revenue for the first quarter increased by 13.6% to $109.2 million from
$96.1 million for the first quarter of the prior year. National revenues were
fueled by the launch of the new PAX-TV network in September 1998, the addition
of two new cable networks, and increased sales of special analysis and
derivative products. Local revenues benefited from the introduction of
electronic measurement in six markets in 1998 and new station clients, including
PAX-TV affiliates.
Operating costs and selling and administrative expenses for the first
quarter of 1999 increased by 10.6% to $74.8 million from $67.6 million for the
first quarter of the prior year. Excluding Year 2000 compliance costs of $2.6
million and $3.2 million from the first quarter of 1999 and 1998, respectively,
operating costs and selling and administrative expenses increased 12.0%,
reflecting higher costs related to increased investment in the business, offset,
in part, by a reduction in corporate overhead expenses.
Operating income increased by 19.5% to $25.5 million for the first quarter
of 1999 compared with $21.3 million for the first quarter of the prior year.
Operating income growth included a decline in spending for Year 2000 compliance
costs of $0.6 million. Excluding Year 2000 compliance costs in both periods,
operating income for the first quarter of 1999 increased by 14.7%.
Interest expense of $3.3 million was incurred during the first quarter of
1999 in conjunction with funds borrowed in connection with the Distribution.
Non-operating income for the first quarter of 1998 included a gain of $3.2
million from the sale of marketable securities.
The Company's effective tax rate was 41.9% for the first quarter of 1999
and 1998.
The Company's net income for the first quarter decreased by 9.6% to $12.9
million from $14.2 million in the first quarter of the prior year, reflecting
the factors discussed above, particularly the incurrence of interest expense in
the first quarter of 1999, and the absence of the gain from the sale of
marketable securities in the first quarter of 1999.
Year Ended December 31, 1998 Compared with Year Ended December 31, 1997
Nielsen Media Research revenue increased 12.1% in 1998 to $401.9 million
from $358.6 million in 1997. National revenues were fueled by the addition of
two new cable network customers in 1998, higher sales of special analyses and
derivative products, the launch of the new PAX-TV network in September and the
growth of the WB network. Local revenues benefited from the full-year effect of
three markets metered in 1997 and the start-up of six additional metered markets
in 1998.
Operating costs and selling and administrative expenses in 1998 were $276.2
million compared with $239.7 million in 1997, an increase of 15.2%. The increase
reflects higher costs related to increased
15
<PAGE>
investment in the business, including the opening of new metered markets and an
increase in Year 2000 expenses of $7.3 million. Excluding the Year 2000
expenses, operating costs and selling and administrative expenses would have
increased 12.3%.
Operating income in 1998 was $94.4 million compared with $90.3 million in
1997, an increase of 4.6%. The increase resulted primarily from the factors
noted above. Excluding the Year 2000 expenses, operating income would have
increased 12.2%.
Interest expense in 1998 was $8.2 million, reflecting the debt assumed in
connection with the Distribution.
Gain on sales of marketable securities in 1998 was $8.0 million. Operating
margin in 1998 was 23.5%, compared with 25.2% in 1997. Excluding the Year 2000
expenses mentioned above, 1998 operating margin was 26.0%.
Nielsen Media Research's consolidated 1998 and 1997 effective tax rates
were 41.9%. The tax rates were computed on a separate-company basis.
Net income in 1998 was $54.7 million, compared with $52.5 million in 1997,
an increase of 4.3%.
Year Ended December 31, 1997 Compared with Year Ended December 31, 1996
Nielsen Media Research revenue increased 12.3% in 1997 to $358.6 million
from $319.4 million in 1996. Revenue growth resulted from additional cable
customers, entrance into three metered markets, an increase in the level of
special analyses and the continued growth of the Hispanic service.
Operating costs and selling and administrative expenses in 1997 were $239.7
million, compared with $212.2 million in 1996, an increase of 12.9%. The
increase reflects higher costs related to increased investment in the business,
including the opening of new metered markets and Year 2000 expenses of $2.7
million. Excluding the Year 2000 expenses, operating costs and selling and
administrative expenses would have increased 11.7%.
Operating income in 1997 was $90.3 million compared with $82.0 million in
1996, an increase of 10.1%. The increase resulted primarily from the factors
noted above, partially offset by Year 2000 expenses of $2.7 million. Excluding
the Year 2000 expenses, operating income would have increased 13.4%. Operating
margin in 1997 was 25.2%, compared with 25.7% in 1996. Excluding the Year 2000
expenses mentioned above, 1997 operating margin was 25.9%.
Nielsen Media Research's consolidated 1997 and 1996 effective tax rates
were 41.9%. The tax rates were computed on a separate-company basis.
Net income in 1997 was $52.5 million, compared with $47.6 million in 1996,
an increase of 10.2%.
LIQUIDITY AND CAPITAL RESOURCES
Three Months Ended March 31, 1999 Compared with Three Months Ended March
31, 1998
Cash and cash equivalents totaled $6.1 million and $4.0 million at March
31, 1999 and 1998, respectively.
Net cash provided by operating activities was $24.5 million and $21.5
million for the three months ended March 31, 1999 and 1998, respectively. The
increase of $3.0 million primarily reflects increased depreciation and
amortization, a greater provision for current and deferred income taxes and a
decrease in other operating assets and liabilities, offset, in part, by a
decrease in net income, a greater increase in accounts receivable driven by
increased revenue and a decrease in accounts payable compared with an increase
in the prior year.
Net cash used in investing activities was $9.4 million and $14.9 million
for the three months ended March 31, 1999 and 1998, respectively. The decrease
of $5.5 million primarily reflects lower increases in property, plant and
equipment and intangibles, due to timing of expenditures.
16
<PAGE>
Net cash used in financing activities was $16.9 million and $8.5 million
for the three months ended March 31, 1999 and 1998, respectively. The increase
of $8.2 million was due primarily to repayment of bank borrowings, offset by
proceeds from stock option plans and a decrease in transfers to Cognizant
Corporation.
Year Ended December 31, 1998 Compared with Year Ended December 31, 1997
Cash and cash equivalents totaled $7.8 million and $6.0 million at December
31, 1998 and 1997, respectively, an increase of $1.8 million.
Net cash provided by operating activities was $122.4 million and $94.4
million for the years ended December 31, 1998 and 1997, respectively. The
increase of $28.0 million in cash provided by operating activities compared with
the prior year primarily reflected higher earnings, an increase in accrued and
other current liabilities primarily related to liabilities assumed in connection
with the Distribution and an increase in accrued compensation, offset, in part,
by a decrease in accounts payable due to the timing of disbursements.
Net cash used in investing activities totaled $68.1 million for the year
ended December 31, 1998 compared with $42.8 million in the prior year. The
increase of $25.3 million primarily reflected increases in additions to
property, plant and equipment, computer software and intangibles.
Net cash used in financing activities was $52.5 million for the year ended
December 31, 1998 compared with $51.1 million in the prior year. The increase of
$1.4 million in cash used in financing activities compared to the prior year
reflected a repayment of bank borrowings, offset, in part, by a decrease in
transfers to Cognizant and D&B, exclusive of the proceeds from the $300.0
million indebtedness consisting of bank borrowings and limited partnership
investment, which were distributed to Cognizant in connection with the
Distribution, and the proceeds from employee stock option exercises and the
employee stock purchase plan.
The Company currently expects that over the next three years it will invest
an estimated $225 million (including amounts already spent in 1999) focused
principally on deployment of digital broadcast measurement technology, new
software development and deployment, additional metered markets and Internet
initiatives.
The Company's existing balances of cash and cash equivalents, cash
generated from operations and debt capacity currently are expected to be
sufficient to meet the Company's long-term and short-term cash requirements
including continued investment in the business. To the extent that the Company
needs additional funding to finance its operations and investments, no assurance
can be given that the Company will be able to access the capital markets or
otherwise obtain necessary financing in the future, or that any such financing
can be obtained in a timely manner or on commercially favorable terms.
In connection with the Distribution, the Company borrowed $275 million
under an unsecured revolving credit facility ("Revolving Credit Facility")
provided by a group of lenders led by The Chase Manhattan Bank. The Revolving
Credit Facility consists of two tranches: a Short-Term $225 million tranche and
a Three-Year $100 million tranche. As of March 31, 1999, $200 million of the
Short-Term tranche and none of the Three-Year tranche were outstanding. The
weighted average interest rate on the Revolving Credit Facility was 5.33% on
March 31, 1999. On June 14, 1999, the commitment under the Short-Term tranche
was reduced to $150 million and extended until December 31, 1999. On the same
day, $100 million was drawn down under the Three-Year tranche to pay down $100
million of $200 million previously outstanding under the Short-Term tranche.
Approximately $100 million under the Short-Term tranche and $50 million under
the Three-Year tranche will be repaid with the proceeds of the Offering and the
Short-Term tranche will be terminated. The outstanding commitments under the
Three-Year tranche will mature on June 15, 2001. Interest under the Revolving
Credit Facility is based upon the London Interbank Offered (LIBO) Rate plus a
spread. The spread for the Three-Year tranche is .50% per annum and may change
based on the credit rating of the Company. The Revolving Credit Facility
contains restrictive covenants which provide, among other things, limitations
on: (i) the incurrence of indebtedness, (ii) the creation of mortgages and
17
<PAGE>
security interests, (iii) certain fundamental changes, (iv) investments and
acquisitions and (v) the existence of certain types of restrictive agreements.
Under the Revolving Credit Facility, the Company is required to maintain certain
specified minimum ratios of cash flow to fixed charges and to total borrowings
and certain minimum levels of net worth. The Revolving Credit Facility contains
various event of default provisions, including default in payment of principal
or interest, material misrepresentation in the Revolving Credit Facility,
default in compliance with other terms of the Revolving Credit Facility or the
related guarantees, bankruptcy, default on other indebtedness, failure to
satisfy or stay certain judgments or orders entered against the Company or any
of its subsidiaries, failure to pay when due certain amounts with respect to
certain employee benefit plans and the occurrence of a change in control. After
giving effect to the Offering, the Company will have $50 million outstanding
under the Revolving Credit Facility and availability under the Revolving Credit
Facility of $50 million.
The Company and one of its subsidiaries participate in a limited
partnership, one of which serves as general partner. In June 1998, a third party
investor contributed $25 million to the partnership in exchange for a limited
partnership interest, which is included in the indebtedness of the Company. The
partnership is obligated to make distributions to the third party limited
partner of approximately 6.26% per annum. The third party limited partner has
the ability to terminate the partnership at the end of December 2000, unless, at
that time, one or more of the other partners elect to purchase the entire
limited partner interest of the third party limited partner. The partnership
licenses computer software.
ADOPTION OF STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". SFAS 133
establishes accounting and reporting standards for derivative instruments
embedded in other contracts, (collectively referred to as derivatives) and for
hedging activities. It requires that entities recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. If certain conditions are met, a derivative may
be specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or liability or an unrecognized firm commitment, (b)
a hedge of an exposure to variable cash flows of a forecasted transaction, or
(c) a hedge of the foreign currency exposure of a net investment in a foreign
operation, or an unrecognized foreign-currency-denominated forecasted
transaction. The Company will be required to implement SFAS 133 beginning
January 1, 2001. The Company expects that the adoption of this pronouncement
will not have a material effect on the Company's financial position, results of
operations or cash flows.
NON-U.S. OPERATING AND MONETARY ASSETS
The Company operates in the U.S. and Canada. Approximately 3% of the
Company's revenues during the quarters ended March 31, 1999 and 1998 and for the
three years ended December 31, 1998 were derived from its Canadian operations.
As a result, fluctuations in the value of the Canadian dollar relative to the
U.S. dollar do not significantly affect the Company's results of operations.
Non-U.S. monetary assets are maintained in Canadian dollars. Changes in the
value of this currency relative to the U.S. dollar are charged or credited to
Shareholders'/Divisional Equity. The effects of exchange rate changes during the
three months ended March 31, 1999 and 1998 and for the years ended December 31,
1998, 1997 and 1996 were not material.
YEAR 2000
Many existing computer systems, software applications and embedded computer
chips use two digits, rather than four, to record years, e.g., "98" instead of
"1998". Unless modified, such systems will not properly record or interpret
years after 1999, which could result in system failures or miscalculations
causing disruption of business operations, including, among other things, an
inability to process transactions, deliver reports, send invoices, or engage in
similar normal business activities. This is known as the Year 2000 Issue.
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The Company began to address the Year 2000 Issue in 1996. The Company
determined that most of its significant information technology ("IT") systems,
as well as production operations applications that interface with its core IT
systems, could be affected and significant portions of software needed to be
modified or replaced so that those systems and applications would properly
utilize dates beyond December 31, 1999. Affected systems and processes include
software applications and computer software and hardware that sample, collect,
process, report, and deliver television ratings and audience estimates to the
television marketplace in the U.S. and Canada.
The Company's project to resolve the Year 2000 Issue involves four phases:
assessment, remediation, testing and implementation. Once each software
application, computer system, or process has completed all four phases, it is
returned to a production environment. After completing a series of
implementations, the Company's project calls for enterprise-wide system testing
of its business-critical systems and processes to validate that key applications
and systems will function in concert in a Year 2000 test environment producing
the same results as today.
To date, the Company has devoted substantially all of its Year 2000 efforts
to modifying and testing its business-critical processes and computer systems to
be Year 2000 ready by September 30, 1999. As of March 31, 1999, for its IT
exposures, the Company has completed 100% of its assessments and was more than
80% complete in the implementation phase. The target to complete the
modifications and testing of the remaining business-critical IT software is
September 30, 1999. As of March 31, 1999, the Company has also completed 100% of
its assessments and more than 70% of the modifications and testing of the
non-business-critical software (which includes certain IT software as well as
applications supported and used by production operations departments that
interface with the IT systems), as well as completed customer notifications of
discontinued and replaced products. The target to complete the modifications and
testing of the non-business-critical software is also September 30, 1999. The
Company completed two of four planned enterprise-wide system tests, which
confirmed that work done to date has been accurate and effective. All four
enterprise-wide system tests are scheduled to be completed by September 30,
1999.
Third parties, including data providers, users of the Company's data, and
application vendors, have been queried about their Year 2000 readiness. To date,
the Company is not aware of any anticipated Year 2000-related failures. Failures
by data providers to be Year 2000 ready could disrupt the flow of data used in
the Company's products. Failures by users could hinder their ability to make use
of the Company's products. Failures by application vendors could impact certain
product delivery schedules until corrected. While the Company believes most
companies it deals with are addressing the issue, it is unable to determine the
effect, if any, such failures might have on the Company's business or future
results of operations.
The Company also relies on local and long-distance telecommunications
companies throughout the U.S. and Canada to transmit viewing data from its
television meters to its computer systems for processing. Given the large number
of telephone companies serving the households where the Company's meters are
installed, the Company may not be able to assess the extent to which
telecommunications failures will occur. Scattered or short-lived
telecommunications outages will be unlikely to materially impair the Company's
ability to deliver television ratings. A serious telecommunications failure,
however, could significantly interrupt the Company's delivery of ratings data to
its metered ratings customers, and, if the failure were lengthy, data could be
lost.
The assessment of embedded computer chips relating to building facilities,
mailing, and print shop equipment is well under way. The Company expects to
complete the resolution of any issues by July 1999.
The Company is utilizing both internal and external resources to address
the Year 2000 issue. This project is estimated to cost $19.6 million and is
being funded through operating cash flows. The operating income impact of the
Year 2000 project was $9.9 million and $2.7 million in 1998 and 1997,
respectively. Based on current information, the operating income impact of the
Year 2000 project for the full year 1999 is expected to be approximately $7.0
million.
The Company is actively engaged in contingency planning for potential
internal and external disruptions. For each area of the business, employees have
been identified as "risk managers" to be
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responsible for executing recovery plans, as necessary. The Company is in the
process of developing a communication plan for employees, customers, vendors,
and cooperating households by September 30, 1999 concerning possible disruptions
and our planned response.
The Company believes that with modifications and replacement of existing
software, the Year 2000 impact on systems and computer code controlled and
maintained by the Company can be mitigated. However, if such modifications and
replacements are not made, are not completed in a timely manner, or if third
party providers fail to provide timely, accurate and uninterrupted goods and
services, the Year 2000 Issue could materially and adversely affect the
Company's results of operations, liquidity and financial condition.
FACTORS THAT MAY AFFECT FUTURE RESULTS; FORWARD LOOKING STATEMENTS
This Prospectus and the documents that are incorporated by reference herein
contain statements which, in the opinion of the Company, may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Litigation Reform Act"). These statements
include, but are not limited to, all statements relating to plans for future
growth and other business development activities as well as capital
expenditures, financing sources and the effects of regulation and competition
and all other statements regarding the intent, plans, beliefs or expectations of
the Company or its directors or officers. Investors are cautioned that such
forward-looking statements are not assurances of future performance or events
and involve risks and uncertainties that could cause actual results and
developments to differ materially from those covered in such forward-looking
statements. These risks and uncertainties include, but are not limited to, the
factors set forth below:
o The Company operates in businesses that require sophisticated data
collection and processing systems, software and other technology. The
technology underlying the media industry continues to undergo rapid
change and the Company will need to continue to develop and refine
techniques for data collection and processing to accommodate such
changes, including digital television, and for interactive television
transmission and Internet usage. There can be no guarantee that the
Company will be able to develop and refine new techniques for data
collection and processing or that it will be able to do so as quickly
or cost-effectively as its competition.
o Each of the Company's businesses is subject to significant or
potential competition that is likely to intensify in the future, as
described under "Technology and Competition" earlier in this
Prospectus.
o The Company is subject to the risks associated with its ability to
find and effectively resolve any problems associated with the Year
2000 issue, as described under "Year 2000" in "Management's Discussion
and Analysis of Financial Condition and Results of Operations".
o Results could be affected by the costs and other effects of litigation
and other contingencies involving the Company. In particular,
management is unable to predict at this time the final outcome of the
IRI Action or the amount of any future D&B tax and interest payments
described in "The Company--Litigation and Contingencies", and whether
the resolution of such matters could materially affect Nielsen Media
Research's results of operations, cash flows or financial position.
o The Company's results could be adversely affected by its ability to
successfully achieve estimated effective tax rates and corporate
overhead levels; regulatory and legislative initiatives; leverage and
debt service (including sensitivity to fluctuations in interest
rates); compliance with covenants in loan agreements; the ability to
obtain future financing on satisfactory terms; and deterioration in
economic conditions, particularly in the media or other industries
where customers operate.
The Company has no obligation to publicly release any revision to any
forward-looking statement contained or incorporated herein to reflect any future
events or occurrences.
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DESCRIPTION OF THE NOTES
The Notes are to be issued under an Indenture, to be dated as of
June __, 1999 (the "Indenture"), between the Company and The Chase
Manhattan Bank, as Trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
following summaries of certain provisions of the Indenture do not purport to be
complete and are subject, and are qualified in their entirety by reference, to
all the provisions of the Indenture, including the definitions therein of
certain terms. Wherever particular Sections or defined terms of the Indenture
are referred to herein, such Sections or defined terms are incorporated by
reference herein. The Indenture provides for the issuance of debt securities in
one or more series at any time and from time to time, and does not limit the
principal amount of debt securities which may be issued thereunder.
GENERAL
The Notes will be unsecured obligations of the Company, will rank pari
passu in right of payment with all existing and future unsecured unsubordinated
indebtedness of the Company, will be limited to $150,000,000 aggregate principal
amount and will mature on _____________, 2009. The Notes will bear interest at
the rate per annum shown on the front cover of this Prospectus from
____________, 1999 or from the most recent Interest Payment Date to which
interest has been paid or provided for, payable semiannually on _____________
and _____________ of each year, commencing ______________, ____ (each, an
"Interest Payment Date"). Interest on each Note will be paid to the Person in
whose name the Note (or any predecessor Note) is registered at the close of
business on the preceding _______________ or _______________, as the case may be
(each, a "Regular Record Date").
The Notes will not have the benefit of any sinking fund.
OPTIONAL REDEMPTION. The Notes will be redeemable as a whole or in part, at
the option of the Company at any time, at a redemption price equal to the
greater of (i) 100% of their principal amount or (ii) the sum of the product
values of the remaining scheduled payments of principal of and interest on the
Notes being redeemed discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus ______ basis points, plus, in either case, accrued and unpaid interest
on the principal amount being redeemed to such redemption date.
"Business Day" means any calendar day that is not a Saturday, Sunday or
legal holiday in New York, New York and on which commercial banks are open for
business in New York, New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the Notes to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity in the remaining term of such Notes.
"Independent Investment Banker" means Morgan Stanley & Co. Incorporated or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Trustee.
"Comparable Treasury Price" means (i) the average of five Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (ii) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"Reference Treasury Dealer" means (i) Morgan Stanley & Co. Incorporated and
Chase Securities Inc., and their respective successors, provided, however, that
if either of the foregoing shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the Company
shall substitute therefor another Primary Treasury Dealer and (ii) any other
Primary Treasury Dealer selected by the Independent Investment Banker after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid
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and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Independent
Investment Banker at 5:00 p.m., New York City time, on the third Business Day
preceding such redemption date.
"Treasury Rate" means, with respect to any redemption date, (1) the yield,
under the heading which represents the average for the immediately preceding
week, appearing in the most recent published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields in
actively traded United States Treasury securities adjusted to constant maturity
under the caption "Treasury Constant Maturities," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months before
or after the Remaining Life, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue shall be determined and
the Treasury Rate shall be interpolated or extrapolated from such yields on a
straight time basis, rounding to the nearest month) or (2) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual 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
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
Holders of Notes to be redeemed will receive notice thereof by first-class
mail at least 30 and not more than 60 days prior to the date fixed for
redemption. If fewer than all of the Notes are to be redeemed, the Trustee will
select, not more than 60 days prior to the redemption date, the particular Notes
or portions thereof for redemption from the outstanding Notes not previously
called by such method as the Trustee deems fair and appropriate.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date, interest will cease to accrue on the Notes or
portions thereof called for redemption.
FORM, EXCHANGE AND TRANSFER
The Notes will be issuable only in fully registered form, without coupons,
in denominations of $1,000 and integral multiples thereof.
At the option of the holder, subject to the terms of the Indenture and the
limitations applicable to Global Securities (as defined below), the Notes will
be exchangeable for other Notes of any authorized denomination and of a like
tenor and aggregate principal amount.
Subject to the terms of the Indenture and the limitations applicable to
Global Securities, Notes may be presented for exchange as provided above or for
registration of transfer (duly endorsed or with the form of transfer endorsed
thereon duly executed) at the office of the Security Registrar (as defined in
the Indenture) or at the office of any transfer agent designated by the Company
for such purpose. No service charge will be made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. The Company may at any time
designate additional transfer agents or rescind the designation of any transfer
agent or approve a change in the office through which any transfer agent acts,
except that the Company will be required to maintain a transfer agent in each
Place of Payment (as defined in the Indenture) for the Notes.
If the Notes are to be redeemed in part, the Company will not be required
to (i) issue, register the transfer of or exchange any Note during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any such Note that may be selected for redemption and
ending at the close of business on the day of such mailing or (ii) register the
transfer of or exchange any Note so selected for redemption, in whole or in
part, except the unredeemed portion of any such Note being redeemed in part.
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BOOK-ENTRY SYSTEM
Upon issuance, the Notes will be represented by one or more global
securities (each, a "Global Security"). Each such Global Security will be
deposited with, or on behalf of, The Depository Trust Company, as depositary
(the "Depositary"), and registered in the name of Cede & Co., the nominee of the
Depositary.
The Depositary has advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code and a "clearing agency" registered pursuant
to the provisions of Section 17A of the Exchange Act. The Depositary holds
securities that its participants ("Participants") deposit with it. The
Depositary also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. The Depositary is owned
by a number of its Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly. The rules applicable to the Depositary and its Participants are on
file with the Securities and Exchange Commission.
Ownership of beneficial interests in the Global Securities will be limited
to Participants or persons that may hold interests through Participants. The
Company expects that upon the issuance of the Global Securities representing the
Notes, the Depositary will credit, on its book-entry registration and transfer
system, the Participants' accounts with the respective principal amounts of the
Notes beneficially owned by such Participants. Ownership of beneficial interests
in such Global Securities will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
(with respect to the interests of Participants) and on the records of
Participants (with respect to interests of persons holding through
Participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability of certain persons to own, transfer
or pledge beneficial interests in a Global Security.
No Global Security may be exchanged in whole or in part for Notes
registered, and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary or a nominee
thereof unless (A) such Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
has creased to be a clearing agency registered under the Exchange Act or (B)
there shall have occurred and be continuing an Event of Default with respect to
such Global Security.
So long as the Depositary, or its nominee, is the registered owner of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and holder of such Global Security and the Notes
represented thereby for all purposes under the Notes and the Indenture. Except
in the limited circumstances referred to above, owners of beneficial interests
in a Global Security will not be entitled to have such Global Security or the
Notes represented thereby registered in their names, will not receive or be
entitled to receive physical delivery of certificated Notes in exchange therefor
and will not be considered to be the owners or holders of such Global Security
or the Notes represented thereby for any purpose under the Notes or the
Indenture. Accordingly, each person owning a beneficial interest in a Global
Security must rely on the procedures of the Depositary and, if such person is
not a Participant, on the procedures of the Participant through which such
person owns its interest, to exercise any rights of a holder under the
Indenture. The Company understands that under existing industry practices, in
the event that the Company requests any action of holders or that an owner of a
beneficial interest in such a Global Security desires to give or take any action
which a holder is entitled to give or take under the Indenture, the Depositary
would authorize the Participants holding the relevant beneficial interests to
give or take such
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action, and such Participants would authorize beneficial owners owning through
such Participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payment of principal of and interest on the Notes registered in the name of
the Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the holder thereof. None of the Company, the Trustee or any
agent of the Company or the Trustee will have any responsibility or liability
for any aspect of the records relating to, or payments made on account of,
beneficial interests in a Global Security, or for maintaining, supervising or
reviewing any records relating to such beneficial interests. The Company expects
that the Depositary, upon receipt of any payment of principal or interest in
respect of a Global Security, will credit the accounts of the Participants with
payment in amounts proportionate to their respective beneficial interests in
such Global Security as shown on the records of the Depositary. The Company also
expects that payments by Participants to owners of beneficial interests in a
Global Security will be governed by standing customer instructions and customary
practices, as is the case with securities held for the accounts of customers in
bearer form or registered in "street name", and will be the responsibility of
such Participants.
Although the Depositary has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Global Securities among Participants,
it is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Trustee nor the
Company will have any responsibility for the performance by the Depositary or
its Participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
The Depositary's management is aware that some computer applications,
systems and the like for processing data that are dependent upon calendar dates,
including dates before, on, and after January 1, 2000, may encounter "Year 2000
problems". The Depositary has informed its participants and other members of the
financial community that it has developed and is implementing a program so that
its systems, as they relate to the timely payment of distributions (including
principal and interest payments) to security holders, book-entry deliveries and
settlements of trades within the Depositary, continue to function appropriately.
This program includes a technical assessment and a remediation plan, each of
which is complete. In addition, the Depositary's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, the Depositary's ability to perform properly its services is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as third party vendors from whom the Depositary licenses
software and hardware, and third party vendors on whom the Depositary relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. The Depositary has informed
its Participants and other members of the financial community that it is
contacting, and will continue to contact, third party vendors from whom the
Depositary acquires services to (1) impress upon them the importance of such
services being Year 2000 compliant and (2) determine the extent of their efforts
for Year 2000 remediation (and, as appropriate, testing) of their services. In
addition, the Depositary is in the process of developing such contingency plans
as it deems appropriate.
PAYMENT AND PAYING AGENTS
Payment of interest on a Note on any Interest Payment Date will be made to
the Person in whose name such Note is registered at the close of business on the
Regular Record Date for such interest.
Principal of and any premium and interest on the Notes will be payable at
the office of such Paying Agent or Paying Agents as the Company may designate
for such purpose from time to time, except that at the option of the Company
payment of any interest may be made by check mailed to the address of the Person
entitled thereto as such address appears in the Security Register. The corporate
trust office of the Trustee in The City of New York will be designated initially
as the Company's sole Paying Agent for payments with respect to Notes. The
Company may at any time designate additional Paying Agents or
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rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that the Company will be required to
maintain a Paying Agent in each Place of Payment for the Notes.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Note which remains unclaimed at
the end of two years after such principal, premium or interest has become due
and payable will be repaid to the Company, and the holder of such Note
thereafter may look only to the Company for payment thereof.
COVENANTS
The Indenture contains the following covenants:
Limitation on Secured Debt
The Company may not issue, incur, create, assume or guarantee, and may not
permit any Restricted Subsidiary to issue, incur, create, assume or guarantee,
any debt for borrowed money secured by a mortgage, security interest, pledge,
lien, charge or other encumbrance ("mortgages") upon any assets of the Company
or any Restricted Subsidiary or upon any shares of stock or indebtedness of any
Restricted Subsidiary (whether such assets, shares or indebtedness are now
existing or owned or hereafter created or acquired) without in any such case
effectively providing concurrently with the issuance, incurrence, creation,
assumption or guarantee of any such secured debt, or the grant of a mortgage
with respect to any such indebtedness, that the Notes (together with, if the
Company shall so determine, any other indebtedness of or guaranteed by the
Company ranking equally with the Notes or any indebtedness of or guaranteed by
any Restricted Subsidiary, as the case may be) shall be secured equally and
ratably with (or, at the option of the Company, prior to) such secured debt. The
foregoing restriction, however, will not apply to: (a) mortgages on property
existing at the time of acquisition thereof by the Company or any Subsidiary;
(b) mortgages on property, shares of stock or indebtedness or other assets of
any corporation existing at the time such corporation becomes a Restricted
Subsidiary; (c) mortgages on property, shares of stock or indebtedness to secure
the payment of all or any part of the purchase price thereof, or mortgages on
property, shares of stock or indebtedness to secure any indebtedness for
borrowed money incurred prior to, at the time of, or within 180 days after, the
latest of the acquisition thereof, or, in the case of property, the completion
of construction, the completion of improvements, or the commencement of
substantial commercial operation of such property, for the purpose of financing
all or any part of the purchase price thereof, such construction, or the making
of such improvements; (d) mortgages to secure indebtedness owing to the Company
or to a Restricted Subsidiary; (e) mortgages existing at the date of the
issuance of the Notes; (f) mortgages on property of a corporation existing at
the time such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary or at the time of a sale, lease or other disposition of
all or substantially all the properties of a corporation to the Company or a
Restricted Subsidiary; (g) mortgages in favor of the United States or any State,
territory or possession thereof (or the District of Columbia) or Canada, or any
department, agency, instrumentality or political subdivision of the United
States or any State, territory or possession thereof (or the District of
Columbia) or Canada, to secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price or the cost of
constructing or improving the property subject to such mortgages; and (h)
extensions, renewals, refinancings or replacements of any mortgage referred to
in the foregoing clauses (a), (b), (c), (e) and (f); provided, however, that any
mortgages permitted by any of the foregoing clauses (a), (b), (c), (e) and (f)
shall not extend to or cover any property of the Company or such Restricted
Subsidiary, as the case may be, other than the property, if any, specified in
such clauses and improvements thereto.
Notwithstanding the restrictions outlined in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to issue, incur, create,
assume or guarantee, debt secured by a mortgage which would otherwise be subject
to such restrictions, without equally and ratably securing the Notes, provided
that after giving effect thereto, the sum of (i) all debt so secured by
mortgages (not including
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mortgages permitted under clauses (a) through (h) above) and (ii) all
Attributable Debt (as defined below) with respect to Sale and Lease-Back
Transactions (as defined below), at the time of determination, does not exceed
10% of the Consolidated Net Assets of the Company.
Limitation on Sale and Lease-Back Transactions
The Company may not, nor may any Restricted Subsidiary, enter into any Sale
and Lease-Back Transaction with respect to any property, other than any such
transaction involving a lease for a term of not more than three years or any
such transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, unless: (a) the Company or such Restricted Subsidiary
would be entitled to incur indebtedness pursuant to the first or second
paragraph under "Limitation on Secured Debt" described above secured by a
mortgage on the property involved in such transaction at least equal in amount
to the Attributable Debt with respect to such Sale and Lease-Back Transaction
without equally and ratably securing the Notes; or (b) the Company shall apply
an amount equal to the greater of the net proceeds of such sale or the
Attributable Debt with respect to such Sale and Lease-Back Transaction within
180 days of such sale to either (or a combination of) the retirement of debt for
borrowed money (other than mandatory scheduled principal payments) of the
Company or a Restricted Subsidiary that matures more than twelve months after
the creation of such indebtedness or the purchase, acquisition, construction or
development of property, plant and equipment, computer software or other
intangibles to be used in the business of the Company or its Restricted
Subsidiaries.
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge into, or convey, transfer or
lease all or substantially all of its properties and assets to, any Person (as
defined in the Indenture), unless (i) the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, all or substantially all of the properties and assets
of the Company shall be a corporation, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium and interest on all the Notes and the performance or observance
of every covenant of the Indenture on the part of the Company to be performed or
observed, (ii) immediately after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing, (iii) if, as a
result of the transaction, property of the Company would become subject to a
mortgage that would not be permitted under the limitation on mortgages described
above under "Limitation on Secured Debt", the successor Person takes such steps
as shall be necessary to secure the Notes equally and ratably with (or prior to)
the indebtedness secured by such mortgage and (iv) certain other conditions are
met.
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Attributable Debt" when used in connection with a Sale and Lease-Back
Transaction means, at the time of determination, the lesser of: (a) the fair
value of the property involved (as determined in good faith by the Board of
Directors of the Company); or (b) the present value of the total net amount of
rent required to be paid under such lease during the remaining term thereof
(including any renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the terms of such
lease or, if not practicable to determine such rate, the interest rate per annum
borne by the Notes compounded semi-annually. For purposes of the foregoing
definition, rent shall not include amounts required to be paid by the lessee,
whether or not designated as rent or additional rent, on account of or
26
<PAGE>
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of the
net amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the net
amount determined assuming no such termination.
"Consolidated Net Assets" means, at any time of determination, (i) the
aggregate amount of assets of the Company and its Subsidiaries at such time
minus (ii) the aggregate amount of current liabilities at such time, calculated
in accordance with generally accepted accounting principles.
"Restricted Subsidiary" means any Subsidiary organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia or Canada or any province thereof.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing by the Company or any Restricted Subsidiary of any
property, which property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such person.
"Subsidiary" means (i) a corporation more than 50% of the voting stock of
which is owned by the Company and/or one or more Subsidiaries or (ii) any other
Person (other than a corporation) of which the Company and/or one or more
Subsidiaries has at least a majority ownership and power to direct the policies,
management and affairs.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) under the Indenture with respect to the
Notes: (a) failure to pay principal of or any premium on any Note when due; (b)
failure to pay any interest on any Note when due, continued for 30 days; (c)
failure to perform any other covenant of the Company in the Indenture, continued
for 60 days after written notice has been given by the Trustee, or the holders
of at least 25% in principal amount of the Notes Outstanding (as defined in the
Indenture), as provided in the Indenture; (d) acceleration of any indebtedness
for money borrowed by the Company having an aggregate principal amount
outstanding of at least $20 million, if such indebtedness has not been
discharged, or such acceleration has not been rescinded or annulled, within 10
days after written notice has been given by the Trustee, or the Holders of at
least 25% in principal amount of Notes, as provided in the Indenture; and (e)
certain events of bankruptcy, insolvency or reorganization involving the
Company.
If an Event of Default (other than an Event of Default described in clause
(e) above) with respect to the Notes at the time Outstanding shall occur and be
continuing, either the Trustee or the holders of at least 25% in aggregate
principal amount of the Outstanding Notes by notice as provided in the Indenture
may declare the principal amount of the Notes to be due and payable immediately.
If an Event of Default described in clause (e) above shall occur, the principal
amount of all the Notes will automatically, and without any action by the
Trustee or any holder, become immediately due and payable. After any such
acceleration, but before a judgment or decree based on acceleration, the holders
of a majority in aggregate principal amount of the Outstanding Notes may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal, have been cured or
waived as provided in the Indenture. For information as to waiver of defaults,
see "Modification and Waiver".
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such holders
shall have offered to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee, the holders of a majority in
aggregate principal amount of the Outstanding Notes will have the right
27
<PAGE>
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Notes.
No holder of a Note will have any right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless (i) such holder has previously given to
the Trustee written notice of a continuing Event of Default with respect to the
Notes, (ii) the holders of at least 25% in aggregate principal amount of the
Outstanding Notes have made written request, and such holder or holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee and (iii) the Trustee has failed to institute such proceeding, and has
not received from the holders of a majority in aggregate principal amount of the
Outstanding Notes a direction inconsistent with such request, within 60 days
after such notice, request and offer of indemnity. However, such limitations do
not apply to a suit instituted by a holder of a Note for the enforcement of
payment of the principal of or any premium or interest on such Note on or after
the applicable due date specified in such Note.
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their knowledge,
is in default in the performance or observance of any of the terms, provisions
and conditions of the Indenture and, if so, specifying all such known defaults.
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture with respect to the Notes may
be made by the Company and the Trustee with the consent of the holders of a
majority in aggregate principal amount of the Outstanding Notes affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the holder of each Outstanding Note
affected thereby, (a) change the stated maturity of the principal of, or any
instalment of principal of or interest on, any Note, (b) reduce the principal
amount of, or any premium or interest on, any Note, (c) reduce the amount of
principal of the Notes payable upon acceleration of the maturity thereof, (d)
change the place or currency of payment of principal of, or any premium or
interest on, any Note, (e) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note, (f) reduce the
percentage in principal amount of Outstanding Notes, the consent of whose
holders is required for modification or amendment of the Indenture or for waiver
of compliance with certain provisions of the Indenture or for waiver of certain
defaults or (g) modify such provisions with respect to modification and waiver.
Without the consent of the holders of the Notes, the Company and the
Trustee, at any time and from time to time, may modify the Indenture with
respect to the Notes for, among other things, any of the following purposes: (a)
to evidence the succession of another Person to the Company and the assumption
by any such successor of the covenants of the Company in the Indenture and in
the Notes, (b) to add to the covenants of the Company for the benefit of the
holders of the Notes or to surrender any right or power conferred in the
Indenture upon the Company, (c) to add any additional Events of Default for the
benefit of the holders, (d) to secure the Notes, (e) to evidence and provide for
the acceptance of appointment hereunder by a successor Trustee with respect to
the Notes and to add to or change any of the provisions of the Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, (f) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect to matters
or questions arising under the Indenture provided that such action shall not
adversely affect the interests of the holders of Notes in any material respect,
and (g) to change or modify any of the provisions of the Indenture, provided
that such action shall not adversely affect the interests of the holders of
Notes in any material respect.
The holders of a majority in principal amount of the Outstanding Notes may
waive compliance by the Company with certain restrictive provisions of the
Indenture. The holders of a majority in principal amount of the Outstanding
Notes may waive any past default under the Indenture, except a default in the
payment of principal, premium or interest and certain covenants and provisions
of the Indenture which cannot be amended without the consent of the holder of
each Outstanding Note affected.
28
<PAGE>
Except in certain limited circumstances, the Company will be entitled to
set any day as a record date for the purpose of determining the holders of
Outstanding Notes entitled to give or take any direction, notice, consent,
waiver or other action under the Indenture, in the manner and subject to the
limitations provided in the Indenture. In certain limited circumstances, the
Trustee will be entitled to set a record date for action by holders. If a record
date is set for any action to be taken by holders, such action may be taken only
by persons who are holders of Outstanding Notes on the record date. To be
effective, such action must be taken by holders of the requisite principal
amount of such Notes within a specified period following the record date. For
any particular record date, this period will be 180 days or such period as may
be specified by the Company (or the Trustee, if it set the record date), and may
be shortened or lengthened (but not beyond 180 days) from time to time.
DEFEASANCE AND COVENANT DEFEASANCE
Defeasance and Discharge. The Indenture will provide that, upon the
Company's exercise of its option to have the defeasance and discharge provisions
of the Indenture applied to the Notes, the Company will be discharged from all
its obligations with respect to such Notes (except for certain obligations to
exchange or register the transfer of Notes, to replace stolen, lost or mutilated
Notes, to maintain paying agencies and to hold moneys for payment in trust) upon
the deposit in trust for the benefit of the holders of the Notes of money or
U.S. Government Obligations, or both, which, through the payment of principal
and interest in respect thereof in accordance with their terms, will provide
money in an amount sufficient to pay the principal of and any premium and
interest on the Notes on the stated maturity in accordance with the terms of the
Indenture and the Notes. Such defeasance or discharge may occur only if, among
other things, the Company has delivered to the Trustee an Opinion of Counsel (as
defined in the Indenture) to the effect that the Company has received from, or
there has been published by, the United States Internal Revenue Service a
ruling, or there has been a change in tax law, in either case to the effect that
holders of the Notes will not recognize gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit, defeasance and discharge
were not to occur.
Defeasance of Certain Covenants. The Indenture will provide that, upon the
Company's exercise of its option to have the provisions relating to the
defeasance of certain covenants applied to the Notes, the Company may omit to
comply with certain restrictive covenants, including those described under
"Covenants" and in clause (iii) under "Consolidation, Merger and Sale of Assets"
and the occurrence of certain Events of Default, which are described in clause
(c) (with respect to such restrictive covenants) under "Events of Default", will
be deemed not to be or result in an Event of Default, in each case with respect
to the Notes. The Company, in order to exercise such option, will be required to
deposit, in trust for the benefit of the holders of the Notes, money or U.S.
Government Obligations, or both, which, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and any premium and interest on
the Notes on the stated maturity in accordance with the terms of the Indenture
and the Notes. The Company will also be required, among other things, to deliver
to the Trustee an Opinion of Counsel to the effect that holders of the Notes
will not recognize gain or loss for federal income tax purposes as a result of
such deposit and defeasance of certain obligations and will be subject to
federal income tax on the same amount, in the same manner and at the same times
as would have been the case if such deposit and defeasance were not to occur. In
the event the Company exercised this option with respect to the Notes and the
Notes were declared due and payable because of the occurrence of any Event of
Default, the amount of money and U.S. Government Obligations so deposited in
trust would be sufficient to pay amounts due on the Notes at the time of their
stated maturity but may not be sufficient to pay amounts due on the Notes upon
any acceleration resulting from such Event of Default. In such case, the Company
would remain liable for such payments.
29
<PAGE>
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Note is registered as the absolute owner
thereof (whether or not such Note may be overdue) for the purpose of making
payment and for all other purposes.
GOVERNING LAW
The Indenture and the Notes will be governed by, and construed in
accordance with, the law of the State of New York.
REGARDING THE TRUSTEE
The Chase Manhattan Bank, an affiliate of Chase Securities Inc., is a
lender to the Company under the Revolving Credit Facility and will receive a
portion of the amounts repaid under such facility with the proceeds of the
offering. Pursuant to the Trust Indenture Act, upon the occurrence of a default,
The Chase Manhattan Bank will be required to resign as Trustee within 90 days of
such default unless it is cured or waived.
UNDERWRITERS
Under the terms and subject to the conditions set forth in the Underwriting
Agreement, dated ________, 1999 (the "Underwriting Agreement"), the underwriters
named below (the "Underwriters") have severally agreed to purchase, and the
Company has agreed to sell to them, severally, the respective principal amount
of the Notes set forth opposite their respective names below:
PRINCIPAL
AMOUNT OF
UNDERWRITER NOTES
----------- ------------
Morgan Stanley & Co. Incorporated ........................... $
Chase Securities Inc. .......................................
------------
Total ..................................................... $150,000,000
============
The Underwriting Agreement provides that the several obligations of the
Underwriters to pay for and accept delivery of the Notes are subject to, among
other things, the approval of certain legal matters by their counsel and certain
other conditions. The Underwriters are obliged to take and pay for all the Notes
if any are taken.
The Underwriters propose initially to offer part of the Notes to the public
at the public offering price set forth on the cover page hereof and in part to
certain dealers at prices that represent a concession not in excess of __% of
the principal amount of the Notes. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of __% of the principal amount of the
Notes to certain other dealers. After the initial offering of the Notes, the
offering price and other selling terms may from time to time be varied by the
Underwriters.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Notes, as permitted by applicable laws
and regulations. The Underwriters are not obligated, however, to make a market
in the Notes and any such market making may be discontinued at the sole
discretion of the Underwriters. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the Notes.
30
<PAGE>
In order to facilitate the offering of the Notes, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Notes. Specifically, the Underwriters may over-allot in connection with this
offering, creating short positions in the Notes for their own account. In
addition, to cover over-allotments or to stabilize the price of the Notes, the
Underwriters may bid for, and purchase, Notes in the open market. Finally, the
Underwriters may reclaim selling concessions allowed to an underwriter or dealer
for distributing Notes in this offering, if the Underwriters repurchase
previously distributed Notes in transactions that cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Notes above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.
The Underwriters and their affiliates maintain ongoing business
relationships with the Company and in connection therewith may provide
investment banking, commercial banking and advisory services. The Chase
Manhattan Bank, an affiliate of Chase Securities Inc., is the administrative
agent and a lender to the Company under the Revolving Credit Facility and will
receive a portion of the amounts repaid under such facility with the proceeds of
the offering. Because more than 10% of the proceeds of the offering will be paid
to affiliates of a member of the National Association of Securities Dealers,
Inc. ("NASD") who are participating in the offering, the offering is being made
pursuant to Rule 2710(c)(8) of the Conduct Rules of the NASD. The Chase
Manhattan Bank is also the Trustee under the Indenture.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
VALIDITY OF THE NOTES
The validity of the Notes offered hereby will be passed upon for the
Company by Simpson Thacher & Bartlett, New York, New York and for the
Underwriters by Sullivan & Cromwell, New York, New York.
EXPERTS
The financial statements and financial statement schedule incorporated in
this Prospectus by reference to the Annual Report on Form 10-K for the year
ended December 31, 1998, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
31
<PAGE>
[NIELSEN MEDIA RESEARCH LOGO]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
Registration Fee ....................................... $ 66,375
Fees and Expenses of Trustee and its Counsel ........... 11,000
Printing ............................................... 50,000
Fees of Accountants .................................... 50,000
Blue Sky and Legal Investment Fees and Expenses ........ 10,000
Legal Fees ............................................. 125,000
Rating Agency Fees ..................................... 150,000
Miscellaneous .......................................... 25,000
--------
$487,375
- ----------
* All amounts, other than the registration fee, are estimated and are subject to
future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Sixth of the Company's Restated Certificate of Incorporation
provides for indemnification of officers, directors and others to the extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware. The Company maintains insurance policies under which officers,
directors, and others (including officers and directors of the Company) may be
indemnified against certain losses arising from certain claims, including claims
under the Securities Act of 1933.
ITEM 16. EXHIBITS.
See Index to Exhibits on pages II-4 through II-6.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of said
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by a registrant of expenses incurred or
paid by a director, officer or controlling person of such registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been entitled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-1
<PAGE>
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this Registration Statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York on this 14th day of
June, 1999.
Nielsen Media Research, Inc.
By: /s/ STEPHEN J. BOATTI
---------------------------
Stephen J. Boatti
Senior Vice President and
Chief Legal Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on this 14th day of June, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ JOHN A. DIMLING* President, Chief Executive Officer and Director
- ------------------------------- (Principal Executive Officer)
(JOHN A. DIMLING)
/s/ THOMAS W. YOUNG* Executive Vice President and Chief Financial Officer
- ------------------------------- (Principal Financial Officer)
(THOMAS W. YOUNG)
/s/ STUART J. GOLDSHEIN* Vice President and Controller
- ------------------------------- (Principal Accounting Officer)
(STUART J. GOLDSHEIN)
/s/ WILLIAM G. JACOBI* Chairman of the Board of Directors and Director
- -------------------------------
(WILLIAM J. JACOBI)
/s/ M. BERNARD PUCKETT* Director
- -------------------------------
(M. BERNARD PUCKETT)
/s/ ROBERT E. WEISSMAN* Director
- -------------------------------
(ROBERT E. WEISSMAN)
/s/ JAMES R. CRAIGIE* Director
- -------------------------------
(JAMES R. CRAIGIE)
/s/ PETER A. LUND* Director
- -------------------------------
(PETER A. LUND)
/s/ MICHAEL D. MOORE* Director
- -------------------------------
(MICHAEL D. MOORE)
Director
- -------------------------------
(RONALD TOWNSEND)
*BY /s/ STEPHEN J. BOATTI As Attorney-in-Fact
- -------------------------------
(STEPHEN J. BOATTI)
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
1** -- Form of Underwriting Agreement.
3 -- Articles of Incorporation and By-laws:
.1 Restated Certificate of Incorporation of Cognizant Corporation
dated October 7, 1996 (incorporated by reference to Exhibit 3.1 to
Registrant's Registration Statement on Form 10 filed October 7,
1996, file number 001-12275).
.2 Amended and Restated By-laws of Registrant (incorporated by
reference to Exhibit 3.2 to Registrant's Registration Statement on
Form 10 filed October 7, 1996, file number 001-12275).
.3 Certificate of Ownership and Merger Merging Nielsen Media
Research, Inc. into Cognizant Corporation filed June 30, 1998 with
the Secretary of State of the State of Delaware.
.4 Certificate of Amendment of Restated Certificate of Incorporation
of Nielsen Media Research, Inc. (incorporated by reference to
Appendix A to Registrant's Proxy Statement filed August 5, 1998,
file number 001-12275).
4
.1** --Form of Indenture dated between the Company and The Chase
Manhattan Bank, as Trustee, Registrar and Paying Agent.
.2** Form of Registered Security (contained as part of Exhibit 4.1).
5** --Opinion of Simpson Thacher & Bartlett.
10 --Material Contracts:
.1 Distribution Agreement among Cognizant Corporation, The Dun &
Bradstreet Corporation and ACNielsen Corporation dated as of
October 28, 1996 (incorporated by reference to Exhibit 10.1 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed March 27, 1997, file number 001-12275).
.2 Tax Allocation Agreement among Cognizant Corporation, The Dun &
Bradstreet Corporation and ACNielsen Corporation dated as of
October 28, 1996 (incorporated by reference to Exhibit 10.2 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed March 27, 1997, file number 001-12275).
.3 Employee Benefits Agreement among Cognizant Corporation, The Dun &
Bradstreet Corporation and ACNielsen Corporation dated as of
October 28, 1996 (incorporated by reference to Exhibit 10.3 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed March 27, 1997, file number 001-12275).
.4 Indemnity and Joint Defense Agreement among Cognizant Corporation,
The Dun & Bradstreet Corporation and ACNielsen Corporation dated
as of October 28, 1996 (incorporated by reference to Exhibit 10.4
to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed March 27, 1997, file number 001-12275).
.5 TAM Master Agreement between Cognizant Corporation and ACNielsen
Corporation dated as of October 28, 1996 (incorporated by
reference to Exhibit 10.5 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1996, filed March 27, 1997,
file number 001-12275).
.6 Intellectual Property Agreement among Cognizant Corporation, The
Dun & Bradstreet Corporation and ACNielsen Corporation dated as of
October 28, 1996 (incorporated by reference to Exhibit 10.6 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed March 27, 1997, file number 001-12275).
.7 1996 Cognizant Corporation Non-Employee Directors Stock Incentive
Plan, as adopted effective November 1, 1996 (incorporated by
reference to Exhibit 10.7 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1996, filed March 27, 1997,
file number 001-12275).*
II-4
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
.8 1996 Cognizant Corporation Non-Employee Directors' Deferred
Compensation Plan, as adopted effective October 15, 1996
(incorporated by reference to Exhibit 10.8 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1996, filed
March 27, 1997, file number 001-12275).*
.9 1996 Cognizant Corporation Key Employees' Stock Incentive Plan, as
amended December 16, 1997 (incorporated by reference to Exhibit
10.9 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997, filed March 18, 1998, file number 001-12275).*
.10 1996 Cognizant Corporation Replacement Plan for Certain Employees
Holding the Dun & Bradstreet Corporation Equity-Based Awards, as
adopted effective November 1, 1996 (incorporated by reference to
Exhibit 10.10 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996, filed March 27, 1997, file number
001-12275).*
.11 1996 Cognizant Corporation Replacement Plan for Certain Employees
Holding I.M.S. International, Inc. Stock Options, as adopted
November 1, 1996 (incorporated by reference to Exhibit 10.11 to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996, filed March 27, 1997, file number 001-12275).*
.12 Form of Non-Employee Directors' Stock Option Agreement
(incorporated by reference to Exhibit 10.12 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1996, filed
March 27, 1997, file number 001-12275).*
.13 Form of Non-Employee Directors' Restricted Stock Agreement
(incorporated by reference to Exhibit 10.13 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1996, filed
March 27, 1997, file number 001-12275).*
.14 Forms of Stock Option Agreement (incorporated by reference to
Exhibit 10.14 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996, filed March 27, 1997, file number
001-12275).*
.15 Forms of Purchased Option Agreement (incorporated by reference to
Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996, filed March 27, 1997, file number
001-12275).*
.16 Forms of Limited Stock Appreciation Right Agreement (incorporated
by reference to Exhibit 10.16 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996, filed March 27,
1997, file number 001-12275).*
.17 Forms of Change-in-Control Agreement for Certain Executives of
Cognizant Corporation, as adopted October 15, 1996 (incorporated
by reference to Exhibit 10.17 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1996, filed March 27,
1997, file number 001-12275).*
.18 Cognizant Corporation Executive Transition Plan, as adopted
effective November 1, 1996 (incorporated by reference to Exhibit
10.18 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996, filed March 27, 1997, file number
001-12275).*
.19 Cognizant Corporation Executive Annual Incentive Plan, as adopted
effective January 1, 1997 (incorporated by reference to Exhibit
10.19 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1996, filed March 27, 1996, file number
001-12275).*
.20 Cognizant Corporation Supplement Executive Retirement Plan, as
adopted effective November 1, 1996 (incorporated by reference to
Exhibit 10.20 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1996, filed March 27, 1997, file number
001-12275).*
.21 Rights Agreement dated as of October 15, 1996 between Cognizant
Corporation and First Chicago Trust Company of New York
(incorporated by reference to Exhibit 1 to Registrant's Current
Report on Form 8-K filed October 15, 1996, file number 001-12275).
.22 Cognizant Corporation Retirement Excess Plan, as adopted effective
January 1, 1997 (incorporated by reference to Exhibit 10.22 to
Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, filed May 13, 1997, file number 001-12275).*
II-5
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
.23 Cognizant Corporation Savings Equalization Plan, as adopted
effective November 1, 1996 (incorporated by reference to Exhibit
10.22 to Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, filed May 13, 1997, file number
001-12275).*
.24 Severance Agreement and Release between Cognizant Corporation and
Dennis G. Sisco dated as of February 28, 1997 (incorporated by
reference to Exhibit 10.24 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997, filed November
14, 1997, file number 001-12275).
.25 Distribution Agreement between Cognizant Corporation and IMS
Health Incorporated dated June 30, 1998 (incorporated by reference
to Exhibit 10.1 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, filed August 13, 1998, file
number 001-12275).
.26 Tax Allocation Agreement between Cognizant Corporation and IMS
Health Incorporated dated June 30, 1998 (incorporated by reference
to Exhibit 10.2 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, filed August 13, 1998, file
number 001-12275).
.27 Employee Benefits Agreement between Cognizant Corporation and IMS
Health Incorporated dated June 30, 1998 (incorporated by reference
to Exhibit 10.3 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998, filed August 13, 1998, file
number 001-12275).
.28 Amended and Restated Transition Services Agreement between The Dun
& Bradstreet Corporation, The New Dun & Bradstreet Corporation,
Cognizant Corporation, IMS Health Incorporated, ACNielsen
Corporation and Gartner Group, Inc. dated June 30, 1998
(incorporated by reference to Exhibit 10.4 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998,
filed August 13, 1998, file number 001-12275).
.29 Undertaking of IMS Health Incorporated dated June 29, 1998
(incorporated by reference to Exhibit 10.5 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1998,
filed August 13, 1998, file number 001-12275).
.30 Forms of Change-in-Control Agreement for Certain Executives of
Nielsen Media Research, Inc., as adopted effective July 1, 1998
(incorporated by reference to Exhibit 10.21 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1998, filed
March 29, 1999, file number 001-12275).*
.31 364-Day Credit Agreement among the Registrant (in the name of
Cognizant Corporation), The Chase Manhattan Bank and the lenders
dated as of June 15, 1998 (incorporated by reference Exhibit 4.3
to Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998, filed November 11, 1998, file number
001-12275).
.32 Three-Year Credit Agreement among the Registrant (in the name of
Cognizant Corporation), The Chase Manhattan Bank and the lenders
dated as of June 15, 1998 (incorporated by reference Exhibit 4.4
to Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998, filed November 11, 1998, file number
001-12275).
.33** Amended and Restated 200-Day Credit Agreement among the
Registrant, The Chase Manhattan Bank and the lenders dated as of
June 14, 1999.
12.1 --Statement regarding Computation of Ratios of Earnings to Fixed
Charges.
21 --List of Active Subsidiaries as of April 30, 1999.
23
.1** --Consent of PricewaterhouseCoopers LLP.
.2** --Consent of Simpson Thacher & Bartlett (included in Exhibit 5).
24 --Powers of Attorney.
25** --Form T-1 Statement of Eligibility and Qualifications under
the Trust Indenture Act of The Chase Manhattan Bank.
- ----------
* Management contract or compensatory plan or arrangement.
** Filed herewith.
II-6
Exhibit 1
NIELSEN MEDIA RESEARCH, INC.
___% NOTES DUE _______, 20___
UNDERWRITING AGREEMENT
June ___, 1999
Morgan Stanley & Co. Incorporated,
Chase Securities Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Morgan Stanley & Co. Incorporated,
1585 Broadway,
New York, New York 10036.
Ladies and Gentlemen:
Nielsen Media Research, Inc., a Delaware corporation (the "Company", which
term shall exclude all businesses which became part of IMS HEALTH as a result of
the Distribution (as defined in the Prospectus referred to below)), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of
$150,000,000 principal amount of ___% Notes Due ______, 20___ (the
"Securities").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-59563) (the
"Initial Registration Statement") in respect of the Securities has been
filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein, to you for each of the other Underwriters,
have been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called a "Preliminary Prospectus"; the various parts of the
Initial Registration Statement and the Rule 462(b) Registration Statement,
if any, including all exhibits thereto but excluding Form T-1 and
including (i) the information contained in the form of final prospectus
<PAGE>
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the time
it was declared effective and (ii) the documents incorporated by reference
in the prospectus contained in the Initial Registration Statement at the
time such part of the Initial Registration Statement became effective,
each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; such final prospectus,
in the form first filed pursuant to Rule 424(b) under the Act, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
through Morgan Stanley & Co. Incorporated expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
-2-
<PAGE>
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through Morgan Stanley & Co. Incorporated
expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Morgan Stanley & Co. Incorporated expressly for use therein;
(e) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in or contemplated in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement);
(f) The Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as would not result in any material
adverse change in, or affecting, the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries (a "Material Adverse Effect") otherwise than
as set forth or contemplated in the Prospectus; and any real property and
buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases with such exceptions
as would not result in a Material Adverse Effect;
(g) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is
in good standing under the laws of each other jurisdiction in which
ownership or lease of properties or conduct of any business requires such
qualification except where the failure to be so qualified in any such
jurisdiction would not result in a Material Adverse Effect; and each
subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and
non-assessable; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued, are fully
-3-
<PAGE>
paid and non-assessable and (except for directors' qualifying shares) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(i) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement and duly authenticated by the Trustee
(as defined below), will have been duly executed, issued and delivered and
will constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the indenture to be dated as of June
__, 1999 (the "Indenture") between the Company and The Chase Manhattan
Bank, as Trustee (the "Trustee"), under which they are to be issued, which
will be substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified under
the Trust Indenture Act and when executed and delivered by the Company and
the Trustee, will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and the Securities and the Indenture will conform to
the descriptions thereof in the Prospectus in all material respects;
(j) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture and
this Agreement and the consummation of the transactions as contemplated by
the Prospectus and herein and therein contemplated will not conflict with
or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument 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, except to the extent such
would not have a Material Adverse Effect, nor will such action result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company; nor will such action result in any violation of
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except to the extent such action
would not have a Material Adverse Effect; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except the registration
under the Act of the Securities, such as have been obtained under the
Trust Indenture Act 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
Securities by the Underwriters, and except to the extent such would not
have a Material Adverse Effect;
(k) Neither the Company nor any of its subsidiaries is (i) in
violation of its Certificate of Incorporation or By-laws or (ii) in
default in the performance or observance of any material obligation,
covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound except to the
extent such default would not have a Material Adverse Effect;
-4-
<PAGE>
(l) The statements set forth in the Prospectus under the caption
"Description of Notes", insofar as they purport to constitute a summary of
the terms of the Securities, are accurate in all material respects;
(m) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which would reasonably be expected to
individually or in the aggregate have a material adverse effect on the
current or future financial position, shareholders' equity or results of
operations of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(n) The Company owns or possesses the right to use all patents,
trademarks, trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by it or
necessary for the conduct of its business, and other than as described in
the Prospectus, the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the Company with
respect to the foregoing. The Company's business has not, and as now
conducted and as proposed to be conducted by the Company, does not and
will not, infringe or conflict with in any material respect patents,
trademarks, service marks, trade names, copyrights, trade secrets,
licenses or other intellectual property or franchise rights of any person;
(o) The Company is not and, after giving effect to the offering and
sale of the Securities, will not be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(p) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes; and
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder.
2. Subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price of .....% of the principal amount thereof, plus accrued
interest, if any, from June __, 1999 to the Time of Delivery hereunder, the
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
3. Upon the authorization by you of the release of the Securities, the
several Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
-5-
<PAGE>
4. (a) The Securities to be purchased by each Underwriter hereunder will
be represented by one or more definitive global Securities in book-entry form
which will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Morgan Stanley & Co. Incorporated, for the account of each
Underwriter, against payment by or on behalf of such Underwriter of the purchase
price therefor by wire transfer of Federal (same-day) funds to the account
specified by the Company to Morgan Stanley Co. Incorporated at least forty-eight
hours in advance, by causing DTC to credit the Securities to the account of
Morgan Stanley & Co. Incorporated at DTC. The Company will cause the
certificates representing the Securities to be made available to Morgan Stanley
& Co. Incorporated for checking at least twenty-four hours prior to the Time of
Delivery (as defined below) at the office of DTC or its designated custodian
(the "Designated Office"). The time and date of such delivery and payment shall
be 9:30 a.m., New York City time, on June __, 1999 or such other time and date
as Morgan Stanley & Co. Incorporated and the Company may agree upon in writing.
Such time and date are herein called the "Time of Delivery".
(b) The documents to be delivered at the Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Underwriters
pursuant to Section 7(i) hereof, will be delivered at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004 (the "Closing Location"),
and the Securities will be delivered at the Designated Office, all at the Time
of Delivery. A meeting will be held at the Closing Location at 3:00 p.m., New
York City time, on the New York Business Day next preceding the Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York City are generally authorized or obligated by
law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form reasonably approved by you and to
file such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Registration Statement or Prospectus prior to
the Time of Delivery which shall be reasonably disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or
-6-
<PAGE>
threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration Statement or
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus or suspending any such qualification, to
promptly use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
in the opinion of counsel to the Underwriters at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Securities and if at such time any
event shall have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Prospectus or to file under
the Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act, the Exchange Act or the Trust Indenture Act, to
notify you and upon your request to file such document and to prepare and
furnish without charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance; and in case any Underwriter is required
in the opinion of counsel to the Underwriters to deliver a prospectus in
connection with sales of any of the Securities at any time nine months or more
after the time of issue of the Prospectus, upon your request but at the expense
of such Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the later of the Time of Delivery and such earlier time as you may
notify the Company, not to offer, sell, contract to sell or otherwise dispose
of, except as provided hereunder any securities of the Company that are
substantially similar to the Securities;
-7-
<PAGE>
(f) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, shareholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Registration Statement), to make available electronically to the holders
of the Securities consolidated summary financial information of the Company and
its subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
you (i) as soon as they are available, make available electronically copies of
any reports and financial statements furnished to or filed with the Commission
or any national securities exchange on which the Securities or any class of
securities of the Company is listed; and (ii) such additional publicly available
information concerning the business and financial condition of the Company as
you may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders generally
or to the Commission);
(h) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds"; and
(i) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, the Indenture, the Blue Sky and Legal
Investment Memoranda, closing documents (including any compilations thereof) and
any other documents in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) the filing fees incident to, and
the fees and disbursements of counsel for the Underwriters in connection with,
any required review by the National Association of Securities Dealers, Inc. of
the terms of the sale of the Securities; (vi) the cost of preparing the
Securities; (vii) the fees and expenses of the Trustee and any agent of the
Trustee and the fees and disbursements of counsel for the Trustee in connection
with the Indenture and the Securities; and
-8-
<PAGE>
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery,
true and correct, the condition that the Company shall have performed in all
material respects all of its obligations hereunder theretofore to be performed,
and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such written opinion and letter, dated the Time of Delivery,
with respect to the incorporation of the Company, the validity of the Indenture,
the Securities, the Registration Statement, the Prospectus and such other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Simpson Thacher & Bartlett, counsel for the Company, and Stephen J.
Boatti, Senior Vice President and Chief Legal Officer of the Company, shall have
furnished to you their written opinions (drafts of such opinions are attached as
Annex II(b) hereto), dated the Time of Delivery, in form and substance
reasonably satisfactory to you;
(d) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any
post-effective amendment to the Registration Statement filed subsequent to the
date of this Agreement and also at the Time of Delivery, PricewaterhouseCoopers
LLP shall have furnished to you a letter or letters, dated the respective dates
of delivery thereof, in form and substance satisfactory to you, to the effect
set forth in Annex I hereto (the executed copy of the letter delivered prior to
the execution of this Agreement is attached as Annex I(a) hereto and a draft of
the form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto");
(e) Subsequent to the execution and delivery of this Agreement and prior
to the Time of Delivery there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth or contemplated in the
-9-
<PAGE>
Prospectus (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement) that, in the judgment of the Representatives, is
material and adverse and that makes it, in the judgment of the Representatives,
impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus;
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities;
(g) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on any of the New York Stock Exchange, the American Stock Exchange or
the National Association of Securities Dealers, Inc.; (ii) a suspension or
material limitation in trading in the Company's securities on any exchange or in
any over-the-counter market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, if the effect of any such event specified in this Clause
(iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the Prospectus;
(h) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement; and
(i) The Company shall have furnished or caused to be furnished to you at
the Time of Delivery certificates of officers of the Company reasonably
satisfactory to you as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the performance by
the Company of all of its obligations hereunder to be performed at or prior to
such Time of Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are 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 will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
-10-
<PAGE>
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Underwriter through Morgan Stanley & Co. Incorporated expressly for use therein;
provided, further, that the foregoing indemnity agreement with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) (excluding documents
incorporated by reference therein) was not sent or given by or on behalf of such
Underwriter to such person, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Securities to such person,
and if the Prospectus (as so amended or supplemented) (excluding documents
incorporated by reference therein) would have cured the defect giving rise to
such losses, claims, damages or liabilities, unless such failure is the result
of noncompliance by the Company with Section 5(c) hereof.
(b) Each Underwriter will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are 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, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through Morgan Stanley & Co.
Incorporated expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not be
counsel to the indemnifying party in the event that the named parties to any
such action (including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them) and, after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of
-11-
<PAGE>
investigation. It is understood that the indemnifying party shall not, in
connection with any one action or proceeding or separate but substantially
similar actions or proceedings in the same jurisdiction arising out of the same
general allegations, be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all indemnified parties, except to
the extent that local counsel, in addition to its regular counsel, is required
in order to effectively defend against such action or proceeding. The
indemnifying party shall not be required to indemnify the indemnified party for
any amount paid or payable by the indemnified party in the settlement of any
proceeding entered into without the written consent of the indemnifying party,
which consent shall not be unreasonably withheld. No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection
-12-
<PAGE>
with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer of the Company who signs the Registration
Statement and to each director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company agrees to file promptly any amendments to the Registration Statement or
the Prospectus which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the principal
amount of Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Securities which such Underwriter agreed
to purchase hereunder) of the Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
-13-
<PAGE>
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Underwriters to purchase
Securities of a defaulting Underwriter or Underwriters, then this Agreement
shall thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or director or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Underwriter except as provided in Sections 6
and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Morgan Stanley & Co. Incorporated on behalf of you as
the representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Morgan Stanley &
Co. Incorporated at 1585 Broadway, New York, New York 10036, Attention:
Registration Department; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth in
the Registration Statement, Attention: Secretary; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and, to the extent provided in Sections 8 and
10 hereof, the officers and directors of
-14-
<PAGE>
the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
-15-
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Underwriters, this letter and such acceptance
hereof shall constitute a binding agreement between each of the Underwriters and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
NIELSEN MEDIA RESEARCH, INC.
By: ___________________________
Name:
Title:
Accepted as of the date hereof:
Morgan Stanley & Co. Incorporated
Chase Securities Inc.
BY: MORGAN STANLEY & CO. INCORPORATED
By: ________________________________
Name:
Title:
-16-
<PAGE>
SCHEDULE I
PRINCIPAL AMOUNT OF
SECURITIES TO BE
UNDERWRITER PURCHASED
----------- -------------------
Morgan Stanley & Co. Incorporated.......................... $
Chase Securities Inc........................................
Total................................................. $150,000,000
-17-
EXHIBIT 4.1
================================================================================
NIELSEN MEDIA RESEARCH, INC.
TO
THE CHASE MANHATTAN BANK
Trustee
--------------
Indenture
Dated as of .............., 1999
--------------
SENIOR DEBT SECURITIES
================================================================================
<PAGE>
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310
THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
- ---------------- -----------------
ss. 310(a)(1) .................................... 609
(a)(2) .................................... 609
(a)(3) .................................... Not Applicable
(a)(4) .................................... Not Applicable
(b) .................................... 608
610
ss. 311(a) .................................... 613
(b) .................................... 613
ss. 312(a) .................................... 701
702
(b) .................................... 702
(c) .................................... 702
ss. 313(a) .................................... 703
(b) .................................... 703
(c) .................................... 703
(d) .................................... 703
ss. 314(a) .................................... 704
(a)(4) .................................... 101
1004
(b) .................................... Not Applicable
(c)(1) .................................... 102
(c)(2) .................................... 102
(c)(3) .................................... Not Applicable
(d) .................................... Not Applicable
(e) .................................... 102
ss. 315(a) .................................... 601
(b) .................................... 602
(c) .................................... 601
(d) .................................... 601
(e) .................................... 514
ss. 316(a) .................................... 101
(a)(1)(A) .................................... 502
512
(a)(1)(B) .................................... 513
(a)(2) .................................... Not Applicable
(b) .................................... 508
(c) .................................... 104
ss. 317(a)(1) .................................... 503
(a)(2) .................................... 504
(b) .................................... 1003
ss. 318(a) .................................... 107
- -------------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
----------
PAGE
----
RECITALS OF THE COMPANY.......................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION ...........................1
SECTION 101. Definitions.....................................................1
Act...........................................................................2
Affiliate.....................................................................2
control.......................................................................2
Attributable Debt.............................................................2
Authenticating Agent..........................................................2
Board of Directors............................................................2
Board Resolution..............................................................2
Business Day..................................................................3
Commission....................................................................3
Company.......................................................................3
Company Request...............................................................3
Company Order.................................................................3
Consolidated Net Assets.......................................................3
Corporate Trust Office........................................................3
corporation...................................................................3
Covenant Defeasance...........................................................3
Defaulted Interest............................................................3
Defeasance....................................................................3
Depositary....................................................................3
Event of Default..............................................................3
Exchange Act..................................................................3
Expiration Date...............................................................4
Global Security...............................................................4
Holder........................................................................4
Indenture.....................................................................4
interest......................................................................4
Interest Payment Date.........................................................4
Investment Company Act........................................................4
Maturity......................................................................4
mortgages.....................................................................4
Notice of Default.............................................................4
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
PAGE
----
Officers' Certificate.........................................................4
Opinion of Counsel............................................................4
Original Issue Discount Security..............................................5
Outstanding...................................................................5
Paying Agent..................................................................6
Person........................................................................6
Place of Payment..............................................................6
Predecessor Security..........................................................6
Redemption Date...............................................................6
Redemption Price..............................................................6
Regular Record Date...........................................................6
Responsible Officer...........................................................6
Restricted Subsidiary.........................................................6
Sale and Lease-Back Transaction...............................................6
Securities....................................................................7
Securities Act................................................................7
Security Register and Security Registrar......................................7
Special Record Date...........................................................7
Stated Maturity...............................................................7
Subsidiary....................................................................7
Trust Indenture Act...........................................................7
Trustee.......................................................................7
U.S. Government Obligation....................................................7
Vice President................................................................7
SECTION 102. Compliance Certificates and Opinions............................8
SECTION 103. Form of Documents Delivered to Trustee..........................8
SECTION 104. Acts of Holders; Record Dates...................................9
SECTION 105. Notices, Etc., to Trustee and Company..........................11
SECTION 106. Notice to Holders; Waiver......................................11
SECTION 107. Conflict with Trust Indenture Act..............................12
SECTION 108. Effect of Headings and Table of Contents.......................12
SECTION 109. Successors and Assigns.........................................12
SECTION 110. Separability Clause............................................12
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
PAGE
----
SECTION 111. Benefits of Indenture..........................................12
SECTION 112. Governing Law..................................................12
SECTION 113. Legal Holidays.................................................13
ARTICLE TWO
SECURITY FORMS ............................13
SECTION 201. Forms Generally................................................13
SECTION 202. Form of Face of Security.......................................14
SECTION 203. Form of Reverse of Security....................................15
SECTION 204. Form of Legend for Global Securities...........................19
SECTION 205. Form of Trustee's Certificate of Authentication................20
ARTICLE THREE
THE SECURITIES .............................20
SECTION 301. Amount Unlimited; Issuable in Series...........................20
SECTION 302. Denominations..................................................23
SECTION 303. Execution, Authentication, Delivery and Dating.................23
SECTION 304. Temporary Securities...........................................24
SECTION 305. Registration, Registration of Transfer and Exchange............25
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities...............26
SECTION 307. Payment of Interest; Interest Rights Preserved.................27
SECTION 308. Persons Deemed Owners..........................................28
SECTION 309. Cancellation...................................................29
- --------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
PAGE
----
SECTION 310. Computation of Interest........................................29
ARTICLE FOUR
SATISFACTION AND DISCHARGE .........................29
SECTION 401. Satisfaction and Discharge of Indenture........................29
SECTION 402. Application of Trust Money.....................................30
ARTICLE FIVE
REMEDIES ..................................31
SECTION 501. Events of Default..............................................31
SECTION 502. Acceleration of Maturity; Rescission and Annulment.............32
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee ..................................................34
SECTION 504. Trustee May File Proofs of Claim ..............................34
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities ...............................................35
SECTION 506. Application of Money Collected.................................35
SECTION 507. Limitation on Suits............................................35
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest ........................................36
SECTION 509. Restoration of Rights and Remedies.............................36
SECTION 510. Rights and Remedies Cumulative.................................36
SECTION 511. Delay or Omission Not Waiver...................................37
SECTION 512. Control by Holders.............................................37
SECTION 513. Waiver of Past Defaults........................................37
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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SECTION 514. Undertaking for Costs..........................................38
SECTION 515. Waiver of Usury, Stay or Extension Laws........................38
ARTICLE SIX
THE TRUSTEE ...............................38
SECTION 601. Certain Duties and Responsibilities............................38
SECTION 602. Notice of Defaults.............................................39
SECTION 603. Certain Rights of Trustee......................................39
SECTION 604. Not Responsible for Recitals or Issuance of
Securities ..................................................40
SECTION 605. May Hold Securities............................................40
SECTION 606. Money Held in Trust............................................40
SECTION 607. Compensation and Reimbursement.................................41
SECTION 608. Conflicting Interests..........................................41
SECTION 609. Corporate Trustee Required; Eligibility........................41
SECTION 610. Resignation and Removal; Appointment of Successor..............42
SECTION 611. Acceptance of Appointment by Successor.........................43
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business .................................................44
SECTION 613. Preferential Collection of Claims Against Company..............45
SECTION 614. Appointment of Authenticating Agent............................45
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY ............47
SECTION 701. Company to Furnish Trustee Names and Addresses
of Holders ..................................................47
SECTION 702. Preservation of Information; Communications
to Holders ..................................................47
SECTION 703. Reports by Trustee.............................................47
SECTION 704. Reports by Company.............................................48
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ..........48
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms...........48
SECTION 802. Successor Substituted..........................................49
ARTICLE NINE
SUPPLEMENTAL INDENTURES .........................49
SECTION 901. Supplemental Indentures Without Consent of Holders.............49
SECTION 902. Supplemental Indentures With Consent of Holders................50
SECTION 903. Execution of Supplemental Indentures...........................51
SECTION 904. Effect of Supplemental Indentures..............................52
SECTION 905. Conformity with Trust Indenture Act............................52
SECTION 906. Reference in Securities to Supplemental Indentures.............52
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE TEN
COVENANTS ................................52
SECTION 1001. Payment of Principal, Premium and Interest....................52
SECTION 1002. Maintenance of Office or Agency...............................53
SECTION 1003. Money for Securities Payments to Be Held in Trust.............53
SECTION 1004. Statement by Officers as to Default...........................54
SECTION 1005. Existence.....................................................54
SECTION 1006. Limitation on Secured Debt....................................55
SECTION 1007. Limitation on Sale Lease-Back Transactions....................56
SECTION 1008. Waiver of Certain Covenants...................................57
ARTICLE ELEVEN
REDEMPTION OF SECURITIES ........................57
SECTION 1101. Applicability of Article......................................57
SECTION 1102. Election to Redeem; Notice to Trustee.........................57
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.............58
SECTION 1104. Notice of Redemption..........................................58
SECTION 1105. Deposit of Redemption Price...................................59
SECTION 1106. Securities Payable on Redemption Date.........................59
SECTION 1107. Securities Redeemed in Part...................................60
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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ARTICLE TWELVE
SINKING FUNDS ..............................60
SECTION 1201. Applicability of Article......................................60
SECTION 1202. Satisfaction of Sinking Fund Payments
with Securities .............................................60
SECTION 1203. Redemption of Securities for Sinking Fund.....................61
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE ...................61
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance ..................................................61
SECTION 1302. Defeasance and Discharge......................................61
SECTION 1303. Covenant Defeasance...........................................62
SECTION 1304. Conditions to Defeasance or Covenant Defeasance...............62
SECTION 1305. Deposited Money and U.S. Government Obligations
to Be Held in Trust; Miscellaneous Provisions ...............64
SECTION 1306. Reinstatement.................................................65
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
INDENTURE, dated as of ................, 1999, between Nielsen Media
Research, Inc., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
299 Park Avenue, New York, New York 10171, and The Chase Manhattan Bank, a
banking corporation duly organized and existing under the laws of the State of
New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted in the United States of America at the date of such
computation;
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(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" when used in connection with a Sale and Lease-Back
Transaction with respect to any series of Securities means, at the time of
determination, the lesser of: (a) the fair value of the property involved (as
determined in good faith by the Board of Directors of the Company); or (b) the
present value of the total net amount of rent required to be paid under such
lease during the remaining term thereof (including any renewal term or period
for which such lease has been extended), discounted at the rate of interest set
forth or implicit in the terms of such lease or, if not practicable to determine
such rate, the interest rate per annum borne by the Securities of such series
compounded semi-annually. For purposes of the foregoing definition, rent shall
not include amounts required to be paid by the lessee, whether or not designated
as rent or additional rent, on account of or contingent upon maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall be the lesser of the net amount determined
assuming termination upon the first date such lease may be terminated (in which
case the net amount shall also include the amount of the penalty, but no rent
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated) or the net amount determined
assuming no such termination.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Net Assets" means, at the time of determination, (i) the
aggregate amount of assets of the Company and its Subsidiaries at such time
minus (ii) the aggregate amount of current liabilities at such time, calculated
in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered, which
office on the date of the execution of this Indenture is located at 450 West
33rd Street, 15th Floor, New York, New York 10001.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
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<PAGE>
"Expiration Date" has the meaning specified in Section 104.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"mortgages" means a mortgage, security interest, pledge, lien, charge or
other encumbrance.
"Notice of Default" means a written notice of the kind specified in
Sections 501(4) and 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be reasonably acceptable to the Trustee.
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<PAGE>
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which the Trustee knows
to be so owned shall be so disregarded. Securities so owned which
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have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant vice president, any assistant secretary, any
assistant treasurer, any trust officer or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary organized and validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia or Canada or any province thereof.
"Sale and Lease-Back Transaction" means any arrangement with any person
providing for the leasing by the Company and/or any Restricted Subsidiary of any
property, which
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<PAGE>
property has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such person.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means (i) a corporation more than 50% of the voting stock of
which is owned by the Company and/or one or more Subsidiaries or (ii) any other
Person (other than a corporation) of which the Company and/or one or more
Subsidiaries has at least a majority ownership and power to direct the policies,
management and affairs.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 1304.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
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<PAGE>
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (except for certificates provided for in
Section 1004) shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matter in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise
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<PAGE>
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders of Securities of such series, provided that the Company may not set a
record date for, and the provisions of this
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paragraph shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not
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designated with respect to any record date set pursuant to this Section, the
party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Mr. Ron
Halleran, The Chase Manhattan Bank, Global Trust Services, 450 West 33rd
Street, New York, New York 10001, fax: (212) 946-8158, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
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In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such 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.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
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SECTION 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
NIELSEN MEDIA RESEARCH, INC.
............................................... CUSIP:
No. ........ $.....
Nielsen Media Research, Inc., a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ........................................, or
registered assigns, the principal sum of ......................................
Dollars on ........................................................ [if the
Security is to bear interest prior to Maturity, insert -- , and to pay interest
thereon from ............. or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on ............
and ............ in each year, commencing ........., at the rate of ....% per
annum, until the principal hereof is paid or made available for payment [if
applicable, insert -- , provided that any principal and premium, and any such
installment of interest, which is overdue shall bear interest at the rate of
...% per annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ....... or ....... (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ....% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. [Any such interest on overdue
principal or premium
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which is not paid on demand shall bear interest at the rate of ......% per annum
(to the extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is paid
or made available for payment. Interest on any overdue interest shall be payable
on demand.]]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in the City of New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts [if applicable, insert
- -- ; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further 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
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
NIELSEN MEDIA RESEARCH, INC.
By......................
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ............... (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert -- , limited in aggregate principal amount to $...........].
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the
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sinking fund for this series at a Redemption Price equal to 100% of the
principal amount, and (2)] at any time [if applicable, insert -- on or after
.........., 19..], as a whole or in part, at the election of the Company, at
the following Redemption Prices (expressed as percentages of the principal
amount): If redeemed [if applicable, insert -- on or before ...............,
...%, and if redeemed] during the 12-month period beginning ............. of the
years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
[if applicable, insert formula for calculating redemption prices in lieu of
table]
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ...........], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
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[if applicable, insert formula for calculating redemption prices in lieu of
table]
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than .....% per annum.]
[If applicable, insert -- The sinking fund for this series provides for the
redemption on ............ in each year beginning with the year ....... and
ending with the year ...... of [if applicable, insert -- not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than througH [if applicable,
insert -- mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required to
be made [if applicable, insert -- , in the inverse order in which they become
due].]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Security] [or] [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance with certain conditions set forth in the Indenture.]
[If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the
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effect provided in the Indenture. Such amount shall be equal to -- insert
formula for determining the amount. Upon payment (i) of the amount of principal
so declared due and payable and (ii) of interest on any overdue principal,
premium and interest (in each case to the extent that the payment of such
interest shall be legally enforceable), all of the Company's obligations in
respect of the payment of the principal of and premium and interest, if any, on
the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of each series to be affected. The Indenture
also contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this 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 any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the
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Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of [$1,000] and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Indenture and this Security shall be governed by and construed in
accordance with the law of the State of New York.
SECTION 204. Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form and/or any
other legend required by, or customary for, the Depositary:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
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SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
As Trustee
By....................
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the
series is payable;
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(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which any Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be
determined;
(11) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or the
Holder thereof, in one or more currencies or currency units other than that
or those in which such Securities are stated to be payable, the currency,
currencies or currency units in which the principal of or any premium or
interest on such Securities as to which such election is made shall be
payable, the periods within which and the terms and conditions upon which
such election is to be made and the amount so payable (or the manner in
which such amount shall be determined);
(13) if other than the entire principal amount thereof, the portion of
the principal amount of any Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 502;
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(14) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or
which shall be deemed to be Outstanding as of any date prior to the Stated
Maturity (or, in any such case, the manner in which such amount deemed to
be the principal amount shall be determined);
(15) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1302 or Section
1303 or both such Sections and, if other than by a Board Resolution, the
manner in which any election by the Company to defease such Securities
shall be evidenced;
(16) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and any
circumstances in addition to or in lieu of those set forth in Clause (2) of
the last paragraph of Section 305 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer
of such Global Security in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(17) any addition to or change in the Events of Default which applies
to any Securities of the series and any change in the right of the Trustee
or the requisite Holders of such Securities to declare the principal amount
thereof due and payable pursuant to Section 502;
(18) any addition to or change in the covenants set forth in Article
Ten which applies to Securities of the series; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
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SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant
to Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent
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transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
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temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
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If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (A) such Depositary (i) has notified
the Company that it is unwilling or unable to continue as Depositary for
such Global Security or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security or (C) there shall
exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by
Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depositary for such Global Security shall
direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same
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series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any 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 that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall
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forthwith cease to be payable to the Holder on the relevant Regular Record Date
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series 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, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be given to each Holder of Securities of such series in the manner set
forth in Section 106, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name
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such Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium and (subject to Section 307)
any interest on such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as
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provided in Section 306 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose money in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and any premium and interest to the date of
such deposit (in the case of Securities which have become due and payable)
or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money ha been deposited with the Trustee.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of series of Securities other than that
series), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with
respect to Securities of any series other than that series) having an
aggregate principal amount outstanding of at least $20 million, or under
any mortgage, indenture or instrument (including this Indenture) under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company having an aggregate
principal amount outstanding of at least $20 million, whether such
indebtedness now exists or shall hereafter be created, which default shall
have resulted in such indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 10 days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the
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Outstanding Securities of that series a written notice specifying such
default and requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled, as the
case may be, and stating that such notice is a "Notice of Default"
hereunder; provided, however, that, subject to the provisions of Sections
601 and 602, the Trustee shall not be deemed to have knowledge of such
default unless a Responsible Officer of the Trustee shall have received
written notice thereof from the Company, from any Holder, from the holder
of any such indebtedness or from the trustee under any such mortgage,
indenture or other instrument; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Section
501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by
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the terms thereof) to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal amount (or specified amount) shall become immediately
due and payable. If an Event of Default specified in Section 501(6) or 501(7)
with respect to Securities of any series at the time Outstanding occurs, the
principal amount of all the Securities of that series (or, if any Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof)
shall automatically, and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such
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proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now
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or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture;
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but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
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SECTION 602. Notice of Defaults.
The Trustee shall not be deemed to have actual knowledge of a default
(other than a default listed in Sections 501(1), (2) and (3)) until a
Responsible Officer of the Trustee receives written notice thereof.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that, except in the case of a default in the payment of the principal
of (or premium, if any) or interest on any Security of such series or in the
payment of any sinking fund installment with respect to Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of Securities of
such series; and provided, further, that in the case of any default of the
character specified in Section 501(4) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" mean any
event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to
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this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably deemed satisfactory by the Trustee against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
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SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as agreed to between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances (if any) incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith;
(3) to indemnify the Trustee (which shall include for purposes of this
Section 607 its officers, directors, employees and agents) for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the fees and expenses of counsel and the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder; and
(4) to pay the reasonable fees and expenses of Trustee's counsel no
later than 10 days after (i) the date of the execution of this Indenture
with respect to the preparation, negotiation, execution and delivery of
this Indenture and (ii) the date of the execution of any amendment or
supplement to this Indenture with respect thereto.
SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such, and has a combined
capital and surplus of at least $50,000,000. If any
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such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of its supervising or examining authority, then for the
purposes of this Section and to the extent permitted by the Trust Indenture Act,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee with respect to the Securities of any
series shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one or
more series by giving written notice thereof to the Company. If the instrument
of acceptance by a successor Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
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If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company of the
Holders of Securities and accepted appointment in the manner required by Section
611, subject to Section 514, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
The Company shall give notice of each resignation and each removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect to
all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
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In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such
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authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 305, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
Dated:
THE CHASE MANHATTAN BANK,
As Trustee
By........................,
As Authenticating Agent
By......................,
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than ............... and ..............
in each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders of Securities of each series as
of the preceding .............. or .............., as the case may be, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
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A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
30 days after the same is so required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease all or substantially all of its properties and assets
to any Person, unless:
(1) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, all or substantially all of the properties and assets of the
Company shall be a corporation, partnership or trust, shall be organized
and validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, the due and punctual payment
of the principal of and any premium and interest on all the Securities and
the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage which would not be permitted under Section
1006, the successor Person shall take such steps as
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shall be necessary effectively to secure the Securities equally and ratably
with (or prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of all or substantially
all of the properties and assets of the Company in accordance with Section 801,
the successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of
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less than all series of Securities, stating that such additional Events of
Default are expressly being included solely for the benefit of such
series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to secure the Securities pursuant to the requirements of Section
1006 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect; or
(10) to change or modify any of the provisions herein, provided that
any such changes or modifications shall not adversely affect the interests
of the Holders of Securities of any series created prior to the execution
of such supplemental indenture in any material respect.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of a majority in aggregate principal amount
of the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating
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any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the coin
or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1008, or the
deletion of this proviso, in accordance with the requirements of Sections
611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
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indenture is authorized or permitted by this Indenture and conforms to the
requirements of the Trust Indenture Act. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
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SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (1) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that
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series, upon the written request of the Trustee, forthwith pay to the Trustee
all sums held in trust by such Paying Agent for payment in respect of the
Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York, New York,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is
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no longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Limitation on Secured Debt.
The Company may not issue, incur, create, assume or guarantee, and may not
permit any Restricted Subsidiary to issue, incur, create, assume or guarantee,
any debt for borrowed money secured by a mortgage upon any assets of the Company
or any Restricted Subsidiary or upon any shares of stock or indebtedness of any
Restricted Subsidiary (whether such assets, shares or indebtedness are now
existing or owned or hereafter created or acquired) without in any such case
effectively providing concurrently with the issuance, incurrence, creation,
assumption or guarantee of any such secured debt, or the grant of a mortgage
with respect to any such indebtedness, that the Securities (together with, if
the Company shall so determine, any other indebtedness of or guaranteed by the
Company ranking equally with the Securities or any indebtedness of or guaranteed
by any Restricted Subsidiary, as the case may be) shall be secured equally and
ratably with (or, at the option of the Company, prior to) such secured debt. The
foregoing restriction, however, will not apply to any of the following:
(1) mortgages on property existing at the time of acquisition thereof
by the Company or any Subsidiary; or
(2) mortgages on property, shares of stock or indebtedness or other
assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary; or
(3) mortgages on property, shares of stock or indebtedness to secure
the payment of all or any part of the purchase price thereof, or mortgages
on property, shares of stock or indebtedness to secure any indebtedness for
borrowed money incurred prior to, at the time of, or within 180 days after,
the latest of the acquisition thereof, or, in the case of property, the
completion of construction, the completion of improvements, or the
commencement of substantial commercial operation of such property, for the
purpose of financing all or any part of the purchase price thereof, such
construction, or the making of such improvements; or
(4) mortgages to secure indebtedness owing to the Company or to a
Restricted Subsidiary; or
(5) mortgages existing at the date of the issuance of the Securities;
or
(6) mortgages on property of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease or other disposition of all or
substantially all of the properties of a corporation to the Company or a
Restricted Subsidiary; or
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(7) mortgages in favor of the United States or any State, territory or
possession thereof (or the District of Columbia) or Canada, or any
department, agency, instrumentality or political subdivision of the United
States or any State, territory or possession thereof (or the District of
Columbia) or Canada, to secure partial, progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred
for the purpose of financing all or any part of the purchase price or the
cost of constructing or improving the property subject to such mortgages;
or
(8) extensions, renewals, refinancings or replacements of any mortgage
referred to in the foregoing clauses (1), (2), (3), (5) and (6); provided,
however, that any mortgages permitted by any of the foregoing clauses (1),
(2), (3), (5) and (6) shall not extend to or cover any property of the
Company or such Restricted Subsidiary, as the case may be, other than the
property, if any, specified in such clauses and improvements thereto.
Notwithstanding the restrictions outlined in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to issue, incur, create,
assume or guarantee debt secured by a mortgage which would otherwise be subject
to such restrictions, without equally and ratably securing the Securities,
provided that after giving effect thereto, the sum of (i) all debt so secured by
mortgages (not including mortgages permitted under clauses (1) through (8)
above) and (ii) all Attributable Debt with respect to Sale and Lease-Back
Transactions, at the time of determination, does not exceed 10% of the
Consolidated Net Assets of the Company.
SECTION 1007. Limitation on Sale Lease-Back Transactions.
The Company may not, nor may any Restricted Subsidiary, enter into any Sale
and Lease-Back Transaction with respect to any property, other than any such
transaction involving a lease for a term of not more than three years or any
such transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, unless:
(1) the Company or such Restricted Subsidiary would be entitled to
incur indebtedness pursuant to any provision of Section 1006 secured by a
mortgage on the property involved in such transaction at least equal in
amount to the Attributable Debt with respect to such Sale and Lease-Back
Transaction without equally and ratably securing the Securities; or
(2) the Company shall apply an amount equal to the greater of the net
proceeds of such sale or the Attributable Debt with respect to such Sale
and Lease-Back Transaction within 180 days of such sale to either (or a
combination of) the retirement of debt for borrowed money (other than
mandatory scheduled principal payments) of the Company or a Restricted
Subsidiary that matures more than twelve months after the creation of such
indebtedness or the purchase, acquisition, construction or development of
property, plant and equipment, computer software or intangibles of the
Company or its Restricted Subsidiaries to be used in the business of the
Company or its Restricted Subsidiaries.
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SECTION 1008. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for Securities
of such series, the Company may, with respect to the Securities of any series,
omit in any particular instance to comply with any term, provision or condition
set forth in any covenant (other than Sections 1001, 1002 and 1003) provided for
the benefit of the Holders of such series, if before the time for such
compliance the Holders of a majority in aggregate principal amount of the
Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Securities) in accordance with
this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
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SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Security, whether such Security is to
be redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
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(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities is herein referred to as a "mandatory sinking fund payment", and
any payment in excess of such minimum amount provided for by the terms of such
Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 1202. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to
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the terms of such Securities as and to the extent provided for by the terms of
such Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than ten days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than ten days prior to each such sinking fund payment date,
the Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1103 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall be evidenced by a Board Resolution or
in another manner specified as contemplated by Section 301 for such Securities.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied
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(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (1) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities when payments
are due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts,
indemnities and immunities of the Trustee hereunder and (4) this Article.
Subject to compliance with this Article, the Company may exercise its option (if
any) to have this Section applied to any Securities notwithstanding the prior
exercise of its option (if any) to have Section 1303 applied to such Securities.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 801(3), Section
1006, Section 1007, Section 1008 and any covenants provided pursuant to Section
301(18), 901(2) or 901(7) for the benefit of the Holders of such Securities and
(2) the occurrence of any event specified in Sections 501(4) (with respect to
any of Section 801(3), Section 1006, Section 1007 and Section 1008 and any such
covenants provided pursuant to Section 301(18), 901(2) or 901(7)) and 501(8)
shall be deemed not to be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
501(4)) whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302 or
Section 1303 to any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security
-62-
<PAGE>
for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any U.S. Government Obligation
which is specified in Clause (x) above and held by such bank for the
account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, provided that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depositary receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (A)
the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there
has been a change in the applicable Federal income tax law, in either case
(A) or (B) to the effect that, and based thereon such opinion shall confirm
that, the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit, Defeasance and
discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.
-63-
<PAGE>
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(6) and
501(7), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to
-64-
<PAGE>
Section 1304 or the principal and interest received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company
-65-
<PAGE>
shall be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
-----------------------------
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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
NIELSEN MEDIA RESEARCH, INC.
By.....................
THE CHASE MANHATTAN BANK,
as Trustee
By.....................
-66-
EXHIBIT 5
[SIMPSON THACHER & BARTLETT LETTERHEAD]
June 14, 1999
Nielsen Media Research, Inc.
299 Park Avenue
New York, New York 10171
Ladies and Gentlemen:
We have acted as counsel to Nielsen Media Research, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 (File No. 333-59563) (the "Registration Statement") filed by the
Company with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, relating to the issuance by the Company of
$150,000,000 aggregate principal amount of the Notes (the "Securities"). The
Securities will be issued under an indenture (the "Indenture") between the
Company and The Chase Manhattan Bank, as Trustee.
We have examined the Registration Statement and the form of the Indenture,
which has been filed with the Commission as an exhibit to the Registration
Statement. We also have examined the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and have made such other and further investigations as we have deemed relevant
and necessary in connection with the opinions expressed herein. As to questions
of fact material to this opinion, we have relied upon certificates of public
officials and of officers and representatives of the Company.
<PAGE>
Nielsen Media Research, Inc. -2- June 14, 1999
In rendering the opinion set forth below, 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. We also have
assumed that at the time of execution, authentication, issuance and delivery of
the Securities, the Indenture will be the valid and legally binding obligation
of the Trustee. We have further assumed that at the time of execution,
authentication, issuance and delivery of the Securities, the Indenture will have
been duly authorized, executed and delivered by the Company.
Based upon the foregoing, and subject to the qualifications and limitations
stated herein, we are of the opinion that assuming (a) the taking of all
necessary corporate action to approve the issuance and terms of the Securities,
the terms of the offering thereof and related matters by the Board of Directors
of the Company, a duly constituted and acting committee of such Board or duly
authorized officers of the Company (such Board of Directors, committee or
authorized officers being hereinafter referred to as the "Board") and (b) the
due execution, authentication, issuance and delivery of the Securities, upon
payment of the consideration therefor provided for in the applicable definitive
purchase, underwriting or similar agreement approved by the Board and otherwise
in accordance with the provisions of the Indenture and such agreement, the
Securities will constitute
<PAGE>
Nielsen Media Research, Inc. -3- June 14, 1999
valid and legally binding obligations of the Company enforceable against the
Company in accordance with their terms.
Our opinion set forth above is subject to the effects of (i) 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.
We are members of the Bar of the State of New York, and we do not express
any opinion herein concerning any law other than the law of the State of New
York, the federal law of the United States and the Delaware General Corporation
Law.
We hereby consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement and to the use of our name under the caption "Validity of
the Notes" in the Prospectus included in the Registration Statement.
Very truly yours,
/s/ SIMPSON THACHER & BARTLETT
----------------------------------
Simpson Thacher & Bartlett
Exhibit 10.33
AMENDMENT AND RESTATEMENT dated as of June
14, 1999 (the "1999 Amendment and Restatement"), to
the 364-Day Credit Agreement dated as of June 15,
1998 (the "Credit Agreement"), among NIELSEN MEDIA
RESEARCH, INC., a Delaware corporation (the
"Borrower"), the Lenders referred to therein (each
individually a "Lender" and collectively the
"Lenders"), and THE CHASE MANHATTAN BANK, a New York
banking corporation, as agent for the Lenders (in
such capacity, the "Agent").
WHEREAS the Borrower, the Agent and the Lenders are
parties to the Credit Agreement; and
WHEREAS the parties hereto desire to amend and restate the
Credit Agreement on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, the Borrower, the Agent and the undersigned
Lenders hereby agree as follows:
SECTION 1. Construction. Capitalized terms used and not
otherwise defined herein or in the recitals hereto shall have the meanings
assigned to them in the Credit Agreement. All references to Section numbers in
this 1999 Amendment and Restatement shall, except as the context requires, be
references to the corresponding Sections of the Credit Agreement. On and after
the Restatement Effective Date (as hereinafter defined), each reference in the
Credit Agreement to "this Agreement", "hereunder", "herein", or words of like
import shall mean and be a reference to the Credit Agreement as amended and
restated hereby.
SECTION 2. Amendment and Restatement of Credit Agreement. The
Credit Agreement is hereby amended and restated in the form in which it is
currently in effect but with the following changes to the text thereof:
(a) The heading of the Credit Agreement is deleted and
replaced with the following:
"AMENDED AND RESTATED 200-DAY CREDIT AGREEMENT dated
as of June 14, 1999, among NIELSEN MEDIA RESEARCH, INC., the
Lenders party hereto and THE CHASE MANHATTAN BANK, as
Administrative Agent."
(b) The definition of "Applicable Rate" in Article I of the
Credit Agreement is deleted and replaced with the following:
"'Applicable Rate' means, for any day, with respect
to any Eurocurrency Revolving Loan, or with respect to the
facility fees payable hereunder, as the case may be, the
applicable rate per annum set forth below under the caption
"Eurocurrency Spread" or
<PAGE>
2
"Facility Fee Rate", as the case may be, based upon the
ratings by S&P and Moody's, respectively, applicable on such
date to the Index Debt:
Ratings Eurocurrency Facility
Category S&P/Moody's Spread Fee Rate
-------- ----------- ------ --------
1 >= A/A2 .300% .070%
2 A-/A3 .420% .080%
3 BBB+/Baa1 .550% .100%
4 BBB/Baa2 .625% .125%
5 BBB-/Baa3 .650% .150%
6 <= BB+/Ba1 or .780% .220%
unrated
For purposes of the foregoing, (i) if either S&P or Moody's
shall not have in effect a rating for index debt (other than
by reason of the circumstances referred to in the last
sentence of this definition) but the other rating agency shall
have such a rating in effect, then the Applicable Rate shall
be based upon the rating of such other rating agency; (ii) if
the ratings established or deemed to have been established by
S&P and Moody's for the Index Debt shall fall within different
Categories, the Applicable Rate shall be based on the higher
of the two ratings unless one of the two ratings is two or
more Categories lower than the other, in which case the
Applicable Rate shall be based upon the Category next above
that of the lower of the two ratings; and (iii) if the ratings
established or deemed to have been established by S&P and
Moody's shall be changed (other than as a result of a change
in the rating system of S&P or Moody's), such change shall be
effective as of the date on which it is first announced by the
applicable rating agency. Each change in the Applicable Rate
shall apply (other than as described in the immediately
succeeding sentence) during the period commencing on the
effective date of such change and ending on the date
immediately preceding the effective date of the next such
change. If the rating system of S&P or Moody's shall change,
or if either such rating agency shall cease to be in the
business of rating corporate debt obligations, the Borrower
and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending
the effectiveness of any such amendment, the Applicable Rate
shall be determined by reference to the rating most recently
in effect prior to such change or cessation.
<PAGE>
3
(c) The reference to "June 14, 1999" in the definition of
"Maturity Date" in Article I of the Credit Agreement is replaced with a
reference to "December 31, 1999".
(d) The reference to "$15,000,000" in Section 2.05(a)(i) of
the Credit Agreement is replaced with a reference to "$10,000,000".
(e) Section 2.20 of the Credit Agreement is deleted, as are
all references to Section 2.20 in other Sections of the Credit
Agreement.
(f) The references to "1997" and "1998" in Section 3.04 of the
Credit Agreement are replaced with references to "1998" and "1999",
respectively.
(g) Each reference in the Credit Agreement to "Coopers &
Lybrand L.L.P." is replaced with a reference to "PricewaterhouseCoopers
L.L.P."
(h) paragraphs (a), (b) and (c) of Section 9.01 of the Credit
Agreement are deleted and replaced with the following:
"(a) if to the Borrower, to it at 299 Park Avenue,
New York, NY 10171, Attention of Assistant Treasurer (Telecopy
No. (212) 708-7500), with a copy to the attention of the
General Counsel (Telecopy No. (212) 708-7500);
(b) if to the Administrative Agent, to The Chase
Manhattan Bank, Agent Bank Services Group, One Chase Manhattan
Plaza, 8th Floor, New York, New York 10081, Attention of Janet
Belden (Telecopy No. (212) 552-5658), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017,
Attention of Bruce Langenkamp (Telecopy No. (212) 270-1204);
(c) if to the Swingline Lender, to The Chase
Manhattan Bank, Agent Bank Services Group, One Chase Manhattan
Plaza, 8th Floor, New York, New York 10081, Attention of Janet
Belden (Telecopy No. (212) 552-5658), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017,
Attention of Bruce Langenkamp (Telecopy No. (212) 270-1204);
and"
(i) Schedule 2.01 to the Credit Agreement is replaced with
Schedule 2.01 hereto.
SECTION 3. By its execution and delivery hereof, the Borrower
represents and warrants:
(a) before and after giving effect to the amendments provided
for herein, (i) the representations and warranties contained in Article
III of the Credit Agreement, as amended by this 1999 Amendment and
Restatement, are true and correct on and as of the date hereof as
though made on and as of each such date, and (ii) no Default or Event
of Default has
<PAGE>
4
occurred and is continuing or would result from the execution
and delivery of this 1999 Amendment and Restatement; and
(b) the Borrower has all requisite corporate power and
authority to execute, deliver and perform this 1999 Amendment and
Restatement and the Credit Agreement as amended hereby, and such
execution, delivery and performance have been authorized by all
necessary corporate proceedings. This 1999 Amendment and Restatement
and the Credit Agreement as amended hereby constitute the legal, valid
and binding obligations of the Borrower enforceable in accordance with
their terms.
SECTION 4. This 1999 Amendment and Restatement shall become
effective as of the date hereof (the "Restatement Effective Date"); provided
that the Agent shall have received:
(i) counterparts of this 1999 Amendment and Restatement duly
and validly executed by the Borrower and each Lender;
(ii) evidence satisfactory to the Agent and its counsel of the
corporate power and authority of the Borrower to execute, deliver and
perform this 1999 Amendment and Restatement and the Credit Agreement as
amended hereby;
(iii) an opinion of Stephen J. Boatti, Associate General
Counsel of the Borrower, in form and substance satisfactory to the
Agent and its counsel; and
(v) all fees and other amounts due and payable under the
Credit Agreement or in connection with this 1999 Amendment and
Restatement on or prior to the Restatement Effective Date.
Immediately prior to or concurrently with such effectiveness, the Borrower shall
repay all Loans outstanding under the Credit Agreement, subject to the
Borrower's right to reborrow all or a portion of such amounts upon or at any
time after such effectiveness (pursuant to a Borrowing Request delivered before,
on or after the date of such effectiveness) in accordance with the provisions of
the Credit Agreement as amended hereby (and if such prepayment and reborrowing
occur on the same date, the Borrower will pay to each Lender, or such Lender
will pay to the Borrower, as the case may be, only the net amount by which such
Lender's outstanding Loans shall have been decreased or increased,
respectively).
SECTION 5. The Borrower agrees to pay on demand all reasonable
costs and expenses of the Agent in connection with the preparation, execution
and delivery of this 1999 Amendment and Restatement (including, without
limitation, the reasonable fees, charges and disbursements of counsel for the
Agent).
SECTION 6. THIS 1999 AMENDMENT AND RESTATEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AND SHALL BE BINDING UPON THE BORROWER, THE AGENT AND THE LENDERS AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS.
<PAGE>
5
SECTION 7. This 1999 Amendment and Restatement may be executed
in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of a signature page of this
1999 Amendment and Restatement by telecopy shall be as effective as delivery of
a manually executed counterpart of this 1999 Amendment and Restatement.
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this 1999 Amendment and Restatement as
of the day and year first above written.
NIELSEN MEDIA RESEARCH, INC.,
by___________________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as
Administrative Agent,
by___________________________________
Name:
Title:
BANKBOSTON, N.A.,
by___________________________________
Name:
Title:
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK
BRANCH
by___________________________________
Name:
Title:
<PAGE>
6
HARRIS TRUST AND SAVINGS BANK,
by___________________________________
Name:
Title:
NORTHERN TRUST BANK,
by___________________________________
Name:
Title:
SUNTRUST BANK, ATLANTA,
by___________________________________
Name:
Title:
<PAGE>
EXHIBIT A
SCHEDULE 2.01
Commitments
Lenders Commitment
------- ----------
The Chase Manhattan Bank $ 50,000,000
BankBoston, N.A. $ 40,000,000
Rabobank $ 30,000,000
Harris Trust and Savings Bank $ 10,000,000
Northern Trust Bank $ 10,000,000
Sun Trust Bank, Atlanta $ 10,000,000
------------
Total $150,000,000
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 27, 1999 relating to the
financial statements, which appears in the 1998 Annual Report to Shareholders of
Nielsen Media Research, Inc., which is incorporated by reference in the Annual
Report on Form 10-K of Nielsen Media Research, Inc. for the year ended December
31, 1998. We also consent to the incorporation by reference of our report dated
January 27, 1999, relating to the financial statement schedule, which appears in
such Annual Report on Form 10-K. We also consent to the reference to us under
the heading "Experts" in this Registration Statement.
PricewaterhouseCoopers LLP
New York, New York
June 14, 1999
EXHIBIT 25
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
----------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------
THE CHASE MANHATTAN BANK
---------------------------------------------------
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
----------------------- -------------------
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
---------------------------------------------------------
(Name, address and telephone number of agent for service)
NIELSEN MEDIA RESEARCH, INC.
---------------------------------------------------
(Exact name of obligor as specified in its charter)
DELAWARE 06-1450569
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
299 PARK AVENUE
NEW YORK, NEW YORK 10171
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
DEBT SECURITIES
-----------------------------------
(Title of the indenture securities)
================================================================================
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
- 2 -
<PAGE>
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of Eligibility.
1. A copy of the Articles of Association of the Trustee as now in effect,
including the Organization Certificate and the Certificates of Amendment dated
February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being contained
in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act (see
Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, The Chase Manhattan Bank, a corporation organized and existing under
the laws of the State of New York, has duly caused this statement of eligibility
to be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York, on the 25TH day of MAY, 1999.
THE CHASE MANHATTAN BANK
By: /s/ RONALD J. HALLERAN
----------------------------------
Ronald J. Halleran
Assistant Vice President
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<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business
December 31, 1998, in accordance with a
call made by the Federal Reserve Bank of
this District pursuant to the provisions
of the Federal Reserve Act.
DOLLAR AMOUNTS
ASSETS IN MILLIONS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................. $ 13,915
Interest-bearing balances .......................... 7,805
Securities:
Held to maturity securities .............................. 1,429
Available for sale securities ............................ 56,327
Federal funds sold and securities purchased under
agreements to resell ............................... 21,733
Loans and lease financing receivables:
Loans and leases, net of unearned income $131,095
Less: Allowance for loan and lease losses .. 2,711
Less: Allocated transfer risk reserve ...... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ............................. 128,384
Trading Assets ........................................... 48,949
Premises and fixed assets (including capitalized
leases) ............................................ 3,095
Other real estate owned .................................. 239
Investments in unconsolidated subsidiaries and
associated companies ............................... 199
Customers' liability to this bank on acceptances
outstanding ........................................ 1,209
Intangible assets ........................................ 2,081
Other assets ............................................. 11,352
--------
TOTAL ASSETS ............................................. $296,717
========
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<PAGE>
LIABILITIES
Deposits
In domestic offices ............................... $105,879
Noninterest-bearing ........................39,175
Interest-bearing ...........................66,704
------
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ............................ 79,294
Noninterest-bearing .........................4,082
Interest-bearing ...........................75,212
Federal funds purchased and securities sold under agree-
ments to repurchase ..................................... 32,546
Demand notes issued to the U.S. Treasury ................ 629
Trading liabilities ..................................... 36,807
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less ..... 4,478
With a remaining maturity of more than one year
through three years ........................ 213
With a remaining maturity of more than three years 115
Bank's liability on acceptances executed and outstanding 1,209
Subordinated notes and debentures ....................... 5,408
Other liabilities ....................................... 10,855
TOTAL LIABILITIES ....................................... 277,433
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........... 0
Common stock ............................................ 1,211
Surplus (exclude all surplus related to preferred stock) 11,016
Undivided profits and capital reserves .................. 6,762
Net unrealized holding gains (losses)
on available-for-sale securities ........................ 279
Cumulative foreign currency translation adjustments ..... 16
TOTAL EQUITY CAPITAL .................................... 19,284
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................... $296,717
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
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