-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CYLdGt70+eXbso44L6odI+HyjpfKDuAggCjGmM3CKqEwBEXeYei7Bi3kAobeZUc3 C0AcjvDy+uqOYR3SwGJrgQ== 0001047469-99-006824.txt : 19990223 0001047469-99-006824.hdr.sgml : 19990223 ACCESSION NUMBER: 0001047469-99-006824 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19990222 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER SCIENCES CORP CENTRAL INDEX KEY: 0000023082 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 952043126 STATE OF INCORPORATION: NV FISCAL YEAR END: 0328 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-72673 FILM NUMBER: 99547131 BUSINESS ADDRESS: STREET 1: 2100 E GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3106150311 MAIL ADDRESS: STREET 1: 2100 EAST GRAND AVE CITY: EL SEGUNDO STATE: CA ZIP: 90245 S-3/A 1 S-3/A AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 22, 1999 REGISTRATION NO. 333-72673 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- COMPUTER SCIENCES CORPORATION (Exact name of registrant as specified in its charter) NEVADA 95-2043126 (State or other (I.R.S. Employer Identification jurisdiction of Number) incorporation or organization)
2100 EAST GRAND AVENUE EL SEGUNDO, CALIFORNIA 90245 (310) 615-0311 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) -------------------------- HAYWARD D. FISK, ESQ. VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY COMPUTER SCIENCES CORPORATION 2100 EAST GRAND AVENUE EL SEGUNDO, CALIFORNIA 90245 (310) 615-0311 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------------- WITH COPIES TO: RONALD S. BEARD, ESQ. EVA HERBST DAVIS, ESQ. BRADFORD P. WEIRICK, ESQ. LATHAM & WATKINS GIBSON, DUNN & CRUTCHER LLP 633 W. 5TH STREET, SUITE 4000 333 S. GRAND AVENUE LOS ANGELES, CA 90071 LOS ANGELES, CA 90071-3197 (213) 485-1234 (213) 229-7000 -------------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE 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. / / -------------------------- CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF AMOUNT TO AGGREGATE PRICE AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE Notes....................................... $200,000,000 100% $200,000,000 $55,600
(1) Estimated solely for the purpose of calculating the registration fee. -------------------------- 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, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SUBJECT TO COMPLETION, DATED FEBRUARY 22, 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 WE ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. PROSPECTUS [LOGO] $200,000,000 % NOTES DUE , 2009 Interest payable and ISSUE PRICE: The notes will mature on , 2009. Interest will accrue from , 1999. We may redeem the notes in whole or part at any time at the redemption price described on page 11. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. - --------------------------------------------------------------------------------
PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC COMMISSIONS THE COMPANY - -------------------------------------------------------------------------------------------- Per note % % % - -------------------------------------------------------------------------------------------- Total $ $ $ - --------------------------------------------------------------------------------------------
The notes will not be listed on any national securities exchange. Currently, there is no public market for the notes. It is expected that delivery of the notes will be made to investors on or about , 1999. J.P. MORGAN & CO. GOLDMAN, SACHS & CO. MERRILL LYNCH & CO. , 1999 No person is authorized to give any information or to make any representations other than those contained or incorporated by reference in this prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the securities described in this prospectus or an offer to sell or the solicitation of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of this prospectus, nor any sale made hereunder, shall, under any circumstances, create any implication that there has been no change in our affairs since the date hereof or that the information contained or incorporated by reference herein is correct as of any time subsequent to the date of such information. TABLE OF CONTENTS
PAGE ----- Where You Can Find More Information........................................................................ 3 Forward-Looking Statements................................................................................. 4 The Company................................................................................................ 5 Recent Developments........................................................................................ 7 Use of Proceeds............................................................................................ 7 Capitalization............................................................................................. 8 Selected Financial Data.................................................................................... 9 Description of the Notes................................................................................... 11 Underwriting............................................................................................... 20 Legal Matters.............................................................................................. 21 Experts.................................................................................................... 21
WITHIN THIS PROSPECTUS, WE SOMETIMES REFER TO YEARS WITHOUT SPECIFYING A MONTH OR DAY. IN ALL SUCH CASES, UNLESS WE SPECIFICALLY REFER TO A CALENDAR YEAR, THE REFERENCE IS TO OUR FISCAL YEAR ENDED ON THE FRIDAY CLOSEST TO MARCH 31 OF SUCH YEAR. WHENEVER WE REFER TO THE "COMPANY" OR TO "US," OR USE THE TERMS "WE" OR "OUR" IN THIS PROSPECTUS, WE ARE REFERRING TO COMPUTER SCIENCES CORPORATION AND ITS SUBSIDIARIES. HOWEVER, FOR PURPOSES OF THE SECTION ENTITLED "DESCRIPTION OF THE NOTES," WHENEVER WE REFER TO THE "COMPANY" OR TO "US," OR USE THE TERMS "WE" OR "OUR," WE ARE REFERRING ONLY TO COMPUTER SCIENCES CORPORATION. 2 WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (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. Please call the SEC at 1-800-732-0330 for further information on the public reference rooms. You may also obtain copies of these materials from the public reference section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Our SEC filings are also available to the public from the SEC's web site at http://www.sec.gov. You may also read and copy reports and other information we file at the office of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. Information about our company is also available to the public from our website at http://www.csc.com. We have filed a registration statement on Form S-3 with the SEC under the Securities Act of 1933, as amended. This prospectus does not contain all of the information set forth in the registration statement. You should read the registration statement for further information about us and the notes. You may inspect the registration statement and its exhibits without charge at the office of the SEC at 450 Fifth Street, N.W., in Washington, D.C. 20549, and you may obtain copies from the SEC at prescribed rates. The SEC allows us to "incorporate by reference" the information that we file with them, 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. The information filed by us with the SEC in the future will update and supersede this information. We incorporate by reference the documents listed below and any future filings made by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until we sell all the notes: 1. Our Annual Report on Form 10-K for the fiscal year ended April 3, 1998; 2. Our Quarterly Report on Form 10-Q for the quarterly period ended July 3, 1998; 3. Our Quarterly Report on Form 10-Q for the quarterly period ended October 2, 1998; and 4. Our Quarterly Report on Form 10-Q for the quarterly period ended January 1, 1999. You may request a copy of these filings, at no cost, by writing or calling us at the following address or telephone number: Investor Relations Computer Sciences Corporation 2100 East Grand Avenue El Segundo, California 90245 (310) 615-0311 3 FORWARD-LOOKING STATEMENTS This prospectus contains or incorporates by reference statements that do not directly or exclusively relate to historical facts. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You can typically identify forward-looking statements by the use of forward-looking words, such as "may," "will," "could," "project," "believe," "anticipate," "expect," "estimate," "continue," "potential," "plan," "forecasts," and the like. These statements represent our intentions, plans, expectations and beliefs and are subject to risks, uncertainties and other factors. Many of these factors are outside our control and could cause actual results to differ materially from such forward-looking statements. These factors include, among others: - general economic conditions in countries in which we do business - competitive pressures - changes in the financial condition of our major commercial customers - changes in the demand for information technology outsourcing and business process outsourcing - changes in U.S. federal government spending levels for information technology services - the future profitability of our customer contracts - our ability to consummate strategic acquisitions and alliances - our ability to attract and retain key personnel - our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends - our ability to become Year 2000 ready and the ability of our customers and suppliers to become Year 2000 ready 4 THE COMPANY GENERAL We are one of the world leaders in the information technology ("IT") services industry. For forty years, we have helped our clients use IT more efficiently, thus improving their operations and profitability. We do not have exclusive agreements with hardware or software providers, and we believe that our "vendor neutrality" enables us to better identify and manage solutions specifically tailored to each client's needs. We offer a broad array of professional services to industry and government, including: - OUTSOURCING--Operating all or a portion of a client's technology infrastructure, including systems analysis, applications development, network operations, desktop computing and data center management - SYSTEMS INTEGRATION--Designing, developing, implementing and integrating complete information systems - CONSULTING--Advising clients on the acquisition and strategic use of IT, and on business strategy, operations, change management and business process reengineering For the fiscal year ended April 3, 1998, we had revenues of $6.6 billion and net income of $260 million. For the first nine months of fiscal 1999, we had revenues of $5.5 billion and net income of $224 million. We derive our revenues from four market sectors:
1998 1997 1996 ----- ----- ----- U.S. Commercial.......................................................... 42% 39% 37% U.S. Federal Government.................................................. 25 29 33 Europe................................................................... 27 26 24 Other International...................................................... 6 6 6 --- --- --- Total Revenues......................................................... 100% 100% 100% --- --- --- --- --- ---
We provide services to commercial clients in a number of industries, including the following: - aerospace - automotive - chemical, oil and gas - consumer goods - energy - financial services - healthcare - manufacturing - media - retail/distribution - telecommunications - traffic and transportation - travel and hospitality - utilities 5 Because of the size of our service offerings within the financial services, healthcare and chemical, oil and gas industries, we have established vertical groups to deliver integrated solutions to our clients in these industries. We have also formed practice groups dedicated to advancing key technical solutions with broad application to both our commercial and governmental clients. These solutions include: - CSC LYNX-SM---CSC Lynx provides a framework that enables our clients to rapidly develop component-based systems. Distributed IT systems allow people to access information more quickly and process business transactions via the Internet. With CSC Lynx, we have developed a framework that not only includes components, but also an architecture, a process and tools for creating these systems quickly. - DATA WAREHOUSING--Data warehousing allows our clients to collect, store and organize their data from information systems throughout their organizations in a central repository. Data warehousing enables our customers to undertake complex analysis and decision making based on historical enterprise data. Our customers are able to "test drive" solutions in our data warehouse applications lab, which illustrates potential frameworks based on successful warehouses we have developed for various industries. - ELECTRONIC COMMERCE--Our global initiative for developing and delivering electronic commerce solutions is called CSC e~Wave-SM-. CSC e~Wave leverages Internet technology to deliver digital solutions for transacting business on the Internet. - ENTERPRISE RESOURCE PLANNING ("ERP")--ERP products are enterprise-wide applications that can integrate disparate business functions, such as finance, manufacturing and human resources, into one cohesive system. ERP products make data easier to find, update and analyze. We have global alliances with four software companies which comprise approximately 70% of the ERP market, and have developed a customized methodology to implement ERP systems more quickly. - INFORMATION SECURITY (INFOSEC-SM-)--Our INFOSEC practice develops and tests new world-class solutions to information security problems for both government and commercial clients. We developed our INFOSEC capabilities through our security contracts with the Department of Defense and other U.S. federal agencies. - SUPPLY CHAIN MANAGEMENT--Our supply chain management process captures efficiencies throughout the business and logistics functions that move goods and information between an organization and its suppliers, manufacturers, distributors and customers. We designed this process to provide greater value, quicker time to market and reduced costs to our clients. - YEAR 2000 COMPLIANCE--Our Year 2000 compliance practice focuses on providing solutions to enable computers to function effectively when processing dates after 1999. Computer programs with two-digit, rather than four-digit, date fields are unable to recognize the difference between dates beginning 19XX and dates beginning 20XX. This inability may cause computer systems to make errors or fail. Our Year 2000 compliance practice targets issues and methodologies addressing all aspects of Year 2000 compliance. We have approximately 47,000 employees, and operate from over 700 offices in 32 countries. The Company is incorporated under the laws of Nevada. Our principal executive offices are located at 2100 East Grand Avenue, El Segundo, California 90245, and our telephone number is (310) 615-0311. - ------------------------ INFOSEC-SM- is a registered service mark of the National Security Agency. 6 RECENT DEVELOPMENTS RECENT CONTRACT AWARDS In December 1998, the Internal Revenue Service selected the CSC PRIME Alliance to enter into a strategic partnership with the IRS to modernize the United States tax system. We lead the CSC PRIME Alliance, which includes six other companies: International Business Machines Corporation, KPMG Peat Marwick LLP, Lucent Technologies Inc., Northrop Grumman Corporation, Science Applications International Corporation and UNISYS Corporation. The CSC PRIME Alliance combines our global capabilities with the specialized business, technical and consulting capabilities of the other alliance members. In January 1999, the United States General Service Administration selected us as one of ten companies to provide IT services and support for the Federal Technology Service, Federal Information Systems Support program under an indefinite delivery/indefinite quantity contract. Under an indefinite delivery/ indefinite quantity contract, a group of service providers is selected to provide as yet unspecified services to a U.S. federal agency or department, which then assigns each required project within the specified scope of work to one of the service providers within the selected group. Our contract calls for the ten selected companies to provide services and support for a two-year base period, with eight one-year extension options. In January 1999, Budget Group, Inc., the parent of Budget Rent a Car Corporation, announced that it had signed a letter of intent with us to enter into a five-year global IT outsourcing agreement. Budget expects the agreement to be finalized in March 1999. In January 1999, AT&T Corp. hired us to manage a portfolio of approximately 50 systems applications that support AT&T consumer services, including software systems for telemarketing and customer support, provisioning and provisioning support, and sales and marketing compensation and commissions. The contract becomes effective in March 1999. In February 1999, the United States Postal Service awarded us a professional services ordering agreement to support the development and implementation of enterprise-wide IT solutions for its payroll function. RECENT ACQUISITIONS We have recently acquired several international IT services companies. - In the quarter ended January 1, 1999, we acquired KPMG Peat Marwick SA, a Paris-based management consulting and IT services firm. When we combine the firm with our existing operations in France, the combined organization will employ approximately 1,100 professionals. - In the quarter ended January 1, 1999, we acquired SYS-AID, a Dutch management consulting and IT services company. SYS-AID employs more than 200 professionals at its operations in the Netherlands and at subsidiaries in Germany and Belgium. - During January 1999, we launched a tender offer to acquire all shares of CSA Holdings Ltd, a publicly traded Singaporean IT services company which employs approximately 2,000 people. As of February 9, 1999, we had purchased or received irrevocable tenders of approximately 51% of the outstanding shares, including the 10% owned by the management of CSA Holdings. The tender offer will remain open for acceptance until March 5, 1999, at which time we will purchase all shares tendered. USE OF PROCEEDS We intend to use the net proceeds from the sale of the notes to repay the $150,000,000 principal amount and approximately $5,100,000 of accrued interest on the 6.80% Guaranteed Notes due April 15, 1999 issued by CSC Enterprises and guaranteed by the Company. We intend to use the remainder of the net proceeds, approximately $ , for general corporate purposes, including, without limitation, capital requirements incurred in connection with the acquisition of CSA Holdings, Ltd. 7 CAPITALIZATION The following table summarizes our debt and stockholders' equity (referred to as "capitalization") as of January 1, 1999: (1) on a historical basis and (2) as adjusted to reflect the sale by the Company of the notes and the application of the estimated net proceeds as described under "Use of Proceeds." You should read this table in conjunction with the consolidated financial statements and related notes of the Company included in our Annual Report on Form 10-K for the fiscal year ended April 3, 1998 and our Quarterly Report on Form 10-Q for the quarterly period ended January 1, 1999, both of which are incorporated herein by reference.
AS OF JANUARY 1, 1999 -------------------------- ACTUAL AS ADJUSTED ------------ ------------ (IN THOUSANDS OF DOLLARS) CURRENT DEBT: Commercial paper.................................................................... $ 424,220 $ 424,220 Notes payable....................................................................... 34,487 34,487 6.80% Guaranteed Notes due April 15, 1999........................................... 150,000 Current maturities of long-term debt................................................ 9,719 9,719 Current maturities of capitalized lease liabilities................................. 8,762 8,762 ------------ ------------ Total current debt................................................................ 627,188 477,188 ------------ ------------ LONG-TERM DEBT: 6.50% Guaranteed Notes, due November 15, 2001....................................... 150,000 150,000 % Notes, due , 2009........................................................ 200,000 Other notes payable................................................................. 42,389 42,389 Capitalized lease liabilities....................................................... 6,224 6,224 ------------ ------------ Total long-term debt.............................................................. 198,613 398,613 ------------ ------------ STOCKHOLDERS' EQUITY: Preferred stock, par value $1 per share; authorized 1,000,000 shares; none issued... Common stock, par value $1 per share; authorized 275,000,000 shares; 159,074,144 shares issued..................................................................... 159,074 159,074 Additional paid-in capital.......................................................... 720,067 720,067 Earnings retained for use in business............................................... 1,461,368 1,461,368 Accumulated other comprehensive income.............................................. (25,652) (25,652) ------------ ------------ 2,314,857 2,314,857 Less common stock in treasury, at cost, 367,050 shares................................ (14,250) (14,250) Unearned restricted stock and other................................................... (455) (455) ------------ ------------ Stockholders' equity, net......................................................... 2,300,152 2,300,152 ------------ ------------ Total capitalization.............................................................. $ 3,125,953 $ 3,175,953 ------------ ------------ ------------ ------------
8 SELECTED FINANCIAL DATA The selected consolidated financial data below has been derived from our audited consolidated financial statements, except for the financial data for the nine months ended January 1, 1999 and December 26, 1997 which are derived from our unaudited consolidated financial statements. You should read the financial data presented below in conjunction with the consolidated financial statements and accompanying notes of the Company which are included in our Annual Report on Form 10-K for the fiscal year ended April 3, 1998 and our Quarterly Report on Form 10-Q for the quarterly period ended January 1, 1999, both of which are incorporated herein by reference. The Company's consolidated financial statements for the fiscal year ended March 29, 1996 were restated to include consolidated financial data of the Company and The Continuum Company, Inc. ("Continuum") on a pooled basis to give retroactive effect to the merger of the Company and Continuum on August 1, 1996. The unaudited consolidated financial statements for the nine months ended January 1, 1999 and December 26, 1997 include all normal recurring adjustments we consider necessary for a fair presentation of the consolidated financial data. The "Other Data" are unaudited.
NINE MONTHS ENDED FISCAL YEARS ENDED -------------------------- -------------------------------------------- JANUARY 1, DECEMBER 26, APRIL 3, MARCH 28, MARCH 29, 1999 1997 1998 1997 1996 ------------ ------------ ------------ ------------ ------------ (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS, RATIOS AND PERCENTAGES) STATEMENT OF EARNINGS INFORMATION: Revenues................................ $ 5,529,587 $4,731,666 $ 6,600,838 $ 5,616,048 $ 4,740,760 ------------ ------------ ------------ ------------ ------------ Cost of services........................ 4,329,380 3,704,273 5,149,218 4,413,173 3,692,267 Selling, general and administrative..... 515,344 432,317 602,708 485,113 471,309 Depreciation and amortization........... 322,536 283,312 386,854 333,247 272,058 Interest expense........................ 35,499 37,593 50,951 40,268 37,925 Interest income......................... (9,572) (5,595) (8,855) (7,995) (5,782) Special charges (1)..................... 208,393 229,093 48,929 76,053 ------------ ------------ ------------ ------------ ------------ Total costs and expenses................ 5,193,187 4,660,293 6,409,969 5,312,735 4,543,830 ------------ ------------ ------------ ------------ ------------ Income before taxes..................... 336,400 71,373 190,869 303,313 196,930 Taxes on income......................... 112,000 (108,900)(1) (69,500)(1) 110,900 87,499 ------------ ------------ ------------ ------------ ------------ Net income.............................. $ 224,400 $ 180,273 $ 260,369 $ 192,413 $ 109,431 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ Earnings per share Basic................................. $ 1.42 $ 1.17 $ 1.68 $ 1.27 $ 0.74 Diluted............................... 1.39 1.14 1.64 1.23 0.71 OTHER DATA: Capital expenditures.................... 304,925 236,397 349,316 322,434 275,841 Ratio of earnings to fixed charges (2)................................... 4.92x 1.86x 2.70x 4.21x 3.26x Debt as a percentage of total capitalization........................ 26.4% 28.9% 27.7% 28.4% 26.2% BALANCE SHEET INFORMATION: Cash and cash equivalents............... $ 167,967 $ 94,008 $ 274,688 $ 110,726 $ 113,873 Working capital......................... 318,475 700,892 767,820 533,915 430,484 Total assets............................ 4,586,060 4,002,626 4,046,795 3,493,087 2,936,019 Total debt.............................. 825,801 775,647 764,975 660,775 504,973 Stockholders' equity.................... 2,300,152 1,904,435 2,001,275 1,669,560 1,420,113
FOOTNOTES TO APPEAR ON FOLLOWING PAGE. 9 FOOTNOTES TO TABLE FROM PREVIOUS PAGE. (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) - ------------------------ (1) We recognized a net special credit of $1,707 or 1 cent per share, during the first quarter of fiscal year 1998 because of developments at CSC Enterprises, a general partnership of which we, through an affiliate, are the managing general partner. A tax benefit of $135,000 and an after-tax special charge of $133,293 ($208,393 before tax) caused the net special credit. During the first quarter of fiscal year 1998, certain partners withdrew from CSC Enterprises. As a result of these withdrawals, CSC Enterprises took actions that caused us to recognize an increase in the tax basis of certain assets. As required by Statement of Financial Accounting Standards ("SFAS") No. 109, this tax basis increase from the previous tax basis resulted in a deferred tax asset of $135,000 and a corresponding reduction of our provision for income taxes. The tax basis increase is temporary and will be realized over time through an increase in depreciation and amortization expense for income tax purposes. In connection with these developments, CSC Enterprises reviewed its operations, its market opportunities and the carrying value of its assets in accordance with SFAS No. 121, "Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." Based on this review, in the first quarter of fiscal year 1998 CSC Enterprises initiated a plan to eliminate certain offerings and write down assets, primarily within its telecommunications operations. As a result of these plans, we recognized a pre-tax special charge of $208,393 ($133,293 after tax). This special charge included goodwill write-offs of $56,300 ($35,000 after tax), contract termination costs of $54,300 ($33,800 after tax), deferred contract costs and other assets of $33,093 ($20,493 after tax), telecommunications software and accruals of $35,800 ($22,300 after tax), telecommunications property, equipment and intangible assets of $18,900 ($11,700 after tax), and other non-tax deductible costs of $10,000. In the fourth quarter of fiscal year 1998, we recorded a before-tax special charge of $20,700, or 9 cents per share after tax, for costs relating to our response to a failed take-over attempt. The charge is comprised of $14,000 for investment banking expenses and $6,700 for other expenses such as legal costs, public relations and shareholder communications. The fiscal year 1997 special charge represents costs and expenses related to the August 1, 1996 acquisition of Continuum. The amount of the charge, net of income tax benefits on the tax-deductible portion, is $35,280 or 23 cents per share. The charge is composed of $11,040 of non-tax deductible investment banking and other merger expenses, $11,785 ($7,540 after tax) related to the write-off of certain capitalized software, other assets and intangibles, and $26,104 ($16,700 after tax) related to the elimination of duplicate data processing facilities, employee severance costs and contract termination costs. On March 15, 1996, prior to its merger with the Company, Continuum acquired Hogan Systems, Inc. In connection with the fiscal year 1996 acquisition of Hogan Systems, Inc., Continuum adopted a plan to integrate, restructure and realign its expanded business. As a result, Continuum expensed approximately $50,100 of special charges, including $9,600 of transaction and $9,800 of restructuring costs. The restructuring costs included costs relating to the consolidation of facilities and data processing and employee terminations. In addition, Continuum recorded non-cash adjustments to the carrying value of certain tangible and intangible assets of $30,700, including $20,200 to capitalized software. Fiscal year 1996 charges also included $26,000 related to an acquisition by Continuum, which Continuum assigned to purchased research and development and subsequently expensed with no income tax benefit. Continuum recorded combined fiscal year 1996 after-tax special charges of $61,800, or 40 cents per share of the Company's restated consolidated results for such year. (2) We computed the ratio of earnings to fixed charges by dividing the sum of fixed charges and income before taxes by fixed charges. Fixed charges consist of interest expense and the estimated interest component of rent expense. 10 DESCRIPTION OF THE NOTES The notes will be issued under an indenture to be dated as of , 1999 (the "Indenture") by and between us and Citibank, N.A., as trustee. The Indenture is subject to, and governed by, the Trust Indenture Act of 1939, as amended. The statements made in this section relating to the notes and the Indenture are summaries of certain provisions of the notes and the Indenture. These summaries are not complete. For more detail you should refer to the Indenture, which we have filed as an exhibit to the registration statement of which this prospectus is a part. For purposes of this section "Description of the Notes," whenever we refer to the "Company" or to "us," or use the terms "we" or "our," we are referring only to Computer Sciences Corporation. GENERAL We will issue the notes in an aggregate principal amount of $200,000,000. The notes will mature on , 2009. The notes are our direct, unconditional, unsecured and unsubordinated general obligations. The notes will rank equally among themselves, without any preference of one over the other, and at least equally with all of our other outstanding unsecured and unsubordinated general obligations. The notes will be effectively subordinate to the indebtedness of our subsidiaries. At January 1, 1999, our subsidiaries had outstanding indebtedness (including capitalized leases) of $825,801,000. The notes will bear interest at the rate of % from , 1999 or from the most recent interest payment date to which interest has been paid or provided for. Interest will be payable on and of each year, commencing , 1999, to the holders of record at the close of business on the date fifteen days prior to each interest payment date. The notes will not be subject to any sinking fund. REDEMPTION AT OUR OPTION We may redeem the notes at our option, in whole or in part, at any time, at a redemption price equal to the greater of: - 100% of the principal amount of notes then outstanding, and - as determined by the Quotation Agent, the sum of the present values of the Remaining Scheduled Payments of principal and interest on such notes (not including any portion of such interest payments accrued as of the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate plus basis points, plus, in either of the above cases, accrued and unpaid interest on such notes to the redemption date. We will mail a notice of redemption at least 30 days but not more than 60 days before the redemption date to each holder of notes to be redeemed. If we elect to partially redeem notes, the trustee will select in a fair and appropriate manner the notes to be redeemed. Unless we default in payment of the redemption price and accrued and unpaid interest on the notes, on and after the redemption date, interest will stop accruing on the notes or portions of the notes called for redemption. For purposes of this section "Redemption at Our Option," the following terms have the following meanings: "ADJUSTED TREASURY RATE" means, with respect to any redemption date, the annual rate equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the 11 Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. "COMPARABLE TREASURY ISSUE" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the notes to be redeemed that would be used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such notes. "COMPARABLE TREASURY PRICE" means, with respect to any redemption date: - the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or - if the trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations. "QUOTATION AGENT" means the Reference Treasury Dealer appointed by us. "REFERENCE TREASURY DEALER" means (1) each of J.P. Morgan Securities Inc., Goldman, Sachs & Co., Inc., Merrill Lynch Government Securities Inc., and their successors; PROVIDED, HOWEVER, that if any of the foregoing cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), we shall substitute another Primary Treasury Dealer; and (2) any other Primary Treasury Dealer selected by us. "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) which such Reference Treasury Dealer quotes in writing to the trustee at 5:00 p.m., New York City time, on the third business day before such redemption date. "REMAINING SCHEDULED PAYMENTS" means, with respect to any notes, the remaining scheduled payments of the principal of the notes to be redeemed and interest on the notes that would be due after the related redemption date but for such redemption; PROVIDED, HOWEVER, that, if such redemption date is not an interest payment date with respect to such note, the amount of the next succeeding scheduled interest payment of the note will be reduced by the amount of interest accrued on the note to such redemption date. LIMITATION ON OUR ABILITY TO INCUR LIENS Other than as provided below under "We May Incur Permitted Liens and We May Enter into Permitted Sale/Leaseback Transactions," neither we nor any of our Subsidiaries may create, incur, assume or suffer to exist any Lien upon any of our assets to secure any Indebtedness, except for: - Liens existing on the date of the Indenture; - any extension, renewal or replacement (or successive extensions, renewals or replacements) of any Lien existing on the date of the Indenture; - Liens on property existing at the time we or any of our Subsidiaries acquires such property, PROVIDED that such Liens (1) are not incurred in connection with, or in contemplation of the acquisition of the property acquired and (2) do not extend to or cover any of our property or assets or any of our Subsidiaries' property or assets other than the property so acquired; - Liens on any property of a corporation or other entity existing at the time such corporation or entity becomes our Subsidiary or is merged into or consolidated with us or a Subsidiary or at the time of a sale, lease or other disposition of the properties of such corporation or entity as an entirety or substantially as an entirety to us or a Subsidiary; PROVIDED that such Liens (1) are not 12 incurred in connection with or in contemplation of such corporation or entity becoming a Subsidiary or merging or consolidating with us or a Subsidiary or are not incurred in connection with or in contemplation of the sale, lease or other disposition of the properties of such corporation or other entity and (2) do not extend to or cover any of our property or assets or any of our Subsidiaries' property or assets other than the property of such corporation or other entity; and - purchase money Liens upon or in any real or personal property (including fixtures and other equipment) we or any of our Subsidiaries hold or have acquired to secure the purchase price of such property or to secure Indebtedness incurred solely to finance or refinance the acquisition or improvement of such property and incurred within 180 days after completion of such acquisition or improvement, PROVIDED that no such Lien will extend to or cover any property other than the property being acquired or improved. For purposes of this section "Limitation on Our Ability to Incur Liens," the following terms have the following meanings: "INDEBTEDNESS" means, with respect to any person, and without duplication: - any liability of such person (1) for borrowed money, or (2) for any letter of credit for the account of such person supporting obligations of such person or other persons, or (3) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a current liability arising in the ordinary course of business), or (4) for the payment of money relating to a capitalized lease; and - any liability of others described in the preceding bullet point that the person has guaranteed or that is otherwise its legal liability; and - any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in the bullet points above. "LIEN" means any lien, security interest, charge, mortgage, pledge or other encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest other than an agreement to secure Indebtedness equally and ratably upon the incurrence of other secured Indebtedness). "SUBSIDIARY" means: - a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time directly or indirectly owned by us, by us and our Subsidiary or Subsidiaries, or by our Subsidiary or Subsidiaries, or - any other person (other than a corporation) in which we, or we and our Subsidiary or Subsidiaries, or our Subsidiary or Subsidiaries directly or indirectly at the date of determination thereof has at least a majority ownership interest. LIMITATION ON OUR ABILITY TO ENTER INTO SALE/LEASEBACK TRANSACTIONS Other than as provided below under "We May Incur Permitted Liens and We May Enter into Permitted Sale/Leaseback Transactions," neither we nor any of our Subsidiaries may enter into any Sale/ Leaseback Transaction unless we or such Subsidiary would be entitled, pursuant to the bullet points 13 under "Limitation on Our Ability to Incur Liens" above, to create, incur, assume or suffer to exist a Lien on the property subject to such Sale/Leaseback Transaction. For purposes of this section "Limitation on Our Ability to Enter Into Sale/Leaseback Transactions," the following term has the following meaning: "SALE/LEASEBACK TRANSACTION" means any arrangement with any person (other than us or any of our Subsidiaries) providing for a capitalized lease by us or any of our Subsidiaries of any property which has been or is to be sold or transferred by us or any of our Subsidiaries to such person or to any person (other than us or any of our Subsidiaries) by whom funds have been or are to be advanced on the security of the leased property. WE MAY INCUR PERMITTED LIENS AND WE MAY ENTER INTO PERMITTED SALE/LEASEBACK TRANSACTIONS Notwithstanding the restrictions set forth above under "Limitation on Our Ability to Incur Liens" and "Limitation on our Ability to Enter into Sale/Leaseback Transactions," we or any of our Subsidiaries may create, incur, assume or suffer to exist any Lien or enter into any Sale/Leaseback Transactions not otherwise permitted as described above, PROVIDED that at the time of such event, and after giving effect to that event, the aggregate amount of all Indebtedness secured by Liens permitted by this paragraph (excluding the Liens permitted pursuant to the bullet points under "Limitation on Our Ability to Incur Liens" above) and the aggregate amount of all Attributable Debt in respect of Sale/Leaseback Transactions permitted by this paragraph (excluding the Sale/Leaseback Transactions permitted under "Limitation on Our Ability to Enter into Sale/Leaseback Transactions" above), measured, in each case, at the time any such Lien is incurred or any such Sale/Leaseback Transaction is entered into, by us or any Subsidiary does not exceed 15% of our Consolidated Net Tangible Assets. For purposes of this section "We May Incur Permitted Liens and We May Enter into Permitted Sale/ Leaseback Transactions," the following terms have the following meanings: "ATTRIBUTABLE DEBT" with respect to any Sale/Leaseback Transaction means the present value of the minimum rental payments called for during the term of the lease (including any period for which such lease has been extended), determined in accordance with generally accepted accounting principles, discounted at a rate that, at the inception of the lease, the lessee would have incurred to borrow over a similar term the funds necessary to purchase the leased assets. "CONSOLIDATED NET TANGIBLE ASSETS" means, as of any particular time, the aggregate amount of our assets and the assets of our Subsidiaries (in each case, less applicable reserves and other properly deductible items) after deducting from such amount: - all current liabilities other than (1) notes and loans payable, (2) current maturities of long-term debt and (3) current maturities of capital lease obligations, and - intangible assets, to the extent included in such aggregate assets, all as set forth on the then most recent consolidated balance sheet of the Company and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles. LIMITATION ON OUR ABILITY TO CONSOLIDATE, MERGE AND SELL ASSETS We, without the consent of the holders of any of the notes, may consolidate with, or merge into, or sell, transfer, lease or convey our assets substantially as an entirety to any domestic corporation, if: - any successor corporation expressly assumes all of our obligations under the notes and the Indenture, - 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, has occurred and is continuing, and 14 - the entity formed by or surviving any such consolidation or merger (if other than us) or to which such sale, transfer, lease or conveyance shall have been made, is a corporation organized under the laws of the United States of America, any state, or the District of Columbia. EVENTS OF DEFAULT An "Event of Default" under the notes means any of the following: - we fail to pay any installment of interest upon any of the notes as and when it becomes due and payable, and such default continues for a period of 30 days; or - we fail to pay all or any part of the principal of any of the notes as and when it becomes due and payable, whether at maturity or otherwise; or - we fail to observe or perform any other of our other covenants or agreements contained in the notes or in the Indenture for a period of 30 days after the date on which written notice specifying such failure, stating that such notice is a "Notice of Default" under the notes and demanding that we remedy the same, has been given to us by the trustee or to us and the trustee by the holders of at least 25% in aggregate principal amount of the notes then outstanding; or - any of our Indebtedness in the aggregate outstanding principal amount of $50 million or more either (1) becomes due and payable prior to the due date for payment of such Indebtedness by reason of acceleration of such Indebtedness following our default or (2) is not repaid at, and remains unpaid after, maturity as extended by any applicable period of grace or any guarantee given by us in respect of Indebtedness of any other person in the aggregate outstanding principal amount of $50 million or more is not honored when, and remains dishonored after, becoming due; or - a court or administrative or other governmental agency or body having jurisdiction in the premises enters a decree or order for relief relating to us in an involuntary case under any applicable bankruptcy, insolvency, reorganization or other similar law in effect on or after the date of the notes, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer of us or ordering the winding up, dissolution or liquidation of our affairs, or otherwise adjudicates or finds us to be bankrupt or insolvent, and such decree or order remains unstayed and in effect for a period of 60 consecutive days; or - a court or administrative or other governmental agency or body having jurisdiction in the premises enters a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer for any substantial part of our properties, and such decree or order remains unstayed and in effect for a period of 60 consecutive days; or - we commence a voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law in effect on or after the date of the notes, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by our receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer, or cease to carry on the whole or substantially the whole of our business, or make any general assignment for the benefit of creditors, or take corporate action in furtherance of any such action; or - we consent to the appointment or taking possession by our receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer for any substantial part of our property, or take corporate action in furtherance of any such action. 15 In each such case, other than as provided in the next sentence, the trustee, by notice to us, or the holders of not less than 25% in aggregate principal amount of the notes then outstanding, by notice to us and the trustee, may declare the principal of all the notes, and the interest accrued on the notes, to be due and payable immediately. If an event of default specified in the fifth or seventh bullet points under the heading "Events of Default" occurs, such an amount shall IPSO FACTO become and be immediately due and payable without any declaration or other act on the part of the trustee or any holder of the notes. The holders of more than 50% in aggregate principal amount of the then outstanding notes by written notice to the trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing events of default (except nonpayment of principal or interest that has become due solely because of the acceleration) have been cured or waived. If, at any time after the principal of the notes has been so declared due and payable, and before any judgment or decree for the payment of the monies due has been obtained or entered, we pay or deposit with the trustee a sum sufficient to pay all monies then due with respect to the notes (other than amounts due solely because of such declaration) and cure all other Events of Default under the notes, then the holders of more than 50% in aggregate outstanding principal amount of the notes may waive all defaults and rescind and annul such declaration and its consequences. The holders of more than 50% in principal amount of the then outstanding notes by notice to us may, on behalf of all the holders, waive an existing default or Event of Default and its consequences except a continuing default or Event of Default in the payment of the principal of or interest on any note. DEFEASANCE AND DISCHARGE The notes and the Indenture provide that we are not required to comply with certain covenants ("covenant defeasance") of the notes (including those described under the caption "Limitation on Our Ability to Incur Liens" and "Limitation on Our Ability to Enter into Sale/Leaseback Transactions"), if: - we irrevocably deposit, in trust with a trustee for the benefit of the holders of the notes, (a) money in an amount, or (b) U.S. Government Obligations (as defined in the notes) which through the payment of interest thereon and principal thereof in accordance with their terms will provide money in an amount, in each case, sufficient to pay all the principal of, and interest on the notes to maturity or redemption, as the case may be, and all other sums payable by us under the Indenture; - no Event of Default under the first, second, fourth, fifth, sixth, seventh or eighth bullet points in the first paragraph under the caption "Events of Default" has occurred and is continuing, and no event which with notice or lapse of time or both would become such an Event of Default with respect to the notes has occurred and is continuing, on the date of such deposit; - we deliver to such trustee an opinion of counsel or a ruling received by the Internal Revenue Service to the effect that the holders of the notes will not recognize income, gain or loss for federal income tax purposes as a result of the exercise of such covenant defeasance and will be subject to federal income tax in the same amount and in the same manner and at the same times as would have been the case absent such exercise; and - we have delivered to such trustee a certificate signed by authorized persons and an opinion of counsel, each stating that all conditions precedent to satisfaction and discharge of the Indenture have been complied with. 16 MODIFICATION AND AMENDMENT We and the trustee may amend or supplement the Indenture or the notes without the consent of any holder: - to cure any ambiguity, defect or inconsistency; - to provide for the assumption of our obligations to the holders of the notes in the case of a consolidation, merger, sale, transfer, lease or conveyance of substantially all of our assets; - to comply with the Trust Indenture Act; - to provide for uncertificated notes in addition to or in place of certificated notes; or - to make any change that provides any additional rights or benefits to the holders of the notes or that does not adversely affect the legal rights of any holder under the notes or the Indenture. Modifications and amendments to the Indenture or the notes requiring consent of holders of the notes may be made, and future compliance or past default by us may be waived, with our consent and the consent of holders of more than 50% in aggregate principal amount of the notes at the time outstanding; PROVIDED THAT no such amendment of the Indenture or any note may, without the consent of each holder affected thereby: - change the stated maturity of the principal of or interest on such note; - reduce the amount of notes whose holders must consent to an amendment or waiver; - reduce the rate of or change the time for payment of interest, including default interest, on any note; - reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to redemption; - waive a default in the payment of principal of or interest on, or redemption payment with respect to, any note; or - change the currency of payment of the principal of or interest on such note. For purposes of calculating the percentage of holders of the notes entitled to take any action, any notes we hold will be excluded. BOOK-ENTRY SYSTEM AND FORM OF NOTES The notes will be represented by beneficial interests in a single, permanent global note in fully registered form without interest coupons and will be deposited with the trustee as custodian for The Depository Trust Company and registered in the name of a nominee of The Depository Trust Company. Ownership of beneficial interests in a global note will be limited to The Depository Trust Company participants or persons that may hold interests through participants. Ownership of beneficial interests in the global note will be shown on, and the transfer of these ownership interests will be effected only through, records maintained by The Depository Trust Company or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). The Depository Trust Company or its nominee, as the case may be, as registered holder of such global note will be considered the sole owner or holder of the notes represented by such global note for all purposes under the notes and the Indenture. In addition, no beneficial owner of an interest in a global 17 note will be able to transfer that interest except in accordance with The Depository Trust Company's applicable procedures (in addition to those under the Indenture). Principal and interest payments on notes represented by a global note registered in the name of The Depository Trust Company or its nominee will be made to The Depository Trust Company or its nominee, as the case may be, as the registered owner of such global note. Neither we, the trustee nor any paying agent for such notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in such global note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We expect that The Depository Trust Company, upon receipt of any payment of principal or interest, will immediately credit participants' accounts with payment in amounts proportionate to their respective beneficial interests in the principal amount of such global note as shown on the records of The Depository Trust Company. We also expect that payments by participants to owners of beneficial interests in such global note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the account of customers registered in "street names," and will be the responsibility of such participants. The Depository Trust Company has advised us as follows: The Depository Trust Company 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 Depository Trust Company holds securities that its participants deposit with The Depository Trust Company and 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. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to The Depository Trust Company 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 direct participant, either directly or indirectly. The rules applicable to The Depository Trust Company and its participants are on file with the SEC. TRUSTEE The trustee may resign at any time and we may remove the trustee at any time in accordance with the bullet points below. A resignation or removal of the trustee and appointment of a successor trustee shall become effective only upon the successor trustee's acceptance of appointment as provided in the Indenture. The trustee may resign and be discharged from the trust created by the Indenture by so notifying us. The holders of a majority in principal amount of the then outstanding notes may remove the trustee by so notifying the trustee and us. We may remove the trustee if: - the trustee fails to comply with the eligibility requirements provided in the Indenture; - the trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the trustee under any applicable federal or state bankruptcy law; - a receiver, trustee, assignee, liquidator or similar official under any applicable federal or state bankruptcy law takes charge of the trustee or its property; or - the trustee becomes incapable of acting. 18 If the Trustee resigns or is removed or if the office of trustee is otherwise vacant, we will appoint a successor trustee in accordance with the provisions of the Indenture. In the ordinary course of its business, Citibank, N.A. and its affiliates have performed, and may in the future perform, commercial banking and related services for us and our affiliates and have received customary compensation therefor. For example, Citibank, N.A. serves as the fiscal agent in connection with the 6.80% Guaranteed Notes due April 15, 1999 and the 6.50% Guaranteed Notes due November 15, 2001, each of which was issued by CSC Enterprises and guaranteed by us, and as issuing and paying agent under two of CSC Enterprises' commercial paper programs guaranteed by us. In addition, Citicorp USA, Inc., an affiliate of Citibank, N.A., serves as the agent for the lenders in a commercial paper backstop credit agreement with CSC Enterprises, under which we are both a co-borrower and a guarantor. Our affiliate, CSC Australia Pty Ltd, has an uncommitted master bond and letter of credit facility and an uncommitted master loan facility with Citibank N.A. (Sydney Branch), an affiliate of Citibank, N.A. The address of the relevant corporate trust office of the trustee is Citibank, N.A., 111 Wall Street, 5th Floor, New York, New York 10043. GOVERNING LAW The Indenture and the notes will be governed by and construed in accordance with the laws of the State of New York. 19 UNDERWRITING Subject to the terms and conditions set forth in the underwriting agreement dated , 1999, the Company has agreed to sell to each of the underwriters named below (the "Underwriters"), severally, and each of the Underwriters has severally agreed to purchase, the principal amount of the notes set forth opposite its name below:
PRINCIPAL UNDERWRITER AMOUNT OF NOTES - ----------------------------------------------------------------------------- --------------- J.P. Morgan Securities Inc................................................... $ Goldman, Sachs & Co.......................................................... Merrill Lynch, Pierce, Fenner & Smith Incorporated...................................................... --------------- Total...................................................................... $ 200,000,000 --------------- ---------------
Under the terms and conditions of the underwriting agreement, if the Underwriters take any of the notes, then the Underwriters are obligated to take and pay for all of the notes. The notes are a new issue of securities with no established trading market and will not be listed on any national securities exchange. The Underwriters have advised the Company that they intend to make a market for the notes, but they have no obligation to do so and may discontinue market making at any time without providing any notice. No assurance can be given as to the liquidity of any trading market for the notes. The Underwriters initially propose to offer part of the notes directly to the public at the offering prices described on the cover page and part to certain dealers at a price that represents a concession not in excess of % of the principal amount of the notes. Any Underwriter may allow, and any such dealer 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 Underwriters may from time to time vary the offering price and other selling terms. The Company has also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or to contribute to payments which the Underwriters may be required to make in respect of any such liabilities. In connection with 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 overallot in connection with the offering of the notes, creating a syndicate short position. In addition, the Underwriters may bid for, and purchase, notes in the open market to cover syndicate short positions or to stabilize the price of the notes. Finally, the underwriting syndicate may reclaim selling concessions allowed for distributing the notes in the offering of the notes, if the syndicate repurchases previously distributed notes in syndicate covering transactions, 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 any of these activities, and may end any of them at any time. Expenses associated with this offering, to be paid by the Company, are estimated to be $ . In the ordinary course of their respective businesses, the Underwriters and their affiliates have performed, and may in the future perform, commercial, financial advisory and/or investment banking services for us and our affiliates and have received customary compensation therefor. For example, Morgan Guaranty Trust Company of New York, an affiliate of J.P. Morgan Securities Inc., has entered into a contract with the Pinnacle Alliance, a team led by us, to manage key parts of its global technology structure. Morgan Guaranty Trust Company of New York is also a member of the syndicate of 20 banks providing standby support for our commercial paper program. Goldman, Sachs & Co. and J.P. Morgan & Co., an affiliate of J.P. Morgan Securities Inc., acted as our advisors in connection with an unsuccessful hostile tender offer to acquire us last year. Merrill Lynch (Singapore) Pte. Ltd., an affiliate of Merrill Lynch & Co., is currently acting as our financial advisor in connection with our tender offer to acquire CSA Holdings Ltd, which is described on page 7. LEGAL MATTERS Gibson, Dunn & Crutcher LLP of Los Angeles, California will issue an opinion to the Company about certain legal matters relating to the notes. Latham & Watkins of Los Angeles, California will issue an opinion to the Underwriters about certain legal matters relating to the notes. Latham & Watkins renders certain legal services to the Company. EXPERTS The consolidated financial statements and the related financial statement schedule of the Company (except The Continuum Company, Inc. for the year ended March 31, 1996) as of April 3, 1998 and March 28, 1997 and for each of the three years in the period ended April 3, 1998, incorporated in this prospectus by reference from the Company's Annual Report on Form 10-K for the year ended April 3, 1998 have been audited by Deloitte & Touche LLP as stated in their report incorporated herein by reference. The financial statements of The Continuum Company, Inc. for the year ended March 31, 1996 (consolidated with those of the Company) have been audited by Ernst & Young LLP as stated in their report incorporated herein by reference. Such financial statements for the Company are incorporated herein by reference in reliance upon the respective reports of such firms given upon their authority as experts in accounting and auditing. All of the foregoing firms are independent auditors. 21 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The Company estimates that the following expenses in connection with the offering described in this Registration Statement will be paid by the Company:
Securities and Exchange Commission registration fee............................... $ 55,600 Printing and engraving expenses*.................................................. 45,000 Legal fees and expenses*.......................................................... 125,000 Accounting fees and expenses*..................................................... 35,000 Rating agency fees*............................................................... 180,000 Trustee fees and expenses*........................................................ 12,500 Blue Sky qualification fees and expenses*......................................... 7,500 --------- $ 460,600 --------- ---------
- ------------------------ * Estimated. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 78.7502 of the Nevada General Corporation Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, except an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with the action, suit or proceeding if he acted in good faith and in a manner in which he reasonably believed to be in or not opposed to the best interest of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Section 78.7502 further provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of another corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses, including amounts paid in settlement and attorneys' fees actually and reasonably incurred by him in connection with the defense or settlement of the action or suit if he acted in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation. In the case of any action by or in the right of the corporation, no indemnification may be made for any claim, issue or matter as to which such person shall have been adjudged by a court of competent jurisdiction, after exhaustion of all appeals therefrom, to be liable to the corporation, or for amounts paid in settlement to the corporation, unless and only to the extent that the court in which such action or suit was brought or another court of competent jurisdiction determines that in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court deems proper. Section 78.7502 further provides that to the extent a director, officer, employee or agent of a corporation has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. II-1 The Registrant's Restated Articles of Incorporation, as amended (the "Charter"), provide that the Registrant shall, to the fullest extent permitted by applicable law, indemnify any person who was or is a party or is threatened to be made a party to any action, suit or proceeding of the type described above by reason of the fact that he or she is or was or has agreed to become a director or officer of the Registrant, or is serving at the request of the Registrant as a director or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. The indemnification of directors and officers shall be against all loss, liability and expenses actually and reasonably incurred by or on behalf of a director or officer in connection with such action, suit or proceeding, including any appeals; provided that with respect to any action, suit or proceeding initiated by a director or officer, the Registrant shall indemnify such director or officer only if the action, suit or proceeding was authorized by the Registrant's Board of Directors, except with respect to a suit for enforcement of rights to indemnification or advancement of expenses in accordance with the procedure therefor prescribed in the Charter. The Charter also provides that the expenses of directors and officers incurred as a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, shall be paid by the Registrant as they are incurred and in advance of the final disposition of the action, suit or proceeding; provided that if applicable law so requires, the advance payment of expenses shall be made only upon receipt by the Registrant of an undertaking by or on behalf of the director or officer to repay all amounts so advanced in the event it is ultimately determined by a final decision, order or decree of a court of competent jurisdiction that the director or officer is not entitled to be indemnified for such expenses under the Charter. The Registrant has entered into Indemnification Agreements with each of its directors and officers pursuant to which it has indemnified them against expenses incurred in connection with any claims made against them as a result of any act, omission, neglect or breach of duty committed or suffered while acting as a director or officer of the Registrant, or while serving at the request of the Registrant as a director or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. These Indemnification Agreements do not obligate the Registrant to make any payment in connection with a claim against a director or officer to the extent that: (a) payment is made under an insurance policy, except in respect of any deductible amount or any excess beyond the amount of payment under such insurance, (b) the director or officer is otherwise indemnified, (c) the claim is based upon the director or officer gaining any improper personal profit or advantage to which he or she is not legally entitled, (d) the claim is for an accounting of profits made from the purchase or sale by the director or officer of securities of the Registrant within the meaning of Section 16(b) of the Securities Exchange Act of 1934 or (e) the claim is brought about or contributed to by the dishonesty of the director or officer, but only if a judgment or other final adjudication adverse to the director or officer establishes that he or she committed acts of active and deliberate dishonesty, with actual dishonest purpose and intent, which acts were material to the cause of action so adjudicated. The Indemnification Agreements provide that the costs and expenses incurred by directors and officers in defending or investigating any action, suit, proceeding or investigation will be paid by the Registrant in advance of the final disposition of the matter upon receipt of a written undertaking by or on behalf of the director or officer to repay any such amounts if it is ultimately determined that he or she is not entitled to indemnification under his or her Indemnification Agreement. No such advance will be made by the Registrant, however, if, within 60 days of a request for such an advance, a determination is reasonably made by the Board of Directors or independent legal counsel, based upon the facts known at the time of such determination, that it is more likely than not it will ultimately be determined that the director or officer is not entitled to indemnification under his or her Indemnification Agreement. The Registrant currently maintains an insurance policy which, within the limits and subject to the terms and conditions thereof, covers certain expenses and liabilities that may be incurred by directors and officers in connection with or as a consequence of certain actions, suits or proceedings that may be II-2 brought against them as a result of an act or omission committed or suffered while acting as a director or officer of the Registrant. ITEM 16. EXHIBITS The Exhibit Index is attached hereto on page 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 the 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 the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial BONA FIDE offering thereof. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 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 shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For purposes 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-3 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 Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of El Segundo, State of California, on this 22nd day of February, 1999. COMPUTER SCIENCES CORPORATION By: * ----------------------------------------- Van B. Honeycutt Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed by the following persons in the capacities and on the date indicated.
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ------------------- Chairman, President and * Chief Executive Officer - ------------------------------ (Principal Executive February 22, 1999 Van B. Honeycutt Officer) Vice President, Chief * Financial Officer and - ------------------------------ Director (Principal February 22, 1999 Leon J. Level Financial Officer) * Vice President and - ------------------------------ Controller (Principal February 22, 1999 Scott M. Delanty Accounting Officer) * - ------------------------------ Director February 22, 1999 Irving W. Bailey, II * - ------------------------------ Director February 22, 1999 William R. Hoover * - ------------------------------ Director February 22, 1999 Richard C. Lawton
II-4
SIGNATURE TITLE DATE - ------------------------------ -------------------------- ------------------- * - ------------------------------ Director February 22, 1999 Thomas A. McDonnell * - ------------------------------ Director February 22, 1999 F. Warren McFarlan * - ------------------------------ Director February 22, 1999 James R. Mellor * - ------------------------------ Director February 22, 1999 William P. Rutledge
*By: /s/ HAYWARD D. FISK ------------------------- Hayward D. Fisk ATTORNEY-IN-FACT
II-5 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ----------- ------------------------------------------------------------------------------------------------ 1.1 Form of Underwriting Agreement by and among the Company, J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Goldman, Sachs & Co............................ 4.1 Form of Indenture between the Company and Citibank, N.A., as Trustee............................ 4.2 Form of Note (included in Exhibit 4.1).......................................................... 5.1 Opinion of Gibson, Dunn & Crutcher LLP.......................................................... 12.1 Computation of Ratios of Earnings to Fixed Charges.............................................. 23.1 Consent of Gibson, Dunn & Crutcher LLP (contained in Exhibit 5.1)............................... 23.2 Consent of Deloitte & Touche LLP................................................................ 23.3 Consent of Ernst & Young LLP.................................................................... *24.1 Power of Attorney (contained in signature page)................................................. 25.1 Statement of eligibility of Trustee on Form T-1.................................................
- ------------------------ *Previously filed. EX-1.1 2 EXHIBIT 1.1 EXHIBIT 1.1 $200,000,000 COMPUTER SCIENCES CORPORATION ____% Notes Due __________, 2009 Form of Underwriting Agreement ______________, 1999 J.P. Morgan Securities Inc. Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated As Representatives of the Several Underwriters Listed in Schedule I c/o J.P. Morgan Securities Inc. 60 Wall Street New York, New York 10260-0060 Ladies and Gentlemen: Computer Sciences Corporation, a Nevada corporation (the "Company"), proposes to issue and sell to the several Underwriters listed in SCHEDULE I hereto (the "Underwriters"), for whom you are acting as representatives (the "Representatives"), $200,000,000 principal amount of its _____% Notes Due __________, 2009 (the "Securities"). The Securities will be issued pursuant to the provisions of an Indenture (the "Indenture") to be dated as of ______________, 1999 between the Company and Citibank, N.A., as Trustee (the "Trustee"). The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Securities Act"), a registration statement, including a prospectus, relating to the Securities. The registration statement as amended at the time when it shall become effective, or, if a post-effective amendment is filed with respect thereto, as amended by such post-effective amendment at the time of its effectiveness, including in each case information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act, is referred to in this Agreement as the "Registration Statement", and the prospectus in the form first used to confirm sales of Securities is referred to in this Agreement as the "Prospectus". If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration Statement"), then any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462 Registration Statement. Any reference in this Agreement to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Securities Act, as of the effective date of the Registration Statement or the date of such preliminary prospectus or the Prospectus, as the case may be, and any reference to "amend," "amendment or "supplement" with respect to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") that are deemed to be incorporated by reference therein. The Company hereby agrees with the Underwriters as follows: 1. The Company agrees to issue and sell the Securities to the several Underwriters as hereinafter provided, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to purchase, severally and not jointly, from the Company the respective principal amount of Securities set forth opposite such Underwriter's name in Schedule I hereto at a price equal to ___% of their principal amount plus accrued interest, if any, from _______, 1999 to the date of payment and delivery. 2. The Company understands that the Underwriters intend (i) to make a public offering of their respective portions of the Securities as soon after (A) the Registration Statement has become effective and (B) the parties hereto have executed and delivered this Agreement, as in the judgment of the Representatives is advisable and (ii) initially to offer the Securities upon the terms set forth in the Prospectus. 3. Payment for the Securities shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representatives on ________1999, or at such other time on the same or such other date, not later than the third Business Day thereafter, as the Representatives and the Company may agree upon in writing. The time and date of such payment is referred to herein as the "Closing Date". As used herein, the term "Business Day" means any day other than a day on which banks are permitted or required to be closed in New York City. Payment for the Securities shall be made against delivery to the nominee of The Depository Trust Company for the respective accounts of the several Underwriters of the Securities of one or more global notes (collectively, the "Global Note ) representing the Securities, with any transfer taxes payable in connection with the transfer to the Underwriters of the Securities duly paid by the Company. The Global Note will be made available for inspection by the Representatives at the office of the Trustee, Citibank, N.A., 111 Wall Street, 5th Floor, New York, New York 10005, not later than 1:00 P.M., New York City time, on the Business Day prior to the Closing Date. As compensation to the Underwriters for the purchase and sale of the Securities hereunder, the Company will pay, or cause to be paid, to J.P. Morgan Securities Inc., for the accounts of the several Underwriters, an amount equal to ____% of the principal 2 amount of the Securities purchased by the Underwriters hereunder on the Closing Date. On the Closing Date the Company will pay or cause to be paid, by wire transfer, in immediately available funds, such commission to the account specified by J.P. Morgan Securities Inc. 4. The Company represents and warrants to each Underwriter as of the date hereof and as of the Closing Date, and agrees with each Underwriter, as follows: (a) PROSPECTUS. No order preventing or suspending the use of any preliminary prospectus has been issued by the Commission, and each preliminary prospectus filed as part of the Registration Statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act, 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 light of the circumstances under which they were made, not misleading; PROVIDED that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein. (b) REGISTRATION STATEMENT. No stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or, to the knowledge of the Company, threatened by the Commission; and the Registration Statement and Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) comply, or will comply, as the case may be, in all material respects with the Securities Act and the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Trust Indenture Act") 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 date of the Prospectus and any amendment or supplement thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as amended or supplemented, if applicable, at the Closing Date will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; except that the foregoing representations and warranties shall not apply to (i) that part of the Registration Statement which constitutes the Statement of Eligibility and Qualification (Form T-1) of the Trustee under the Trust Indenture Act, and (ii) statements or omissions in the Registration Statement or the Prospectus made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein. (c) INCORPORATED DOCUMENTS. The documents incorporated or deemed to be incorporated by reference in the Prospectus at the time they were or hereafter are filed with the Commission complied and will comply in all material respects with the requirements of the Securities Act or the Exchange Act, as applicable, and, when read together with the other information in the Prospectus, at the date of the Prospectus and at 3 the Closing Date, do not and will not include 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 that this representation, warranty and agreement shall not apply to pricing information omitted in the preliminary prospectus or to statements in or omissions from the Prospectus made in reliance upon and in conformity with information furnished to the Company in writing by any Underwriter through the Representatives expressly for use in the Prospectus. (d) INDEPENDENT ACCOUNTANTS. The accountants who certified the financial statements and supporting schedules included in the Registration Statement and the Prospectus (including any financial statements and supporting schedules incorporated by reference therein) are independent certified public accountants with respect to the Company and its former subsidiary, The Continuum Company, Inc., a Delaware corporation ("Continuum"), within the meaning of Regulation S-X under the Securities Act and the Exchange Act. (e) FINANCIAL STATEMENTS. The financial statements, together with the related schedules and notes, included or incorporated by reference in the Registration Statement and the Prospectus present fairly (i) the financial position of the Company and its consolidated subsidiaries at the dates indicated, (ii) the statement of operations of the Company and its consolidated subsidiaries, and (iii) stockholders' equity and cash flows of the Company and its consolidated subsidiaries for the periods specified; said financial statements have been prepared in conformity with generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods involved. The supporting schedules, if any, included in or incorporated by reference in the Registration Statement and the Prospectus present fairly in accordance with GAAP the information required to be stated therein. The selected financial information included in the Registration Statement and the Prospectus present fairly the information shown therein and has been compiled on a basis consistent with that of the audited financial statements included in the Registration Statement and the Prospectus. (f) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since January 1, 1999 and except as otherwise stated in the Registration Statement and the Prospectus, (i) there has been no material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, assets, properties or business affairs of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business (a "Material Adverse Effect"), (ii) there has been no material change in the capital stock of the Company or the long-term debt of the Company and its subsidiaries and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock. (g) GOOD STANDING OF THE COMPANY. The Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Nevada and has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform 4 its obligations under this Agreement; and the Company is duly qualified as a foreign corporation to transact business in all 50 states of the United States (except for the state of its incorporation) and is in good standing in all 50 states of the United States. (h) STATUS OF CSC ENTERPRISES. CSC Enterprises, a Delaware general partnership ("CSC Enterprises"), has been duly formed and is validly existing as a general partnership under the laws of the State of Delaware, with power and authority (partnership and other) to own, lease and operate its properties and to conduct its business as described in the Prospectus. (i) STATUS OF CSC COMPUTER SCIENCES LIMITED. CSC Computer Sciences Limited ("CSC Limited") has been duly organized and is validly existing under the laws of England and Wales, has power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, and all resolutions, returns and other documents required by the Companies Act of 1985 or to be delivered to the Registrar of Companies have been duly delivered and are true and accurate. All of the issued and outstanding capital stock of CSC Limited has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of CSC Limited was issued in violation of any preemptive or similar rights arising by operation of law, or under the memorandum or articles of association or by-laws of CSC Limited or under any agreement to which the Company or CSC Limited is a party. (j) GOOD STANDING OF DESIGNATED SUBSIDIARIES. Each of CSC Consulting, Inc., CSC Outsourcing Inc., CSC Credit Services, Inc., CSC Healthcare, Inc. and CSC Enterprises, Inc. (each a "Designated Subsidiary" and, collectively, the "Designated Subsidiaries") has been duly organized and is validly existing as a corporation, in good standing under the laws of the jurisdiction of its incorporation, has power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect (all such jurisdictions are listed on Schedule II hereto); except as otherwise disclosed in the Prospectus, all of the issued and outstanding capital stock of each such Designated Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and (except for CSC Outsourcing Inc., all of the issued and outstanding capital stock of which is owned directly or through subsidiaries by CSC Holdings, Inc., all of the issued and outstanding common stock of which is owned by CSC Enterprises, which in turn is a partnership in which the Company, directly or through subsidiaries, has a 99.9% ownership interest) is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Designated Subsidiary was issued in violation of any preemptive or similar rights arising by operation of law, or under the charter or by-laws of any Designated Subsidiary or under any agreement to which the Company or any Designated Subsidiary is a party. 5 (k) CAPITALIZATION. The authorized, issued and outstanding capital stock of the Company is as set forth in the Pros pectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances or subsequent repurchases, if any, pursuant to employee benefit or option plans referred to in the Annual Report on Form 10-K for the year ended April 3, 1998 or subsequent repurchases or cancellations, if any, of restricted stock awards that do not vest upon termination of employment, or subsequent issuances of cash in lieu of fractional shares in connection with the Continuum acquisition). (l) AUTHORIZATION OF AGREEMENT. This Agreement has been duly authorized, executed and delivered by the Company. (m) AUTHORIZATION OF THE INDENTURE. The Indenture has been duly authorized by the Company and, upon effectiveness of the Registration Statement, will have been duly qualified under the Trust Indenture Act and, when executed and delivered by the Company and the Trustee will constitute a legally valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law). (n) AUTHORIZATION OF THE SECURITIES. The Securities have been duly authorized and, at the Closing Date, will have been duly executed by the Company and, when authenticated in the manner provided for in the Indenture and delivered against payment of the purchase price therefor, will constitute legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforcement thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights generally, or by general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture. (o) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The Securities and the Indenture will conform in all material respects to the respective statements relating thereto contained in the preliminary prospectus, the Prospectus and the Registration Statement and will be in substantially the respective forms previously delivered to the Underwriters; PROVIDED, HOWEVER, that the preliminary prospectus excludes certain pricing information. (p) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of its subsidiaries is in violation of its charter or by-laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by 6 which any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (collectively, "Agreements and Instruments"), except for such defaults that would not result in a Material Adverse Effect; and the execution, delivery and performance of this Agreement, the Indenture, the Securities and any other agreement or instrument entered into or issued or to be entered into or issued by the Company in connection with the transactions contemplated hereby or thereby or in the Prospectus and the consummation of the transactions contemplated herein and in the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use of Proceeds") and compliance by the Company with its obligations hereunder and under the Indenture and the Securities have been duly authorized by all necessary corporate action and do not and will not, whether with or without the giving of notice or passage of time or both, conflict with or constitute a breach of, or default or a Repayment Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, the Agreements and Instruments except for such conflicts, breaches or defaults or liens, charges or encumbrances that, individually or in the aggregate, would not result in a Material Adverse Effect, nor will such action result in any violation of the provisions of the charter, by-laws or other organizational documents of the Company or any of its subsidiaries or any applicable law, statute, rule, regulation, judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of its subsidiaries or any of their assets or properties. As used herein, a "Repayment Event" means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder's behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its subsidiaries prior to its scheduled maturity. No consent, approval, authorization, order, license, registration or qualification of or with any such government instrumentality or court 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 such consents, approvals, authorizations, orders, licenses, registrations or qualifications as have been obtained under the Securities Act, the Trust Indenture Act and as may be required under state securities or "blue sky" laws in connection with the purchase and distribution of the Securities by the Underwriters. (q) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent, and the Company is not aware of any existing or imminent labor disturbance by the employees of any of its or any subsidiary's principal suppliers, manufacturers, customers or contractors, which, in either case, would result in a Material Adverse Effect. (r) ABSENCE OF PROCEEDINGS. The Company reasonably believes that there are no actions, suits, proceedings, inquiries or investigations before or brought by any court or governmental agency or body, domestic or foreign, now pending or, to the knowledge of the Company, threatened, against or applicable to the Company or any of its subsidiaries which (i) could reasonably be expected, either individually or in the aggregate, to result in a Material Adverse Effect, or (ii) would materially and adversely 7 affect the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder. There are no contracts or other documents that are required to be filed as an exhibit to the Registration Statement which are not filed as required. (s) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its subsidiaries own or have the right to use adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, "Intellectual Property") necessary to carry on the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, individually or in the aggregate, would result in a Material Adverse Effect. (t) POSSESSION OF LICENSES AND PERMITS. The Company and its subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, "Governmental Licenses") issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except where the failure to have any such Governmental License would not, either individually or in the aggregate, have a Material Adverse Effect; the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure to comply would not, individually or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except when the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. (u) TITLE TO PROPERTY. The Company and its subsidiaries have good title to all real property owned by the Company and its subsidiaries, as the case may be, and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (i) are described in the Prospectus or (ii) do not, individually or in the aggregate, interfere with the use made and proposed to be made of such property by the Company or any of its subsidiaries, except where such interferences, either individually or in the aggregate, would not have a 8 Material Adverse Effect; and all of the leases and subleases to which the Company or any of its subsidiaries is a party and under which the Company or any of its subsidiaries holds properties described in the Prospectus or in any document incorporated by reference therein, are in full force and effect, except where the failure to be in full force and effect would not, either individually or in the aggregate, have a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of any claim of any sort that has been asserted by anyone adverse to the rights of the Company or any of its subsidiaries under any such leases or subleases, or affecting or questioning the rights of the Company or any of its subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease, except where such claim, either individually or in the aggregate, would not have a Material Adverse Effect. (v) NO BRIBES. Neither the Company nor any of its subsidiaries has, directly or indirectly, paid or delivered any fee, commission or other sum of money or item or property, however characterized, to any finder, agent, government official or other party, in the United States or any other country, which is in any manner related to the business, assets or operations of the Company or any of its subsidiaries, which is illegal under any federal, state or local laws of the United States (including, without limitation, the U.S. Foreign Corrupt Practices' Act) or any other country having jurisdiction; and neither the Company nor any of its subsidiaries has participated in any boycotts. (w) TAX RETURNS. The Company and its subsidiaries have filed all federal, state, local and foreign tax returns that are required to be filed or have duly requested extensions thereof and have paid all taxes required to be paid by any of them and any related assessments, fines or penalties, except for any such tax, assessment, fine or penalty that is being contested in good faith and by appropriate proceedings, and except where the failure to have made such filings, paid such taxes or requested such extensions would not, either individually or in the aggregate, have a Material Adverse Effect; and adequate charges, accruals and reserves have been provided for in the financial statements referred to in Section 4(e) above in respect of all federal, state, local and foreign taxes for all periods as to which the tax liability of the Company or any of its subsidiaries has not been finally determined or remains open to examination by applicable taxing authorities, except where the failure to provide for such adequate charges, accruals and reserves would not, individually or in the aggregate, have a Material Adverse Effect. (x) ENVIRONMENTAL LAWS. Except as described in the Prospectus and except as would not, individually or in the aggregate, result in a Material Adverse Effect, (i) neither the Company nor any of its subsidiaries is in violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance, code, policy or rule of common law or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment, relating to pollution or protection of human health, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, "Hazardous Materials") or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, "Environmental Laws"), (ii) the Company and its subsidiaries have all permits, authorizations and approvals required under any applicable Environmental Laws and are each in compliance with their requirements, (iii) there are no pending or threatened administrative, regulatory or judicial actions, suits, demands, 9 demand letters, claims, liens, notices of noncompliance or violation, investigation or proceedings relating to any Environmental Laws against the Company or any of its subsidiaries and (iv) there are no events or circumstances that might reasonably be expected to form the basis of an order for clean-up or remediation, or an action, suit or proceeding by any private party or governmental body or agency, against or affecting the Company or any of its subsidiaries relating to Hazardous Materials or Environmental Laws. (y) INVESTMENT COMPANY ACT. The Company is not, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Prospectus 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"). (z) RELATED TRANSACTIONS. The Company is not aware of any relationship, direct or indirect, between or among the Company or any of its subsidiaries on the one hand, and the directors and officers of the Company or any of its subsidiaries on the other hand, which is required by the Securities Act to be described in the Registration Statement and the Prospectus which is not so described. 5. The Company covenants and agrees with each of the several Underwriters as follows: (a) to use its best efforts to cause the Registration Statement to become effective at the earliest possible time and, if required, to file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A under the Securities Act; and 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 and to furnish copies of the Prospectus to the Underwriters in New York City prior to 10:00 a.m., New York City time, on the Business Day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request; (b) to deliver, at the expense of the Company, to the Representatives, four conformed copies of the Registration Statement (as originally filed) and each amendment thereto, in each case including exhibits and documents incorporated by reference therein, and to each other Underwriter a conformed copy of the Registration Statement (as originally filed) and each amendment thereto, in each case without exhibits but including the documents incorporated by reference therein and, during the period mentioned in paragraph (e) below, to each of the Underwriters as many copies of the Prospectus (including all amendments and supplements thereto) as the Representatives may reasonably request; (c) before filing any amendment or supplement to the Registration Statement or the Prospectus, whether before or after the time the Registration Statement becomes 10 effective, to furnish the Representatives with a copy of the proposed amendment or supplement for review and not to file any such proposed amendment or supplement to which the Representatives reasonably object; (d) to advise the Representatives promptly, and to confirm such advice in writing, (i) when the Registration Statement has become effective, (ii) when any amendment to the Registration Statement has been filed or becomes effective, (iii) when any supplement to the Prospectus or any amendment to the Prospectus has been filed, (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for any additional information, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose, (vi) of the occurrence of any event, within the period referenced in paragraph (e) below, 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 when the Prospectus is delivered to a purchaser, not misleading, and (vii) of the receipt by the Company of any notification with respect to any suspension of the qualification of the Securities for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and to use its best efforts to prevent the issuance of any such stop order, or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of any order suspending any such qualification of the Securities, or notification of any such order thereof and, if issued, to obtain as soon as possible the withdrawal thereof; (e) if, during such period of time after the first date of the public offering of the Securities that in the opinion of counsel for the Underwriters or the opinion of counsel to the Company a prospectus relating to the Securities is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if it is necessary to amend or supplement the Prospectus to comply with law, forthwith to prepare and furnish, at the expense of the Company, to the Underwriters and to the dealers (whose names and addresses the Representatives will furnish to the Company) to which Securities may have been sold by the Representatives on behalf of the Underwriters and to any other dealers upon request, such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law; (f) to endeavor to qualify the Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Representatives shall reasonably request and to continue such qualification in effect so long as reasonably required for distribution of the Securities; PROVIDED that the Company shall not be required to file a general consent to service of process in any jurisdiction, to qualify as a foreign corporation or as a dealer 11 in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject; (g) so long as the Securities are outstanding, to furnish to the Representatives copies of all reports or other communications (financi al or other) furnished to holders of the Securities, and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange; (h) during the period beginning on the date hereof and continuing to and including the Business Day following the Closing Date, not to offer, sell, contract to sell, or otherwise dispose of any debt securities of or guaranteed by the Company which are substantially similar to the Securities; (i) to use the net proceeds received by the Company from the sale of the Securities pursuant to this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds"; (j) whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limiting the generality of the foregoing, all costs and expenses (i) incident to the preparation, issuance, execution, authentication and delivery of the Securities, including any expenses of the Trustee, (ii) incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Prospectus and any preliminary prospectus (including in each case all exhibits, amendments and supplements thereto), (iii) incurred in connection with the registration or qualification and determination of eligibility for investment of the Securities under the laws of such jurisdictions as the Underwriters may designate (including fees and disbursements of Latham & Watkins associated with state securities or blue sky laws), (iv) related to any filing with National Association of Securities Dealers, Inc., (v) in connection with the costs of duplication and delivery of this Agreement, the Indenture and the Preliminary and Supplemental Blue Sky Memoranda to the Underwriters and dealers and the furnishing to Underwriters and dealers of copies of the Registration Statement and the Prospectus, including mailing and shipping, as herein provided, and (vi) payable to rating agencies in connection with the rating of the Securities; PROVIDED, HOWEVER, that the Underwriters will pay all expenses of their counsel incident to the performance of their obligations under this Agreement (other than fees and disbursements of Latham & Watkins associated with state securities or blue sky laws). 6. The several obligations of the Underwriters hereunder to purchase the Securities on the Closing Date are subject to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) the Registration Statement shall have become effective (or if a post-effective amendment is required to be filed under the Securities Act, such post-effective amendment shall have become effective) not later than 5:00 P.M., New York City time, 12 on the date hereof; and no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment shall be in effect, and no proceedings for such purpose shall be pending before or threatened by the Commission; 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 Securities Act and in accordance with Section 5(a) hereof; and all requests for additional information shall have been complied with to the satisfaction of the Representatives; (b) the representations and warranties of the Company contained herein are true and correct on and as of the Closing Date as if made on and as of the Closing Date and the Company shall have complied with all agreements and all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date; (c) subsequent to the execution and delivery of this Agreement and prior to the Closing Date, there shall not have occurred any downgrading, nor (i) shall any notice have been given of (A) any downgrading or (B) any intended or potential downgrading in the rating accorded any securities of or guaranteed by the Company by any "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g)(2) under the Securities Act nor (ii) shall any such nationally recognized statistical rating organization have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any securities of the Company; (d) since the respective dates as of which information is given in the Prospectus there shall not have been any material change in the capital stock or long-term debt of the Company or any of its subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, business, prospects, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Prospectus, the effect of which 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 Closing Date on the terms and in the manner contemplated in the Prospectus; and neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements included in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; (e) the Representatives shall have received on and as of the Closing Date a certificate of an executive officer of the Company, with specific knowledge about the Company's financial matters, satisfactory to the Representatives to the effect set forth in subsections (a) through (c) (with respect to the respective representations, warranties, agreements and conditions of the Company) of this Section and to the further effect that 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, assets, properties or business affairs of the Company and its subsidiaries, taken as a whole, whether or not arising in the ordinary course of business, from that set forth 13 or contemplated in the Registration Statement; (f) at the Closing Date, the Representatives shall have received the favorable opinion, dated as of the Closing Date, of (i) Gibson, Dunn & Crutcher LLP, counsel for the Company, in the form attached hereto as EXHIBIT A, together with signed or reproduced copies of such letter for each of the other Underwriters, (ii) Hayward D. Fisk, the Vice President, General Counsel and Secretary of the Company, in the form attached hereto as EXHIBIT B, together with signed or reproduced copies of such letter for each of the other Underwriters. In giving such opinion Gibson, Dunn & Crutcher LLP may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal law of the United States, upon the opinions of counsel satisfactory to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers of the Company and its subsidiaries and certificates of public officials; (g) on the effective date of the Registration Statement and the effective date of the most recently filed post-effective amendment to the Registration Statement and also on the Closing Date, Deloitte & Touche LLP shall have furnished to the Representatives letters, dated the respective dates of delivery thereof, in form and substance satisfactory to the Representatives, containing statements and information of the type customarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; (h) the Representatives shall have received on and as of the Closing Date an opinion of Latham & Watkins, counsel to the Underwriters, with respect to the validity of the Indenture and the Securities, the Registration Statement, the Prospectus and other related matters as the Representatives 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; and (i) on or prior to the Closing Date the Company shall have furnished to the Representatives such further certificates and documents as set forth in Schedule III hereto. 7. The Company agrees to indemnify and hold harmless each Underwriter, each affiliate of any Underwriter which assists such Underwriter in the distribution of the Securities and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, the legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make 14 the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein; PROVIDED, HOWEVER, that the indemnity agreement provided in this Section 7 with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling any Underwriter) from whom the person asserting any losses, claims, damages, liabilities or actions based upon any untrue statement or alleged untrue statement of material fact or omission or alleged omission to state therein a material fact purchased Securities, if the untrue statement or omission or alleged untrue statement or omission made in such preliminary prospectus is eliminated or remedied in the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto) or had not been sent or given to such person within the time required by the Securities Act. Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person who controls the Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to each Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any preliminary prospectus. If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such person (the "Indemnified Person") shall promptly notify the person against whom such indemnity may be sought (the "Indemnifying Person") in writing, and the Indemnifying Person, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may designate in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both the Indemnifying Person and the Indemnified Person and the Indemnified Person objects to the selection of counsel after having been advised by such counsel that there may be one or more legal defenses available to the Indemnified Person which are different from or additional to those available to the Indemnifying Person. It is understood that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and 15 expenses shall be reimbursed as they are incurred. Any such separate firm for the Underwriters, each affiliate of any Underwriter which assists such Underwriter in the distribution of the Securities and such control persons of Underwriters shall be designated in writing by J.P. Morgan Securities Inc. and any such separate firm for the Company, its directors, its officers who sign the Registration Statement and such control persons of the Company shall be designated in writing by the Company. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified Person from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested an Indemnifying Person to reimburse the Indemnified Person for fees and expenses of counsel, the Indemnifying Person agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such Indemnifying Person of the aforesaid request and (ii) such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement; PROVIDED, HOWEVER, that the Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent if (i) such Indemnifying Person reimburses such Indemnified Person in accordance with such aforesaid request to the extent the Indemnifying Person in good faith considers such request to be reasonable; and (ii) such Indemnifying Person provides written notice to the Indemnified Person stating that in good faith the Indemnifying Person believes the unpaid balance to be unreasonable and substantiating the reasons therefor, in each case prior to the date of such settlement. No Indemnifying Person shall, without the prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding. If the indemnification provided for in the first and second paragraphs of this Section 7 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same respective proportions as the net proceeds from the offering (before deducting expenses) received by the Company and the total underwriting discounts and the 16 commissions received by the Underwriters, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate public offering price of the Securities. The relative fault of the Company on the one hand and the Underwriters on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters 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 Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall an Underwriter 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 that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7 are several in proportion to the respective principal amount of Securities set forth opposite their names in SCHEDULE I hereto, and not joint. The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law of in equity. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter or any person controlling any Underwriter or by or on behalf of the Company, its officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Securities. 8. Notwithstanding anything herein contained, this Agreement may be terminated in the absolute discretion of the Representatives, by notice given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, or the National Association of Securities Dealers, Inc., 17 (ii) trading of any securities of or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal, New York State or California State authorities, or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of the Representatives, is material and adverse and which, in the judgment of the Representatives, makes it impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. 9. This Agreement shall become effective upon the later of (x) execution and delivery hereof by the parties hereto and (y) release of notification of the effectiveness of the Registration Statement (or, if applicable, any post-effective amendment) by the Commission. If on the Closing Date any one or more of the Underwriters shall fail or refuse to purchase Securities which it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the principal amount of Securities set forth opposite their respective names in SCHEDULE I bears to the aggregate principal amount of Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as the Representatives may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; PROVIDED that in no event shall the principal amount of Securities that any Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant to this Section 9 by an amount in excess of one-tenth of such principal amount of Securities without the written consent of such Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail or refuse to purchase Securities which it or they have agreed to purchase hereunder on such date, and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, and arrangements satisfactory to the Representatives and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either the Underwriters or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. Any action taken under this paragraph shall 18 not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement. 10. If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement or any condition of the Underwriters' obligations cannot be fulfilled, the Company agrees to reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and expenses of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder. 11. This Agreement shall inure to the benefit of and be binding upon the Company, the Underwriters or each affiliate of any Underwriter which assists such Underwriter in the distribution of the Securities, any controlling persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase. 12. Any action by the Underwriters hereunder may be taken by the Representatives jointly or by J.P. Morgan Securities Inc. alone on behalf of the Underwriters, and any such action taken by the Representatives jointly or by J.P. Morgan Securities Inc. alone shall be binding upon the Underwriters. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be given to the Representatives c/o J.P. Morgan Securities Inc., 60 Wall Street, New York, New York 10260-0060 (fax: (212) 648-5151); Attention: Transaction Execution Group. Notices to the Company shall be given to it at Computer Sciences Corporation, 2100 East Grand Avenue, El Segundo, California 90245, (fax: (310) 640-3167); Attention: Hayward D. Fisk, Esq. and Stephen E. Johnson, Esq. 13. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 14. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of laws provisions thereof. 19 If the foregoing is in accordance with your understanding, please sign and return four counterparts hereof. Very truly yours, COMPUTER SCIENCES CORPORATION By: ------------------------------------ Name: Title: Accepted: __________, 1999 J.P. Morgan Securities Inc. Goldman, Sachs & Co. Merrill Lynch, Pierce Fenner & Smith Incorporated Acting severally on behalf of themselves and the several Underwriters listed in Schedule I hereto. By: J.P. Morgan Securities Inc. By: -------------------------------- Name: Title: S-1 EXHIBIT A FORM OF OPINION OF COUNSEL TO THE COMPANY TO BE DELIVERED PURSUANT TO SECTION 6(f) Note: A final draft form of opinion, with all assumptions and qualifications, will be attached prior to execution of this Agreement. 1. The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Nevada. 2. The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and to enter into and perform its obligations under the Underwriting Agreement. 3. The Underwriting Agreement has been duly authorized, executed and delivered by the Company. 4. The Indenture has been duly authorized, executed and delivered by the Company and (assuming the due authorization, execution and delivery thereof by the Trustee) constitutes a legally valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended. 5. The Securities are in the form contemplated by the Indenture, have been duly authorized, executed and delivered by the Company and, assuming that the Securities have been duly authenticated by the Trustee in the manner described in the authentication order delivered to the Trustee by the Company on the date hereof upon payment therefor, the Securities have been duly issued and delivered by the Company and constitute legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms and will be entitled to the benefits of the Indenture. 6. The Securities and the Indenture conform in all material respects to the descriptions thereof contained in the Prospectus and the Registration Statement. 7. The information set forth in the Registration Statement under the heading "Indemnification of Directors and Officers," insofar as such statements constitute a summary of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents or proceedings. 8. No filing with, or authorization, approval, consent, license, order, registration, qualification or decree of, any court or governmental authority or agency, other than under the blue sky laws of the various states and/or foreign A-1 jurisdictions (as to which we render no opinion), is necessary or required in connection with the due authorization, execution and delivery of the Underwriting Agreement or the due execution, delivery or performance of the Indenture by the Company or for the offering, issuance, sale or delivery of the Securities, except such authorization, approval, consent, license, order, registration, qualification or decree as have been obtained under the Securities Act and the Trust Indenture Act and as may be required under state securities or blue sky laws (as to which we render no opinion) in connection with the purchase and distribution of the Securities by the Underwriters. 9. The execution, delivery and performance of the Underwriting Agreement, the Indenture and the Securities and the consummation of the transactions contemplated in the Underwriting Agreement (including the issuance and sale of the Securities and the use of proceeds from the sale of the Securities to repay the principal and accrued interest on the 6.80% Guaranteed Notes due April 15, 1999 issued by CSC Enterprises and guaranteed by the Company as described in the Prospectus under the caption "Use of Proceeds") and compliance by the Company with its obligations under the Underwriting Agreement, the Indenture and the Securities do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with, constitute a breach of or result in any violation of, the provisions of the applicable organizational documents, charter or by-laws of the Company, or any applicable law, statute, rule, regulation, judgment, order, writ or decree, known to us, of any government, government instrumentality or court having jurisdiction over the Company or any of its subsidiaries or any of its properties, assets or operations. 10. The Company is not an "investment company", as such term is defined in the Investment Company Act of 1940, as amended. We have participated in conferences with officers and representatives of the Company, representatives of the independent public accountants for the Company and the Representatives and their counsel at which the contents of the Registration Statement and Prospectus and related matters were discussed. Except as set forth in paragraph 7, we have not undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Registration Statement or Prospectus, (including, without limitation, the financial statements, notes thereto, financial statement schedules, other financial, statistical or accounting data included or incorporated by reference therein or omitted therein or information derived therefrom, as to which we make no comment) and because of the limitations inherent in the examination made by us and knowledge available to us and the nature and extent of our participation in such conferences, except as set forth in paragraph 7, we are not passing upon and are unable to assume, explicitly or implicitly, and, except as set forth in paragraph 7, we do not assume, any responsibility for the accuracy, completeness or fairness of such statements and we can give no assurance that such examination, knowledge and participation in such conferences would necessarily reveal matters of significance with respect to the items discussed in the remainder of this paragraph. However, based on and subject to the foregoing, nothing has come to our attention that A-2 would lead us to believe that the Registration Statement (except for financial statements, notes thereto, financial statement schedules, other financial, statistical or accounting data included or incorporated by reference therein or omitted therefrom or information derived therefrom, as to which we make no statement), at the time it became effective, 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 or that the Prospectus or any amendment or supplement thereto (except for financial statements, notes thereto, financial statement schedules, other financial, statistical or accounting data included or incorporated by reference therein or omitted therefrom or information derived therefrom, as to which we make no statement), as of the date of the Prospectus, at the time any such amendment or supplement thereto was issued or at the Closing Date, contained an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinion, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). A-3 EXHIBIT B FORM OF OPINION OF HAYWARD D. FISK, VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY OF THE COMPANY TO BE DELIVERED PURSUANT TO SECTION 6(f) Note: A final draft form of opinion, with all assumptions and qualifications, will be attached prior to execution of this Agreement. 1. The Company is a Nevada corporation duly qualified as a foreign corporation to transact business in each of the other 49 states of the United States and is in good standing in all 50 states. CSC Enterprises has been duly formed and is validly existing as a general partnership under the laws of the State of Delaware. CSC Enterprises has the requisite partnership power and authority to own, lease and operate its properties and to conduct its business as it is presently being conducted. 2. The authorized, issued and outstanding capital stock of the Company is as set forth in the Prospectus in the column entitled "Actual" under the caption "Capitalization" (except for subsequent issuances or subsequent repurchases, if any, pursuant to employee benefit or option plans referred to in the Company's Annual Report on From 10-K for the period ended April 3, 1998, or subsequent repurchases or cancellations, if any, of restricted stock awards that do not vest upon termination of employment or subsequent issuances of cash in lieu of fractional shares in connection with the Continuum acquisition). 3. CSC Limited has been duly organized and is validly existing under the laws of England and Wales, has power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus, and all resolutions, returns and other documents required by the Companies Act of 1985 or to be delivered to the Registrar of Companies have been duly delivered and are true and accurate. All of the issued and outstanding capital stock of CSC Limited has been duly authorized and validly issued, is fully paid and non-assessable and is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of CSC Limited was issued in violation of any preemptive or similar rights arising by operation of law, or under the memorandum or articles of association or by-laws of CSC Limited or under any agreement to which the Company or CSC Limited is a party. 4. Each Designated Subsidiary has been duly organized and is validly existing as a corporation, in good standing under the laws of the jurisdiction of its incorporation, has power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which B-1 such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect (all such jurisdictions are listed on SCHEDULE II hereto); except as otherwise disclosed in the Prospectus, all of the issued and outstanding capital stock of each such Designated Subsidiary has been duly authorized and validly issued, is fully paid and non-assessable and (except for CSC Outsourcing Inc., all of the issued and outstanding capital stock of which is owned directly or through subsidiaries by CSC Holdings, Inc., all of the issued and outstanding common stock of which is owned by CSC Enterprises, which in turn is a partnership in which the Company, directly or through subsidiaries, has a 99.9% ownership interest) is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding shares of capital stock of any Designated Subsidiary was issued in violation of any preemptive or similar rights arising by operation of law, or under the charter or by-laws of any Designated Subsidiary or under any agreement to which the Company or any Designated Subsidiary is a party. 5. The execution, delivery and performance of the Underwriting Agreement, the Indenture and the Securities, and the consummation of the transactions contemplated in the Underwriting Agreement and in the Prospectus (including the issuance and sale of the Securities and the use of the proceeds from the sale of the Securities as described in the Prospectus under the caption "Use of Proceeds"), and compliance by the Company with its obligations under the Underwriting Agreement, the Indenture and the Securities, do not and will not, whether with or without the giving of notice or lapse of time or both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section 4(o) of the Underwriting Agreement) under or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement note, lease or any other agreement or instrument, known to me, to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a Material Adverse Effect), nor will such action result in any violation of the provisions of the applicable organizational documents, charter or by-laws of any of the subsidiaries of the Company. 6. The documents incorporated by reference in the Prospectus (other than the financial statements and supporting schedules included therein or omitted therefrom, as to which I express no opinion), when they became effective or were filed with the Securities and Exchange Commission (the "Commission"), as the case may be, complied as to form in all material respects with the requirements of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, as applicable, and the rules and regulations of the Commission thereunder. B-2 7. There are no franchises, contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the Prospectus or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto, and the descriptions thereof or references thereto are correct in all material respects. 8. The Company and its subsidiaries possess such Governmental Licenses issued by the appropriate federal, state, local or foreign regulatory agencies or bodies necessary to conduct the business now operated by them, except where the failure to have any such Governmental License would not, either individually or in the aggregate, have a Material Adverse Effect; the Company and its subsidiaries are in compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, individually or in the aggregate, have a Material Adverse Effect; all of the Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses which, individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would result in a Material Adverse Effect. I have participated in conferences with officers and representatives of the Company, representatives of the independent public accountants for the Company and the Representatives and their counsel at which the contents of the Registration Statement and Prospectus and related matters were discussed. Except as set forth in paragraph 8, I have not undertaken to determine independently the accuracy, completeness or fairness of the statements contained in the Registration Statement or Prospectus (including, without limitation, the financial statements, notes thereto, financial statement schedules, other financial or accounting data included or incorporated by reference therein or omitted therein or information derived therefrom, as to which I make no comment), and because of the limitations inherent in the examination made by me and knowledge available to me and the nature and extent of my participation in such conferences, except as set forth in paragraph 8, I am not passing upon and am unable to assume, explicitly or implicitly, and, except as set forth in paragraph 8, I do not assume, any responsibility for the accuracy, completeness or fairness of such statements and I can give no assurance that such examination, knowledge and participation in such conferences would necessarily reveal matters of significance with respect to the items discussed in the remainder of this paragraph. However, based on and subject to the foregoing, nothing has come to my attention that would lead me to believe that the Registration Statement (except for financial statements, notes thereto, financial statement schedules, other financial or accounting data included or incorporated by reference therein or omitted therefrom or information derived therefrom, as to which I make no statement), at the time it became effective 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 or that the Prospectus or any amendment or supplement thereto (except for financial statements, notes thereto, financial statement schedules, other financial or B-3 accounting data included or incorporated by reference therein or omitted therefrom or information derived therefrom, as to which I make no statement), as of the date of the Prospectus, at the time any such amendment or supplement thereto was issued or at the Closing Date, contained an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Such opinion shall not state that it is to be governed or qualified by, or that it is otherwise subject to, any treatise, written policy or other document relating to legal opinion, including, without limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991). B-4 SCHEDULE I LIST OF UNDERWRITERS
Principal Underwriters Amount of Notes - ------------ --------------- J.P. Morgan Securities Inc. Goldman, Sachs & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated
SCHEDULE II JURISDICTION OF DESIGNATED SUBSIDIARIES 1. CSC Consulting, Inc. Alabama Arizona California Colorado Connecticut Delaware Florida Georgia Illinois Indiana Iowa Kentucky Maryland Michigan Minnesota Missouri Nevada New Jersey New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Virginia Washington Washington DC West Virginia Wisconsin 2. CSC Credit Services, Inc. Florida Illinois Indiana Iowa Kansas Kentucky Louisiana Minnesota Missouri Nebraska New York North Carolina North Dakota Ohio Oklahoma Pennsylvania Virginia Wisconsin 3. CSC Enterprises, Inc. Iowa Kansas Kentucky Minnesota Missouri North Carolina North Dakota Oklahoma Tennessee Texas Virginia Wisconsin 4. CSC Outsourcing Inc. Arizona California Connecticut Florida Maine Massachusetts Michigan Minnesota Missouri New Jersey New York North Carolina Ohio Pennsylvania Rhode Island South Carolina Texas Utah Vermont Virginia Washington DC 5. CSC Healthcare, Inc. Alabama Alaska Arizona Arkansas Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington Washington DC West Virginia Wisconsin Wyoming SCHEDULE III FURTHER CERTIFICATES AND DOCUMENTS TO BE DELIVERED BY THE COMPANY 1. A certificate signed by the Secretary of the Company certifying copies of certain documents. 2. A letter, addressed to the Underwriters, regarding delivery of the Securities. 3. A receipt acknowledging the receipt of funds. 4. A certified copy of the Restated Articles of Incorporation of the Company issued and certified by the Secretary of State of the State of Nevada. 5. A Certificate of Good Standing (long form, if available) for the Company and each Designated Subsidiary, each dated as of a recent date prior to the Closing Date, issued by the Secretary of State (or other competent official) of their respective jurisdictions or organization, together with letters of good tax standing (as available) from the tax authorities of their respective jurisdictions of organization, each dated as of a recent date prior to the Closing Date. 6. A certificate issued by the Registrar of Companies, dated as of a recent date prior to the Closing Date, stating that all required filings have been made by CSC Computer Sciences Limited. 7. A Registration Certificate of CSC Enterprises as filed with the Prothonotary of the County of New Castle, Delaware and the Partnership Agreement of CSC Enterprises. 8. Certificates of qualification to do business, dated as of a recent date prior to the Closing Date for the Company and each Designated Subsidiary, issued by the Secretary of State of each state where the Company and each Designated Subsidiary has its executive offices. 9. A bring-down telegram, dated as of the end of business on the Closing Date, regarding the good standing in each jurisdiction of organization of the Company and each Designated Subsidiary. 10. A copy of the DTC Letter of Representations regarding book-entry clearance of the Global Note through the facilities of DTC. 11. Three letters regarding the rating of the Securities, one from each of Standard & Poor's Rating Services relating to the "A" rating, one from Moody's Investor Services relating to the "A2" rating and one from Duff & Phelps Credit Rating Co. relating to the "A+" rating. 11. Wire transfer instructions. 12. Order to the Trustee authorizing the authentication of the Securities. EX-4.1 3 EXHIBIT 4.1 EXHIBIT 4.1 COMPUTER SCIENCES CORPORATION $200,000,000 __% Notes due __________, 2009 _____________ [FORM OF INDENTURE] Dated as of ___________, 1999 _____________ CITIBANK, N.A. Trustee CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section - --------------- ----------------- 310(a)(1)............................................... 7.10 (a)(2)............................................... 7.10 (a)(3)............................................... N.A. (a)(4)............................................... N.A. (b).................................................. 7.08;7.10;10.02 (c).................................................. N.A. 311(a).................................................. 7.11 (b).................................................. 7.11 (c).................................................. N.A. 312(a).................................................. 2.05 (b).................................................. 10.03 (c).................................................. 10.03 313(a).................................................. 7.06 (b)(1)............................................... N.A. (b)(2)............................................... 7.06 (c).................................................. 7.06;10.02 (d).................................................. 7.06 314(a).................................................. 4.03;10.02 (b).................................................. N.A. (c)(1)............................................... 10.04 (c)(2)............................................... 10.04 (c)(3)............................................... N.A. (d).................................................. N.A. (e).................................................. 10.05 (f).................................................. N.A. 315(a).................................................. 7.01(b) (b).................................................. 7.05;10.02 (c).................................................. 7.01(a) (d).................................................. 7.01(c) (e).................................................. 6.11 316(a)(last sentence)................................... 2.09 (a)(1)(A)............................................ 6.05 (a)(1)(B)............................................ 6.04 (a)(2)............................................... N.A. (b).................................................. 6.07 317(a)(1)............................................... 6.08 (a)(2)............................................... 6.09 (b).................................................. 2.04 318(a).................................................. 10.01
N.A. means not applicable. *This Cross-Reference Table is not part of the Indenture. TABLE OF CONTENTS
Page ---- ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . . . . . . . . .1 Section 1.01. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . .1 Section 1.02. Incorporation by Reference of Trust Indenture Act. . . . . . . . 6 Section 1.03. Rules of Construction.. . . . . . . . . . . . . . . . . . . . . .6 ARTICLE 2. THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Section 2.01. Form and Dating.. . . . . . . . . . . . . . . . . . . . . . . . .6 Section 2.02. Execution and Authentication.. . . . . . . . . . . . . . . . . . 7 Section 2.03. Registrar and Paying Agent. . . . . . . . . . . . . . . . . . . .7 Section 2.04. Paying Agent to Hold Money in Trust.. . . . . . . . . . . . . . .7 Section 2.05. Securityholder Lists. . . . . . . . . . . . . . . . . . . . . . .8 Section 2.06. Transfer and Exchange.. . . . . . . . . . . . . . . . . . . . . .8 Section 2.07. Replacement Securities. . . . . . . . . . . . . . . . . . . . . .9 Section 2.08. Outstanding Securities. . . . . . . . . . . . . . . . . . . . . .9 Section 2.09. Treasury Securities.. . . . . . . . . . . . . . . . . . . . . . .9 Section 2.10. Temporary Securities. . . . . . . . . . . . . . . . . . . . . . .9 Section 2.11. Cancellation. . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 2.12. Defaulted Interest. . . . . . . . . . . . . . . . . . . . . . . 10 ARTICLE 3. REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3.01. Optional Redemption.. . . . . . . . . . . . . . . . . . . . . . 10 Section 3.02. Notices to Trustee.. . . . . . . . . . . . . . . . . . . . . . 11 Section 3.03. Selection of Securities to Be Redeemed. . . . . . . . . . . . . 11 Section 3.04. Notice of Redemption. . . . . . . . . . . . . . . . . . . . . . 11 Section 3.05. Effect of Notice of Redemption. . . . . . . . . . . . . . . . . 12 Section 3.06. Deposit of Redemption Price.. . . . . . . . . . . . . . . . . . 12 Section 3.07. Securities Redeemed in Part.. . . . . . . . . . . . . . . . . . 12 ARTICLE 4. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Section 4.01. Payment of Securities.. . . . . . . . . . . . . . . . . . . . . 13 Section 4.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 13 Section 4.03. SEC Reports; Financial Statements.. . . . . . . . . . . . . . . 13 Section 4.04. Compliance Certificate. . . . . . . . . . . . . . . . . . . . . 14 Section 4.05. Compliance With Laws, Taxes.. . . . . . . . . . . . . . . . . . 15 Section 4.06. Stay, Extension and Usury Laws. . . . . . . . . . . . . . . . . 15 Section 4.07. Limitation on Liens.. . . . . . . . . . . . . . . . . . . . . . 15 Section 4.08. Corporate Existence.. . . . . . . . . . . . . . . . . . . . . . 16 Section 4.09. Limitation on Sale/Leaseback Transactions.. . . . . . . . . . . 16 Section 4.10. Permitted Liens and Permitted Sale/Leaseback Transactions.. . . 16
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Page ---- ARTICLE 5. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Section 5.01. Consolidation, Merger and Sale of Assets. . . . . . . . . . . . 17 Section 5.02. Successor Corporation Substituted . . . . . . . . . . . . . . . 17 ARTICLE 6. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . 18 Section 6.01. Events of Default.. . . . . . . . . . . . . . . . . . . . . . . 18 Section 6.02. Acceleration.. .. . . . . . . . . . . . . . . . . . . . . . . . 19 Section 6.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 19 Section 6.04. Waiver of Past Defaults.. . . . . . . . . . . . . . . . . . . . 20 Section 6.05. Control by Majority.. . . . . . . . . . . . . . . . . . . . . . 20 Section 6.06. Limitation on Suits.. . . . . . . . . . . . . . . . . . . . . . 20 Section 6.07. Rights of Holders to Receive Payment. . . . . . . . . . . . . . 20 Section 6.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . . . . 21 Section 6.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . . . . 21 Section 6.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Section 6.11. Undertaking for Costs.. . . . . . . . . . . . . . . . . . . . . 22 ARTICLE 7. TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Section 7.01. Duties of Trustee.. . . . . . . . . . . . . . . . . . . . . . . 22 Section 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 23 Section 7.03. Individual Rights of Trustee. . . . . . . . . . . . . . . . . . 24 Section 7.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . . . . 24 Section 7.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . 24 Section 7.06. Reports by Trustee to Holders.. . . . . . . . . . . . . . . . . 24 Section 7.07. Compensation and Indemnity. . . . . . . . . . . . . . . . . . . 24 Section 7.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . . . . 25 Section 7.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . 26 Section 7.10. Eligibility; Disqualification.. . . . . . . . . . . . . . . . . 26 Section 7.11. Preferential Collection of Claims Against Company.. . . . . . . 27 Section 7.12. Trustee as Paying Agent or Registrar. . . . . . . . . . . . . . 27 Section 7.13. Knowledge of Event of Default . . . . . . . . . . . . . . . . . 27 ARTICLE 8. DISCHARGE OF INDENTURE. . . . . . . . . . . . . . . . . . . . . . . . . 27 Section 8.01. Termination of Company's Obligations. . . . . . . . . . . . . . 27 Section 8.02. Application of Trust Money... . . . . . . . . . . . . . . . . . 28 Section 8.03. Repayment to Company. . . . . . . . . . . . . . . . . . . . . . 29 Section 8.04. Reinstatement.. . . . . . . . . . . . . . . . . . . . . . . . . 29 ARTICLE 9. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Section 9.01. Without Consent of Holders. . . . . . . . . . . . . . . . . . . 29
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Page ---- Section 9.02. With Consent of Holders. . . . . . . . . . . . . . . . . . . . 30 Section 9.03. Compliance with Trust Indenture Act.. . . . . . . . . . . . . . 31 Section 9.04. Revocation and Effect of Consents.. . . . . . . . . . . . . . . 31 Section 9.05. Notation on or Exchange of Securities.. . . . . . . . . . . . . 31 Section 9.06. Trustee to Sign Amendments, etc.. . . . . . . . . . . . . . . . 31 ARTICLE 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Section 10.01. Trust Indenture Act Controls. . . . . . . . . . . . . . . . . 32 Section 10.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Section 10.03. Communication by Holders with Other Holders.. . . . . . . . . 33 Section 10.04. Certificate and Opinion as to Conditions Precedent. . . . . . 33 Section 10.05. Statements Required in Certificate or Opinion.. . . . . . . . 34 Section 10.06. Rules by Trustee and Agents.. . . . . . . . . . . . . . . . . 34 Section 10.07. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . 34 Section 10.08. No Recourse Against Others. . . . . . . . . . . . . . . . . . 34 Section 10.09. Governing Law.. . . . . . . . . . . . . . . . . . . . . . . . 35 Section 10.10. No Adverse Interpretation of Other Agreements.. . . . . . . . 35 Section 10.11. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . 35 Section 10.12. Severability. . . . . . . . . . . . . . . . . . . . . . . . . 35 Section 10.13. Counterpart Originals.. . . . . . . . . . . . . . . . . . . . 35 Section 10.14. Variable Provisions.. . . . . . . . . . . . . . . . . . . . . 35 Section 10.15. Table of Contents, Headings, etc. . . . . . . . . . . . . . . 35 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 EXHIBIT A FORM OF SECURITY
THIS INDENTURE dated as of ____________ __, 1999 is by and between Computer Sciences Corporation, a Nevada corporation, and Citibank, N.A., a national banking association ("Trustee"). Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the Holders of the Company's _____% Notes due ____________ __, 2009 ("Securities"): ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. DEFINITIONS. "ADJUSTED TREASURY RATE" means, with respect to any Redemption Date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. "AFFILIATE" means (a) any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor upon the Securities, (b) any spouse, immediate family member or other relative who has the same principal residence of any Person described in (a) above, (c) any trust in which any such Persons described in clause (a) or (b) above has a beneficial interest and (d) any corporation or other organization of which any such Persons described in clause (a), (b) or (c) above collectively own more than 50% of the equity of such entity. For purposes of this definition, beneficial ownership of 10% or more of the voting common equity (on a fully diluted basis) or warrants to purchase such equity (whether or not currently exercisable) of a Person shall be deemed to be control of such Person. "AGENT" means any Registrar, Paying Agent or co-registrar. "ATTRIBUTABLE DEBT" with respect to any Sale/Leaseback Transaction means the present value of the minimum rental payments called for during the term of the lease (including any period for which such lease has been extended), determined in accordance with generally accepted accounting principles, discounted at a rate that, at the inception of the lease, the lessee would have incurred to borrow over a similar term the funds necessary to purchase the leased assets. "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. "BOARD OF DIRECTORS" means the Board of Directors of the Company or any authorized committee of the Board. "BUSINESS DAY" means any day other than a Legal Holiday. 1 "CAPITAL LEASE" means, at the time any determination thereof is to be made, any lease of property, real or personal, in respect of which the present value of the minimum rental commitment would be capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles. "CAPITAL LEASE OBLIGATION" means, at the time any determination thereof is to be made, the amount of the liability in respect of a Capital Lease which would at such time be so required to be capitalized on such balance sheet in accordance with generally accepted accounting principles. "CAPITAL STOCK" means any and all shares, interests, participations or other equivalents (however designated) of corporate stock or partnership interests. "COMPANY" means Computer Sciences Corporation until a successor replaces it in accordance with Article 5 and thereafter means the successor. "COMPARABLE TREASURY ISSUE" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Securities 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 to the remaining term of the Securities. "COMPARABLE TREASURY PRICE" means, with respect to any Redemption Date: (a) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations. "CONSOLIDATED NET TANGIBLE ASSETS" means, as of any particular time, the aggregate amount of assets of the Company and the Subsidiaries (in each case, less applicable reserves and other properly deductible items) after deducting therefrom: (a) all current liabilities other than (i) notes and loans payable, (ii) current maturities of long-term debt and (iii) current maturities of Capital Lease Obligations and (b) intangible assets, to the extent included in such aggregate assets, all as set forth on the then most recent consolidated balance sheet of the Company and its consolidated subsidiaries and computed in accordance with generally accepted accounting principles. "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the Trustee specified in Section 10.02 or such other address as the Trustee may give notice to the Company. "CO-TRUSTEE" means any Person appointed by the Trustee pursuant to Section 7.12 hereof. "COVENANT DEFEASANCE" has the meaning set forth in Section 8.01 hereof. 2 "DEFAULT" means any event which is, or after notice or passage of time or both would be, an Event of Default. "EVENT OF DEFAULT" has the meaning set forth in Section 6.01 hereof. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "HOLDER" means a Person in whose name a Security is registered. "INDEBTEDNESS" means, with respect to any Person, and without duplication: (a) any liability of such Person (i) for borrowed money, or (ii) for any letter of credit for the account of such Person supporting obligations of such Person or other Persons, or (iii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a current liability arising in the ordinary course of business), or (iv) for the payment of money relating to a capitalized lease; (b) any liability of others described in the preceding clause (a) that the Person has guaranteed or that is otherwise its legal liability; and (c) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (a) and (b) above. "INDENTURE" means this Indenture as amended from time to time. "LEGAL HOLIDAY" has the meaning set forth in Section 10.07 hereof. "LIEN" means any lien, security interest, charge, mortgage, pledge or other encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest other than an agreement to secure Indebtedness equally and ratably upon the incurrence of other secured Indebtedness). "OBLIGATIONS" means any Principal, interest, penalties, fees and other liabilities payable under the documentation governing any Indebtedness. "OFFICERS" means the President, the Treasurer, any Assistant Treasurer, Controller, Secretary or any Vice-President of the Company or any other obligor upon the Securities. "OFFICERS' CERTIFICATE" means a certificate signed by two Officers. See Sections 10.04 and 10.05 hereof. "OPINION OF COUNSEL" means an opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or any other obligor upon the Securities or to the Trustee. See Sections 10.04 and 10.05 hereof. 3 "PAYING AGENT" has the meaning set forth in Section 2.03 hereof. "PERSON" means any individual, corporation, partnership, joint venture, limited liability company, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "PRINCIPAL" of a debt security means the principal of the security plus the premium, if any, on the security. "QUOTATION AGENT" means the Reference Treasury Dealer appointed by the Company. "REDEMPTION DATE" has the meaning set forth in Section 3.01 hereof. "REDEMPTION PRICE" has the meaning set forth in Section 3.01 hereof. "REFERENCE TREASURY DEALER" means (a) each of J.P. Morgan Securities Inc., Goldman, Sachs & Co., Inc., Merrill Lynch Government Securities Inc., and their respective successors; PROVIDED, HOWEVER, that if 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 (b) any other Primary Treasury Dealer selected by the Company. "REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. "REGISTRAR" has the meaning set forth in Section 2.03 hereof. "REMAINING SCHEDULED PAYMENTS" means, with respect to any Security, the remaining scheduled payments of the Principal thereof to be redeemed and interest thereon that would be due after the related Redemption Date but for such redemption; PROVIDED, HOWEVER, that, if such Redemption Date is not an Interest Payment Date (as set forth on the face of the Security) with respect to such Security, the amount of the next succeeding scheduled interest payment thereon will be reduced by the amount of interest accrued thereon to such Redemption Date. "SALE/LEASEBACK TRANSACTION" means any arrangement with any Person (other than the Company or any Subsidiary) providing for a Capital Lease by the Company or any Subsidiary of any property which has been or is to be sold or transferred by the Company or any Subsidiary to such Person or to any Person (other than the Company or any Subsidiary) by whom funds have been or are to be advanced on the security of the leased property. "SEC" means the Securities and Exchange Commission. "SECURITIES" means the Securities described above issued under this Indenture. 4 "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITYHOLDER" means a Holder of one or more Securities. "SUBSIDIARY" means (a) a corporation a majority of whose Capital Stock with voting power, under ordinary circumstances, to elect directors is at the time directly or indirectly owned by the Company or by the Company and a Subsidiary or Subsidiaries of the Company or by a Subsidiary or Subsidiaries of the Company or (b) any other Person (other than a corporation) in which the Company or the Company and a Subsidiary or Subsidiaries of the Company or a Subsidiary or Subsidiaries of the Company directly or indirectly at the date of determination thereof has at least a majority ownership interest. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA, except as provided in Section 9.01 hereof. "TRUSTEE" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "TRUST OFFICER" means any officer within the Corporate Trust Office including any Vice President, Managing Director, Assistant Vice President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge and familiarity with the particular subject. "U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United States of America for the payment of which the full faith and credit of the United States of America is pledged. SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA term used in this Indenture has the following meaning: "OBLIGOR" on the Securities means the Company, any other obligor upon the Securities or any successor obligor upon the Securities. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise requires: 5 (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles in the United States; (c) references to "generally accepted accounting principles" shall mean generally accepted accounting principles in effect in the United States as of the time when and for the period as to which such accounting principles are to be applied; (d) "or" is not exclusive; (e) words in the singular include the plural, and in the plural include the singular; and (f) provisions apply to successive events and transactions. ARTICLE 2. THE SECURITIES SECTION 2.01. FORM AND DATING. The Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A, which is part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication. The Securities shall be in denominations of $1,000 and integral multiples thereof. SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the Securities for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Securities. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The form of Trustee's certificate of authentication to be borne by the Securities shall be substantially as set forth in Exhibit A hereto. The Trustee shall authenticate Securities for original issue up to the aggregate Principal amount stated in paragraph 4 of the Securities, upon a written order of the Company signed by two Officers. The aggregate Principal amount of Securities outstanding at any time may not exceed the amount set forth therein except as provided in Section 2.07. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities. An authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes 6 authentication by such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate. SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Securities may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent, Registrar or co-registrar without notice to any Securityholder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent, Registrar or co-registrar. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company (or any other obligor upon the Securities) shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of Principal or interest on the Securities, and will notify the Trustee in writing of any default by the Company (or any other obligor upon the Securities) in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company (or any other obligor upon the Securities) at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company, a Subsidiary or any other obligor upon the Securities) shall have no further liability for the money. If the Company, a Subsidiary or any other obligor upon the Securities acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Securityholders all money held by it as Paying Agent. SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company (or any other obligor upon the Securities) shall furnish to the Trustee at least seven Business Days before each interest payment date (and in all events at intervals of not more than six months) and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders, and the Company shall otherwise comply with TIA Section 312(a). SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are presented to the Registrar or a co-registrar with a request to register, transfer or exchange them for an equal Principal amount of Securities of other denominations, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met; PROVIDED, HOWEVER, that any Security presented or surrendered for 7 registration of transfer or exchange shall be duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing. To permit registrations of transfer and exchanges, the Company shall issue and the Trustee shall authenticate Securities at the Registrar's request. The Company shall not be required (a) to issue, to register the transfer of or to exchange Securities during a period beginning at the opening of business on a Business Day 15 days before the day of any selection of Securities for redemption under Section 3.03 hereof and ending at the close of business on the day of selection, (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 or (c) to register the transfer or exchange of a Security between the record date and the next succeeding interest payment date. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.10, 3.07 or 9.05 hereof). SECTION 2.07. REPLACEMENT SECURITIES. If any mutilated Security is surrendered to the Trustee, or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Security, the Company shall issue and the Trustee, upon the written order of the Company signed by two Officers, shall authenticate a replacement Security if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Security is replaced. The Company may charge for its expenses in replacing a Security. Every replacement Security is an additional obligation of the Company. SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. If the Principal amount of any Security is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue. A Security does not cease to be outstanding because the Company or an Affiliate holds the Security. 8 SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of the required Principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, any other obligor upon the Securities or an Affiliate shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee, upon receipt of the written order of the Company signed by the two Officers, shall authenticate definitive Securities in exchange for temporary Securities. Until such exchange, temporary Securities shall be entitled to the same rights, benefits and privileges as definitive Securities. SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy canceled Securities unless the Company directs them to be returned to it. The Company may not issue new Securities to replace Securities that it has paid or that have been delivered to the Trustee for cancellation. All canceled Securities held by the Trustee shall be destroyed and certification of their destruction delivered to the Company unless by a written order, signed by two Officers, the Company shall direct that canceled Securities be returned to it. SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of interest on the Securities, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Securityholders on a subsequent special record date, in each case at the rate provided in the Securities and in Section 4.01 hereof. The Company shall, with the consent of the Trustee, fix each such special record date and payment date. At least 15 days before the record date, the Company (or the Trustee, in the name of and at the expense of the Company) shall mail to Securityholders a notice that states the special record date, the related payment date and the amount of such interest to be paid. 9 ARTICLE 3. REDEMPTION SECTION 3.01. OPTIONAL REDEMPTION. The Securities will be subject to redemption at the option of the Company on any date prior to the maturity date, in whole or from time to time in part, in $1,000 increments (PROVIDED that any remaining Principal amount thereof shall be at least the minimum authorized denomination thereof), on written notice given to the Holders thereof not less than 30 days nor more than 60 days prior to the date fixed for redemption in such notice (the "Redemption Date"), at a redemption price equal to the greater of (a) 100% of the Principal amount of such Securities to be redeemed and (b) as determined by the Quotation Agent, the sum of the present values of the Remaining Scheduled Payments of Principal and interest thereon (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the Adjusted Treasury Rate plus [ ] basis points (such greater amount is referred to herein as the "Redemption Price"), plus, in either the case of clause (a) or clause (b), accrued and unpaid interest thereon to the Redemption Date. The Company shall calculate the Redemption Price not less than 30 days prior to the Redemption Date. The Company shall notify the Trustee in writing of the Redemption Price promptly on calculation thereof, and the Trustee shall have no duty or liability to calculate or verify the Redemption Price. Any redemption pursuant to this Section 3.01 shall be made pursuant to the provisions of Sections 3.02 through 3.07 hereof. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Securities. SECTION 3.02. NOTICES TO TRUSTEE. If the Company elects to redeem Securities pursuant to the optional redemption provisions of Section 3.01 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a Redemption Date, an Officers' Certificate providing notice of such redemption and stating that the redemption shall occur pursuant to Section 3.01 of the Indenture, the Redemption Date, the Principal amount of Securities to be redeemed and the Redemption Price. SECTION 3.03. SELECTION OF SECURITIES TO BE REDEEMED. If less than all of the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed in accordance with a method the Trustee considers fair and appropriate (and in such manner as complies with applicable legal and stock exchange requirements, if any). In the event of partial redemption by lot, the particular Securities to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the Redemption Date by the Trustee from the outstanding Securities not previously called for redemption. 10 The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Security selected for partial redemption, the Principal amount thereof to be redeemed. Securities and portions of them selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Securities of a Holder are to be redeemed, the entire outstanding amount of Securities held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. SECTION 3.04. NOTICE OF REDEMPTION. At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption to each Holder (with a copy to the Trustee) whose Securities are to be redeemed. The notice shall identify the Securities to be redeemed and shall state: (a) the Redemption Date; (b) the Redemption Price; (c) if any Security is being redeemed in part, the portion of the Principal amount of such Security to be redeemed and that, after the Redemption Date, upon surrender of such Security, a new Security or Securities in Principal amount equal to the unredeemed portion will be issued; (d) the name and address of the Paying Agent; (e) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (f) that interest on Securities called for redemption ceases to accrue on and after the Redemption Date; and (g) that the Securities called for redemption are being redeemed pursuant to Section 3.01 of the Indenture. At the Company's written request, the Trustee shall give the notice of redemption in the Company's name and at its expense. SECTION 3.05. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed, Securities called for redemption become due and payable on the Redemption Date at the Redemption Price. 11 SECTION 3.06. DEPOSIT OF REDEMPTION PRICE. One Business Day prior to the Redemption Date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the Redemption Price of and accrued interest on all Securities to be redeemed on that date. The Trustee or the Paying Agent shall return to the Company any money not required for that purpose. If the Company complies with the preceding paragraph, interest on the Securities to be redeemed will cease to accrue on the applicable Redemption Date, whether or not such Securities are presented for payment. If any Security called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest will be paid on the unpaid Principal, from the Redemption Date until such Principal is paid, and on any interest not paid on such unpaid Principal, in each case at the rate provided in the Securities and in Section 4.01 hereof. SECTION 3.07. SECURITIES REDEEMED IN PART. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Security equal in Principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4. COVENANTS SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the Principal of and interest on the Securities on the dates and in the manner provided in the Securities. Principal and interest shall be considered paid on the date due if the Paying Agent, other than the Company or a Subsidiary of the Company, holds on that date money deposited by the Company in available funds and designated for and sufficient to pay all Principal and interest then due. The Company shall pay interest (including postpetition interest in any proceeding under any Bankruptcy Law) on overdue Principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Securities to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee, Registrar or co-registrar) where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities 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 12 presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Securities 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 the Borough of Manhattan, The City of New York 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. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. SECTION 4.03. SEC REPORTS; FINANCIAL STATEMENTS. (a) The Company and any other obligor upon the Securities shall file with the Trustee, within 15 days after filing with the SEC, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company or any other obligor upon the Securities is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If either the Company or any other obligor upon the Securities is not subject to the requirements of such Section 13 or 15(d) of the Exchange Act, the Company or such other obligor, as the case may be, shall file with the Trustee, within 15 days after it would have been required to file with the SEC, financial statements, including any notes thereto (and with respect to annual reports, an auditors' report by a firm of established national reputation reasonably satisfactory to the Trustee), and a "Management's Discussion and Analysis of Financial Condition and Results of Operations," both comparable to that which the Company or such other obligor, as the case may be, would have been required to include in such annual reports, information, documents or other reports if the Company or such other obligor, as the case may be, were subject to the requirements of such Section 13 or 15(d) of the Exchange Act. The Company and any other obligor upon the Securities shall also comply with the provisions of TIA Section 314(a). (b) If the Company or any other obligor upon the Securities is required to furnish annual or quarterly reports to its stockholders pursuant to the Exchange Act, the Company or such other obligor, as the case may be, shall cause any annual report furnished to its stockholders generally and any quarterly or other financial reports furnished by it to its stockholders generally to be filed with the Trustee and mailed to the Holders at their addresses appearing in the register of Securities maintained by the Registrar. If either the Company or any other obligor upon the Securities is not required to furnish annual or quarterly reports to its stockholders pursuant to the Exchange Act, the Company or such other obligor, as the case may be, shall cause its financial statements referred to in Section 4.03(a) above, including any notes thereto (and with respect to annual reports, an auditors' report by a firm of established national reputation reasonably satisfactory to the Trustee), and a "Management's Discussion and Analysis of Financial Condition and Results of Operations," to be so mailed to the Holders within 120 days after the end of each of its fiscal years and within 60 days after the end of each of its first 13 three fiscal quarters. As of the date hereof, the Company's fiscal year ends on the Friday closest to March 31. SECTION 4.04. COMPLIANCE CERTIFICATE. (a) The Company (and any other obligor upon the Securities) shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, a certificate signed by the principal executive officer, principal financial officer or principal accounting officer of the Company stating that a review of the activities of the Company and its Subsidiaries (or of such obligor) during the preceding fiscal year has been made under the supervision of the signing officer with a view to determining whether each has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such officer signing such certificate, that to the best of his knowledge each has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have knowledge and what action the Company or such other obligor, as the case may be, is taking or proposes to take with respect thereto) and that to the best of his knowledge no event has occurred and remains in existence by reason of which payments on account of the Principal of or interest, if any, on the Securities are prohibited or if such event has occurred, a description of the event and what action the Company or such other obligor, as the case may be, is taking or proposes to take with respect thereto. For the purposes of this clause (a) such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. (b) The Company (and any other obligor upon the Securities) will, so long as any of the Securities are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default, Event of Default or default in the performance of any covenant, agreement or condition contained in this Indenture, an Officers' Certificate specifying such Default, Event of Default or default and what action each is taking or proposes to take with respect thereto. SECTION 4.05. COMPLIANCE WITH LAWS, TAXES. The Company shall, and shall cause each of its Subsidiaries to, comply with all statutes, laws, ordinances, or government rules and regulations to which it is subject, noncompliance with which would materially adversely affect the business, earnings, properties, assets or financial condition of the Company and its Subsidiaries taken as a whole. The Company shall, and shall cause each of its Subsidiaries to, pay prior to delinquency all taxes, assessments, and governmental levies except as contested in good faith and by appropriate proceedings. SECTION 4.06. STAY, EXTENSION AND USURY LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to 14 the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted. SECTION 4.07. LIMITATION ON LIENS. Other than as provided in Section 4.10, so long as any of the Securities are outstanding, neither the Company nor any Subsidiary shall create, incur, assume or suffer to exist any Lien upon any of their respective assets to secure any Indebtedness, except for: (i) Liens existing on the date hereof; (ii) any extension, renewal or replacement (or successive extensions, renewals or replacements) of any Lien existing on the date hereof; (iii) Liens on property that are in existence at the time the Company or any Subsidiary acquires such property, PROVIDED that such Liens (A) are not incurred in connection with, or in contemplation of the acquisition of the property acquired and (B) do not extend to or cover any property or assets of the Company or any Subsidiary other than the property so acquired; (iv) Liens on any property of a Person existing at the time such Person becomes a Subsidiary or is merged into or consolidated with the Company or a Subsidiary or at the time of a sale, lease or other disposition of the properties of such Person as an entirety or substantially as an entirety to the Company or a Subsidiary; provided that such Liens (A) are not incurred in connection with or in contemplation of such Person becoming a Subsidiary or merging or consolidating with the Company or a Subsidiary or are not incurred in connection with or in contemplation of the sale, lease or other disposition of the properties of such Person and (B) do not extend to or cover any property or assets of the Company or any of its Subsidiaries, other than the property of such Person; and (v) purchase money Liens upon or in any real or personal property (including fixtures and other equipment) acquired or held by the Company or any Subsidiary to secure the purchase price of such property or to secure Indebtedness incurred solely for the purpose of financing or refinancing the acquisition or improvement of such property and incurred within 180 days after completion of such acquisition or improvement, PROVIDED that no such Lien shall extend to or cover any property other than the property being acquired or improved. SECTION 4.08. CORPORATE EXISTENCE. Subject to Article 5 hereof, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence in accordance with its organizational documents. 15 SECTION 4.09. LIMITATION ON SALE/LEASEBACK TRANSACTIONS. Other than as provided in Section 4.10, neither the Company nor any of its Subsidiaries may enter into any Sale/Leaseback Transaction unless the Company or such Subsidiary would be entitled, pursuant to Section 4.07, to create, incur, assume or suffer to exist a Lien on the property subject to such Sale/Leaseback Transaction. SECTION 4.10. PERMITTED LIENS AND PERMITTED SALE/LEASEBACK TRANSACTIONS. Notwithstanding the restrictions set forth in Sections 4.07 and 4.09, the Company or any of its Subsidiaries may create, incur, assume or suffer to exist any Lien or enter into any Sale/Leaseback Transactions not otherwise permitted in Section 4.07 or Section 4.09, PROVIDED that at the time of such event, and after giving effect thereto, the aggregate amount of all Indebtedness secured by Liens permitted by this Section 4.10 (excluding the Liens permitted pursuant to Section 4.07) and the aggregate amount of all Attributable Debt in respect of Sale/Leaseback Transactions permitted by this Section 4.10 (excluding the Sale/Leaseback Transactions permitted pursuant to Section 4.09), measured, in each case, at the time any such Lien is incurred or any such Sale/Leaseback Transaction is entered into, by the Company or any Subsidiary does not exceed 15% of Consolidated Net Tangible Assets. ARTICLE 5. SUCCESSORS SECTION 5.01. CONSOLIDATION, MERGER AND SALE OF ASSETS. The Company, without the consent of any Holder, may consolidate with, or merge into, or sell, transfer, lease or convey its assets substantially as an entirety to any domestic corporation, PROVIDED that: (a) the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, transfer, lease or conveyance shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (b) the corporation formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, lease, transfer or conveyance shall have been made, assumes by supplemental indenture in a form satisfactory to the Trustee all the obligations of the Company under the Securities and this Indenture; and (c) immediately before and 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. The Company shall deliver to the Trustee prior to the consummation of the proposed transaction an Officers' Certificate to the foregoing effect and an Opinion of Counsel stating that the proposed transaction and such Supplemental Indenture comply with this Indenture. 16 Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or merger, or any sale, lease, conveyance or other disposition of all or substantially all of the assets of the Company or any assignment of its obligations under this Indenture or the Securities in accordance with Section 5.01, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, lease, conveyance or other disposition or assignment 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 corporation has been named as the Company herein; PROVIDED, HOWEVER, that the predecessor Company in the case of a sale, lease, conveyance or other disposition or assignment shall not be released from the obligation to pay the Principal of and interest on the Securities. ARTICLE 6. DEFAULTS AND REMEDIES Section 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if: (a) the Company fails to pay any installment of interest on any Security as and when the same shall become due and payable, and such default continues for a period of 30 days; (b) the Company fails to pay all or any part of the Principal of any Security as and when the same shall become due and payable, whether at maturity, upon redemption, or otherwise; (c) the Company fails to observe or perform any other of its other covenants or agreements contained in the Securities or in this Indenture and the Default continues for the period and after the notice specified below; (d) any of the Company's Indebtedness in the aggregate outstanding Principal amount of $50 million or more either (i) becomes due and payable prior to the due date for payment thereof by reason of acceleration thereof following default by the Company or (ii) is not repaid at, and remains unpaid after, maturity as extended by the period of grace, if any, applicable thereto, or any guarantee given by the Company in respect of Indebtedness of any other Person in the aggregate outstanding Principal amount of $50 million or more is not honored when, and remains dishonored after, becoming due; (e) (i) a court or administrative or other governmental agency or body having jurisdiction in the premises enters a decree or order for relief relating to the Company in an involuntary case under any Bankruptcy Law in effect on the date of the Securities or thereafter, or appoints a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer of the Company or ordering the winding up, dissolution or liquidation of the Company's affairs, or otherwise adjudicates or finds the Company to be bankrupt or insolvent, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (ii) a court or administrative or other governmental agency or body 17 having jurisdiction in the premises enters a decree or order appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer for any substantial part of the Company's properties, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (f) (i) the Company commences a voluntary case under any Bankruptcy Law in effect on the date of the Securities or thereafter, or consents to the entry of an order for relief in an involuntary case under any such law, or consents to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer of the Company or ceases to carry on the whole or substantially the whole of its business, or makes any general assignment for the benefit of creditors, or takes corporate action in furtherance of any such action; or (ii) the Company consents to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar officer for any substantial part of its property or takes corporate action in furtherance of any such action. A Default under clause (c) is not an Event of Default until the Trustee notifies the Company, or the Holders of at least 25% in Principal amount of the then outstanding Securities notify the Company and the Trustee, of the Default and the Company does not cure the Default within 30 days after receipt of the notice. The notice must specify the Default, demand that it be remedied and state that the notice is a "Notice of Default." SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of Default specified in clauses (e)(i) and (f)(i) of Section 6.01) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in Principal amount of the then outstanding Securities, by notice to the Company and the Trustee, may declare the unpaid Principal of and any accrued interest on all the Securities to be due and payable immediately. Upon such declaration the Principal and interest shall be due and payable immediately. If an Event of Default specified in clause (e)(i) or (f)(i) of Section 6.01 occurs, such an amount shall IPSO FACTO become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of more than 50% in aggregate Principal amount of the then outstanding Securities by written notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of Principal or interest that has become due solely because of the acceleration) have been cured or waived. If, at any time after the Principal of the Securities shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, the Company shall pay or deposit with the Trustee a sum sufficient to pay all monies then due with respect to the Securities (other than amounts due solely because of such declaration) and cure all other Events of Default under the Securities, then the holders of more than 50% in aggregate outstanding Principal amount of the Securities may waive all defaults and rescind and annul such declaration and its consequences. 18 SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of Principal or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of more than 50% in Principal amount of the then outstanding Securities by notice to the Trustee may, on behalf of all the Holders, waive an existing Default or Event of Default and its consequences except a continuing Default or Event of Default in the payment of the Principal of or interest on any Security. 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; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05. CONTROL BY MAJORITY. The Holders of more than 50% in Principal amount of the then outstanding Securities may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to the rights of other Securityholders, or that may involve the Trustee in personal liability. SECTION 6.06. LIMITATION ON SUITS. A Securityholder may pursue a remedy with respect to this Indenture or the Securities only if: (a) the Holder gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in Principal amount of the then outstanding Securities make a written request to the Trustee to pursue the remedy; (c) such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and 19 (e) during such 60-day period the Holders of more than 50% in Principal amount of the then outstanding Securities do not give the Trustee a direction inconsistent with the request. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of Principal and interest on the Security, on or after the respective due dates expressed in the Security, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the Holder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company (or any other obligor upon the Securities) for the whole amount of Principal and interest remaining unpaid on the Securities and interest on overdue Principal and, to the extent lawful, interest and 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. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Securityholders allowed in any judicial proceedings relative to the Company (or any other obligor upon the Securities), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Securityholder 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 Securityholders, to pay to the Trustee any amount due to 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 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties which the Holders of the Securities may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or 20 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 Securityholder in any such proceeding. SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee for amounts due under Section 7.07; Second: to Securityholders for amounts due and unpaid on the Securities for Principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities for Principal and interest, respectively; and Third: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders. SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in Principal amount of the then outstanding Securities. ARTICLE 7. TRUSTEE SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed 21 therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform the requirements of this Indenture and to confirm the correctness of all mathematical computations. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) this Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is conclusively proved by a court of competent jurisdiction that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or power unless it receives indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written 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. 22 (c) The Trustee may act through agents, attorneys, custodians or nominees and shall not be responsible for the misconduct or negligence of any agent, attorney, custodian or nominee appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers conferred upon it by the Indenture. (e) Unless otherwise specifically provided in the Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10 and 7.11. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities or any money paid to the Company or upon the Company's direction under any provision hereof, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any statement or recital herein or any statement in the Securities other than its certificate of authentication. SECTION 7.05. NOTICE OF DEFAULTS. If a Default or Event of Default occurs and is continuing, the Trustee shall mail to Securityholders a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment on any Security, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each August 15 beginning with the August 15 following the date of this Indenture, the Trustee shall mail to Securityholders a brief report dated as of such reporting date that complies with TIA Section 313(a). The Trustee also shall comply with TIA Section 313(b). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). Commencing at the time this Indenture is qualified under the TIA, a copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange on which the Securities are listed. The Company or any other obligor upon the Securities shall notify the Trustee in writing when the Securities are listed on any stock exchange. 23 SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable disbursements, advances and expenses incurred by it. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee and its officers, directors, employees and agents against any loss, liability or expense incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, except as set forth in the next paragraph. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The Company need not reimburse any expense or indemnify against any loss or liability incurred by the Trustee through negligence or bad faith. To secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Securities on all money or property held or collected by the Trustee, except that held in trust to pay Principal and interest on particular Securities. Such Lien shall survive the satisfaction and discharge of the Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(e) or (f) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any Bankruptcy Law. The provisions of this Section 7.07 shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee. SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in Principal amount of the then outstanding Securities may remove the Trustee by so notifying the Trustee and the Company. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; 24 (c) a receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company and any other obligor upon the Securities shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in Principal amount of the then outstanding Securities may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in Principal amount of the then outstanding Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee after written request by any Securityholder who has been a Securityholder for at least six months fails to comply with Section 7.10, such Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the Lien provided for in Section 7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. There shall at all times be a Trustee hereunder which shall be a corporation organized and doing business under the laws of the United States of America or of any state thereof authorized under such laws to exercise corporate trustee power, shall be subject to supervision or examination by Federal or state authority and shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee is subject to TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9). 25 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. SECTION 7.12. TRUSTEE AS PAYING AGENT OR REGISTRAR. In the event that the Trustee is also acting as Paying Agent or Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Paying Agent or Registrar. SECTION 7.13. KNOWLEDGE OF EVENT OF DEFAULT The Trustee shall not be charged with knowledge of any Event of Default unless either (a) a Trust Officer of the Trustee shall have actual knowledge or (b) the Trustee shall have received notice thereof from the Company or a Securityholder. ARTICLE 8. DISCHARGE OF INDENTURE SECTION 8.01. TERMINATION OF CERTAIN OF COMPANY'S OBLIGATIONS. (a) This Indenture shall cease to be of further effect (except that the Company's obligations under Section 7.07 and the Trustee's and Paying Agent's obligations under Section 8.03 shall survive) when all outstanding Securities theretofore authenticated and issued have been delivered (other than destroyed, lost or stolen Securities which have been replaced or paid) to the Trustee for cancellation and the Company has paid all sums payable hereunder. (b) In addition, the Company may, at its option and at any time, by written notice executed by an Officer delivered to the Trustee, elect to have its obligations under Sections 4.07, 4.09, 4.10 and 5.01 discharged with respect to all outstanding Securities and this Indenture (hereinafter, "covenant defeasance"), such discharge to be effective on the date the conditions set forth in clauses (i) through (iv) of this Section 8.01(b) are satisfied, and such Securities shall thereafter be deemed to be not "outstanding" for the purposes of any direction, waiver, consent or declaration of Holders (and the consequences of any thereof) in connection with Sections 4.07, 4.09, 4.10 and 5.01, but shall continue to be "outstanding" for all other purposes under this Indenture. 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 Section, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or by reason of reference in any such Section to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01(c) or otherwise, but except as specified in this Section 8.01(b), the remainder of the Company's obligations under the Securities and this Indenture shall be unaffected thereby. 26 The following shall be the conditions to the application of Section 8.01(b) to the outstanding Securities: (i) the Company irrevocably deposits in trust with the Trustee or, at the option of the Trustee, with a trustee satisfactory to the Trustee and the Company under the terms of an irrevocable trust agreement in form and substance satisfactory to the Trustee, money or U.S. Government Obligations sufficient to pay Principal and interest on the Securities to maturity or redemption, as the case may be, and to pay all other sums payable by it hereunder, PROVIDED that (A) the trustee of the irrevocable trust shall have been irrevocably instructed to pay such money or the proceeds of such U.S. Government Obligations to the Trustee and (B) the Trustee shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said Principal and interest with respect to the Securities; (ii) the Company delivers to the Trustee an Officers' Certificate stating that all conditions precedent to satisfaction and discharge of this Indenture have been complied with, and an Opinion of Counsel to the same effect; (iii) no Default or Event of Default under clauses (a), (b), (d), (e) or (f) of Section 6.01 shall have occurred and be continuing, and no event which with notice or lapse of time or both would become such an Event of Default shall have occurred and be continuing, on the date of such deposit; and (iv) the Company shall have delivered to the Trustee an Opinion of Counsel or a ruling received from the Internal Revenue Service to the effect that the Holders of the Securities will not recognize income, gain or loss for Federal income tax purposes as a result of the Company's exercise of its option under this Section 8.01 and will be subject to Federal income tax in the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised. After such irrevocable deposit made pursuant to this Section 8.01 and satisfaction of the other conditions set forth herein, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under Sections 4.07, 4.09, 4.10 and 5.01. In order to have money available on a payment date to pay Principal or interest on the Securities, the U.S. Government Obligations shall be payable as to Principal or interest on or before such payment date in such amounts as will provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option. SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee or a trustee satisfactory to the Trustee and the Company shall hold in trust money or U.S. Government Obligations deposited with it pursuant to Section 8.01. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of Principal and interest on the Securities. 27 SECTION 8.03. REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall promptly pay to the Company upon written request any excess money or securities held by them at any time. The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of Principal or interest that remains unclaimed for two years after the date upon which such payment shall have become due; PROVIDED, HOWEVER, that the Company shall have either caused notice of such payment to be mailed to each Securityholder entitled thereto no less than 30 days prior to such repayment or within such period shall have published such notice in a financial newspaper of widespread circulation published in The City of New York. After payment to the Company, Securityholders entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. SECTION 8.04. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 8.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with Section 8.01; PROVIDED, HOWEVER, that if the Company has made any payment of interest on or Principal of any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE 9. AMENDMENTS SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may amend this Indenture or the Securities without the consent of any Securityholder: (a) to cure any ambiguity, defect or inconsistency; (b) to comply with Section 5.02; (c) to comply with any requirements of the SEC in connection with the qualification of this Indenture under the TIA as then in effect; (d) to provide for uncertificated Securities in addition to or in place of certificated Securities; or 28 (e) to make any change that would provide any additional rights or benefits to the Securityholders or that does not adversely affect, the legal rights hereunder or under the Securities of any Securityholder. Upon the request of the Company, accompanied by a resolution of the Board of Directors authorizing the execution of any such Supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of any Supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into such Supplemental Indenture which affects its own rights, duties or immunities under this Indenture or otherwise. SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee may amend this Indenture or the Securities with the written consent of the Holders of at least a majority in Principal amount of the then outstanding Securities. The Holders of a majority in Principal amount of the Securities then outstanding may, or the Trustee with the written consent of the Holders of at least a majority in Principal amount of the then outstanding Securities may, waive compliance in a particular instance by the Company with any provision of this Indenture or the Securities. Upon the request of the Company, accompanied by a resolution of the Board of Directors authorizing the execution of any such Supplemental Indenture, and upon the filing with the Trustee of evidence of the consent of the Securityholders as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.06 hereof, the Trustee shall join with the Company in the execution of such Supplemental Indenture unless such Supplemental Indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such Supplemental Indenture. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment or waiver under this Section becomes effective, the Company shall mail to the Holders of each Security affected thereby a notice briefly describing the amendment or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture. Notwithstanding the first paragraph of this Section 9.02, without the consent of each Securityholder affected, an amendment under this Section may not: (a) reduce the amount of Securities whose Holders must consent to an amendment or waiver; (b) change the stated maturity of the Principal of or interest on such Security; 29 (c) reduce the rate of or change the time for payment of interest, including default interest, on any Security; (d) reduce the Principal of or change the fixed maturity of any Security or alter the provisions with respect to redemption pursuant to Section 3.01 hereof; (e) change the currency of payment of the Principal of or interest on such Security; or (f) waive a Default in the payment of Principal of or interest on, or redemption payment with respect to, any Security. SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. If at the time this Indenture shall be qualified under the TIA, every amendment to this Indenture or the Securities shall be set forth in a Supplemental Indenture that complies with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent as to his Security or portion of a Security if the Trustee receives written notice of revocation before the date the amendment or waiver becomes effective. An amendment or waiver becomes effective in accordance with its terms and thereafter binds every Securityholder. SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may place an appropriate notation about an amendment or waiver on any Security thereafter authenticated. The Company in exchange for all Securities may issue and the Trustee shall authenticate new Securities that reflect the amendment or waiver. SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amendment, waiver or Supplemental Indenture authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, waiver or Supplemental Indenture, the Trustee shall be entitled to receive and, subject to Section 7.01, shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel as conclusive evidence that such amendment, waiver or Supplemental Indenture is authorized or permitted by this Indenture, that it is not inconsistent herewith, and that it will be valid and binding upon the Company in accordance with its terms. The Company may not sign an amendment, waiver or Supplemental Indenture until the Board of Directors approves it. 30 ARTICLE 10. MISCELLANEOUS SECTION 10.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 10.02. NOTICES. Any notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in Person or mailed by first-class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the other's address: If to the Company: Computer Sciences Corporation 2100 East Grand Avenue El Segundo, California 90245 Attention: Hayward D. Fisk Telephone No: (310) 615-1770 Fax No. (310) 322-9767 With a copy to: Gibson, Dunn & Crutcher 333 South Grand Avenue Los Angeles, CA 90071-3197 Attention: Bradford P. Weirick Telephone No: (213) 229-7765 Fax No: (213) 229-7520 If to the Trustee: Citibank, N.A. 111 Wall Street, 5th Floor New York, New York 10005 Attention: Global Agency and Trust Services Telephone No: (212) 657-7805 Fax No: (212) 657-3862 The Company, any other obligor upon the Securities, or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. 31 All notices and communications (other than those sent to Securityholders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Securityholder shall be mailed by first-class mail, certified or registered, return receipt requested, to his address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company (or any other obligor upon the Securities) mails a notice or communication to Securityholders, it shall mail a copy to the Trustee and each Agent at the same time. SECTION 10.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Securityholders may communicate pursuant to TIA Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any request or application by the Company (or any other obligor upon the Securities) to the Trustee to take any action under this Indenture, the Company (or such other obligor) shall furnish to the Trustee: (a) an Officers' Certificate (which shall include the statements set forth in Section 10.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel (which shall include the statements set forth in Section 10.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with. SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; 32 (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he 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 (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with. SECTION 10.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Securityholders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 10.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized or obligated by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. SECTION 10.08. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder of the Company, as such, shall not have any liability for any Obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such Obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. SECTION 10.09. GOVERNING LAW. The laws of the State of New York shall govern and be used to construe this Indenture and the Securities. SECTION 10.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 10.11. SUCCESSORS. All agreements of the Company in this Indenture and the Securities shall bind its successor. All agreements of the Trustee in this Indenture shall bind its successor. 33 SECTION 10.12. SEVERABILITY. 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 10.13. COUNTERPART ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 10.14. VARIABLE PROVISIONS. The Company initially appoints the Trustee as Paying Agent and Registrar. SECTION 10.15. TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms or provisions hereof. (SIGNATURE PAGE TO FOLLOW) 34 SIGNATURES Dated as of _________ __, 1999 COMPUTER SCIENCES CORPORATION By:______________________________ Name: Title: Attest: ____________________________ (SEAL) Dated as of __________ __, 1999 CITIBANK, N.A., as Trustee By:______________________________ Name: Title: Attest: ____________________________ (SEAL) S-1 EXHIBIT A (Face of Security) THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "SECURITIES DEPOSITORY") TO A NOMINEE OF THE SECURITIES DEPOSITORY OR BY THE SECURITIES DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE SECURITIES DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IN WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. ___% NOTE DUE ________________ __, 2009 No. $__________ COMPUTER SCIENCES CORPORATION promises to pay to or registered assigns, the principal sum of Dollars on _____________ __, 19__. Interest Payment Dates:____________________ Record Dates: ______________________________ Dated: ___________ __, 19___ COMPUTER SCIENCES CORPORATION By:_________________________________ By:_________________________________ (SEAL) This is one of the Securities referred to in the within- mentioned Indenture: [Name of Trustee], as Trustee By ___________________________ Authorized Signature A-2 (Back of Security) ___% NOTE DUE _____________ ___, 2009 1. INTEREST. Computer Sciences Corporation, a Nevada corporation (the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above from the date this Security is issued until maturity. The Company will pay interest semi-annually on _______________ and _________________ of each year. Interest on the Securities will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; PROVIDED, that if there is no existing Default in the payment of interest, and if this Security is authenticated between a record date referred to on the face hereof and the next succeeding interest payment date, interest shall accrue from such next succeeding interest payment date; PROVIDED FURTHER, that the first interest payment date shall be ___________ __, 1999. The Company shall pay interest on overdue principal at the rate of __% per annum; it shall pay interest on overdue installments of interest (without regard to any applicable grace periods) at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Securities (except defaulted interest) to the Persons who are registered Holders of Securities at the close of business on the record date next preceding the interest payment date, even if such Securities are canceled after such record date and on or before such interest payment date. The Holder must surrender this Security to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. The Company, however, may pay principal and interest by check payable in such money. It may mail an interest check to a Holder's registered address. 3. PAYING AGENT AND REGISTRAR. Initially, Citibank, N.A., as Trustee ("Trustee"), will act as Paying Agent and Registrar. The Company may change any Paying Agent, Registrar or co-registrar without notice to any Securityholder. The Company may act in any such capacity. 4. INDENTURE. The Company issued the Securities under an Indenture dated as of __________ __, 1999 ("Indenture") between the Company and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date the Indenture is qualified. The Securities are subject to all such terms, and Securityholders are referred to the Indenture and such Act for a statement of such terms. The Securities are unsecured general obligations of the Company limited to $200,000,000 in aggregate principal amount. 5. OPTIONAL REDEMPTION. The Securities will be subject to redemption at the option of the Company on any date prior to the maturity date, in whole or from time to time in part, in $1,000 increments (PROVIDED that any remaining principal amount thereof shall be at least the minimum authorized denomination thereof), on written notice given to the Holders thereof not less than 30 days nor more than 60 days prior to the date fixed for redemption in such notice A-3 (the "Redemption Date"), at a redemption price equal to the greater of (i) 100% of the principal amount of such Securities to be redeemed and (ii) as determined by the Quotation Agent (as defined in the Indenture), the sum of the present values of the Remaining Scheduled Payments (as defined in the Indenture) of principal and interest thereon (not including any portion of such payments of interest accrued as of the Redemption Date) discounted to the Redemption Date, on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months), at the Adjusted Treasury Rate (as defined in the Indenture) plus [ ] basis points (such greater amount is referred to herein as the "Redemption Price"), plus, in either the case of clause (i) or clause (ii), accrued and unpaid interest thereon to the Redemption Date. The Company shall calculate the Redemption Price not less than 30 days prior to the Redemption Date. The Company shall notify the Trustee in writing of the Redemption Price promptly on calculation thereof, and the Trustee shall have no duty or liability to calculate or verify the Redemption Price. The Company shall not be required to make mandatory redemption or sinking fund payments with respect to the Securities. 6. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at its registered address. Securities in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Securities held by a Holder are to be redeemed. On and after the Redemption Date interest ceases to accrue on Securities or portions of them called for redemption. 7. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not exchange or register the transfer of any Security or portion of a Security selected for redemption. Also, it need not exchange or register the transfer of any Securities for a period of 15 days before a selection of Securities to be redeemed or during the period between a record date and the next succeeding interest payment date. 8. PERSONS DEEMED OWNERS. The registered Holder of a Security may be treated as its owner for all purposes. 9. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the Holders of at least a majority in principal amount of the then outstanding Securities, and any existing default (except a payment default) may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Securities. Without the consent of any Securityholder, the Indenture or the Securities may be amended to cure any ambiguity, defect or inconsistency, to provide for assumption of Company obligations to Securityholders, to provide for uncertificated Securities in addition to certificated Securities, or to make any change that would provide any additional rights or benefits to the Securityholders or that does not adversely affect, the legal rights of any Securityholder. A-4 10. DEFAULTS AND REMEDIES. Events of Default include: default in payment of interest on the Securities for 30 days; default in payment of principal on the Securities; failure by the Company to comply with any of its other agreements in the Indenture or the Securities (for 30 days after notice); certain defaults under and accelerations of other indebtedness; and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Securities may declare all the Securities to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Securities become due and payable immediately without further action or notice. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish an annual compliance certificate to the Trustee. 11. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not Trustee. 12. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any Obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such Obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Securities. 13. AUTHENTICATION. This Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 14. ABBREVIATIONS. Customary abbreviations may be used in the name of a Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). A-5 The Company will furnish to any Securityholder upon written request and without charge a copy of the Indenture. Request may be made to: Computer Sciences Corporation 2100 East Grand Avenue El Segundo, California 90245 Attention: Corporate Secretary A-6 ASSIGNMENT FORM To assign this Security, fill in the form below: (I) or (we) assign and transfer this Security to ______________________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. no.) ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint ______________________________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. ______________________________________________________________________________ Date: ______________ Your Signature:_________________________________ (Sign exactly as your name appears on the face of this Security) Signature Guarantee. EX-5.1 4 EXHIBIT 5.1 EXHIBIT 5.1 [Letterhead of Gibson, Dunn & Crutcher LLP] February 22, 1999 (213) 229-7000 C16084-00116 Computer Sciences Corporation 2100 East Grand Avenue El Segundo, California 90245 Re: REGISTRATION STATEMENT OF FORM S-3 Ladies and Gentlemen: We have acted as counsel to Computer Sciences Corporation (the "Corporation"), a Nevada corporation, in connection with the registration under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the Registration Statement on Form S-3 (the "Registration Statement") to which this opinion is an exhibit, of $200,000,000 of the Corporation's notes described in the Registration Statement (the "Notes"). The Notes are being issued pursuant to an indenture to be entered into by and between the Corporation and Citibank, N.A. in substantially the form filed as an exhibit to the Registration Statement (the "Indenture"). We have examined the originals or certified copies of such corporate records, certificates of officers of the Corporation and/or public officials and such other documents, and have made such other factual and legal investigations, as we have deemed relevant and necessary as the basis for the opinions set forth below. In such examination, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as conformed or photostatic copies. In rendering this opinion, we have further assumed the due and valid execution and delivery of the Indenture by the Corporation and the Trustee in substantially the form filed as an exhibit to the Registration Statement and that the Indenture constitutes the legal, valid and binding agreement of the Trustee. Based on the foregoing and in reliance thereon, and subject to the assumptions, exceptions, qualifications and limitations contained herein and relying on the statements of fact contained in the documents that we have examined, we are of the opinion that (a) the Notes, upon the execution, authentication, delivery and issuance thereof and timely payment in full therefor in the manner described in the Indenture, the Registration Statement and the prospectus which forms a part of the Registration Statement, will be validly issued, fully paid and non-assessable and (b) the Notes so issued will be legally binding obligations of the Corporation entitled to the benefits of the Indenture. Our opinions set forth above are subject to the effect of (i) applicable bankruptcy, reorganization, insolvency, moratorium and other similar laws and court decisions of general application (including, without limitation, statutory or other laws regarding fraudulent or preferential transfers) relating to, limiting or affecting the enforcement of creditors' rights generally, and (ii) general principles of equity, regardless of whether a matter is considered in a proceeding in equity, at law or in arbitration, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing. Without limitation, we express no opinion as to the ability to obtain specific performance, injunctive relief or other equitable relief as a remedy for noncompliance with any of the Notes or the Indenture. We further express no opinion as to the validity or legally binding nature of any provisions in the Notes or Computer Sciences Corporation February 22, 1999 Page 2 the Indenture relating to indemnification, exculpation or contribution or as to any provisions that may be construed as imposing penalties or forfeitures. Although we are not admitted to practice in the State of Nevada, we are generally familiar with the General Corporation Law of the State of Nevada as presently in effect and have made such inquiries as we consider necessary to render the opinions related to Nevada law herein. Our opinions herein are limited to matters involving the laws of the United States of America and the State of New York and the General Corporation Law of the State of Nevada. We express no opinion as to matters involving the laws of any other jurisdiction (or any other laws of the State of Nevada). This opinion is limited to the effect of the present state of the laws of the United States of America and the State of New York and, to the limited extent set forth in the second preceding sentence, the State of Nevada and the facts as they presently exist. In rendering this opinion, we assume no obligation to revise or supplement this opinion should the present laws, or the interpretation thereof, or such facts, be changed. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to our name under the caption "Legal Matters" in the prospectus which forms a part of the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations of the Securities and Exchange Commission. Very truly yours, /S/ GIBSON, DUNN & CRUTCHER LLP GIBSON, DUNN & CRUTCHER LLP EX-12.1 5 EXHIBIT 12.1 EXHIBIT 12.1 COMPUTER SCIENCES CORPORATION RATIO OF EARNINGS TO FIXED CHARGES NINE MONTHS ENDED JANUARY 1, 1999 AND DECEMBER 26, 1997 FIVE YEARS ENDED APRIL 3, 1998
NINE MONTHS ENDED FISCAL YEARS ENDED ------------------------- ----------------------------------------------------------- JANUARY 1, DECEMBER 26, APRIL 3, MARCH 28, MARCH 29, MARCH 31, APRIL 1, 1999 1997 1998 1997 1996 1995 1994 ----------- ------------ --------- ----------- ----------- ----------- --------- Earnings Income before income taxes... $ 336,400 $ 71,373 $ 190,869 $ 303,313 $ 196,930 $ 220,814 $ 124,921 Interest expense............. 35,499 37,593 50,951 40,268 37,925 31,419 21,055 Imputed interest on operating leases..................... 50,360 45,782 61,043 54,259 49,363 46,074 36,193 ----------- ------------ --------- ----------- ----------- ----------- --------- Total earnings............. $ 422,259 $ 154,748 $ 302,863 $ 397,840 $ 284,218 $ 298,307 $ 182,169 ----------- ------------ --------- ----------- ----------- ----------- --------- ----------- ------------ --------- ----------- ----------- ----------- --------- Fixed charges Interest expense............. $ 35,499 $ 37,593 $ 50,951 $ 40,268 $ 37,925 $ 31,419 $ 21,055 Imputed interest on operating leases..................... 50,360 45,782 61,043 54,259 49,363 46,074 36,193 ----------- ------------ --------- ----------- ----------- ----------- --------- Total earnings............. $ 85,859 $ 83,375 $ 111,994 $ 94,527 $ 87,288 $ 77,493 $ 57,248 ----------- ------------ --------- ----------- ----------- ----------- --------- ----------- ------------ --------- ----------- ----------- ----------- --------- Ratio of Earnings to fixed charges...................... 4.92 1.86 2.70 4.21 3.26 3.85 3.18 ----------- ------------ --------- ----------- ----------- ----------- --------- ----------- ------------ --------- ----------- ----------- ----------- ---------
EX-23.2 6 EXHIBIT 23.2 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Amendment No. 1 to Registration Statement of Computer Sciences Corporation (the "Company") on Form S-3 of our report dated May 26, 1998, appearing in the Annual Report on Form 10-K of the Company for the year ended April 3, 1998 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Amendment No. 1 to Registration Statement. /s/DELOITTE & TOUCHE, LLP DELOITTE & TOUCHE, LLP Los Angeles, California February 22, 1999 EX-23.3 7 EXHIBIT 23.3 EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Amendment No. 1 to Form S-3) and related Prospectus of Computer Sciences Corporation registering $200,000,000 principal amount of Notes of Computer Sciences Corporation and to the incorporation by reference therein of our report dated May 1, 1996, with respect to the consolidated financial statements of The Continuum Company, Inc. included in the Annual Report of Computer Sciences Corporation for the year ended April 3, 1998 filed with the Securities and Exchange Commission. Austin, Texas /s/ ERNST & YOUNG LLP February 19, 1999 EX-25.1 8 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE Check if an application to determine eligibility of a Trustee pursuant to Section 305 (b)(2) ____ ------------------------ CITIBANK, N.A. (Exact name of trustee as specified in its charter) 13-5266470 (I.R.S. employer identification no.) 399 Park Avenue, New York, New York 10043 (Address of principal executive office) (Zip Code) ----------------------- Computer Sciences Corporation (Exact name of obligor as specified in its charter) Nevada 95-2043126 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2100 East Grand Avenue El Segundo, California 90245 (Address of principal executive offices) (Zip Code) ------------------------- Debt Securities (Title of the indenture securities) 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. Name Address ---- ------- Comptroller of the Currency Washington, D.C. Federal Reserve Bank of New York New York, NY 33 Liberty Street New York, NY Federal Deposit Insurance Corporation Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto. Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983) Exhibit 2 - Copy of certificate of authority of the Trustee to commence business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577). Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519) Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to Registration Statement No. 33-34988) Exhibit 5 - Not applicable. Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement No. 33-19227.) Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of September 30, 1998 attached) Exhibit 8 - Not applicable. Exhibit 9 - Not applicable. ------------------ SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York and State of New York, on the 12th day of February, 1999. CITIBANK, N.A. By /s/Wafaa Orfy ------------------------- Wafaa Orfy Senior Trust Officer CHARTER NO. 1461 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT REPORT OF CONDITION CONSOLIDATING DOMESTIC AND FOREIGN SUBSIDIARIES OF CITIBANK, N.A. OF NEW YORK IN THE STATE OF NEW YORK, AT THE CLOSE OF BUSINESS ON SEPTEMBER 30, 1998, PUBLISHED IN RESPONSE TO CALL MADE BY COMPTROLLER OF THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161. CHARTER NUMBER 1461 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT.
ASSETS Thousands of dollars Cash and balances due from de- pository institutions: Noninterest-bearing balances and currency and coin. . . . . . . . . . . . . . . $ 8,336,000 Interest-bearing balances . . . . . . . . . . . . . . . 14,937,000 Held-to-maturity securities . . . . . . . . . . . . . . 0 Available-for-sale securities . . . . . . . . . . . . . 33,505,000 Federal funds sold and. . . . . . . . . . . . . securities purchased under agreements to resell. . . . . . . . . . . . . . . . . 11,948,000 Loans and lease financing receiv- ables: Loans and Leases, net of un- earned income . . . . . . . . . . . .$174,282,000 LESS: Allowance for loan and lease losses. . . . . . . . . . . 4,631,000 Loans and leases, net of un- earned income, allowance, and reserve . . . . . . . . . . . . . . . . . . . . . 169,651,000 Trading assets . . . . . . . . . . . . . . . . . . . . 36,759,000 Premises and fixed assets (includ- ing capitalized leases) . . . . . . . . . . . . . . . 3,757,000 Other real estate owned . . . . . . . . . . . . . . . . 510,000 Investments in unconsolidated subsidiaries and associated com- panies. . . . . . . . . . . . . . . . . . . . . . . . 1,252,000 Customers' liability to this bank on acceptances outstanding. . . . . . . . . . . . . . 1,611,000 Intangible assets . . . . . . . . . . . . . . . . . . . 2,965,000 Other assets. . . . . . . . . . . . . . . . . . . . . . 10,891,000 ------------ TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . $296,122,000 ------------ ------------ LIABILITIES Deposits: In domestic offices . . . . . . . . . . . . . . . . . $ 38,517,000 Noninterest- bearing. . . . . . . . . . . . . .$ 12,875,000 Interest- bearing. . . . . . . . . . . . . . .25,642,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs . . . . . . . . . . . . . . . . . . . . . . . . 162,357,000 Noninterest- bearing. . . . . . . . . . . . . . .10,724,000 Interest- bearing. . . . . . . . . . . . . . 151,633,000 Federal funds purchased and securities sold under agree- ments to repurchase . . . . . . . . . . . . . . . . . 8,114,000 Trading liabilities . . . . . . . . . . . . . . . . . . 31,664,000 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less. . . . . . . . . . . . . . . . . . . . . 10,429,000 With a remaining maturity of more than one year through three years . . . . . . . . . . 1,405,000 With a remaining maturity of more than three years. . . . . . . . . . . . . . . . . . . 2,160,000 Bank's liability on acceptances ex- ecuted and outstanding. . . . . . . . . . . . . . . . 1,684,000 Subordinated notes and debentures. . . . . . . . . . . . . . . . . . . . . . . 6,000,000 Other liabilities . . . . . . . . . . . . . . . . . . . 15,590,000 ------------ TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . $277,920,000 ------------ ------------ EQUITY CAPITAL Perpetual preferred stock and related surplus . . . . . . . . . . . . . . . . . 0 Common stock. . . . . . . . . . . . . . . . . . . . . . $ 751,000 Surplus . . . . . . . . . . . . . . . . . . . . . . . . 7,771,000 Undivided profits and capital re- serves. . . . . . . . . . . . . . . . . . . . . . . . 10,629,000 Net unrealized holding gains (losses) on available-for-sale securities. . . . . . . . . . . (245,000) Cumulative foreign currency translation adjustments . . . . . . . . . . . . . . . (704,000) ------------ TOTAL EQUITY CAPITAL. . . . . . . . . . . . . . . . . . $ 18,202,000 ------------ TOTAL LIABILITIES, LIMITED- LIFE PREFERRED STOCK, AND EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . $296,122,000 ------------ ------------
I, Roger W. Trupin, Controller of the above- named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. ROGER W. TRUPIN CONTROLLER We, the undersigned directors, attest to the correctness of this Report of Condition. We 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 and is true and correct. PAUL J. COLLINS JOHN S. REED WILLIAM R. RHODES DIRECTORS -----END PRIVACY-ENHANCED MESSAGE-----