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EXHIBIT 4
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NATIONAL EDUCATION CORPORATION,
HARCOURT GENERAL, INC.,
AND
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of July 21, 1997
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FIRST SUPPLEMENTAL INDENTURE, dated as of July 21, 1997, among National
Education Corporation, a Delaware corporation (the "Company"), Harcourt General,
Inc., a Delaware corporation ("Harcourt"), and IBJ Xxxxxxxx Bank & Trust
Company, a New York corporation, as trustee (the "Trustee"). Terms not defined
herein shall have the meanings assigned to them in the Indenture.
R E C I T A L S
WHEREAS, the Company and the Trustee (as successor trustee pursuant to a
Tripartite Agreement dated as of June 1, 1990 among the Company, the Trustee and
Continental Bank, National Association, as resigning trustee) are parties to an
Indenture, dated as of May 15, 1986 (the "Indenture"), relating to the Company's
6 1/2% Convertible Subordinated Debentures due 2011 (the "Debentures").
WHEREAS, on June 10, 1997, a wholly-owned subsidiary of Harcourt was
merged with and into the Company with the Company being the surviving
corporation in the merger (the "Merger") and each outstanding share of common
stock of the Company was converted into the right to receive $21.00 in cash.
WHEREAS, Harcourt desires to assume all of the obligations of the
Company under the Indenture and the Debentures.
WHEREAS, Section 901 of the Indenture provides that the Company, when
authorized by a Board Resolution, and the Trustee may enter into a supplemental
indenture, without the consent of any Holder, to make any provision with
respect to matters arising under the Indenture not inconsistent with the
Indenture, provided that such action shall not adversely affect the interest of
the Holders in any material respect.
WHEREAS, Section 1211 of the Indenture provides that in the case of any
merger of another corporation into the Company, the corporation formed by such
consolidation or resulting from such merger shall execute and deliver to the
Trustee a supplemental indenture providing the Holders certain rights as
described therein,
WHEREAS, the Company and the Trustee have determined that this First
Supplemental Indenture complies with Section 901 of the Indenture and does not
require the consent of any Holders and, on the basis of the foregoing, the
Trustee has determined that this First Supplemental Indenture is in form
satisfactory to it.
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W I T N E S S E T H :
NOW, THEREFORE, for and in consideration of the premises, it is
mutually covenanted and agreed, for the equal and ratable benefit of the
Holders, as follows:
ARTICLE 1
ASSUMPTION OF OBLIGATIONS
SECTION 1.1. Assumption. Harcourt hereby unconditionally assumes on
and after the Effective Date (as defined below) all of the obligations of the
Company under the Indenture and the Debentures, including the punctual payment
when due, whether at stated maturity, by acceleration or otherwise, of the
principal of, premium, if any, and interest on the Debentures according to the
terms of the Debentures and as more fully described in the Indenture.
Notwithstanding the foregoing, (i) the Company shall remain obligated under the
Indenture and the Debentures, in accordance with the terms of the Indenture and
(ii) Harcourt shall not assume any obligation of the Company under Article 12
of the Indenture other than the obligations specifically set forth in Section
2.1 of this First Supplemental Indenture. "Effective Date" shall mean the date
on which the Securities and Exchange Commission declares effective the Form 8-A
filed by Harcourt with respect to the Debentures.
ARTICLE 2
CONVERSION RIGHTS OF HOLDERS IN
CONNECTION WITH THE MERGER
SECTION 2.1. Conversion Rights. The Company, as the surviving
corporation of the Merger, and Harcourt hereby provide in accordance with
Section 1211 of the Indenture that the Holder of each Debenture outstanding at
the effective time of the Merger shall have the right, during the period such
Debenture shall be convertible as specified in Section 1201 of the Indenture,
to convert such Debenture only into an amount of cash equal to the product of
$21.00 and the number of shares of Common Stock of the Company into which such
Debenture would have been convertible immediately prior to the Merger.
ARTICLE 3
GENERAL PROVISIONS
SECTION 3.1. Incorporation of Indenture. All the provisions of this
First Supplemental Indenture shall be deemed to be incorporated in, and made a
part of, the Indenture; and the Indenture, as supplemented and amended by this
First Supplemental Indenture, shall be read, taken and construed as one and the
same instrument.
SECTION 3.2. Headings. The headings of the Articles and Sections of
this First Supplemental Indenture are inserted for convenience of reference and
shall not be deemed to be a part thereof.
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SECTION 3.3. Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 3.4. 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 First Supplemental Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
SECTION 3.5. Successors. All covenants and agreements in this First
Supplemental Indenture by the Company and Harcourt shall be binding upon and
accrue to the benefit of their respective successors. All covenants and
agreements in this First Supplemental Indenture by the Trustee shall be binding
upon and accrue to the benefit of its successors.
SECTION 3.6. Separability Clause. In case any provision in this First
Supplemental Indenture 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 3.7. Benefits of First Supplemental Indenture. Nothing in
this First Supplemental Indenture, express or implied, shall give to any
person, other than the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under
this First Supplemental Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this First Supplemental Indenture,
as of the date first above written.
NATIONAL EDUCATION CORPORATION
/s/ Xxxx X. Xxxx
________________________________
By: Xxxx X. Xxxx
Title: Vice President
Attest:
/s/ Xxxxxx X. Xxxxx
___________________________________
NAME: Xxxxxx X. Xxxxx
Assistant Secretary
HARCOURT GENERAL, INC.
/s/ Xxxx X. Xxxx
____________________________________
By: Xxxx X. Xxxx
Title: Senior Vice President
Chief Financial Officer
Attest:
/s/ Xxxxxx X. Xxxxx
___________________________________
Name: Xxxxxx X. Xxxxx
Assistant Secretary
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
/s/ Xxxxx Xxxxx
____________________________________
By: Xxxxx Xxxxx
Title: Assistant Vice President
