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EXHIBIT 4.1
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TRIBUNE COMPANY,
Issuer
and
BANK OF MONTREAL TRUST COMPANY,
Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of August 5, 1998
Supplemental to Indenture dated as of January 1, 1997
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FIRST SUPPLEMENTAL INDENTURE dated as of August 5, 1998 (this "Supplemental
Indenture"), made and entered into by and between Tribune Company, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Bank of Montreal Trust Company, a
trust company duly organized and existing under the laws of the State of New
York, as Trustee (herein called the "Trustee") under the Indenture of the
Company dated as of January 1, 1997 (the "Indenture").
WHEREAS, the parties hereto previously entered into the Indenture to
provide for the issuance and sale by the Company from time to time of its
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"); and
WHEREAS, Sections 9.01(5) and (6) of the Indenture provide that the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into an indenture supplemental to the
Indenture, in form satisfactory to the Trustee, without the consent of any
Holder (a) to add to, change or eliminate any of the provisions of the
Indenture, in respect of one or more series of Securities, provided that any
such addition, change or elimination shall become effective only when there is
no such Security Outstanding and (b) to establish the form or terms of
Securities of any series as permitted by Section 2.01 and 3.01 of the
Indenture; and
WHEREAS, the Company has duly authorized the creation of a series of its
Securities denominated its "6 1/4% Exchangeable Notes Due August August 15,
2001" representing up to 5,210,796 of its "Debt Exchangeable for Common
Stock(SM)" (such Securities being referred to herein as the "DECS(SM)"), the
principal amount of which is mandatorily exchangeable at Maturity into shares
of Common Stock, par value $.01 per share (the "Learning Common Stock") of The
Learning Company, Inc. ("The Learning Company"), or, at the option of the
Company (under the circumstances described herein), cash, in either case at the
Exchange Rate (as defined herein) and/or such other consideration as permitted
or required by the terms of the DECS; and
WHEREAS, the entry into this Supplemental Indenture by the parties hereto
is in all respects authorized by the provisions of the Indenture; and
WHEREAS, the Company has duly authorized the execution and delivery of
this Supplemental Indenture, and all things necessary have been done to make
the DECS, when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
and to make this Supplemental Indenture a valid agreement of the Company, in
accordance with their and its terms:
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NOW THEREFORE:
It is mutually covenanted and agreed, for the equal and proportionate
benefit of all Holders of the DECS, as follows:
ARTICLE I
SECTION 1.01. Definitions.
For all purposes of the Indenture and this Supplemental Indenture as they
relate to the DECS, except as otherwise expressly provided or unless the
context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article;
(2) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to the Indenture and this Supplemental Indenture as a
whole and not to any particular Article, Section or other subdivision; and
(3) capitalized terms used but not defined herein are used as they are
defined in the Indenture.
"Adjustment Event" has the meaning set forth in Section 2.04(b).
"Business Day" mean any day that is not a Saturday, a Sunday or a day on
which the NYSE or banking institutions or trust companies in The City of New
York are authorized or obligated by law or executive order to close.
"Closing Price" of any security on any date of determination mean (i) the
closing sale price (or, if no closing price is reported, the last reported sale
price) of such security (regular way) on the NYSE on such date, (ii) if such
security is not listed for trading on the NYSE on any such date, as reported in
the composite transactions for the principal United States securities exchange
on which such security is so listed, (iii) if such security is not so listed on
a United States national or regional securities exchange, as reported by the
Nasdaq Stock Market, (iv) if such security is not so reported, the last quoted
bid price for such security in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or (v) if such security is
not so quoted, the average of the mid-point of the last bid and ask prices for
such security from each of at least three nationally recognized independent
investment banking firms selected by the Company for such purpose.
"DECS" has the meaning set forth in the recitals to this Supplemental
Indenture.
"Dilution Event" has the meaning set forth in Section 2.05(a)(ii).
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"Exchange Rate" means a rate equal to (a) if the Maturity Price is greater
than or equal to $33.625 (the "Threshold Appreciation Price"), 0.8309 shares of
Learning Common Stock per DECS, (b) if the Maturity Price is less than the
Threshold Appreciation Price but is greater than the Initial Price, a fraction
equal to (i) the Initial Price divided by (ii) the Maturity Price of one share
of Learning Common Stock per DECS and (c) if the Maturity Price is less than or
equal to the Initial Price, one share of Learning Common Stock per DECS;
provided, however, that the Exchange Rate is subject to adjustment from time to
time pursuant to Section 2.04(a).
"Initial Price" means $27.9375.
"Learning Common Stock" has the meaning set forth in the recitals to this
Supplemental Indenture.
"Market Price" means, as of any date of determination, the average Closing
Price per share of Learning Common Stock for the 20 Trading Days immediately
prior to the date of determination; provided, however, that if there are not 20
Trading Days for the Learning Common Stock occurring later than the 60th
calendar day immediately prior to, but not including, such date, the Market
Price shall be determined as the market value per share of Learning Common Stock
as of such date as determined by a nationally recognized investment banking firm
retained for such purpose by the Company.
"Maturity" mean the date on which the principal of a DECS becomes due and
payable as provided herein, whether at Stated Maturity or by declaration of
acceleration or otherwise.
"Maturity Price" means the average Closing Price per share of Learning
Common Stock on the 20 Trading Days immediately prior to (but not including)
the date of Maturity; provided, however, that if there are not 20 Trading Days
for the Learning Common Stock occurring later than the 60th calendar day
immediately prior to, but not including, the date of Maturity, Maturity Price
means the market value per share of Learning Common Stock as of Maturity as
determined by a nationally recognized investment banking firm retained for such
purpose by the Company.
"NYSE" means the New York Stock Exchange, Inc.
"Ordinary Cash Dividend" has the meaning set forth in subparagraph (b)(5)
of Section 2.04.
"Reported Securities" has the meaning set forth in subparagraph (b)(3) of
Section 2.04.
"Share Components" means the ratios of shares of Learning Common Stock per
DECS specified in clauses (a), (b) and (c) of the definition of "Exchange Rate"
set forth in this Article.
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"Threshold Appreciation Price" has the meaning specified in the definition
of "Exchange Rate" set forth in this Article.
"Trading Day" means a Business Day on which the security, the Closing
Price of which is being determined, (a) is not suspended from trading on any
national or regional securities exchange or association or over-the-counter
market at the close of business and (b) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of such security.
"Transaction Value" means (a) for any cash received in any Adjustment
Event, the amount of cash received per share of Learning Common Stock, (b) for
any Reported Securities received in any Adjustment Event, an amount equal to
(x) the average Closing Price per security of such Reported Securities for the
20 Trading Days immediately prior to Maturity multiplied by (y) the number of
such Reported Securities (as adjusted pursuant to subparagraph (b)(4) of
Section 2.04) received per share of Learning Common Stock and (c) for any
property received in any Adjustment Event other than cash or such Reported
Securities, an amount equal to the fair market value of the property received
per share of Learning Common Stock on the date such property is received, as
determined by a nationally recognized investment banking firm retained for this
purpose by the Company; provided, however, that in the case of clause (b), (x)
with respect to securities that are Reported Securities by virtue of only
clause (iv) of the definition of Reported Security, Transaction Value with to
any such Reported Security means the average of the mid-point of the last bid
and ask prices for such Reported Security as of Maturity from each of at least
three nationally recognized investment banking firms retained for such purpose
by the Company multiplied by the number of such Reported Securities (as
adjusted pursuant to subparagraph (b)(4) of Section 2.04) received per share of
Learning Common Stock and (y) with respect to all other Reported Securities, if
there are not 20 Trading Days for any particular Reported Security occurring
later than the 60th calendar day immediately prior to, but not including, the
date of Maturity, Transaction Value with respect to such Reported Security
means the market value per security of such Reported Security as of Maturity as
determined by a nationally recognized investment banking firm retained for such
purpose by the Company multiplied by the number of such Reported Securities (as
adjusted pursuant to subparagraph (b)(4) of Section 2.04) received per share of
Learning Common Stock. For purposes of calculating the Transaction Value, any
cash, Reported Securities or other property receivable in any Adjustment Event
shall be deemed to have been received immediately prior to the close of
business on the record date for such Adjustment Event or, if there is no record
date for such Adjustment Event, immediately prior to the close of business on
the effective date of such Adjustment Event.
Section 1.02. Effect of Headings.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
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Section 1.03. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.04. Separability.
In case any provision in this Supplemental Indenture or the DECS 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 1.05. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Supplemental
Indenture by any of the provisions of the Trust Indenture Act of 1939, as
amended, such required provisions shall control.
Section 1.06. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture, expressed or implied, shall give
to any person, other than the parties hereto and their successors hereunder,
and the Holders of the DECS any benefit or any legal or equitable right, remedy
or claim under this Supplemental Indenture.
SECTION 1.07. Application of Supplemental Indenture.
This Supplemental Indenture shall take effect on the date hereof, and
shall apply only to the DECS. This Supplemental Indenture shall have no effect
on any other Securities, whether originally issued prior to the date hereof or
thereafter. If any provision of this Supplemental Indenture is inconsistent
with any provision of the Indenture, then, to the extent permitted by the
Indenture, the provision in this Supplemental Indenture shall control.
SECTION 1.08. Governing Law.
THIS SUPPLEMENTAL INDENTURE AND THE DECS SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF ILLINOIS AND THIS SUPPLEMENTAL INDENTURE
AND EACH SUCH DECS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ILLINOIS.
ARTICLE II
The DECS
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Section 2.01. Title and Terms.
There is hereby created under the Indenture a series of Securities known
and designated as the "6 1/4% Exchangeable Notes Due August 15, 2001" of the
Company. The aggregate principal amount of DECS that may be authenticated and
delivered under this Indenture is limited to $200 million, except for DECS
authenticated and delivered upon reregistration of, transfer of, or in exchange
for, or in lieu of, other DECS pursuant to Section 3.04, 3.05, 3.06 and 11.06
of the Indenture.
The DECS shall bear interest at the rate of 6 1/4% of the principal amount
per annum, from the date of original issuance or the most recent Interest
Payment Date to which interest has been paid or duly provided for, until the
principal amount thereof is exchanged at maturity pursuant to the terms of the
DECS. Interest on the DECS shall be payable quarterly in arrears on February
15, May 15, August 15 and November 15 of each year, commencing November 15,
1998 (each, an Interest Payment Date"), to the persons in whose names the DECS
(or any predecessor securities) are registered at the close of business on
February 1, May 1, August 1 and November 1 immediately preceding such Interest
Payment Date, provided that interest payable at Maturity shall be payable to
the person to which the Learning Common Stock is deliverable.
The DECS shall be initially issued in the form of a Global Security and
the depositary for the DECS shall be the Depositary Trust Company, New York,
New York.
The DECS shall not be redeemable prior to their Maturity and shall not be
subject to any sinking fund. The DECS are not subject to payment prior to the
date of Maturity at the option of the Holder.
The DECS shall be mandatorily exchangeable as provided in Section 2.02.
The DECS shall be issuable in denominations of $27.9375 and any integral
multiple thereof.
The DECS shall not be issued as Original Issue Discount Securities.
The form of DECS attached hereto as Exhibit A is hereby adopted, pursuant
to Section 9.01(6) of the Indenture, as a form of Securities of a series that
consists of DECS. Certain terms of the DECS are set forth in the form of the
DECS.
The Company shall not be obligated to pay any additional amount on the
DECS in respect of taxes, except as otherwise provided in Section 2.06.
Section 2.02. Exchange at Maturity.
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Subject to Section 2.04(b), at maturity the principal amount of each DECS
shall be mandatorily exchanged by the Company into a number of shares of
Learning Common Stock at the Exchange Rate; provided, however, that, pursuant
to Section 2.03, no fraction of a share of Learning Common Stock shall be
issued. The Holders of the DECS shall be responsible for the payment of any
and all brokerage costs upon the subsequent sale of such shares. The Company
may, at its option, in lieu of delivering Learning Common Stock, deliver cash
in an amount (calculated to the nearest 1/100th of a dollar per DECS or, if
there is not a nearest 1/100th of a dollar, then to the next higher 1/100th of
a dollar) equal to the product of the number of shares of Learning common Stock
otherwise deliverable in respect of such DECS on the date of Maturity,
multiplied by the Maturity Price; provided, however, that if such option is
exercised, the Company shall deliver cash with respect to all, but not less
than all, of the Learning Common Stock that would otherwise be deliverable. In
determining the amount of cash deliverable in exchange for the DECS in lieu of
Learning Common Stock pursuant to the prior sentence hereof, if more than one
DECS shall be surrendered for exchange at one time by the same Holder, the
amount of cash which shall be delivered upon exchange shall be computed on the
basis of the aggregate number of DECS so surrendered at Maturity.
Section 2.03. No Fractional Shares.
If more than one DECS shall be surrendered for exchange pursuant to
Section 2.02 at one time by the same Holder, the number of full shares of
Learning Common Stock or Reported Securities which shall be delivered upon such
exchange, in whole or in part, as the case may be, shall be computed on the
basis of the aggregate number of DECS surrendered at Maturity. No fractional
shares or script representing fractional shares of Learning Common Stock or
Reported Securities shall be issued or delivered upon any exchange pursuant to
Section 2.02 of any DECS. In lieu of any fractional share of Learning Common
Stock or securities which, but for the immediately preceding sentence, would
otherwise be deliverable upon such exchange, the Company, through any
applicable Paying Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional share of
Learning Common Stock or security at the Maturity Price. The Company shall,
upon such exchange of any DECS, provide cash to any applicable Paying Agent in
an amount equal to the cash payable with respect to any fractional shares of
Learning Common Stock deliverable upon such exchange, and the Company shall
retain such fractional shares of Learning Common Stock.
SECTION 2.04. Adjustment of Exchange Rate.
(a) Adjustment for Distributions, Reclassifications, etc. The Exchange
Rate shall be subject to adjustment from time to time as follows:
(i) If The Learning Company shall:
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(A) pay a stock dividend or make a distribution, in each case,
with respect to the Learning Common Stock in shares of such stock;
(B) subdivide or split the outstanding shares of Learning
Common Stock;
(C) combine its outstanding shares of Learning Common Stock
into a smaller number of shares; or
(D) issue by reclassification (other than a reclassification
pursuant to clause (ii), (iii), (iv) or (v) of the definition of
Adjustment Event in paragraph (b) of this Section) of its shares of
Learning Common Stock any shares of common stock of The Learning
Company; or
then, in any such event, the Exchange Rate shall be adjusted by adjusting
each of the Share Components of the Exchange Rate in effect immediately
prior to such event so that a holder of any DECS shall be entitled to
receive, upon exchange pursuant to Section 2.02 of the principal amount of
such DECS at Maturity, the number of shares of Learning Common Stock (or,
in the case of a reclassification referred to in clause (D) of this
sentence, the number of shares of other common stock of The Learning
Company issued pursuant thereto) which such holder of such DECS would have
owned or been entitled to receive immediately following such event had
such DECS been exchanged immediately prior to such event or any record
date with respect thereto. Each such adjustment shall become effective at
the opening of business on the Business Day next following the record date
for determination of holders of Learning Common Stock entitled to receive
such dividend or distribution in the case of a dividend or distribution
and shall become effective immediately after the effective date in the
case of a subdivision, split, combinations or reclassification. Each such
adjustment shall be made successively.
(ii) If The Learning Company shall, after the date hereof, issue
rights or warrants to all holders of Learning Common Stock entitling them
to subscribe for or purchase shares of Learning Common stock (other than
rights to purchase Learning Common Stock pursuant to a plan for the
reinvestment of dividends) at a price per share less than the Market Price
of the Learning Common Stock on the Business Day next following the record
date for the determination of holders of shares of Learning Common Stock
entitled to receive such rights or warrants, then in each case, the
Exchange Rate shall be adjusted by multiplying each of the Share
Components of the Exchange Rate in effect on the record date for the
determination of holders of Learning Common Stock entitled to receive such
right rights or warrants, by a fraction, of which the numerator shall be
(A) the number of shares of Learning Common Stock outstanding on such
record date plus (B) the number of additional shares of Learning Common
Stock offered for subscription or purchase pursuant to such rights or
warrants, and of which the
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denominator shall be (x) the number of shares of Learning Common Stock
outstanding on such record date plus (y) the number of additional shares
of Learning Common Stock which the aggregate offering price of the total
number of shares of Learning Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at the Market
Price of the Learning Common Stock on the Business Day next following such
record date, which number of additional shares shall be determined by
multiplying such total number of shares by the exercise price of such
rights or warrants and dividing the product so obtained by such Market
Price of Learning Common Stock. Such adjustment shall become effective at
the opening of business on the Business Day next following the record date
for the determination of holders of Learning Common Stock entitled to
receive such rights or warrants. To the extent that such rights or
warrants expire prior to the Maturity of the DECS and shares of Learning
Common Stock are not delivered pursuant to such rights or warrants prior
to such expiration, the Exchange Rate shall be readjusted to the Exchange
Rate which would then be in effect had such adjustments for the issuance
of such rights or warrants been made upon the basis of delivery of only
the number of shares of Learning Common Stock actually delivered pursuant
to such rights or warrants. Each such adjustment shall be made
successively.
(iii) Any shares of Learning Common Stock issuable in payment of a
dividend shall be deemed to have been issued immediately prior to the
close of business on the record date for such dividend for purposes of
calculating the number of outstanding shares of Learning Common Stock
under paragraph (a)(ii) of this Section.
(iv) All adjustments to the Exchange Rate will be calculated to the
nearest 1/10,000th of a share of Learning Common Stock (or if there is not
a nearest 1/10,000th of a share of Learning Common Stock to the next lower
1/10,000th of a share of Learning Common Stock). No adjustment in the
Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however,
that any adjustments which by reason of the foregoing are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. If an adjustment is made to the Exchange Rate pursuant to
paragraphs (a)(i) or (a)(ii) of this Section, an adjustment shall also be
made to the Maturity Price as such term is used throughout the definition
of Exchange Rate set forth in Section 1.01. The required adjustment to
the Maturity Price shall be made at Maturity by multiplying the original
Maturity Price by the cumulative number or fraction determined under
paragraphs (a)(i) and/or (a)(ii) of this Section by which the original
Exchange Rate was multiplied to adjust such rate. In the case of a
reclassification of any shares of Learning Common Stock into any common
stock of The Learning Company other than Learning Common Stock, such
common stock shall be deemed to be shares of Learning Common Stock solely
to determine the Maturity Price and to apply the Exchange Rate at
Maturity.
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Each such adjustment to the Exchange Rate and the Maturity Price shall be
made successively.
(b) Other Adjustment Events. In the event of (i) any dividend or
distribution by The Learning Company to all holders of Learning Common Stock of
evidences of its indebtedness or other assets (excluding any dividends or
distributions referred to in clause (A) of paragraph (a)(i) of this Section,
any common shares issued pursuant to a reclassification referred to in clause
(D) of paragraph (a)(i) of this Section and any Ordinary Cash Dividends) or any
issuance by The Learning Company to all holders of Learning Common Stock of
rights or warrants (other than rights or warrants referred to in paragraph
(a)(ii) of this Section), (ii) any consolidation or merger of The Learning
Company with or into another entity (other than a merger or consolidation in
which The Learning Company is the continuing corporation and in which the
Learning Common Stock outstanding immediately prior to the merger or
consolidation are not exchanged for cash, securities or other property of The
Learning Company or another corporation), (iii) any sale, transfer, lease or
conveyance to another corporation of the property of The Learning Company as an
entirety or substantially as an entirety, (iv) any statutory exchange of
securities of The Learning Company with another corporation (other than in
connection with a merger or acquisition) or (v) any liquidation, dissolution or
winding up of The Learning Company (any such event, an "Adjustment Event"), the
property receivable by Holders of DECS at Maturity shall be subject to
adjustment from time to time as follows:
(1) Each holder of a DECS will receive at Maturity, in lieu of or (in
the case of an Adjustment Event described in clause (i) of this paragraph
(b)) in addition to, the shares of Learning Common Stock that it would
otherwise receive as required by Section 2.02, cash in an amount equal to
(A) if the Maturity Price is greater than or equal to the Threshold
Appreciation Price, 0.8309 multiplied by the Transaction Value, (B) if the
Maturity Price is less than the Threshold Appreciation Price but is
greater than the Initial Price, the product of (x) the Initial Price
divided by the Maturity Price multiplied by (y) the Transaction Value and
(C) if the Maturity Price is less than or equal to the Initial Price, the
Transaction Value.
(2) Following an Adjustment Event, the Maturity Price, as such term
is used in subparagraph (b)(1) above and throughout the definition of
Exchange Rate, shall be deemed to equal (A) if shares of Learning Common
Stock are outstanding at Maturity, subject to Section 2.04(b)(2)(B), the
Maturity Price of the shares of Learning Common Stock, as adjusted
pursuant to the provisions of paragraph (a)(iv) of this Section, plus the
Transaction Value or (B) if shares of Learning Common Stock are not
outstanding at maturity (or if the Learning Common Stock, as a result of
an Adjustment Event, is not (i) listed on a United States national
securities exchange, (ii) reported on a United States national securities
system subject to last sale reporting or (iii) traded in the
over-the-counter market and reported on the National Quotation Bureau or
similar organization,
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and for which bid and ask prices are not available from at least three
nationally recognized investment banking firms), the Transaction Value.
(3) Notwithstanding the foregoing, with respect to any securities
received in an Adjustment Event that (A) are (i) listed on a United States
national securities exchange, (ii) reported on a United States national
securities system subject to last sale reporting, (iii) traded in the
over-the-counter market and reported on the National Quotation Bureau or
similar organization or (iv) for which bid and ask prices are available
from at least three nationally recognized investment banking firms and (B)
are either (x) perpetual equity securities or (y) non-perpetual equity or
debt securities with a stated maturity after the Stated Maturity
("Reported Securities"), the Company may, at its option, in lieu of
delivering the amount of cash deliverable in respect of Reported
Securities received in an Adjustment Event, as determined in accordance
with subparagraph (b)(1), deliver a number of such Reported Securities
with a value equal to such cash amount, as determined in accordance with
clause (b) of the definition of Transaction Value set forth in Section
1.01; provided, however, that (i) if such option is exercised, the Company
shall deliver Reported Securities in respect of all, but not less than
all, cash amounts that would otherwise be deliverable in respect of
Reported Securities received in an Adjustment Event, (ii) the Company may
not exercise such option if the Company has elected to deliver cash in
lieu of Learning Common Stock, if any, deliverable upon Maturity or if
such Reported Securities have not yet been delivered to the holders
entitled thereto following such Adjustment Event or any record date with
respect thereto, and (iii) subject to clause (ii) of this proviso, the
Company must exercise such option if the Company does not elect to deliver
cash in lieu of Learning Common Stock, if any, deliverable upon Maturity.
If the Company elects to deliver Reported Securities, each holder of a
DECS will be responsible for the payment of any and all brokerage and
other transaction costs upon the sale of such Reported Securities. If,
following any Adjustment Event, any Reported Security ceases to qualify as
a Reported Security, then (x) the Company may no longer elect to deliver
such Reported Security in lieu of an equivalent amount of cash and (y)
notwithstanding clause (b) of the definition of Transaction Value, the
Transaction Value of such Reported Security shall mean the fair market
value of such Reported Security on the date such security ceases to
qualify as a Reported Security, as determined by a nationally recognized
investment banking firm retained for this purpose by the Company.
(4) The amount of cash and/or the kind and number of securities into
which the DECS shall be exchangeable after an Adjustment Event shall be
subject to adjustment following such Adjustment Event in the same manner
and upon the occurrence of the same type of events as described in
paragraphs (a) and (b) of this Section with respect to Learning Common
Stock and The Learning Company.
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(5) For purposes of the foregoing, the term "Ordinary Cash Dividend"
means, with respect to any consecutive 365-day period, any dividend with
respect to Learning Common Stock paid in cash to the extent that the
amount of such dividend, together with the aggregate amount of all other
dividends on Learning Common Stock paid in cash during such 365-day
period, does not exceed on a per-share basis 10% of the average of the
Closing Prices of Learning Common Stock over such 365-day period. For
purposes of this subparagraph (b)(5), any cash dividend shall be deemed to
be paid as of the record date for such cash dividend.
Section 2.05. Notice of Adjustment and Certain Other Events.
(a) Whenever the Exchange Rate is adjusted as herein provided or an
Adjustment Event occurs, the Company shall:
(i) forthwith compute the adjusted Exchange Rate (or Transaction
Value) in accordance with Section 2.04 and prepare a certificate signed by
an officer of the Company setting forth the adjusted Exchange Rate (or
Transaction Value), the method of calculation thereof in reasonable detail
and the facts requiring such adjustment and upon which such adjustment is
based, which certificate shall be conclusive, final and binding evidence
of the correctness of the adjustment, and file such certificate forthwith
with the Trustee; and
(ii) within ten Business Days following the occurrence of an event
that permits or requires an adjustment to the Exchange Rate pursuant to
Section 2.04(a) (each, a "Dilution Event") or an Adjustment Event that
permits or requires a change in the consideration to be received by
Holders pursuant to Section 2.04(b) (or, in any case, if the Company is
not aware of such occurrence, as soon as practicable after becoming so
aware), provide written notice to the Trustee and to the Holders of the
outstanding DECS of the occurrence of such Dilution Event or Adjustment
Event including a statement in reasonable detail setting forth the method
by which any adjustment to the Exchange Rate or change in the
consideration to be received by Holders of DECS following the Adjustment
Event was determined and setting forth the revised Exchange Rate or
consideration, as the case may be provided, however, that in respect of
any adjustment of the Maturity Price, such notice need only disclose the
factor by which the Maturity Price is to be multiplied pursuant to Section
2.04(a)(iv) in order to determine which clause of the definition of the
Exchange Rate will apply at Maturity, it being understood that, until
Maturity, the Exchange Rate itself cannot be determined.
(b) In case at any time while any of the DECS are outstanding the Company
receives notice from The Learning Company that:
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(i) The Learning Company will declare a dividend (or any other
distribution) on or in respect of the Learning Common Stock to which
Section 2.04(a)(i) or (ii) shall apply (other than any cash dividends and
distributions, if any, paid from time to time by The Learning Company that
constitute Ordinary Cash Dividends);
(ii) The Learning Company will authorize the issuance to all holders
of Learning Common Stock of rights or warrants to subscribe for or
purchase shares of Learning Common Stock or of any other subscription
rights or warrants;
(iii) there will occur any conversion or reclassification of Learning
Common Stock (other than a subdivision or combination of outstanding
shares of such Learning Common Stock) or any consolidation, merger or
reorganization to which The Learning Company is a party and for which
approval of any stockholders of The Learning Company is required, or the
sale or transfer of all or substantially all of the assets of The Learning
Company; or
(iv) there will occur the voluntary or involuntary dissolution,
liquidation or winding up of The Learning Company;
then, if the notice provides to the Company the information described in clause
(x) and (y) below in a reasonable amount of time in advance of the delivery and
filing requirements set forth in this subparagraph (b), the Company shall cause
to be delivered to the Trustee and any applicable Paying Agent and filed at the
office or agency maintained for the purpose of exchange of DECS at Maturity in
the Borough of Manhattan, in The City of New York by the Trustee (or any
applicable Paying Agent), and shall cause to be mailed to the Holders of DECS
at their last addresses as they shall appear upon the registration books of the
Security Registrar, at least ten days before the date hereinafter specified (or
the earlier of the dates hereinafter specified, in the event that more than one
is specified), a notice stating (x) the date on which a record is to be taken
for the purpose of such dividend, distribution or grant of rights or warrants
or, if a record is not to be taken, the date as of which holders of Learning
Common Stock of record to be entitled to such dividend, distribution or grant
of rights are to be determined, or (y) the date, if known by the Company, on
which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective.
Following any Adjustment Event, the provisions of this paragraph (b) shall
apply with respect to any Reported Securities in the same manner as with
respect to The Learning Company and the Learning Common Stock.
(c) On or prior to the fourth Business Day preceding the Stated Maturity
of the DECS the Company shall notify the Trustee and will publish a notice in a
daily newspaper of national circulation stating whether the Company will
deliver, in accordance with Section 2.02, shares of Learning Common Stock or
cash (and/or, in accordance with Section 2.04(b), cash or Reported Securities)
upon the mandatory exchange of the principal amount of the DECS. The Trustee
shall notify DTC of the form of consideration to be delivered by the Company.
After the close of
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business on the Business Day immediately preceding the Stated Maturity of the
DECS, the Company shall notify the Trustee in writing of the number of shares
of Learning Common Stock and/or Reported Securities, or the amount of cash to
be paid per DECS.
SECTION 2.06. Taxes.
(a) The Company will pay any and all documentary, stamp, transfer or
similar taxes that may be payable in respect of the transfer and delivery of
Learning Common Stock (or Reported Securities) pursuant hereto; provided,
however, that the Company shall not be required to pay any such tax which may
be payable in respect of any transfer involved in the delivery of Learning
Common Stock (or Reported Securities) in a name other than that in which the
DECS so exchanged were registered, and no such transfer or delivery shall be
made unless and until the person requesting such transfer has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid.
(b) The parties hereto hereby agree, and each Holder of a DECS by its
purchase of a DECS hereby agrees:
(i) to treat, for U.S. federal income tax purposes, each DECS as a
forward purchase contract to purchase Learning Common Stock at Maturity
(including as a result of acceleration or otherwise) ( the "forward
purchase contract characterization"), under the terms of which contract
(a) at the time of issuance of the DECS the Holder deposits irrevocably
with the Company a fixed amount of cash equal to the purchase price of the
DECS to assure the fulfillment of the Holder's purchase obligation
described in clause (c) below, which deposit will unconditionally and
irrevocably be applied at Maturity to satisfy such obligation, (b) until
Maturity the Company will be obligated to pay interest on such deposit at
a rate equal to the stated rate of interest on the DECS as compensation to
the Holder for the Company's use of such cash deposit during the term of
the DECS, and (c) at Maturity such cash deposit unconditionally and
irrevocably will be applied by the Company in full satisfaction of the
Holder's obligation under the forward purchase contract, and the Company
will deliver to the Holder the number of shares of Learning Common Stock
that the Holder is entitled to receive at the time pursuant to the terms
of the DECS (subject to the Company's right to deliver cash in lieu of the
shares of Learning Common Stock);
(ii) to treat, consistent with the above characterization, (x)
amounts paid to the Company in respect of the original issue of a DECS as
allocable in their entirety to the amount of the cash deposit attributable
to such DECS, and (y) amounts denominated as interest that are payable
with respect to the DECS as interest payable on the amount of such
deposit, includible annually in the income of the Holder as interest
income in accordance with its method of accounting; and
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(iii) to file all U.S. federal, state and local income and franchise
tax returns consistent with the forward purchase contract characterization
(unless required otherwise by an applicable taxing authority).
SECTION 2.07. Delivery of Securities upon Maturity.
All Learning Common Stock and Reported Securities deliverable to Holders
upon the Maturity of the DECS shall be delivered to such Holders, whenever
practicable, in such manner (such as book-entry transfer) so as to assure
same-day transfer of such securities to Holders and otherwise in the manner
customary at such time for delivery of such securities and securities of the
same type.
ARTICLE III
Covenants
SECTION 3.01. Shares Free and Clear; No Rights in the Stock.
With respect to the DECS only and for the benefit of only the Holders
thereof, the Company covenants and warrants that upon exchange of a DECS at
Maturity pursuant to the Indenture and this Supplemental Indenture, the Holder
of a DECS shall receive valid title to the Learning Common Stock (and, in the
event an Adjustment Event has occurred, the Reported Securities, if Reported
Securities are delivered) for which such DECS is at such time exchangeable
pursuant to this Indenture, free and clear of any and all liens, claims,
charges and encumbrances whatsoever, except to the extent such liens, claims,
charges and encumbrances are caused by the Holders. Except as provided in
Section 2.06(a), the Company shall pay all taxes and charges with respect to
the delivery of Learning Common Stock (and Reported Securities) delivered in
exchange for DECS hereunder. Until such time, if any, as the Company shall
deliver shares of Learning Common Stock to Holders of the DECS at Maturity, the
Holders shall not be entitled to any rights with respect to the Learning Common
Stock (including, without limitation, voting rights and the rights to receive
any dividends or other distributions in respect thereof.
Section 3.02 Discharge of Indenture.
With respect to the DECS only and for the benefit of only the Holders
thereof, the Company surrenders all rights and powers conferred on it by
subclause (b)(ii) or (iii) of clause (1) of Section 4.01 of the Indenture.
With respect to the DECS only and for the benefit of only the Holders thereof,
the Company shall have the right to discharge the Indenture pursuant to and in
accordance with the remaining provisions of Section 4.01 of the Indenture if,
instead of depositing with the Trustee funds, the Company deposits Learning
Common Stock, Reported Securities and/or cash sufficient to pay and discharge
the entire indebtedness on the DECS for principal and interest to the date of
Stated Maturity.
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ARTICLE IV
Miscellaneous
SECTION 4.01. Confirmation of Indenture.
The Indenture, as supplemented and amended by this Supplemental Indenture
and all other indentures supplemental thereto, is in all respects ratified and
confirmed, and the Indenture, this Supplemental Indenture and all indentures
supplemental thereto shall be read, taken and construed as one and the same
instrument.
SECTION 4.02. Concerning the Trustee.
The Trustee assumes no duties, responsibilities or liabilities by reason
of this Supplemental Indenture other than as set forth in the Indenture.
SECTION 4.03. Payment of Principal.
Each reference in the Indenture to the payment by the Company of the
principal of any Security (or words of like import) shall be deemed, for
purposes of the DECS only, to mean the delivery of the Learning Common Stock
(or, at the Company's option, the cash equivalent thereof) at the time, rate
and manner set forth herein.
_______________
This Supplemental Indenture may be executed in any number of counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
TRIBUNE COMPANY
By:________________________
Name:
Title:
Attest: ________________________
Name:
Title:
BANK OF MONTREAL TRUST
COMPANY, as Trustee
By: ________________________
Name:
Title:
Attest: ________________________
Name:
Title:
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STATE OF ILLINOIS )
) SS.:
COUNTY OF ▇▇▇▇ )
On the ____ day of ___________, 1998, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that she/he is the ____________ of TRIBUNE COMPANY, one of the corporations
described in and which executed the foregoing instrument; that she/he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors
of said corporation, and that she/he signed her/his name thereto by like
authority.
___________________________
Notary Public
SEAL
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the ___ day of __________, 1998, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
she/he is the _________ of BANK OF MONTREAL TRUST COMPANY, one of the
corporations described in and which executed the foregoing instrument; that
she/he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that she/he signed her/his name
thereto by like authority.
_______________________
Notary Public
SEAL
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Exhibit A
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN
PART FOR THE INDIVIDUAL DEBT SECURITIES REPRESENTED HEREBY, THIS GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE
TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NO.____________ CUSIP NO. ▇▇▇▇▇▇▇▇▇
[Form of Face of DECS]
TRIBUNE COMPANY
________________DECS (SM)
(Debt Exchangeable for Common Stock (SM)
6 1/4% Exchangeable Note Due August 15, 2001
(Subject to Exchange at Maturity into Shares of Common Stock,
Par Value $.01 Per Share, of The Learning Company, Inc.)
Tribune Company, a Delaware corporation (hereinafter called the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to exchange with CEDE & CO.
or registered assigns, on August
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15, 2001 a number of shares of Common Stock, par value $.01 per share (the
"Learning Common Stock"), of the Learning Company, Inc. (The "Learning Company")
(or, at the Company's option, the cash equivalent thereof and/or such other
consideration as permitted or required by the terms of the DECS) at the
Exchange Rate (as defined herein), and to pay interest (computed on the basis
of a 360-day year of twelve 30-day months) on such principal amount from the
date of original issuance or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for, quarterly
on February 15, May 15, August 15 and November 15 of each year (each, an
"Interest Payment Date" and, collectively, the "Interest Payment Dates"),
commencing November 15, 1998, at the rate per annum specified in the title of
this note, until Maturity. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
said Indenture, be paid to the person in whose name this DECS (or the DECS in
exchange or substitution for which this DECS was issued) is registered at the
close of business on the Regular Record Date (as defined below) for interest
payable on such Interest Payment Date. The Regular Record Date for any interest
payment is the close of business on the February 1, May 1, August 1 and
November 1 immediately preceding the relevant Interest Payment Date, whether or
not a Business Day (as defined below), provided that interest payable at
Maturity shall be payable to the person to whom the Learning Common Stock is
deliverable. In any case where such Interest Payment Date shall not be a
Business Day, then (notwithstanding any other provision of said Indenture or
this DECS) payment of such interest need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on such Interest Payment Date, and, if such payment is so made, no
interest shall accrue for the period from and after such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holder on such Regular Record Date, and
may be paid to the person in whose name this DECS (or the DECS in exchange or
substitution for which this DECS was issued) is registered at the close of
business on a record date for the payment of such interest to be fixed by the
Trustee for the DECS, notice whereof shall be given to Holders of the DECS not
less than ten days prior to such record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the DECS may be listed and not deemed impracticable by the
Trustee, and upon such notice as may be required by such exchange.
At Maturity, the principal amount of this DECS will be mandatorily
exchanged into a number of shares of Learning Common Stock, at the Exchange
Rate. The "Exchange Rate" is equal to (a) if the Maturity Price (as defined
below) is greater than or equal to $33.625 (the "Threshold Appreciation
Price"), .8309 shares of Learning Common Stock per DECS, (b) if the Maturity
Price is less than the Threshold Appreciation Price but is greater than
$27.9375 (the "Initial Price"), a fraction equal to the Initial Price divided
by the Maturity Price of one share of Learning Common Stock per DECS (such
fractional share being calculated to the nearest 1/10,000th of a share or, if
there is not a nearest 1/10,000th of a share, to the next higher 1/10,000th of
a share) and (c) if the Maturity Price is less than or equal to the Initial
Price, one share of Learning Common Stock per DECS. Any shares of Learning
Common Stock delivered
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by the Company to the Holders of the DECS that are not affiliated with The
Learning Company shall be free of any transfer restrictions except to the
extent any transfer restrictions are caused by the Holders of DECS, and the
holders of DECS will be responsible for the payment of any and all brokerage
costs upon the subsequent sale of such shares. No fractional shares of
Learning Common Stock will be issued at Maturity as provided in the Indenture.
The Company may at its option, in lieu of delivering shares of Learning
Common Stock, deliver cash in an amount equal to the value of such number of
shares of Learning Common Stock at the Maturity Price as provided in the
Indenture; provided, however, that if such option is exercised, the Company
shall deliver cash with respect to all, but not less than all, of the shares of
Learning Common Stock that would otherwise be deliverable.
Notwithstanding the foregoing, (i) in the case of certain dilution events,
the Exchange Rate will be subject to adjustment and (ii) in the case of certain
adjustment events, the consideration received by Holders of DECS at Maturity
will be shares of Learning Common Stock, other securities and/or cash, each as
provided in the Indenture.
The "Maturity Price" is defined as the average Closing Price per share of
Learning Common Stock on the 20 Trading Days immediately prior to (but not
including) the date of Maturity or, under certain circumstances as provided in
the Indenture, the market value per share of Learning Common Stock as of the
date of Maturity as determined by a nationally recognized investment banking
firm retained for this purpose by the Company. The "Closing Price" of any
security on any date of determination means (i) the closing sale price (or, if
no closing sale price is reported, the last reported sale price) of such
security (regular way) on the New York Stock Exchange (the "NYSE") on such
date, (ii) if such security is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which such security is so listed, (iii) if such security
is not so listed on a United States national or regional securities exchange,
as reported by the Nasdaq Stock Market, (iv) if such security is not so
reported, the last quoted bid price for such security in the over-the counter
market as reported by the National Quotation Bureau or similar organization or
(v) if such security is not so quoted, the average of the mid-point of the last
bid and ask prices for such security from each of at least three nationally
recognized investment banking firms selected for this purpose by the Company.
A "Trading Day" is defined as a Business Day on which the security the Closing
Price of which is being determined (i) is not suspended from trading on any
national or regional securities exchange or association or over-the-counter
market at the close of business and (ii) has traded at least once on the
national or regional securities exchange or association or over-the-counter
market that is the primary market for the trading of such security. "Business
Day" means any day that is not a Saturday, a Sunday or a day on which the NYSE,
banking institutions or trust companies in The City of New York, New York are
authorized or obligated by law or executive order to close.
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Interest on this DECS will be payable, and delivery of Learning Common
Stock (or, at the Company's option, its cash equivalent and/or such other
consideration as permitted or required herein and in the Indenture) in exchange
for the principal amount of this DECS at Maturity will be made upon surrender
of this DECS, at the office or agency of the Company maintained for that
purpose, and payment of interest on (and, if the Company elects not to deliver
Learning Common Stock and/or other securities upon exchange at Maturity, the
cash equivalent thereof payable upon exchange for the principal amount of) this
DECS will be made in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the persons in whose names the DECS are registered on
the close of business on the February 1, May 1, August 1 and November 1
immediately preceding the relevant Interest payment Date. Initially, such
office shall be the principal corporate trust office of the Trustee in New York
City, which is located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ADDITIONAL PROVISIONS OF THIS DECS ARE CONTAINED ON THE REVERSE HEREOF AND
SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH IN THIS
PLACE.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee for this DECS by manual signature, this DECS shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose. "DECS" and "Debt Exchangeable for Common Stock" are service marks of
Salomon Brothers Inc.
IN WITNESS WHEREOF, Tribune Company has caused this instrument to be duly
executed under its corporate seal.
Dated: TRIBUNE COMPANY
By:______________________
Name:
Title:
Attest:
Name:
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the within-mentioned Indenture.
BANK OF MONTREAL TRUST COMPANY, as
Trustee
By:_____________________________
Authorized Officer
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[Form of Reverse of DECS]
TRIBUNE COMPANY
6 1/4% Exchangeable Note Due August 15, 2001
(Subject to Exchange at Maturity into Shares of Common Stock,
Par Value $.01 Per Share, of The Learning Company, Inc.)
This DECS is one of a duly authorized issue of debentures, notes or other
evidences of indebtedness (hereinafter called the "Debt Securities") of the
Company of the series hereinafter specified, which DECS are limited in
aggregate principal amount to $200 million, all such Debt Securities issued
and to be issued under an indenture dated as of January 1, 1997, as
supplemented by the First Supplemental Indenture dated August 5, 1998 (as so
supplemented and as may be further supplemented from time to time, the
"Indenture") between the Company and Bank of Montreal Trust Company, as trustee
(herein called the "Trustee", which term includes any successor Trustee under
the Indenture), pursuant to which the Company has designated Bank of Montreal
Trust Company as Trustee for the DECS, to which Indenture and all other
indentures supplemental thereto reference is hereby made for a statement of the
rights and limitation of rights thereunder of the Holders of the Debt
Securities and of the rights, obligations, duties and immunities of the Trustee
for each series of Debt Securities and of the Company, and the terms upon which
the Debt Securities are and are to be authenticated and delivered. As provided
in the Indenture, the Debt Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts,
may be denominated in currencies other than U.S. Dollars (including composite
currencies), may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking fund or other purchase provisions, if any, may
be subject to different covenants and Events of Default and may otherwise vary
as in the Indenture provided or permitted. This DECS is one of a series of the
Debt Securities designated as 6 1/4% Exchangeable Notes Due August 15, 2001.
The DECS may not be redeemed prior to Stated Maturity and are not entitled
to the benefit of any sinking fund.
The provisions contained in the Indenture for defeasance of the Company's
obligations upon compliance by the Company with certain conditions set forth
therein will not be applicable to the DECS. Certain other provisions contained
in the Indenture pertaining to satisfaction and discharge of the Indenture upon
deposit of funds with the Trustee shall apply to the DECS in the manner set
forth in the First Supplemental Indenture referred to above.
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If an Event of Default with respect to the DECS, as defined in the
Indenture, shall occur and be continuing, the principal of all DECS may be
declared due and payable and therefore will result in the mandatory exchange of
the principal amount thereof for Learning Common Stock (or, at the Company's
option, cash and/or such other consideration as permitted or required herein),
all in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series
under the Indenture at any time by the Company with the consent of the Holders
of not less than a majority in aggregate principal amount of the Debt
Securities at the time outstanding of each series to be affected thereby. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Debt Securities of any series
at the time outstanding, on behalf of the Holders of all the Debt Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences
with respect to such series. Any such consent or waiver by the Holder of this
DECS shall be conclusive and binding upon such Holder and upon all future
Holders of this DECS and of any DECS issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent or
waiver is made upon this DECS.
No reference herein to the Indenture and no provision of this DECS or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the interest on this DECS and make the
mandatory exchange for Learning Common Stock at the times, place and rate, and
in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, this DECS is transferable on the register for the DECS, upon
surrender of this DECS for registration of transfer at the office or agency of
the Company to be maintained for that purpose in The City of New York, New
York, or at any other office or agency of the Company maintained for that
purpose, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Registrar for the DECS duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new DECS, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees. No service charge shall be made for any such transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental. charge payable in connection with the registration
of such transfer or exchange, other than certain exchanges not involving any
transfer.
Certain capitalized terms used in this DECS but not defined herein
have the meanings set forth in the Indenture.
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THIS DECS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
The Company, the Trustee for the DECS and any agent of the Company or such
Trustee may treat the person in whose name this DECS is registered as the owner
hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this DECS be overdue, and neither the Company,
such Trustee nor any such agent shall be affected by notice to the contrary.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ___________Custodian___________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as _________________________________
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
___________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee
________________
_______________________________________________________________________________
_______________________________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code of Assignee
_______________________________________________________________________________
the within DECS and all rights thereunder, hereby irrevocably constituting and
appointing ________________ attorney to transfer said DECS on the books of
Tribune Company with full power of substitution in the premises.
Dated: _______________________
____________________________________
Signature
____________________________________
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within DECS in every particular,
without alteration or enlargement or
any change whatsoever.
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