<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
- ----- QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
| X | EXCHANGE ACT OF 1934
- -----
For the quarterly period ended March 31, 1996
----------------
Commission File No. 0-3532
--------
OLSTEN CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-2610512
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
175 Broad Hollow Road, Melville, New York 11747-8905
- ----------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 844-7800
-------------------
Not Applicable
- --------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------------- ------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 6, 1996
- ------------------------------------ ---------------------------
Common Stock, $ .10 par value 50,660,122 shares
Class B Common Stock, $.10 par value 14,055,566 shares
<PAGE> 2
INDEX
-------
Page No.
---------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets -
March 31, 1996 (Unaudited) and December 31, 1995 2
Consolidated Statements of Income (Unaudited) -
Quarters Ended March 31, 1996 and
April 2, 1995, respectively 3
Consolidated Statements of Cash Flows
(Unaudited) - Quarters Ended
March 31, 1996 and April 2, 1995, respectively 4
Notes to Consolidated Financial Statements
(Unaudited) 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 6
PART II - OTHER INFORMATION
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K. 7
SIGNATURES 8
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
---------------------
Olsten Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands, except share amounts)
March 31, 1996 December 31, 1995
ASSETS -------------- -----------------
(Unaudited)
CURRENT ASSETS:
Cash $ 201,488 $ 40,049
Receivables, net 469,217 430,919
Other current assets 38,227 37,935
---------- ---------
Total current assets 708,932 508,903
FIXED ASSETS, NET 101,631 92,879
INTANGIBLES, NET 358,821 283,089
OTHER ASSETS 10,410 7,047
---------- ---------
$1,179,794 $891,918
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses $ 81,555 $ 72,202
Payroll and related taxes 48,480 49,434
Insurance costs 28,369 34,948
Accounts payable 15,891 24,391
--------- ---------
Total current liabilities 174,295 180,975
LONG-TERM DEBT 446,054 180,780
OTHER LIABILITIES 67,157 58,118
SHAREHOLDERS' EQUITY:
Common stock $.10 par value; authorized
110,000,000 shares; issued 50,644,289 and
50,428,046 shares, respectively 5,064 5,043
Class B common stock $.10 par value;
authorized 50,000,000 shares; issued
13,832,094 and 13,906,891 shares,
respectively 1,383 1,391
Additional paid-in capital 240,970 238,645
Retained earnings 247,214 228,721
Cumulative translation adjustment (2,343) (1,755)
---------- ---------
Total shareholders' equity 492,288 472,045
---------- ---------
$1,179,794 $891,918
========== =========
See notes to consolidated financial statements.
2
<PAGE> 4
Olsten Corporation and Subsidiaries
Consolidated Statements of Income
(In thousands, except share amounts)
(Unaudited)
First Quarter Ended
-------------------
March 31, April 2,
1996 1995
--------- ---------
Service sales, franchise fees,
management fees and
other income $683,214 $590,350
Cost of services sold 478,039 413,183
------- --------
Gross profit 205,175 177,167
Selling, general and
administrative expenses 163,172 143,523
Interest expense, net 2,584 846
-------- --------
Income before income taxes
and minority interests 39,419 32,798
Income taxes 16,044 13,695
-------- --------
Income before minority
interests 23,375 19,103
Minority interests 372 11
-------- --------
Net income $ 23,003 $ 19,092
======== ========
SHARE INFORMATION:
-----------------
Primary:
Net income $ .35 $ .29
======== ========
Average shares outstanding 65,643 64,854
======== ========
Fully diluted:
Net income $ .34 $ .28
======== ========
Average shares outstanding 71,208 70,328
======== ========
See notes to consolidated financial statements.
3
<PAGE> 5
Olsten Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
First Quarter Ended
--------------------
March 31, 1996 April 2, 1995
--------------- ---------------
OPERATING ACTIVITIES:
Net income $ 23,003 $ 19,092
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,354 6,417
Deferred income taxes 1,000 4,100
Changes in assets and liabilities,
net of effects from acquisitions
and dispositions:
Accounts receivable, and other
current assets (12,973) 584
Current liabilities (30,812) (8,953)
Other, net (8,415) 15,609
--------- ---------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (19,843) 36,849
--------- ---------
INVESTING ACTIVITIES:
Acquisitions/dispositions of businesses and
reacquisitions of franchises (73,348) (1,246)
Purchases of fixed assets (6,252) (13,361)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (79,600) (14,607)
--------- ---------
FINANCING ACTIVITIES:
Net proceeds from issuance of Senior Notes 197,672 -
Net proceeds from line of credit agreements 65,620 -
Issuances of common stock under stock plans 2,100 1,756
Cash dividends (4,510) (3,333)
--------- ---------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 260,882 (1,577)
--------- ---------
NET INCREASE IN CASH 161,439 20,665
CASH AT BEGINNING OF PERIOD 40,049 68,628
--------- ---------
CASH AT END OF PERIOD $ 201,488 $ 89,293
========= =========
See notes to consolidated financial statements.
4
<PAGE> 6
Olsten Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(In thousands)
(Unaudited)
1. Accounting Policies
--------------------
The consolidated financial statements have been prepared by Olsten
Corporation (the "Company") pursuant to the rules and regulations of the
Securities and Exchange Commission and, in the opinion of management, include
all adjustments necessary for a fair presentation of results of operations,
financial position and cash flows for each period presented.
2. Long-Term Debt
---------------
In March 1996, the Company issued $200 million in 7% Senior Notes due 2006.
The proceeds will be used to repay a portion of our revolving credit
facility, to expand our existing office network and the types of services
provided to clients, both internally and through acquisitions, and for
general working capital purposes.
Interest expense, net, consists primarily of interest on long-term debt for
the quarter of $3.5 million in 1996 and $1.6 million in 1995 offset by
interest income from investments of $900 thousand and $759 thousand,
respectively.
3. Acquisitions
-------------
During the first quarter of 1996, the Company acquired various businesses
which were accounted for by the purchase method of accounting.
In January 1996, the Company completed its purchase of OFFiS Unternehmen fur
Zeitarbeit GmbH & Co. KG (OFFiS), Germany's third-largest staffing services
company, for $47.5 million in cash. Additionally, the Company's 50.1% owned
Norwegian subsidiary, Norsk Personal AS, acquired Kontorsjouren AB, Sweden's
third-largest staffing services company for $5.3 million in cash.
In February 1996, the Company acquired Top Notch Temporary Services, Inc. and
Multiforce Temporary Services, Inc., comprising the largest privately held
staffing operation in the Commonwealth of Puerto Rico, for $5.5 million in
cash plus net assets acquired of approximately $4 million.
In March 1996, the Company completed the acquisition of ARMS, Inc., an
information technology services company, for $14.5 million in cash.
During the first quarter of 1996, the Company purchased four separate health
care businesses for an aggregate purchase price of $14.1 million in cash.
4. Subsequent Event
----------------
On May 1, 1996, the Company entered into an agreement to acquire Quantum
Health Resources, Inc., a provider of alternate site therapies and support
services to individuals affected by certain chronic diseases and other
disorders. The transaction will be accounted for as a pooling of interests
and is subject to satisfaction of customary conditions, including approval by
the shareholders of both companies and certain regulatory filings.
5
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
-----------------------------------------------------------------
Results of Operations.
-----------------------
Results of Operations
- ----------------------
Net income for the first quarter increased 20% to $23 million, or $.35 per
share, compared to $19 million or $.29 per share. The increases over 1995
resulted from increased profit growth in each of our businesses, as we continued
to pursue our strategic initiatives for Staffing Services and HealthCare
Services.
Revenues increased $93 million or 16% to $683 million for the first quarter, as
compared to $590 million for last year's first quarter. Staffing Services
reported increased revenues of 34% for the first quarter, reflecting increased
major contracts, increased volume, growth of our information technology services
businesses, and acquisitions of businesses. Revenues for HealthCare Services
declined 5% for the first quarter compared to last year. This decline resulted
primarily from the sale of certain operations and divestitures in selected
markets of Medicare-reimbursed businesses to further establish and build
Olsten's hospital contract management services business.
Cost of services increased $65 million to $478 million for the first quarter of
1996 due primarily to the growth in revenues. As a percentage of revenues, such
expenses remained stable at 70% for the quarter. Gross margins, as a percentage
of revenues, were unchanged at 30% for the quarter.
Selling, general and administrative expenses increased approximately $20 million
or 14% to $163 million for the first quarter. For the quarter, selling, general
and administrative expenses as a percentage of revenues decreased .4% to 23.9%
resulting from our continued commitment to control expenses.
Net interest expense was $2.6 million and $846 thousand for the first quarters
of 1996 and 1995, respectively. Net interest reflected borrowing costs on
long-term debt offset by interest income on investments. The increase resulted
from interest expense incurred as the Company continued to fund its acquisition
program.
Liquidity and Capital Resources
- --------------------------------
Working capital at March 31, 1996, including $202 million in cash, was $535
million. The Company issued $200 million in 7% senior notes due 2006. The
proceeds will be used to repay a portion of our revolving credit facility,
expand, both internally and through acquisitions, our existing office network
and the types of services provided to clients and for general working capital
purposes.
The Company has revolving credit agreements with six banks for up to $211
million in borrowings and letters of credit. As of March 31, 1996, there were
$121 million in borrowings and $60 million in standby letters of credit
outstanding. The Company has invested available funds in secure, short-term,
interest-bearing investments. The Company believes that its levels of working
capital liquidity and available sources of funds are sufficient to support
present operations and to continue to fund future growth and business
opportunities as the Company increases its scope of services.
6
<PAGE> 8
PART II - OTHER INFORMATION
Item 5. Other Information
-----------------
On March 22, 1996, the Company issued and sold $200,000,000 aggregate
principal amount of 7% Senior Notes due 2006 (the "Notes") pursuant to
a publicly underwritten offering. The Notes were issued pursuant to an
Indenture dated as of March 15, 1996 between the Company and First
Union National Bank, as Trustee, and mature on March 15, 2006.
Interest is payable March 15 and September 15 in each year, commencing
September 15, 1996.
Item 6. Exhibits and Reports on Form 8-K.
----------------------------------
(a) The following exhibits are filed herewith:
Exhibit 4 - Indenture dated as of March 15, 1996 between the
Company and First Union National Bank, as Trustee
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K.
--------------------
The Company filed a report on Form 8-K, dated March 13, 1996,
reporting in Item 5, Other Events, certain acquisitions of the
Company from March 1995 to March 1996. An unaudited pro forma
consolidated balance sheet as of December 31, 1995 and unaudited
pro forma consolidated statement of income for the year ended
December 31, 1995 were filed.
7
<PAGE> 9
SIGNATURES
------------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OLSTEN CORPORATION
(REGISTRANT)
Date: May 10, 1996 By: /s/ Frank N. Liguori
------------------------------
Frank N. Liguori
Chairman and Chief
Executive Officer
Date: May 10, 1996 By: /s/ Anthony J. Puglisi
-------------------------------
Anthony J. Puglisi
Senior Vice President - Finance
Chief Financial Officer
8
<PAGE> 10
EXHIBIT INDEX
Exhibit 4 - Indenture dated as of March 15, 1996 between
the Company and First Union National Bank,
as Trustee
Exhibit 27 - Financial Data Schedule
<PAGE> 1
Conformed Copy
====================================================================
OLSTEN CORPORATION, as Issuer
and
FIRST UNION NATIONAL BANK, as Trustee
--------------------------
INDENTURE
Dated as of March 15, 1996
--------------------------
$200,000,000
7% Senior Notes due 2006
====================================================================
<PAGE> 2
Table of Contents
Page
----
PARTIES................................................................ 1
RECITALS OF THE COMPANY............................................... 1
ARTICLE ONE Definitions and Other Provisions
of General Application..................... 1
SECTION 101. Definitions............................................... 1
Act ......................................................... 2
Affiliate.................................................... 2
Attributable Debt............................................ 2
Authenticating Agent......................................... 2
Board of Directors........................................... 2
Board Resolution............................................. 2
Business Day................................................. 2
Commission................................................... 2
Company ..................................................... 2
Company Request" or "Company Order........................... 2
Consolidated Shareholders' Equity............................ 3
Corporate Trust Office....................................... 3
Corporation.................................................. 3
Covenant Defeasance.......................................... 3
Defaulted Interest........................................... 3
Defeasance................................................... 3
Depositary................................................... 3
Event of Default............................................. 3
Exchange Act................................................. 3
Funded Debt.................................................. 3
GAAP ........................................................ 3
Global Security.............................................. 3
Holder ...................................................... 3
Indebtedness................................................. 3
Indenture.................................................... 4
Interest Payment Date........................................ 4
Lien ........................................................ 4
Maturity .................................................... 4
Officers' Certificate........................................ 4
Opinion of Counsel........................................... 4
Outstanding.................................................. 4
Paying Agent................................................. 5
Person ...................................................... 5
Predecessor Security......................................... 5
Regular Record Date.......................................... 5
Responsible Officer.......................................... 5
Sale and Leaseback Transaction............................... 5
i
<PAGE> 3
Page
----
Securities................................................... 5
Security Register............................................ 5
Senior Funded Debt........................................... 5
Significant Subsidiary....................................... 6
Special Record Date.......................................... 6
Stated Maturity.............................................. 6
Subsidiary................................................... 6
Trustee ..................................................... 6
Trust Indenture Act.......................................... 6
U.S. Government Obligation................................... 6
Vice President............................................... 6
SECTION 102. Compliance Certificates and Opinions................. 6
SECTION 103. Form of Documents Delivered to Trustee............... 7
SECTION 104. Acts of Holders; Record Dates........................ 7
SECTION 105. Notices, Etc., to Trustee and Company................ 8
SECTION 106. Notice to Holders; Waiver............................ 8
SECTION 107. Conflict with Trust Indenture Act.................... 9
SECTION 108. Effect of Headings and Table of Contents............. 9
SECTION 109. Successors and Assigns............................... 9
SECTION 110. Separability Clause.................................. 9
SECTION 111. Benefits of Indenture................................ 9
SECTION 112. Governing Law........................................ 9
SECTION 113. Legal Holidays...................................... 10
SECTION 114. No Security Interest Created........................ 10
SECTION 115. Limitation on Individual Liability.................. 10
ARTICLE TWO Security Forms............................. 10
SECTION 201. Forms Generally..................................... 10
SECTION 202. Form of Face of Security............................ 11
SECTION 203. Form of Reverse of Security......................... 13
SECTION 204. Form of Trustee's Certificate of Authentication..... 15
SECTION 205. Global Securities................................... 15
ARTICLE THREE The Securities............................. 16
SECTION 301. Title and Terms..................................... 16
SECTION 302. Denominations....................................... 16
SECTION 303. Execution, Authentication, Delivery and Dating.......16
SECTION 304. Temporary Securities................................ 17
SECTION 305. Registration, Registration of Transfer and Exchange. 17
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.....19
SECTION 307. Payment of Interest; Interest Rights Preserved...... 20
SECTION 308. Persons Deemed Owners............................... 21
SECTION 309. Cancellation........................................ 21
SECTION 310. Computation of Interest............................. 21
ii
<PAGE> 4
Page
----
ARTICLE FOUR Satisfaction and Discharge..................21
SECTION 401. Satisfaction and Discharge of Indenture............. 21
SECTION 402. Application of Trust Money.......................... 22
ARTICLE FIVE Remedies................................... 23
SECTION 501. Events of Default................................... 23
SECTION 502. Acceleration of Maturity; Rescission and Annulment.. 24
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee................................. 25
SECTION 504. Trustee May File Proofs of Claim.................... 26
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................. 26
SECTION 506. Application of Money Collected...................... 26
SECTION 507. Limitation on Suits................................. 27
SECTION 508. Unconditional Right of Holders to Receive Principal
and Interest............................... 27
SECTION 509. Restoration of Rights and Remedies.................. 27
SECTION 510. Rights and Remedies Cumulative...................... 28
SECTION 511. Delay or Omission Not Waiver........................ 28
SECTION 512. Control by Holders.................................. 28
SECTION 513. Waiver of Past Defaults............................. 28
SECTION 514. Undertaking for Costs............................... 29
SECTION 515. Waiver of Stay or Extension Laws.................... 29
ARTICLE SIX The Trustee......................................... 29
SECTION 601. Certain Duties and Responsibilities................. 29
SECTION 602. Notice of Defaults.................................. 30
SECTION 603. Certain Rights of Trustee........................... 30
SECTION 604. Not Responsible for Recitals or Issuance of
Securities................................. 31
SECTION 605. May Hold Securities................................. 31
SECTION 606. Money Held in Trust................................. 31
SECTION 607. Compensation and Reimbursement...................... 31
SECTION 608. Disqualification; Conflicting Interests............. 32
SECTION 609. Corporate Trustee Required; Eligibility............. 32
SECTION 610. Resignation and Removal; Appointment of Successor... 33
SECTION 611. Acceptance of Appointment by Successor.............. 34
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business................................... 34
SECTION 613. Preferential Collection of Claims Against Company... 34
SECTION 614. Appointment of Authenticating Agent................. 34
iii
<PAGE> 5
Page
----
ARTICLE SEVEN Holders' Lists and Reports by Trustee and Company....36
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.................................... 36
SECTION 702. Preservation of Information; Communications to
Holders.................................... 37
SECTION 703. Reports by Trustee.................................. 37
SECTION 704. Reports by Company.................................. 37
ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease..37
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms.......................................37
SECTION 802. Successor Substituted............................... 38
ARTICLE NINE Supplemental Indentures.................... 39
SECTION 901. Supplemental Indentures Without Consent of Holders.. 39
SECTION 902. Supplemental Indentures with Consent of Holders..... 39
SECTION 903. Execution of Supplemental Indentures................ 40
SECTION 904. Effect of Supplemental Indentures................... 40
SECTION 905. Conformity with Trust Indenture Act................. 40
SECTION 906. Reference in Securities to Supplemental Indentures.. 40
SECTION 907. Notice of Supplemental Indenture.................... 41
ARTICLE TEN Covenants.................................. 41
SECTION 1001. Payment of Principal and Interest.................. 41
SECTION 1002. Maintenance of Office or Agency.................... 41
SECTION 1003. Money for Security Payments to Be Held in Trust.... 41
SECTION 1004. Statement by Officers as to Default................ 42
SECTION 1005. Existence.......................................... 43
SECTION 1006. Maintenance of Properties.......................... 43
SECTION 1007. Payment of Taxes and Other Claims.................. 43
SECTION 1008. Maintenance of Insurance........................... 43
SECTION 1009. Restrictions on Liens.............................. 44
SECTION 1010. Restrictions on Sale and Leaseback Transactions.... 44
SECTION 1011. Waiver of Certain Covenants........................ 45
ARTICLE ELEVEN Defeasance and Covenant Defeasance......... 45
SECTION 1101. Company's Option to Effect Defeasance or Covenant
Defeasance........................ 45
SECTION 1102. Defeasance and Discharge........................... 45
SECTION 1103. Covenant Defeasance................................ 46
SECTION 1104. Conditions to Defeasance or Covenant Defeasance.... 46
iv
<PAGE> 6
Page
----
SECTION 1105. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions..48
SECTION 1106. Reinstatement...................................... 48
v
<PAGE> 7
OLSTEN CORPORATION
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- --------------- ---------
310(a)(1) .................................... 609
(a)(2) .................................... 609
(a)(3) .................................... Not
.................................... Applicable
(a)(4) .................................... Not
.................................... Applicable
(b) .................................... 608
.................................... 610
311(a) .................................... 613
(b) .................................... 613
312(a) .................................... 701
.................................... 702(a)
(b) .................................... 702(b)
(c) .................................... 702(c)
313(a) .................................... 703(a)
(b) .................................... 703(a)
(c) .................................... 703(a)
(d) .................................... 703(b)
314(a) ..................................... 704
(a)(4) ..................................... 1004
(b) ..................................... Not
..................................... Applicable
(c)(1) ..................................... 102
(c)(2) ..................................... 102
(c)(3) ..................................... Not
..................................... Applicable
(d) ..................................... Not
..................................... Applicable
(e) ..................................... 102
315(a) ..................................... 601
(b) ..................................... 602
(c) ..................................... 601
(d) ..................................... 601
(e) ..................................... 514
vi
<PAGE> 8
Trust Indenture Indenture
Act Section Section
- --------------- ---------
316(a)(1)(A) ..................................... 502
..................................... 512
(a)(1)(B) ..................................... 513
(a)(2) ..................................... Not
..................................... Applicable
(b) ..................................... 508
(c) ..................................... 104(c)
317(a)(1) ..................................... 503
(a)(2) ..................................... 504
(b) ..................................... 1003
318(a) ..................................... 107
- --------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
vii
<PAGE> 9
INDENTURE, dated as of March 15, 1996, between OLSTEN
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
175 Broad Hollow Road, Melville, New York 11747 and FIRST UNION NATIONAL BANK,
as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
7% Senior Notes due 2006 (herein called the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, 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 Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
this instrument; and
(4) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
<PAGE> 10
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the then present value
(discounted at the actual rate of interest of such transaction) of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such Sale and Leaseback Transaction (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended).
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board to which the powers of
that board have been lawfully delegated.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in The Borough of
Manhattan, The City of New York, the State of New Jersey or the State of North
Carolina are authorized or obligated by law, regulation or executive order to
close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
2
<PAGE> 11
"Consolidated Shareholders' Equity" of the Company means the
shareholders' equity of the Company and its Subsidiaries on a consolidated basis
calculated in accordance with GAAP as of the last day of the Company's then most
recently completed fiscal quarter.
"Corporate Trust Office" means the office of the Trustee located
at (i) 230 South Tryon Street, Charlotte, North Carolina 28288-1153, with
respect to payment transactions and registration of transfer or exchange of
Securities, and (ii) 765 Broad Street, Newark, New Jersey 07102 with respect to
notices to the Trustee.
"Corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1103.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1102.
"Depositary" means, with respect to Securities issuable or issued
in whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as Depositary
for such Securities, which such Depositary initially shall be The Depository
Trust Company, a limited-purpose trust company organized under the New York
Banking Law ("DTC").
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
"Funded Debt" means Indebtedness of the Company and its
Subsidiaries, whether incurred, assumed or guaranteed, which by its terms
matures more than one year from the date of creation thereof, or which is
extendable or renewable at the sole option of the obligor so that it may become
payable more than one year from such date.
"GAAP" means, unless otherwise specified in this Indenture, such
accounting principles as are generally accepted in the United States as of the
date of the relevant calculation.
"Global Security" means a Security that evidences all or part of
the Securities, is registered in the name of the Depositary or its nominee and
bears the legend set forth in Section 205.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indebtedness" of any Person means, without duplication, notes,
bonds, debentures or other evidences of indebtedness for borrowed money and all
indebtedness under purchase money mortgages or other purchase money liens or
conditional sales or similar title retention agreements, in each case where such
indebtedness has been created, incurred, assumed or guaranteed by such Person or
where such Person is otherwise liable therefor, and indebtedness for borrowed
3
<PAGE> 12
money secured by any mortgage, pledge or other lien or encumbrance upon property
owned by such Person even though such Person has not assumed or become liable
for the payment of such indebtedness.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien (statutory
or other), or preference, priority, or other security or similar agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any agreement to give or grant a Lien or any lease, conditional sale
or other title retention agreement having substantially the same economic effect
as any of the foregoing).
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, or otherwise.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation:
(b) Securities for whose payment money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities;
(c) Securities as to which Defeasance has been effected pursuant
to Section 1102; and
(d) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant
4
<PAGE> 13
to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands
such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the February 28 or August 31 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
"Responsible Officer," when used with respect to the Trustee,
means any officer of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Sale and Leaseback Transaction" has the meaning specified in
Section 1009.
"Securities" means the 7% Senior Notes due 2006 of the Company
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Funded Debt" means all Funded Debt, except Funded Debt
the payment of which is subordinated to the payment of the Securities.
5
<PAGE> 14
"Significant Subsidiary" has the meaning ascribed to it under
Regulation C promulgated under the Securities Act of 1933, as amended.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means any corporation, partnership, association or
other business entity of which more than 50% of the outstanding voting stock is
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries. For the
purposes of this definition, "voting stock" means stock (or a similar interest)
which ordinarily has voting power for the election of directors, managers or
trustees, whether at all times or only so long as no senior class of stock (or
similar interest) has such voting power by reason of any contingency.
"Trustee" means the Person named as such in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligation" has the meaning specified in Section
1104.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
6
<PAGE> 15
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
7
<PAGE> 16
(b) The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may be proved in any
manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date, only the Holders on such date (or their duly designated proxies)
shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at 765 Broad Street, Newark, New Jersey 07102,
Attention: Corporate Trust Department, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where
8
<PAGE> 17
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws as applied in such state.
9
<PAGE> 18
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date or Stated Maturity of
any Security shall not be a Business Day, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest or
principal 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 the Interest Payment
Date or at the Stated Maturity; provided that no interest shall accrue for the
period from and after such Interest Payment Date or Stated Maturity, as the case
may be.
SECTION 114. No Security Interest Created.
Nothing in this Indenture or in the Securities, express or
implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
SECTION 115. Limitation on Individual Liability.
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture or in any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, shareholders, officers or
directors, as such, of the Company or any successor Person, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Security or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, shareholder, officer or director, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security or implied therefrom, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of such Security.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
10
<PAGE> 19
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities. Unless required by the Depositary, any securities exchange on which
the Securities may be listed or any rule, regulation or law, Securities issued
in the form of Global Securities need not be printed, lithographed or engraved
on steel engraved borders, but shall be in such form as is acceptable to the
Depositary.
SECTION 202. Form of Face of Security.
The form of the face of the Global Securities shall be as set
forth below and include the legend(s) set forth in Section 205 (if a Security is
issued in definitive form, the form of such definitive security will be in
substantially the form of the face of the Global Security, except that the
legend(s) set forth in Section 205 shall be omitted):
OLSTEN CORPORATION
7% Senior Notes due 2006
No. $
CUSIP No.
OLSTEN CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to___________, or registered assigns, the
principal sum of__________________ Dollars on March 15, 2006 and to pay interest
thereon from the date of original issuance of Securities pursuant to the
Indenture or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on March 15 and September 15 in
each year, commencing September 15, 1996, at the rate of 7% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the February 28 or
August 31 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
11
<PAGE> 20
Payment of the principal of and interest on this Security will be
made (i) in respect of Securities held of record by the Depositary or its
nominee in same day funds and (ii) in respect of Securities held of record by
Holders other than the Depositary or its nominee at the office of the Trustee
located at 230 South Tryon Street, Charlotte, North Carolina 28288-1153 or at
such other office or agency of the Company maintained for that purpose pursuant
to the Indenture, in each case 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 in respect of Securities held of record by Holders other than the
Depositary or its nominee may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
12
<PAGE> 21
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: , 1996
----------------
OLSTEN CORPORATION
By____________________
Attest:
- -------------------------------
SECTION 203. Form of Reverse of Security.
The form of the reverse of the Securities shall be as set forth
below:
This Security is one of a duly authorized issue of securities of
the Company designated as its 7% Senior Notes due 2006 (herein called the
"Securities"), limited in aggregate principal amount to $200,000,000, issued and
to be issued under an Indenture, dated as of March 15, 1996 (herein called the
"Indenture"), between the Company and First Union National Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
This Security is not redeemable in whole or in part at any time
prior to the Stated Maturity of its principal amount.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants and
Events of Default with respect to this Security, in each case upon compliance by
the Company with certain conditions set forth in the Indenture.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable 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 Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of at least 50% in aggregate principal amount of the
13
<PAGE> 22
Securities at the time Outstanding, and, under certain limited circumstances, by
the Company and the Trustee without the consent of the Holders. The Indenture
also contains provisions permitting the Holders of specified percentages in
aggregate principal amount of the Securities at the time Outstanding, on behalf
of the Holders of all the Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office of the Trustee located at 230 South Tryon Street, Charlotte, North
Carolina 28288-1153 or at such other office or agency of the Company maintained
for that purpose pursuant to the Indenture duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. The Company
will furnish to any Holder upon written request and without charge a copy of the
Indenture.
14
<PAGE> 23
SECTION 204. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
_________________, as Trustee
By____________________________
Authorized Officer
SECTION 205. Global Securities.
Except as provided in Section 305, the Securities shall be issued
in the form of one or more Global Securities. Every Global Security
authenticated and delivered hereunder shall bear a legend in substantially the
following form, in capital letters and bold-face type:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
If the Depositary is the Depository Trust Company, the Global
Security authenticated and delivered hereunder shall also bear a legend in
substantially the following form, in capital letters and bold-face type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY
OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
15
<PAGE> 24
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $200,000,000,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section 304,
305, 306 or 906.
The Securities shall be known and designated as the "7% Senior
Notes due 2006" of the Company. Their Stated Maturity shall be March 15, 2006
and they shall bear interest at the rate of 7% per annum, from the date of
original issuance of Securities pursuant to this Indenture or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, as the case may be, payable semi-annually on March 15 and September 15,
commencing September 15, 1996, to the Person in whose name the Security or any
Predecessor Security is registered at the close of business on the February 28
or the August 31 next preceding such Interest Payment Date, until the principal
thereof is paid or made available for payment.
The principal of and interest on the Securities shall be payable
(i) in respect of Securities held of record by the Depositary or its nominee in
same day funds and (ii) in respect of Securities held of record by Holders other
than the Depositary or its nominee at the office of the Trustee located at 230
South Tryon Street, Charlotte, North Carolina 28288-1153 or at such other office
or agency maintained by the Company for such purpose pursuant to this Indenture;
provided, however, that at the option of the Company payment of interest to
Holders of record other than the Depositary or its nominee may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
The Securities, in whole or any specified part, shall be
defeasible pursuant to Section 1102 or Section 1103 or both such Sections.
Except as may be otherwise provided for by Section 305, the
Securities shall be issuable in the form of one or more Global Securities, shall
bear the legend specified in Section 205 and shall be registered in the name of
The Depository Trust Company or its nominee, as Depositary.
SECTION 302. Denominations.
The Securities shall be issuable only in fully registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
16
<PAGE> 25
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Indenture and not otherwise. The aggregate principal amount of
Securities Outstanding at any time may not exceed $200,000,000 except as
provided in Section 306.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. The Trustee may appoint an
Authenticating Agent pursuant to the terms of Section 614.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities. Every such temporary Security shall be executed by
the Company and shall be authenticated and delivered by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Security in lieu of which it is issued.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities may be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security
17
<PAGE> 26
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount and of a like Stated Maturity and with like terms and
conditions, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304 or 906 not involving any transfer.
The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall
be registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security
shall constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than the Depositary
for such Global Security or a nominee thereof unless (A) such
Depositary (i) has notified the Company that it is unwilling or unable
to continue as
18
<PAGE> 27
Depositary for such Global Security and is not replaced by a successor
Depositary approved by the Trustee within 90 days or (ii) at any time
has ceased to be a clearing agency registered under the Exchange Act,
or (B) the Company in its sole discretion determines not to have all of
the Securities represented by a Global Security and notifies the
Trustee thereof.
(3) Subject to clause (2) above, any exchange of a Global
Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion
thereof shall be registered in such names as the Depositary for such
Global Security shall direct.
(4) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Security or any portion thereof, whether pursuant to this Section,
Section 304, 306 or 906 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
19
<PAGE> 28
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. Payment of interest will be made (i) in respect of Securities held by
the Depositary or its nominee in same day funds and (ii) in respect of
Securities held of record by Holders other than the Depositary or its nominee at
the office of the Trustee located at 230 South Tryon Street, Charlotte, North
Carolina 28288-1153 or at such other office or agency of the Company as it shall
maintain for that purpose pursuant to Section 1002, provided, however, that, at
the option of the Company, interest on any Security held of record by Holders
other than the Depositary or its nominee may be paid by mailing checks to the
addresses of the Holders thereof as such addresses appear in the Securities
Register.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2).
20
<PAGE> 29
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, registration of transfer
or exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly cancelled
by the Trustee. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities held by the Trustee shall
be destroyed by the Trustee and a certificate of such destruction delivered to
the Company unless the Trustee is otherwise directed by a Company Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
21
<PAGE> 30
(1) either
A. all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
B. all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, and the Company, in the case of (i) or (ii), has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal and interest to the date of
such deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607, the obligations
of the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section or if money or U.S. Government Obligations have been deposited with
the Trustee pursuant to Section 1104, the obligations of the Trustee under
Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401, all money and U.S.
Government Obligations deposited with the Trustee pursuant to Section 1102 or
1103 and all money received by the Trustee in respect of U.S. Government
Obligations deposited with the Trustee pursuant to Section 1102 or 1103, shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
interest for whose payment such money has been deposited with or received by the
Trustee.
22
<PAGE> 31
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of the principal of any Security at
its Stated Maturity; or
(2) default in the payment of any interest upon any Security when
it becomes due and payable, and continuance of such default for a
period of 30 days; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default
or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(4) a default in the payment of principal at Maturity (subject to
any applicable grace period) of any Indebtedness for money borrowed by
the Company or any Subsidiary in an aggregate principal amount of
$25,000,000 or the acceleration of such indebtedness without such
acceleration having been rescinded or annulled within a period of 30
days after there shall have been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities a written notice specifying such default and requiring the
Company to cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; provided,
however, that, subject to the provisions of Sections 601 and 602, the
Trustee shall not be deemed to have knowledge of such default unless
either (A) a Responsible Officer of the Trustee shall have actual
knowledge of such default or (B) the Trustee shall have received
written notice thereof from the Company, from any Holder, from the
holder of any such indebtedness or from the trustee under any such
mortgage, indenture or other instrument; or
(5) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or any
Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or
23
<PAGE> 32
State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(6) the commencement by the Company or any Significant Subsidiary
of a voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company or any Significant Subsidiary in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by
it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company or
any Significant Subsidiary in furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified
in Section 501(5) or 501(6)) occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities may declare the principal of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal plus any interest accrued on the Securities to the date of
declaration shall become immediately due and payable. If an Event of Default
specified in Section 501(5) or 501(6) occurs, the principal amount of all the
Securities shall automatically, and without any declaration or other action on
the part of the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
at least 50% in principal amount of the Outstanding Securities, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest thereon
at the rate borne by the Securities,
24
<PAGE> 33
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 607;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of any
Security at the Stated Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and unpaid
and may prosecute any such proceeding to judgment or final decree, and may
enforce the same against the Company (or any other obligor upon the Securities)
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company (or any other obligor upon the
Securities), wherever situated.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
25
<PAGE> 34
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
Creditors' Committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and all other
amounts due the Trustee under Section 607, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
26
<PAGE> 35
THIRD: The balance, if any, to the Company or any other Person or
Persons determined to be entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of 50% or
more in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest on
such Security on the respective Stated Maturities expressed in such Security and
to institute suit for the enforcement of any such payment on or after such
Stated Maturities, and such rights shall not be impaired without the consent of
such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
27
<PAGE> 36
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
SECTION 512. Control by Holders.
The Holders of 50% or more in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of at least 50% in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or interest on any
Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
28
<PAGE> 37
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company; and provided, further,
that the provisions of this Section shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of the Outstanding
Securities, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of or interest on any Security on or after the Stated
Maturities expressed in such Security.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.
29
<PAGE> 38
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default
hereunder as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(3), no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(g) The Trustee shall not be liable for errors of judgment made
in good faith unless it was negligent in ascertaining the pertinent
facts;
30
<PAGE> 39
(h) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of at least 50% in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(i) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder
need not be segregated from other funds except to the extent required by law.
The Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder as may be
mutually agreed upon in writing by the Company and the Trustee (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with the
performance of its duties under this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents
31
<PAGE> 40
and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (other than any income or
franchise tax attributable to compensation payable to the Trustee
hereunder) incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall
notify the Company promptly of any action, suit or proceeding for which
it may seek indemnity. The Company shall defend such action, suit or
proceeding and the Trustee may have separate counsel, and, if the
Company has failed to assume the defense and employ counsel, or if the
named parties to any such action, suit or proceeding (including any
impleaded parties) include both the Trustee and the Company and the
Trustee shall have been advised by its counsel that representation of
the Trustee and the Company by the same counsel would be inappropriate
under applicable standards of professional conduct due to actual or
potential differing interests between them, the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its consent, which shall not be
unreasonably withheld.
The indemnity provided for in this Section 607 shall survive the
resignation or removal of any Trustee under this Indenture.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(5) or (6), the
expenses and the compensation for the services are intended to constitute
expenses of administration under any bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If
32
<PAGE> 41
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of 50% or more in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee
and shall comply with the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders of at
least 50% in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 611, any Holder who has been a
bona fide Holder of a
33
<PAGE> 42
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registration of transfer or
pursuant to Section 306, and Securities so authenticated
34
<PAGE> 43
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have represented to the Trustee that it is eligible for
appointment as Authenticating Agent under this Section and to have agreed with
the Trustee that: it will perform and carry out the duties of an Authenticating
Agent as herein set forth, including among other things the duties to
authenticate Securities when presented to it in connection with the original
issuance and with exchanges, registrations of transfer or pursuant to Section
306; it will keep and maintain, and furnish to the Trustee from time to time as
requested by the Trustee, appropriate records of all transactions carried out by
it as Authenticating Agent and will furnish the Trustee such other information
and reports as the Trustee may reasonably require; and it will notify the
Trustee promptly if it shall cease to be eligible to act as Authenticating Agent
35
<PAGE> 44
in accordance with the provisions of this Section. Any Authenticating Agent by
the acceptance of its appointment shall be deemed to have agreed with the
Trustee to indemnify the Trustee against any loss, liability or expense incurred
by the Trustee and to defend any claim asserted against the Trustee by reason of
any acts or failures to act of such Authenticating Agent, but such
Authenticating Agent shall have no liability for any action taken by it in
accordance with the specific written direction of the Trustee.
The Company agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture
----------
As Trustee
By______________________________
As Authenticating Agent
By______________________________
By Authorized Signatory
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days (15 days with respect to any Special Record Date) after
the receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such
list is furnished;
Notwithstanding the foregoing, so long as the Trustee shall be the Security
Registrar for the Securities, no such list need be furnished.
36
<PAGE> 45
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) Within 60 days following each May 15, the Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act, if any,
at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or
37
<PAGE> 46
convey, transfer or lease its properties and assets substantially as an entirety
to the Company, unless:
(1) in case the Company shall consolidate with or merge into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of
the principal of and interest on all the Securities and the performance
or observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event
of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be
continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by Section 1009, the
Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all Indebtedness secured
thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
38
<PAGE> 47
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the
Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders or an additional Event of Default, or to surrender any right or
power herein conferred upon the Company; or
(3) to secure the Securities; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(5) to cause the Indenture and the Securities to comply with
applicable law, including the Trust Indenture Act; or
(6) to cure any defect or ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture; provided that such
action pursuant to this clause (6) shall not adversely affect the
interests of the Holders in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of at least 50% in principal
amount of the Outstanding Securities, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon, or change the place of
payment where, or the coin or currency in which, any Security or
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof, or
39
<PAGE> 48
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1011, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, in
addition to the Officer's Certificate and Opinion of Counsel required by Section
102, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
40
<PAGE> 49
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to Section 902, the Company shall transmit
to the Holders a notice setting forth the substance of such supplemental
indenture.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency (which may be the
Corporate Trust Office of the Trustee and which in any event shall not be
located outside the contiguous United States of America) where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company hereby appoints the office of the Trustee located at
230 South Tryon Street, Charlotte, North Carolina 28288-1153 as its agent where
Securities may be presented or surrendered for payment, whereby Securities may
be surrendered for registration of transfer or exchange and the office of the
Trustee located at 765 Broad Street, Newark, New Jersey 07102 as its agent where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
41
<PAGE> 50
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest on
any Security and remaining unclaimed for two years after such principal or
interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
42
<PAGE> 51
The Company shall promptly, and in any event within 10 days of
the occurrence thereof, give notice to the Trustee of any default or Event of
Default hereunder.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory) and franchises and the existence,
rights (charter and statutory) and franchises of each Subsidiary; provided,
however, that the Company shall not be required to preserve any such right or
franchise, whether relating to the Company or any Subsidiary, if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1008. Maintenance of Insurance.
The Company will maintain, and will cause each of its
Subsidiaries to maintain, with insurers the Company reasonably believes to be
financially sound and reputable, insurance deemed adequate by the Company with
respect to its properties and business and the properties and business of its
Subsidiaries against loss or damage of the kinds customarily insured against by
corporations in the same or similar business. Such insurance may be subject to
co-insurance, deductibility or similar clauses which, in effect, result in
self-insurance of certain losses, provided that such self-insurance is in accord
with the practices of corporations in the same or similar business and adequate
insurance reserves are maintained in connection with such self-insurance.
43
<PAGE> 52
SECTION 1009. Restrictions on Liens.
So long as any of the Securities are Outstanding, the Company
will not, and will not permit any Subsidiary to, issue, assume, incur or
guarantee any Indebtedness secured by a Lien on or with respect to any property
or assets of the Company or any Subsidiary, or upon any shares of capital stock,
indebtedness or other obligations of any Subsidiary, whether now owned or leased
or hereafter acquired, without in any such case effectively providing that the
Securities shall be secured equally and ratably with (or prior to) such
Indebtedness, except that the foregoing restrictions shall not apply to: (a)
Liens existing as of the date of this Indenture, (b) Liens created solely to
secure the payment of Indebtedness incurred to finance all or any part of the
purchase price or cost of construction of improvements in respect of property or
assets acquired by the Company or a Subsidiary after the date of this Indenture
and incurred prior to, at the time of, or within 90 days after, the acquisition
of any such property or assets or the completion of any such construction of
improvements, provided that any such Lien shall not secure Indebtedness in
excess of the amount expended in the acquisition of, or construction of
improvements on, such property or assets and shall not extend to or cover any
property or assets other than the property or assets so acquired or the
improvements thereon, (c) Liens upon any property or assets owned or leased by
any Subsidiary when it becomes a Subsidiary and not incurred as a result of, or
in connection with or in anticipation of, such Subsidiary becoming a Subsidiary
(except to the extent otherwise permitted by (b) above), (d) Liens existing on
any property or assets at the time of its acquisition by the Company or a
Subsidiary (including acquisition through merger or consolidation) and not
incurred as a result of, or in connection with or in anticipation of, such
acquisition (except to the extent otherwise permitted by (b) above), (e) Liens
securing Indebtedness of a Subsidiary to the Company or to another Subsidiary
and (f) the extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any Lien referred to in the
foregoing clauses (a) through (e), or of any Indebtedness secured thereby, but
only if the principal amount of Indebtedness secured by the Lien immediately
prior thereto is not increased and the Lien is not extended to other property or
assets. Notwithstanding the foregoing, the Company or any Subsidiary may issue,
assume, incur or guarantee Indebtedness secured by Liens which otherwise would
be subject to the foregoing restrictions, in an aggregate amount which, together
with all other such Indebtedness of the Company and its Subsidiaries outstanding
which would otherwise be subject to the foregoing restrictions (not including
Indebtedness permitted to be secured under clauses (a) through (f) above) and
all Attributable Debt in respect of Sale and Leaseback Transactions which would
not be permitted by either clause (a), (b) or (c) under Section 1010, does not
exceed 15% of Consolidated Shareholders' Equity of the Company.
SECTION 1010. Restrictions on Sale and Leaseback Transactions.
So long as any of the Securities are Outstanding, the Company
will not, nor will it permit any Subsidiary to, enter into any arrangement with
any Person (other than the Company or a Subsidiary) providing for the leasing by
the Company or any Subsidiary of any property or assets, whether now owned or
hereafter acquired, which has been or is to be sold or transferred by the
Company or such Subsidiary to such Person with the intention of taking back a
lease on such property or assets (a "Sale and Leaseback Transaction") unless (a)
such transaction involves a lease or right to possession or use for a temporary
period not to exceed three years following such sale, by the end of which it is
intended that the use of such property or assets by the lessee will be
discontinued, (b) the Company or such Subsidiary would, on the effective date of
such transaction, be entitled to issue, assume or guarantee Indebtedness secured
by a Lien on such
44
<PAGE> 53
property or assets at least equal in an amount to the Attributable Debt in
respect thereof, without equally and ratably securing the Securities as set
forth in this Indenture, or (c) if the proceeds of such sale (i) are equal to or
greater than the fair market value (as determined by the Board of Directors of
the Company) of such property or assets and (ii) are applied within 90 days
after the receipt of the proceeds of sale or transfer to the repayment of Senior
Funded Debt of the Company or any Subsidiary. Notwithstanding the foregoing, the
Company or any Subsidiary may enter into Sale and Leaseback Transactions in
addition to any permitted by the immediately preceding sentence and without any
obligation to retire any Indebtedness; provided that, at the time of entering
into such Sale and Leaseback Transaction, and after giving effect thereto, the
amount of Attributable Debt in respect of such Sale and Leaseback Transaction,
together with all such other Attributable Debt outstanding and all Indebtedness
outstanding secured by Liens (not including Indebtedness permitted to be secured
under clauses (a) through (f) in Section 1009), does not exceed 15% of
Consolidated Shareholders' Equity of the Company.
SECTION 1011. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any covenant or condition set forth in Sections 1009 and 1010, if before the
time for such compliance the Holders of at least 50% in principal amount of the
Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE ELEVEN
Defeasance and Covenant Defeasance
SECTION 1101. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section
1102 or Section 1103 applied to any Securities designated pursuant to Section
301 as being defeasible pursuant to such Section 1102 or 1103, in accordance
with any applicable requirements provided pursuant to Section 301 and upon
compliance with the conditions set forth below in this Article. Any such
election shall be evidenced by a Board Resolution or in another manner specified
as contemplated by Section 301 for such Securities.
SECTION 1102. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities the Company shall be deemed to have been
discharged from its obligations with respect to such Securities as provided in
this Section on and after the date the conditions set forth in Section 1104 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same), subject
45
<PAGE> 54
to the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Securities to receive, solely from
the trust fund described in Section 1104 and as more fully set forth in such
Section, payments in respect of the principal and interest on such Securities
when payments are due, (2) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (4) this Article.
Subject to compliance with this Article, the Company may exercise its option (if
any) to have this Section applied to any Securities notwithstanding the prior
exercise of its option (if any) to have Section 1103 applied to such Securities.
SECTION 1103. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities (1) the Company shall be released from its
obligations under Section 801(3), Sections 1006 through 1010, inclusive, and any
covenant provided pursuant to Section 901(2) for the benefit of the Holders of
such Securities and (2) the occurrence of any event specified in Sections 501(3)
(with respect to any of Section 801(3), Sections 1006 through 1011, inclusive,
and any such covenants provided pursuant to Section 901(2) and 501(4) shall be
deemed not to be or result in an Event of Default, in each case with respect to
such Securities as provided in this Section on and after the date the conditions
set forth in Section 1104 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
501(3)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 1104. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
Section 1102 or Section 1103 to any Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust
for the purpose of making the following payments, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of
such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall
be applied by the Trustee (or any such other qualifying trustee) to pay
and discharge, the principal and interest on such Securities on the
respective Stated Maturities, in accordance with the terms of this
Indenture and such Securities. As used herein, "U.S. Government
Obligation" means (x) any security which is (i) a direct obligation of
the United States of America for the payment of which the full faith
and credit of the United States of
46
<PAGE> 55
America is pledged or (ii) an obligation of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America,
which, in either case (i) or (ii), is not callable or redeemable at the
option of the issuer thereof, and (y) any depositary receipt issued by
a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is
specified in clause (x) above and held by such bank for the account of
the holder of such depositary receipt, or with respect to any specific
payment of principal of or interest on any U.S. Government Obligation
which is so specified and held; provided that (except as required by
law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) In the event of an election to have Section 1102 apply to any
Securities the Company shall have delivered to the Trustee an Opinion
of Counsel stating that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since
the date of this instrument, there has been a change in the applicable
Federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit, Defeasance and discharge were not
to occur.
(3) In the event of an election to have Section 1103 apply to any
Securities the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Holders of such Securities will not
recognize gain or loss for Federal income tax purposes as a result of
the deposit and Covenant Defeasance to be effected with respect to such
Securities and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case
if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that such Securities, if then listed on any
securities exchange, will not be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to such Securities or
any other Securities shall have occurred and be continuing at the time
of such deposit or, with regard to any such event specified in Sections
501(5) and (6), at any time on or prior to the 90th day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the
meaning of such Act).
47
<PAGE> 56
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
within the meaning of the Investment Company Act unless such trust
shall be registered under such Act or exempt from registration
thereunder.
(9) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have
been complied with.
SECTION 1105. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee (solely for purposes of
this Section and Section 1106, the Trustee and any such other trustee are
referred to collectively as the "Trustee") pursuant to Section 1104 in respect
of any Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any such Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and interest, but money so held in trust need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1104 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1104 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount which would then be required to be deposited to effect the Defeasance or
Covenant Defeasance, as the case may be, with respect to such Securities.
SECTION 1106. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money
in accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1102 or 1103 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section
48
<PAGE> 57
1105 with respect to such Securities in accordance with this Article; provided,
however, that if the Company makes any payment of principal of or interest on
any such Security following such reinstatement of its obligations, the Company
shall be subrogated to the rights (if any) of the Holders of such Securities to
receive such payment from the money so held in trust.
* * *
49
<PAGE> 58
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
OLSTEN CORPORATION
/s/ William P. Costantini
----------------------------
Name: William P. Costantini
Title: Senior Vice President
Attest:
/s/ Laurin L. Laderoute, Jr.
- -----------------------------
Name: Laurin L. Laderoute, Jr.
Title: Secretary
FIRST UNION NATIONAL BANK,
as Trustee
/s/ Stephanie Roche
----------------------
Name: Stephanie Roche
Title: Vice President
Attest:
/s/ James J. Waters
- ----------------------
Name: James J. Waters
Title: Vice President
50
<PAGE> 59
STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On the 21st day of March, 1996 before me personally came William
P. Costantini, to me known, who, being by me duly sworn, did depose and say that
he is Senior Vice President of Olsten Corporation, one of the corporations
described in and which executed the foregoing instrument; that 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 he signed his name thereto by like authority.
/s/ Diane Hadley
-----------------
Diane Hadley
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 21st day of March, 1996, before me personally came
Stephanie Roche, to me known, who, being by me duly sworn, did depose and say
that she is Vice President of First Union National Bank, one of the corporations
described in and which executed the foregoing instrument; that she 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 signed her name thereto by like authority.
/s/ Anna K. Weisz
------------------
Anna K. Weisz
Notary Public
51
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Olsten
Corporation and Subsidiaries Consolidated Balance Sheets at March 31, 1996
(unaudited) and Olsten Corporation and Subsidiaries Consolidated Statements of
Income for the three months ended March 31, 1996 (unaudited) and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> MAR-31-1996
<CASH> 201,488
<SECURITIES> 0
<RECEIVABLES> 490,209
<ALLOWANCES> 20,992
<INVENTORY> 0
<CURRENT-ASSETS> 708,932
<PP&E> 166,933
<DEPRECIATION> 65,302
<TOTAL-ASSETS> 1,179,794
<CURRENT-LIABILITIES> 174,295
<BONDS> 0
<COMMON> 6,446
0
0
<OTHER-SE> 485,842
<TOTAL-LIABILITY-AND-EQUITY> 1,179,794
<SALES> 683,214
<TOTAL-REVENUES> 683,214
<CGS> 478,039
<TOTAL-COSTS> 478,039
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 267
<INTEREST-EXPENSE> 3,519
<INCOME-PRETAX> 39,419
<INCOME-TAX> 16,044
<INCOME-CONTINUING> 23,003
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,003
<EPS-PRIMARY> .35
<EPS-DILUTED> .34
</TABLE>
