1
Exhibit 99.8
================================================================================
TRIBUNE COMPANY,
Issuer
and
BANK OF MONTREAL TRUST COMPANY,
Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of August 5, 1998
Supplemental to Indenture dated as of January 1, 1997
================================================================================
2
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 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, 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 15, 2001"
representing up to 5,210,796 of its "Debt Exchangeable for Common Stock(SM)"
(such Securities being referred to herein as the "DECSSM"), 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:
2
3
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).
3
4
"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.
"Threshold Appreciation Price" has the meaning specified in the
definition of "Exchange Rate" set forth in this Article.
4
5
"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.
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.
5
6
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
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
6
7
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.
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
7
8
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:
(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
8
9
(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
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
9
10
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. 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,
10
11
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, 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
11
12
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.
(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
12
13
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:
(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;
13
14
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 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
14
15
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
(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
15
16
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.
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.
16
17
---------------
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.
17
18
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:/s/Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President/Treasurer
Attest:/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director/Treasury Operations
BANK OF MONTREAL TRUST
COMPANY, as Trustee
By:/s/ Xxx Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
Attest: /s/ Xxx Xxxxxxx
-----------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
18
19
STATE OF ILLINOIS )
) SS.:
COUNTY OF XXXX )
On the 4th day of August, 1998, before me personally came XXXXX X.
XXXXXX, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President 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.
/s/ Xxxxx Xxx Xxxxxx
-----------------------------------
Notary Public
SEAL
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 3rd day of August, 1998, before me personally came XXX
XXXXXXX, to me known, who, being by me duly sworn, did depose and say that she
is the Vice President 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.
/s/ Xxxxxxxx Xxxxxx
-----------------------------------
Notary Public
SEAL
19
20
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 XXXXX XXXXXX, XXX XXXX, XXX XXXX) 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. 000000000
[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 15, 2001 a number of shares of
Common Stock, par value $.01 per share (the "Learning Common
F-1
21
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 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
F-2
22
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.
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
F-3
23
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 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000
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:
F-4
24
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
F-5
25
[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.
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
R-1
26
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.
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.
R-2
27
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.
R-3
28
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.
R-4
