<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 6, 1996.
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
OLSTEN CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 13-2610512
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
------------------------------------
175 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747-8905
(516) 844-7800
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
WILLIAM P. COSTANTINI, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
175 BROAD HOLLOW ROAD
MELVILLE, NEW YORK 11747-8905
(516) 844-7250
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
<TABLE>
<S> <C>
COPIES TO:
MARJORIE SYBUL ADAMS, ESQ. FREDERICK W. KANNER, ESQ.
GORDON ALTMAN BUTOWSKY DEWEY BALLANTINE
WEITZEN SHALOV & WEIN 1301 AVENUE OF THE AMERICAS
114 WEST 47TH STREET NEW YORK, NEW YORK 10019-6902
NEW YORK, NEW YORK 10036-1510 (212) 259-7300
(212) 626-0861
</TABLE>
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT (1) OFFERING PRICE (1) FEE
- ---------------------------------------------------------------------------------------------------------------
% Senior Notes due 2006................. $200,000,000 100% $200,000,000 $68,966
</TABLE>
- --------------------------------------------------------------------------------
(1) Pursuant to Rule 457(c) of the Securities Act of 1933, these amounts are
used solely for the purpose of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 6, 1996
PROSPECTUS
$200,000,000
LOGO
% SENIOR NOTES DUE 2006
Interest payable March 15 and September 15
------------------
The % Senior Notes due 2006 (the "Notes") are being offered by Olsten
Corporation (the "Company"). Interest on the Notes will be payable semi-annually
on March 15 and September 15, commencing on September 15, 1996, at the rate of
% per annum. The Notes will mature on March 15, 2006. The Notes will not be
redeemable by the Company prior to maturity and will not be entitled to the
benefit of any mandatory sinking fund.
The Notes will be unsecured obligations of the Company ranking pari passu
with all existing and future unsubordinated and unsecured obligations of the
Company. The Notes will be effectively subordinated to indebtedness and
liabilities of the Company's subsidiaries with respect to the assets of such
subsidiaries. In addition, the Notes will be effectively subordinated to secured
indebtedness of the Company and its subsidiaries with respect to the collateral
securing such indebtedness and the claims of the Company as the holder of
general unsecured intercompany indebtedness will be similarly effectively
subordinated to secured indebtedness of its subsidiaries. As of February 28,
1996, after giving effect to the sale of the Notes and the use of proceeds of
such sale in the manner described in "Use of Proceeds," the Company would have
had approximately $373 million of indebtedness outstanding, $48 million of which
would have ranked pari passu with the Notes and $125 million of which would have
ranked, by its terms, subordinate to the Notes. See "Description of the Notes."
The Notes will be issued in fully registered form only in denominations of
$1,000 or integral multiples thereof. The Notes initially will be represented by
one or more Global Notes registered in the name of The Depository Trust Company
(the "Depositary") or its nominee. Beneficial interests in the Notes will be
shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants. Owners of beneficial
interests in the Notes will be entitled to physical delivery of Notes in
certificated form equal in principal amount to their respective beneficial
interests only under the limited circumstances described herein. Settlement for
the Notes will be made in immediately available funds. The Notes will trade in
the Depositary's Same-Day Funds Settlement System until maturity, and secondary
market trading activity for the Notes therefore will settle in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds. See "Description of the Notes -- Global
Notes; Form, Exchange and Transfer."
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC(1) AND COMMISSIONS(2) COMPANY(3)
- ---------------------------------------------------------------------------------------------------------
Per Note % % %
- ---------------------------------------------------------------------------------------------------------
Total $ $ $
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from the date of initial issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before estimated expenses of $350,000 payable by the Company.
------------------
The Notes are being offered by the Underwriters named herein, subject to
prior sale, when, as and if accepted by them and subject to certain conditions.
It is expected that the Notes will be available for delivery on or about March
, 1996, through the facilities of the Depositary.
------------------
SMITH BARNEY INC.
CHASE SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
March , 1996
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY EFFECT TRANSACTIONS
WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES AT LEVELS ABOVE THOSE
WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
New York Regional Office, 7 World Trade Center, New York, New York 10048, and
Chicago Regional Office, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of the
prescribed fees. Such reports, proxy statements and other information may also
be inspected and copied at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which the Company's Common Stock is listed.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents incorporated herein by reference (other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents). Written or telephone requests should be
directed to: Olsten Corporation, 175 Broad Hollow Road, Melville, New York
11747-8905, Attention: Laurin L. Laderoute, Jr., Vice President and Secretary,
(516) 844-7800.
AVAILABLE INFORMATION
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Notes, reference is hereby made to the Registration Statement. Statements
contained herein concerning the provisions of any document are not necessarily
complete, and in each instance reference is made to the copy of such document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission. Each such statement is qualified in its entirety by such reference.
Copies of the Registration Statement may be inspected, without charge, at the
offices of the Commission or obtained at prescribed rates from the Public
Reference Section of the Commission at the address set forth on the inside front
cover of this Prospectus.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are hereby incorporated in this Prospectus by reference and
made a part hereof: (i) the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995; (ii) information contained under the captions
"Security Ownership of Certain Beneficial Owners and Management" and "Executive
Compensation" in the Company's definitive Proxy Statement dated March 31, 1995;
and (iii) the Company's Report on Form 8-K dated March , 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this Offering shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the respective dates of filing
of such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for all purposes to the extent that a statement contained in this
Prospectus or another subsequently filed document that is also incorporated by
reference herein modifies or supersedes such statement. Any such statements so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
2
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus or
incorporated by reference herein.
THE COMPANY
Olsten Corporation (the "Company") is one of the world's leading providers
of staffing services and North America's largest provider of home health care
and related services, based on systemwide sales (described below). Primarily
through Olsten Staffing Services, the Company provides assignment employees to
business and industry, professional and service organizations and government
agencies and services for the design, development and maintenance of information
systems. Through Olsten Kimberly QualityCare, the Company serves as a network
manager to provide managed care organizations with a single source for nursing
services, infusion therapy, home medical equipment, physical/occupational/speech
therapies, respiratory therapy, rehabilitation services and pediatric and
perinatal care. The Company is also the nation's leading provider of management
services to hospital-based home health agencies. The Company's services are
provided through a network of approximately 1,300 owned, licensed and franchised
offices in North America, South America, Great Britain and Continental Europe.
The Company, together with its licensees and franchisees, serves a diverse
client base of approximately 500,000 client and patient accounts. For the year
ended December 31, 1995, the Company's total revenues (service sales, franchise
fees, management fees and other income) and systemwide sales (sales generated by
the Company, licensed and franchised offices, and hospital-based home health
agencies under management) were $2.519 billion and $3.006 billion, respectively.
Staffing services and health care services accounted for 56% and 44%,
respectively, of the Company's 1995 systemwide sales.
Staffing Services
The Company provides skilled and semi-skilled assignment employees in the
following broad service areas: general office, office automation, information
technology, professional accounting support, technical/scientific, legal
support, production, assembly and distribution, marketing support and
teleservices. By supplying an auxiliary work force, the Company believes it
affords economies, productivity and flexibility to its clients to meet
fluctuations in their staffing requirements during peak periods and to complete
special assignments. With the availability of such services, a client can
maintain on a cost-effective basis a nucleus of core personnel that can be
supplemented by skilled specialists for long- and short-term assignments.
The Company is also pursuing alternative staffing service relationships
that are becoming increasingly important to the Company. Through its Partnership
Program(R) services with major corporate clients, the Company acts as a master
vendor responsible for the recruitment, training and management of large groups
of employees for departments at a single site or at multiple sites, allowing its
clients to focus better on their core businesses. Other clients have outsourced
entire functions whereby people, processes and technology are all managed by the
Company.
Health Care Services
The Company provides licensed professional health care personnel, such as
registered nurses and licensed practical nurses, and unlicensed health care
personnel, such as home health aides, homemakers, companions and nursing
assistants, to individuals in the home and to hospitals and other health care
facilities. In the furnishing of home health care, the Company's licensed health
care personnel offer a broad range of services, including physician-prescribed
skilled nursing treatments, patient and family education, case management,
pediatric and perinatal care, physical, occupational, neurological and speech
therapies, intravenous administration of drugs, nutrients and other solutions,
and rehabilitation. Through its clinical pharmacy network, the Company is able
to deliver nutrients and medications utilized in certain of its home health care
services. Home health care provided by the Company's unlicensed personnel may
involve assistance with personal hygiene, feeding, dressing, preparation of
meals and light housekeeping. The Company's health care professionals perform
services for hospitals, nursing homes, clinics and other health care facilities
and furnish business and industry with specialized staffing.
The Company is actively pursuing relationships with managed care
organizations as a provider and is expanding its capabilities as a network
manager for managed care organizations in home health care delivery. In this
role, the Company manages and contracts for all home health care services. The
Company believes that its nationwide office network and the quality, range and
cost-effectiveness of its services are important factors as it seeks
opportunities as a network manager. In its managed care relationships, the
Company offers the direct and managed provision of care as a single gatekeeper,
thereby optimizing utilization. The Company also has expanded its health care
service delivery capabilities through hospital management contracts to manage
hospital-based home health operations in exchange for management fees.
Growth Strategy
The Company intends to pursue expansion opportunities by strengthening
relationships with major clients, making strategic acquisitions within and
outside the United States, opening additional offices and developing and
extending specialized services, particularly in health care, information
technology, accounting and legal support.
3
<PAGE> 5
THE OFFERING
Securities Offered.............. $200,000,000 aggregate principal amount of
% Senior Notes due 2006 (the "Notes").
Maturity Date................... March 15, 2006.
Interest Rate and Payment Dates... The Notes will bear interest at a rate of
% per annum. Interest on the Notes will
accrue from the date of issuance and will be
payable semi-annually on each March 15 and
September 15, commencing September 15, 1996.
Ranking......................... The Notes will be unsecured obligations of
the Company ranking pari passu with all
existing and future unsubordinated and
unsecured obligations of the Company. The
Notes will be effectively subordinated to
indebtedness and liabilities of the Company's
subsidiaries with respect to the assets of
such subsidiaries. In addition, the Notes
will be effectively subordinated to secured
indebtedness of the Company and its
subsidiaries with respect to the collateral
securing such indebtedness and the claims of
the Company as the holder of general
unsecured intercompany indebtedness will be
similarly effectively subordinated to secured
indebtedness of its subsidiaries. As of
February 28, 1996, after giving effect to the
sale of the Notes and the use of proceeds of
such sale in the manner described in "Use of
Proceeds," the Company would have had
approximately $373 million of indebtedness
outstanding, $48 million of which would have
ranked pari passu with the Notes and $125
million of which would have ranked, by its
terms, subordinate to the Notes. See
"Description of the Notes."
Redemption...................... The Notes will not be redeemable by the
Company prior to maturity.
Certain Covenants............... The Indenture will contain certain covenants
which, among other things, will restrict the
ability of the Company and its subsidiaries
to (i) incur additional indebtedness secured
by liens, (ii) enter into sale and leaseback
transactions or (iii) consolidate, merge or
sell all or substantially all of their
assets. These covenants are subject to
important exceptions and qualifications. See
"Description of the Notes -- Certain
Covenants" and "-- Consolidation, Merger and
Disposition of Assets."
Use of Proceeds................. To repay a portion of the Company's
indebtedness under its existing revolving
credit facilities, to expand the Company's
existing office network and the types of
services provided to clients, both internally
and through acquisitions, and for general
working capital purposes. See "Use of
Proceeds."
4
<PAGE> 6
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following summary consolidated financial information of the Company has
been derived from the Consolidated Financial Statements of the Company which
appear in the Company's Annual Report on Form 10-K for the year ended December
31, 1995. Such Form 10-K is incorporated by reference herein. See "Incorporation
of Certain Information by Reference." The following summary is qualified in its
entirety by reference to such Consolidated Financial Statements and to all the
financial information and notes contained therein and should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in such Form 10-K.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------------------------
DECEMBER JANUARY JANUARY JANUARY DECEMBER
29, 3, 2, 1, 31,
1991(1) 1993(1) 1994(1) 1995 1995
---------- --------- --------- --------- ----------
(IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATING DATA:
Service sales, franchise fees, management
fees and other income................... $1,725,166 $1,990,733 $2,196,678 $2,307,667 $2,518,875
Gross profit.............................. $ 554,797 $ 621,144 $ 673,545 $ 685,607 $ 761,556
Income (loss) before extraordinary
charge.................................. $ (10,472 ) $ 27,531 $ (11,243) $ 71,242 $ 90,469
Net income (loss)......................... $ (10,472 ) $ 27,531 $ (25,911) $ 71,242 $ 90,469
Income (loss) per share before
extraordinary charge, fully
diluted(2).............................. $(0.19 ) $0.49 $(0.19) $1.07 $1.33
Net income (loss) per share, fully
diluted(2).............................. $(0.19 ) $0.49 $(0.43) $1.07 $1.33
Average number of shares outstanding,
fully diluted(2)........................ 54,842 55,998 60,467 70,073 70,704
Ratio of earnings to fixed charges(3)..... 1.4x 2.5x 1.1x 6.7x 8.7x
Ratio of EBITDA to interest expense(4).... 2.8x 4.4x 2.4x 17.9x 22.7x
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1995
----------------------
AS
ACTUAL ADJUSTED(5)
-------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital................................................................ $327,928 $ 472,148
Total assets................................................................... $891,918 $ 1,084,138
Long-term debt................................................................. $180,780 $ 373,000
Shareholders' equity........................................................... $472,045 $ 472,045
</TABLE>
- ---------------
(1) Results for the fiscal year ended January 2, 1994 are net of merger and
integration costs associated with the merger of Lifetime Corporation into
the Company, which reduced net income by $58.7 million, net of tax, and an
extraordinary charge of $14.7 million, net of tax, related to debt
prepayment penalties.
For the fiscal year ended January 3, 1993, Lifetime Corporation recorded a
severance and restructuring charge of $7.1 million, net of tax.
For the fiscal year ended December 29, 1991, Lifetime Corporation recorded a
$43 million pretax charge to write-down goodwill.
(2) Share information has been retroactively restated for the three-for-two
stock split declared on February 16, 1996.
(3) The ratio of earnings to fixed charges is computed by dividing fixed charges
into earnings from continuing operations before income taxes, minority
interests and extraordinary items plus fixed charges. Fixed charges consist
of interest expense, amortization of financing costs and the estimated
interest component of rent expense.
(4) EBITDA represents earnings from continuing operations before interest
expense, income taxes, minority interests, depreciation and amortization and
extraordinary items. EBITDA is included herein because management believes
that certain investors find it to be a useful tool for measuring a company's
ability to service its debt; however, EBITDA does not represent cash flow
from operations, as defined by generally accepted accounting principles,
should not be considered as a substitute for net earnings as an indicator of
the Company's operating performance or cash flow as a measure of liquidity,
and should be examined in conjunction with the Consolidated Financial
Statements of the Company incorporated by reference herein.
(5) Adjusted to reflect the sale of the Notes offered hereby and the repayment
of certain indebtedness as described under "Use of Proceeds" and the January
1996 acquisition of a German staffing services company and related debt.
5
<PAGE> 7
THE COMPANY
The Company was formed in 1967, as a Delaware corporation, as the successor
to a business founded in 1950. The Company's principal executive offices are
located at 175 Broad Hollow Road, Melville, New York 11747 and its telephone
number is (516) 844-7800. As used in this Prospectus, except as otherwise
specified or when the context otherwise requires, the "Company" means Olsten
Corporation and its consolidated subsidiaries.
USE OF PROCEEDS
The net proceeds from the sale of the $200,000,000 principal amount of
Notes offered hereby, after deducting estimated expenses payable by the Company
in connection with this offering, are estimated to be approximately
$198,350,000. The Company intends to use the net proceeds to repay all or
substantially all of its borrowings outstanding at the completion of this
offering under: (i) its existing revolving credit facility with six banks (the
"Revolving Credit Facility"), to the extent such borrowings are denominated in
United States dollars and (ii) its existing revolving credit facility with Fleet
Bank (the "Fleet Revolver"). As of February 28, 1996, borrowings under the
Revolving Credit Facility and the Fleet Revolver were approximately $94.5
million (of which approximately $47 million were dollar denominated) and $10.8
million, respectively. Borrowings under the Revolving Credit Facility and the
Fleet Revolver which are to be repaid with the proceeds of the offering bear
interest at the London Interbank Offered Rate ("LIBOR") plus 5/8 of 1%. All
amounts outstanding under the Revolving Credit Facility and the Fleet Revolver
on December 15, 1996, may, at the Company's option, be converted to term loans
which will mature on December 15, 2000. The remaining portion of the net
proceeds of this offering will be used by the Company to expand its existing
office network and the types of services provided to clients, both internally
and through acquisitions, and for general working capital purposes. Although the
Company is continually seeking and evaluating acquisition opportunities, the
Company currently has no agreements with respect to any material acquisitions.
Pending use for the foregoing purposes, the Company intends to invest the net
proceeds of this offering in short-term, interest-bearing obligations of
investment grade.
CAPITALIZATION
The following table sets forth (i) the capitalization of the Company as of
December 31, 1995 and (ii) such capitalization as adjusted to give effect to the
issuance and sale of the Notes offered hereby, the repayment of certain
indebtedness as described under "Use of Proceeds" and the incurrence in 1996 of
$48 million in Eurocurrency loans under the Revolving Credit Facility.
<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Long-term debt:
% Senior Notes due 2006................................................. $ -- $ 200,000
4 7/8% Convertible Subordinated Debentures due 2003........................ 125,000 125,000
Revolving credit facilities................................................ 55,780 48,000
-------- -----------
Total long-term debt.................................................... 180,780 373,000
-------- -----------
Shareholders' equity:
Preferred Stock, $.10 par value; 250,000 shares authorized; no shares
issued or outstanding................................................... -- --
Common Stock, $.10 par value; 110,000,000 shares authorized;
50,428,046 shares issued and outstanding(1)(2)(3)....................... 5,043 5,043
Class B Common Stock, $.10 par value; 50,000,000 shares authorized;
13,906,891 shares issued and outstanding(1)(3)(4)....................... 1,391 1,391
Additional paid-in capital(1)................................................ 238,645 238,645
Retained earnings............................................................ 228,721 228,721
Cumulative translation adjustment............................................ (1,755) (1,755)
-------- -----------
Total shareholders' equity................................................. 472,045 472,045
-------- -----------
Total capitalization.................................................... $652,825 $ 845,045
======== =========
</TABLE>
- ---------------
(1) Retroactively restated for the three-for-two stock split declared on
February 16, 1996.
(2) Does not include: (i) 3,591,954 shares of Common Stock (5,387,931 as
restated for the three-for-two stock split declared on February 16, 1996)
reserved for issuance upon conversion of the Company's 4 7/8% Convertible
Subordinated Debentures due 2003, (ii) 10,264,549 shares of Common Stock
(15,396,823 as restated for the three-for-two stock split declared on
February 16, 1996) reserved for issuance upon conversion of Class B Common
Stock (including the shares of Class B Common Stock described in footnote 4)
and (iii) 2,386,747 shares of Common Stock (3,580,120 as restated for the
three-for-two stock split declared on February 16, 1996) reserved for
issuance under the Company's stock plans.
(3) The Common Stock is entitled to one vote per share and the Class B Common
Stock is entitled to ten votes per share.
(4) Does not include 888,000 and 105,288 shares of Class B Common Stock
(1,332,000 and 157,932 as restated for the three-for-two stock split
declared on February 16, 1996) reserved for issuance upon exercise of
outstanding warrants and stock options, respectively.
6
<PAGE> 8
DESCRIPTION OF THE NOTES
The Notes will be issued under an indenture to be dated as of March 15,
1996 (the "Indenture") between the Company and First Union National Bank, as
trustee (the "Trustee"). The following summary of certain provisions of the
Indenture does not purport to be complete and is subject to, and qualified in
its entirety by reference to, the provisions of the Indenture (the form of which
has been filed as an exhibit to the Registration Statement of which this
Prospectus is a part), including the definitions of certain terms contained
therein and those terms made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended, as in effect on the date of the Indenture.
GENERAL
The Notes will be unsecured obligations of the Company limited to
$200,000,000 aggregate principal amount and ranking pari passu in right of
payment with all existing and future unsubordinated and unsecured obligations of
the Company. The Notes will be issued only in registered form without coupons,
in denominations of $1,000 and integral multiples thereof. The Notes will be
initially issued in the form of one or more book-entry notes (each, a "Global
Note"). Principal of and interest on the Global Notes will be payable, and the
Global Notes will be transferable and exchangeable, only as provided for below
under the caption "-- Global Notes; Form, Exchange and Transfer." Principal of
and interest on Notes subsequently issued in a form other than as a Global Note
will be payable, and such Notes will be transferable and exchangeable, at the
corporate trust office of the Trustee. In addition, interest payable with
respect to Notes subsequently issued in a form other than as a Global Note may
be paid, at the option of the Company, by check mailed to the Person entitled
thereto as shown on the security register of the Notes. No service charge will
be made for any transfer or exchange of Notes, except in certain circumstances
for any tax or other governmental charge that may be imposed in connection
therewith.
The Notes will mature on March 15, 2006. Interest on the Notes will accrue
at the rate of % per annum and will be payable semi-annually on each March
15 and September 15, commencing September 15, 1996, to the Holders of record of
Notes at the close of business on the February 28 and August 31 immediately
preceding such interest payment date. Interest on the Notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the original date of issuance of the Notes (the "Issue Date").
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
The Notes are not redeemable at the option of the Company prior to maturity
and will not be entitled to the benefit of any mandatory sinking fund.
The Notes will be unsubordinated and unsecured obligations of the Company
ranking pari passu with all existing and future unsubordinated and unsecured
obligations of the Company. Claims of Holders of Notes will be effectively
subordinated to the claims of holders of the debt of the Company's subsidiaries
with respect to the assets of such subsidiaries. In addition, claims of Holders
of Notes will be effectively subordinated to the claims of holders of secured
debt of the Company and its subsidiaries with respect to the collateral securing
such claims and claims of the Company as the holder of general unsecured
intercompany debt will be similarly effectively subordinated to claims of
holders of secured debt of its subsidiaries. As of February 28, 1996, after
giving effect to the sale of the Notes and the use of proceeds of such sale in
the manner described in "Use of Proceeds," the Company would have had
approximately $373 million of indebtedness outstanding, $48 million of which
would have ranked pari passu with the Notes and $125 million of which would have
ranked, by its terms, subordinate to the Notes.
The Indenture does not contain any restrictions on the incurrence of
unsecured indebtedness or the payment of dividends or any financial covenants.
The Indenture does not contain provisions which would afford the Holders of
Notes protection in the event of a transfer of assets to a subsidiary and
incurrence of unsecured debt by such subsidiary, or in the event of a decline in
the Company's credit quality resulting from highly leveraged or other similar
transactions involving the Company.
7
<PAGE> 9
HOLDING COMPANY STRUCTURE
The Notes are obligations exclusively of the Company, which is a holding
company. Since the operations of the Company are currently conducted principally
through its Subsidiaries, the cash flow of the Company and the consequent
ability to service its debt, including the Notes, are dependent upon the
earnings of such Subsidiaries and the distribution of those earnings to the
Company, or upon loans or other payments of funds by such Subsidiaries to the
Company. The Subsidiaries are separate and distinct legal entities and have no
obligation, contingent or otherwise, to pay any amounts due pursuant to the
Notes or to make any funds available therefor, whether by dividends, loans or
other payments. In addition, the payment of dividends and certain loans and
advances to the Company by such Subsidiaries may be subject to certain statutory
or contractual restrictions, are contingent upon the earnings of such
Subsidiaries and are subject to various business considerations.
The Notes will be effectively subordinated to all indebtedness and other
liabilities and commitments (including trade payables and lease obligations) of
the Company's Subsidiaries. Any right of the Company to receive assets of any
such Subsidiary upon the liquidation or reorganization of any such Subsidiary
(and the consequent right of the holders of the Notes to participate in those
assets) will be effectively subordinated to the claims of that Subsidiary's
creditors, except to the extent that the Company is itself recognized as a
creditor of such Subsidiary, in which case the claims of the Company would still
be subordinate to any security in the assets of such Subsidiary and any
indebtedness of such Subsidiary senior to that held by the Company.
GLOBAL NOTES; FORM, EXCHANGE AND TRANSFER
The Notes will be initially issued in the form of fully registered Global
Notes deposited with or on behalf of, and registered in the name of, The
Depository Trust Company (the "Depositary") or a nominee thereof. Unless and
until it is exchanged in whole or in part for Notes in definitive registered
form, a Global Note may not be transferred, except as a whole: (i) by the
Depositary to a nominee of such Depositary, or (ii) by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or (iii) by
such Depositary or any such nominee to a successor of such Depositary or a
nominee of such successor.
Ownership of beneficial interests in a Global Note will be limited to
Persons that have accounts with the Depositary ("participants") or Persons that
may hold interests through participants. Upon the issuance of a Global Note, the
Depositary will credit, on its book-entry registration and transfer system, the
participants' accounts with the respective principal amounts of the Notes
represented by such Global Note beneficially owned by such participants. The
accounts to be credited will initially be designated by the Underwriters.
Ownership of beneficial interests in such Global Note will be shown on, and the
transfer of such ownership interests will be effected only through, records
maintained by the Depositary or its nominee (with respect to interests of
participants) and on the records of participants (with respect to interests of
Persons holding through participants). The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to own,
transfer or pledge beneficial interests in Global Notes.
So long as the Depositary, or its nominee, is the owner of record of a
Global Note, the Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of Notes represented by such Global Note for
all purposes under the Indenture. Except as set forth below, owners of
beneficial interests in a Global Note will not be entitled to have Notes
represented by such Global Note registered in their names, and will not receive
or be entitled to receive physical delivery of such Notes in definitive form and
will not be considered the owners or holders thereof under the Indenture.
Accordingly, each Person owning a beneficial interest in a Global Note must rely
on the procedures of the Depositary and, if such Person is not a participant, on
the procedures of the participant through which such Person owns its interest,
to exercise any rights of a Holder of record under the Indenture. The Company
understands that under existing industry practices, if the Company requests any
action of Holders or if any owner of a beneficial interest in a Global Note
desires to give or take any action which a Holder is entitled to give or take
under the Indenture, the Depositary would authorize the participants holding the
relevant beneficial interests to give or take such action, and such participants
would authorize beneficial owners owning through such participants to give or
take such action or
8
<PAGE> 10
would otherwise act upon the instruction of beneficial owners holding through
them. No beneficial owner of an interest in a Global Note will be able to
transfer that interest except in accordance with the Depositary's applicable
procedures, in addition to those provided for in the Indenture.
Payments of principal and interest on Notes represented by a Global Note
registered in the name of the Depositary or its nominee will be made to the
Depositary or its nominee, as the case may be, as the registered owner of such
Global Note. None of the Company, the Trustee or any other agent of the Company
or agent of the Trustee will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in such Global Note or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a Global Note, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in such Global Note as shown on the records of
the Depositary or its nominee. The Company also expects that payments by
participants to owners of beneficial interests in such Global Note held through
such participants will be governed by standing customer instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
If the Depositary notifies the Company that it is at any time unwilling or
unable to continue as Depositary or ceases to be eligible under applicable law,
and a successor Depositary eligible under applicable law is not appointed by the
Company within 90 days, the Company will issue Notes in definitive form in
exchange for Global Notes representing such Notes. In addition, the Company may
at any time and in its sole discretion determine not to have any of the Notes
represented by one or more Global Notes and, in such event, will issue Notes in
definitive form in exchange for Global Notes representing such Notes. Any Notes
issued in definitive form in exchange for a Global Note will be registered in
such name or names as the Depositary shall instruct the Trustee. It is expected
that such instructions will be based upon directions received by the Depositary
from participants with respect to ownership of beneficial interests in such
Global Note.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depositary
holds securities that its participants deposit with the Depositary. The
Depositary also facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. The Depositary is owned
by a number of its participants and by the New York Stock Exchange, Inc., the
American Stock Exchange Inc. and the National Association of Securities Dealers,
Inc. Access to the Depositary's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. The Rules applicable to the Depositary and its participants are on
file with the Commission.
Although the Depositary and its participants are expected to follow the
foregoing procedures in order to facilitate transfers of interests in a Global
Note among participants, they are under no obligation to perform or continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither the Company nor the Trustee will have any responsibility for the
performance by the Depositary or the participants of their respective
obligations under the rules and procedures governing their operations.
SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL NOTES
So long as any Notes are represented by Global Notes registered in the name
of the Depositary or its nominee, such Notes will trade in the Depositary's
Same-Day Funds Settlement System, and secondary market trading activity in such
Notes will therefore be required by the Depositary to settle in immediately
9
<PAGE> 11
available funds. No assurance can be given as to the effect, if any, of
settlement in immediately available funds on trading activity in the Notes.
CERTAIN COVENANTS
Restrictions on Liens
The Indenture will contain a covenant providing that so long as any of the
Notes 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 Notes 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 the
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 the 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 (a), (b) or (c)
under "Restrictions on Sale and Leaseback Transactions" below, does not exceed
15% of Consolidated Shareholders' Equity of the Company.
Restrictions on Sale and Leaseback Transactions
The Indenture contains a covenant providing that so long as any of the
Notes 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 property or
assets at least equal in an amount to the Attributable Debt in respect thereof,
without equally and ratably securing the Notes as set forth in the 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
10
<PAGE> 12
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) under "Restrictions on Liens" above), does not
exceed 15% of Consolidated Shareholders' Equity of the Company.
Certain Definitions
"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).
"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.
"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 the Indenture, such accounting
principles as are generally accepted in the United States as of the date of the
relevant calculation.
"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
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.
"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).
"Senior Funded Debt" means all Funded Debt, except Funded Debt the payment
of which is subordinated to the payment of the Notes.
"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.
CONSOLIDATION, MERGER AND DISPOSITION OF ASSETS
The Company may not consolidate with or merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, any Person, and
may not permit any Person to consolidate with or merge
11
<PAGE> 13
into, or convey, transfer or lease its properties and assets substantially as an
entirety to, the Company, unless (a) the successor, if other than the Company,
is a Person organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and such successor, if other than the
Company, expressly assumes the Company's obligations under the Indenture and the
Notes, (b) immediately after giving effect to such transaction, no Event of
Default under the Indenture or event which, after notice or lapse of time or
both, would become an Event of Default thereunder would exist and be continuing,
(c) 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 as described under "Certain Covenants -- Restrictions on Liens,"
the Company or such successor Person, as the case may be, shall take such steps
as shall be necessary to effectively secure the Notes equally and ratably with
(or prior to) all indebtedness secured thereby, and (d) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such transaction complies with the Indenture. Upon compliance
with these provisions, the successor Person will succeed to, and be substituted
for, the Company under the Indenture, and the Company will be relieved (except
in the case of a lease) of its obligations under the Indenture and the Notes.
EVENTS OF DEFAULT
Each of the following will constitute an "Event of Default" under the
Indenture with respect to the Notes: (a) default in the payment of principal of
any Note, (b) default in the payment of any interest upon any Note when due,
which default continues for 30 days, (c) default in the performance, or breach,
of any other covenant or warranty contained in the Indenture, which default
continues for 60 days after written notice 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 Notes, (d) 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 million
or more or the acceleration of such indebtedness, if such acceleration is not
rescinded or annulled within 10 days after written notice as specified in clause
(c) and requiring the Company to cause such indebtedness to be discharged or
cause such acceleration to be rescinded or annulled, and (e) certain events of
bankruptcy, insolvency or reorganization.
If an Event of Default (other than an Event of Default described in clause
(e) above) with respect to the Outstanding Notes shall occur and be continuing,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Notes may, by notice in writing to the Company (and to
the Trustee if given by Holders), declare the principal amount of all Notes to
be due and payable immediately. If an Event of Default described in clause (e)
above with respect to the Notes shall occur, the principal amount of all the
Notes will automatically, and without any action by the Trustee or any Holder,
become immediately due and payable. After any such acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Notes may, under certain circumstances, rescind and annul such
acceleration if all Events of Default, other than the non-payment of accelerated
principal, have been cured or waived as provided in the Indenture.
The Indenture will provide that the Trustee shall, within 90 days after the
occurrence of a default with respect to the Notes, give to the Holders of the
Notes notice of such default known to it, unless such default shall have been
cured or waived; provided, however, that, except in the case of a default in the
payment of the principal of or interest on any of the Notes, the Trustee shall
be protected in withholding such notice if in good faith it determines that the
withholding of such notice is in the interest of such Holders. The Indenture
provides that, subject to the duty of the Trustee during a default to act with
the required standard of care, the Trustee will not be under an obligation to
exercise any right or power under the Indenture at the request or direction of
any of the Holders, unless the Holders shall have offered to the Trustee
reasonable security or indemnity. The Indenture provides that the Holders of a
majority in aggregate principal amount of the Outstanding Notes may direct the
time, method and place of conducting proceedings for remedies available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Notes.
No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture, or for the appointment of a receiver or a trustee, or
for any other remedy thereunder, unless (a) such Holder
12
<PAGE> 14
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to the Notes, (b) the Holders of not less than 25% in
aggregate principal amount of the Outstanding Notes shall have made written
request to the Trustee to institute proceedings as Trustee, (c) such Holder or
Holders shall have offered to the Trustee reasonable security or indemnity, (d)
the Trustee shall have failed to institute such proceeding within 60 days
thereafter and (e) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Outstanding Notes a direction
inconsistent with such request. However, such limitations do not apply to a suit
instituted by a Holder of a Note for the enforcement of payment of the principal
of or interest on such Note on or after the applicable due date specified in
such Note.
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of its obligations under the Indenture and
as to any default in such performance.
MODIFICATION AND WAIVERS
Modifications and amendments of the Indenture may be made by the Company
and the Trustee without the consent of the Holders to: (a) 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 Notes; (b) add to
the covenants of the Company for the benefit of the Holders or an additional
Event of Default or surrender any right or power conferred upon the Company; (c)
secure the Notes; (d) cause the Notes to comply with applicable law; (e)
evidence and provide for the acceptance of appointment by a successor Trustee
with respect to the Notes; and (f) cure any defect or ambiguity or correct or
supplement any provision which may be defective or inconsistent with any other
provision, or make any other provisions with respect to matters or questions
arising under the Indenture which shall not be inconsistent with the provisions
of the Indenture, provided, however, that no such modification or amendment may
adversely affect the interest of the Holders in any material respect.
Modifications and amendments of the Indenture may be made by the Company
and the Trustee, with the consent of the Holders of at least a majority in
aggregate principal amount of the Outstanding Notes, by executing supplemental
indentures for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, the Indenture or modifying in
any manner the rights of the Holders of the Outstanding Notes; provided, that no
such modification or amendment may, without the consent of the Holders of each
Outstanding Note affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest on, any Note, (b) reduce the
principal amount of or interest on, any Note, (c) change the place or currency
of payment of principal of, or any interest on, any Note, (d) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Note when due, (e) reduce the percentage of aggregate principal amount of
Outstanding Notes necessary to modify or amend the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults, or (f) modify certain provisions of the Indenture with respect to
modification and waiver.
The Holders of at least a majority in aggregate principal amount of the
Outstanding Notes may waive compliance by the Company with certain restrictive
provisions of the Indenture. The Holders of at least a majority in aggregate
principal amount of the Outstanding Notes may waive any past default under the
Indenture, except a default in the payment of the principal of or interest on
any Note and certain covenants and provisions of the Indenture which cannot be
modified or amended without the consent of the Holder of each Outstanding Note.
SATISFACTION AND DISCHARGE; DEFEASANCE AND COVENANT DEFEASANCE
The Indenture will provide that the Company may discharge its obligations
under the Indenture while Notes remain Outstanding if all Outstanding Notes will
become due and payable at their scheduled maturity within one year and the
Company has deposited with the Trustee an amount sufficient to pay and discharge
all Outstanding Notes on the date of their scheduled maturity. The Indenture
will further provide that the Company, at its option, (a) will be discharged
from any and all obligations with respect to the Notes (except for certain
obligations which include exchanging or registering the transfer of the Notes,
replacing stolen, lost or mutilated Notes, maintaining paying agencies and
holding monies for payment in trust) ("defeasance"), or
13
<PAGE> 15
(b) need not comply with certain restrictive covenants of the Indenture
("covenant defeasance"), and the occurrence of certain events which would
otherwise be or result in an Event of Default will be deemed not to be or result
in an Event of Default with respect to the Notes, upon the deposit with the
Trustee, in trust for the benefit of the Holders of the Notes, of money or U.S.
Government Obligations, or both, which through the payment of principal of and
interest in respect thereof in accordance with their terms will provide money in
an amount sufficient to pay principal of and interest on the Notes on the dates
such payments are due in accordance with the terms of the Indenture. To
establish such defeasance or covenant defeasance, the Company will be required
to meet certain conditions, including delivery to the Trustee of an Opinion of
Counsel to the effect that the Holders of the Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such defeasance or covenant defeasance had not occurred. In the case of
defeasance pursuant to clause (a), such Opinion of Counsel must refer to and be
based upon either (i) a ruling received by the Company from, or published by,
the Internal Revenue Service or (ii) a change in applicable federal income tax
law after the date of the Indenture.
INFORMATION CONCERNING THE TRUSTEE
The Indenture will provide that, except during the continuance of an Event
of Default, the Trustee thereunder will perform only such duties as are
specifically set forth in the Indenture. If an Event of Default has occurred and
is continuing, the Trustee will exercise such rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise as
a prudent Person would exercise under the circumstances in the conduct of such
Person's own affairs.
The Indenture and provisions of the Trust Indenture Act of 1939, as
amended, incorporated by reference therein, contain limitations on the rights of
the Trustee thereunder, should it become a creditor of the Company, to obtain
payment of claims in certain cases or to realize on certain property received by
it in respect of any such claims, as security or otherwise. The Trustee is
permitted to engage in other transactions with the Company; provided, however,
that if it acquires any conflicting interest (as defined in such Act) it must
eliminate such conflict or resign.
The Company and its Subsidiaries may maintain deposit accounts and conduct
other banking transactions with the Trustee in the ordinary course of business.
GOVERNING LAW
The Indenture and the Notes will be governed by the laws of the State of
New York, without regard to principles of conflicts of law.
14
<PAGE> 16
UNDERWRITING
Under the terms and subject to the conditions contained in the Underwriting
Agreement dated March , 1996, each Underwriter named below has severally
agreed to purchase, and the Company has agreed to sell to such Underwriter, the
principal amount of Notes set forth opposite the name of such Underwriter.
<TABLE>
<CAPTION>
PRINCIPAL
NAME AMOUNT
--------------------------------------------------------- -----------
<S> <C>
Smith Barney Inc......................................... $
Chase Securities, Inc....................................
Prudential Securities Incorporated.......................
-----------
Total.................................................. $200,000,000
===========
</TABLE>
The Underwriters are obligated to take and pay for the total principal
amount of Notes offered hereby if any such Notes are taken.
The Underwriters have advised the Company that they propose to offer part
of the Notes directly to the public at the public offering price set forth on
the cover page hereof and part to certain dealers at a price that represents a
concession not in excess of % of the public offering price of the Notes. The
Underwriters may allow, and such dealers may reallow, a concession not in excess
of % of the public offering price of the Notes to certain other dealers.
The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.
The Company does not intend to apply for listing of the Notes on a national
securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Notes, as permitted by applicable laws
and regulations. The Underwriters are not obligated, however, to make a market
in the Notes, and any such market making may be discontinued at any time at the
sole discretion of the Underwriters. Accordingly, no assurance can be given as
to the liquidity of, or trading markets for, the Notes.
Certain of the Underwriters and their affiliates have engaged in
transactions with and perform services for the Company or one or more of its
affiliates in the ordinary course of business, and may do so in the future. In
addition, an affiliate of Chase Securities, Inc. is a party to the Revolving
Credit Facility and, accordingly, will receive its pro rata portion of the
proceeds from the offering used to repay outstanding borrowings thereunder. See
"Use of Proceeds."
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company by Gordon
Altman Butowsky Weitzen Shalov & Wein, New York, New York ("Gordon Altman") and
for the Underwriters by Dewey Ballantine, New York, New York. Andrew N. Heine, a
Director of the Company, is of counsel to Gordon Altman.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and January 1, 1995
and the consolidated statements of income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1995 incorporated
by reference in this Prospectus, have been incorporated herein in reliance on
the report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
15
<PAGE> 17
- ------------------------------------------------------
- ------------------------------------------------------
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITY OTHER THAN THE NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Available Information.................. 2
Incorporation of Certain Information by
Reference............................ 2
Prospectus Summary..................... 3
The Company............................ 6
Use of Proceeds........................ 6
Capitalization......................... 6
Description of the Notes............... 7
Underwriting........................... 15
Legal Matters.......................... 15
Experts................................ 15
</TABLE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
$200,000,000
LOGO
% SENIOR
NOTES DUE 2006
------------
PROSPECTUS
MARCH , 1996
------------
SMITH BARNEY INC.
CHASE SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred by the
Company in connection with the issuance and distribution of the Notes being
registered hereby, other than underwriting discounts and commissions.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee...................... $ 68,966
Trustee's Fees and Expenses.............................................. 5,500
Printing and Engraving Costs............................................. 20,000
Legal Fees and Expenses.................................................. 75,000
Accounting Fees and Expenses............................................. 20,000
Blue Sky Fees and Expenses............................................... 20,000
Rating Agency Fees....................................................... 135,000
Miscellaneous............................................................ 5,534
--------
Total............................................................... $350,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Ninth of the Registrant's Restated Certificate of Incorporation
provides for indemnification of Directors of the Registrant as follows:
NINTH: No director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit. This Article NINTH shall
not eliminate or limit the liability of a director for any act or omission
occurring prior to the effective date of its adoption. If the Delaware
General Corporation Law is amended after approval by the stockholders of
this article to authorize corporate action further eliminating or limiting
the personal liability of directors, then the liability of a director of
the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such
repeal or modification.
As authorized by Section 145 of the Delaware General Corporation Law,
Article V of the Registrant's By-Laws provides as follows:
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he
or she is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director or officer of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director or officer or in any
other capacity while serving as a director or officer shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by
the Delaware General Corporation Law, as the same exists or may hereafter
be amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than permitted prior thereto), against all expense, liability and
loss (including attorneys' fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid in settlement) reasonably incurred or suffered
by such indemnitee in connection therewith and such indemnification shall
continue as to an indemnitee who has ceased to be a director or officer and
II-1
<PAGE> 19
shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that the Corporation shall indemnify any
such indemnitee in connection with a proceeding (or part thereof) initiated
by such indemnitee only if such proceeding was authorized by the Board.
Section 2. Right to Advancement of Expenses. This right to
indemnification conferred to in Section I of this Article V shall include
the right to be paid by the Corporation the expenses incurred in defending
any proceeding for which such right to indemnification is applicable in
advance of its final disposition (hereinafter an "advancement of
expenses"); provided, however, that, if the Delaware General Corporation
Law requires, an advancement of expenses incurred by an indemnitee in his
or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such
indemnitee, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right
to appeal that such indemnitee is not entitled to be indemnified for such
expenses under this Article V or otherwise.
Section 3. Non-Exclusivity of Rights. The rights to indemnification
and to the advancement of expenses conferred in this Article V shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, the Restated Certificate of Incorporation, By-Law,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person against such
expense, liability or loss under the Delaware General Corporation Law.
Section 5. Indemnification of Employees and Agents of the
Corporation. The Corporation may, to the extent authorized from time to
time by the Board, grant rights to indemnification and to the advancement
of expenses to any employee or agent of the Corporation or, if serving at
the request of the Corporation, as an employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, to the fullest
extent of the provisions of this Article V with respect to the
indemnification and advancement of expenses of directors and officers of
the Corporation.
In addition, the Registrant maintains directors' and officers' liability
insurance covering certain liabilities that may be incurred by the directors and
officers of the Registrant in connection with the performance of their duties.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ---------------------------------------------------------------------------
<C> <C> <S>
1.1 Form of Underwriting Agreement.
4.1 Form of Indenture (including form of Note).
5.1 Opinion of Gordon Altman Butowsky Weitzen Shalov & Wein.
12.1 Statement re Computation of Ratios.
23.1 Consent of Gordon Altman Butowsky Weitzen Shalov & Wein (included in
Exhibit 5.1).
23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility on Form T-1 of First Union National Bank to act as
trustee under the Indenture.
</TABLE>
II-2
<PAGE> 20
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes that:
(1) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(2) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of any employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared effective.
II-3
<PAGE> 21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Melville, State of New York, on March 6, 1996.
OLSTEN CORPORATION
By: /s/ FRANK N. LIGUORI
--------------------------------
Frank N. Liguori,
Chairman and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Frank N. Liguori, William P. Costantini and
Laurin L. Laderoute, Jr. and each and any one of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any or all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------- --------------------------------------- ---------------
<S> <C> <C>
/s/ FRANK N. LIGUORI Chairman and Chief Executive Officer March 6, 1996
- ------------------------------------- and Director (Principal Executive
Frank N. Liguori Officer)
/s/ ANTHONY J. PUGLISI Senior Vice President-Finance March 6, 1996
- ------------------------------------- (Principal Financial and Accounting
Anthony J. Puglisi Officer)
/s/ STUART OLSTEN Director March 6, 1996
- -------------------------------------
Stuart Olsten
/s/ ANDREW N. HEINE Director March 6, 1996
- -------------------------------------
Andrew N. Heine
/s/ STUART R. LEVINE Director March 6, 1996
- -------------------------------------
Stuart R. Levine
/s/ JOHN M. MAY Director March 6, 1996
- -------------------------------------
John M. May
</TABLE>
II-4
<PAGE> 22
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------------- --------------------------------------- ---------------
<C> <S> <C>
/s/ MIRIAM OLSTEN Director March 6, 1996
- -------------------------------------
Miriam Olsten
/s/ RICHARD A. SHAROFF Director March 6, 1996
- -------------------------------------
Richard A. Sharoff
/s/ RAYMOND S. TROUBH Director March 6, 1996
- -------------------------------------
Raymond S. Troubh
/s/ JOSH S. WESTON Director March 6, 1996
- -------------------------------------
Josh S. Weston
</TABLE>
II-5
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- ----------- ---------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
4.1 Form of Indenture (including form of Note).
5.1 Opinion of Gordon Altman Butowsky Weitzen Shalov & Wein.
12.1 Statement re Computation of Ratios.
23.1 Consent of Gordon Altman Butowsky Weitzen Shalov & Wein (included in Exhibit
5.1).
23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility on Form T-1 of First Union National Bank to act as
trustee under the Indenture.
</TABLE>
<PAGE> 1
Draft of 3/4/96
$200,000,000
OLSTEN CORPORATION
______% SENIOR NOTES DUE 2006
UNDERWRITING AGREEMENT
March ___, 1996
SMITH BARNEY INC.
CHASE SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Dear Sirs:
Olsten Corporation, a Delaware corporation (the "Company"), proposes,
upon the terms and conditions set forth herein, to issue and sell $200,000,000
aggregate principal amount of its _____% Senior Notes due 2006 (the "Notes") to
you, Smith Barney Inc., Chase Securities, Inc. and Prudential Securities
Incorporated (the "Underwriters"). The Notes will be issued pursuant to the
provisions of an Indenture to be dated as of March 15, 1996 (the "Indenture")
between the Company and First Union National Bank, as Trustee (the "Trustee").
The Company wishes to confirm as follows its agreement with you in
connection with the several purchases by you of the Notes.
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 under the Act
(the "registration statement"), including a prospectus subject to completion,
relating to the Notes. The term "Registration Statement" as used in this
Agreement means the registration statement (including all financial schedules
and exhibits), as amended at the time it becomes effective, or, if the
registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed and must
be declared effective before the offering of the Notes may commence, the term
"Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment. If an additional
registration statement is prepared and filed with the Commission in accordance
with Rule 462(b) under the Act (an "Additional Registration Statement"), the
term "Registration Statement" as used in this Agreement includes the Additional
Registration Statement. The term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement, or, if the
prospectus included in the Registration Statement omits information in reliance
on Rule 430A under the Act and such information is included in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectus filed with the Commission
pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in this
Agreement means the prospectus subject to completion in the form included in
the registration statement at the time of the initial filing of the
registration statement with the Commission, and as such prospectus shall have
been amended from time to time prior to the date of the Prospectus. Any
reference in this Agreement to the registration statement, the Registration
<PAGE> 2
Statement, any Prepricing Prospectus or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein pursuant to Form
S-3 under the Act, as of the date of the registration statement, the
Registration Statement, such Prepricing Prospectus or the Prospectus, as the
case may be, and any reference to any amendment or supplement to the
registration statement, the Registration Statement, any Prepricing Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed
after such date under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") which, upon filing, are incorporated by reference therein, as
required by Form S-3. As used herein, the term "Incorporated Documents" means
the documents which at the time are incorporated by reference in the
registration statement, the Registration Statement, any Prepricing Prospectus,
the Prospectus, or any amendment or supplement thereto.
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of ______% of the
principal amount thereof, the principal amount of Notes set forth opposite the
name of such Underwriter in Schedule I hereto (or such principal amount of
Notes increased as set forth in Section 10 hereof).
3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Notes as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Notes upon the terms set forth in the Prospectus.
4. DELIVERY OF THE NOTES AND PAYMENT THEREFOR. Delivery to the
Underwriters of and payment for the Notes shall be made at the office of Smith
Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M., New York
City time, on March __, 1996 (the "Closing Date"). The place of closing for
the Notes and the Closing Date may be varied by agreement between you and the
Company.
The Notes will be delivered to you against payment of the purchase
price therefor specified in Section 2 hereof by wire transfer to an account
previously designated to Smith Barney Inc. by the Company of Federal (same day)
funds and registered in such names and in such denominations as you shall
request prior to 1:00 P.M., New York City time, on the second business day
preceding the Closing Date. The Notes to be delivered to the Underwriters
shall be made available to you in New York City for inspection and packaging
not later than 9:30 A.M., New York City time, on the business day next
preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a
post-effective amendment thereto or any Additional Registration
Statement to be declared effective before the offering of the Notes
may commence, the Company will endeavor to cause the Registration
Statement or such post-effective amendment to become effective as soon
as possible and will advise you promptly and, if requested by you,
will confirm such advice in writing, when the Registration Statement
or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any
request by the Commission for amendment of or a supplement to the
Registration Statement, any Prepricing Prospectus or the Prospectus or
for additional information; (ii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of the suspension of qualification of the Notes for
offering or sale in any jurisdiction or the initiation of any
proceeding for such purpose; and (iii) within the period of time
referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net
worth or results of operations, or of the happening of any event,
which makes any material statement made in the Registration Statement
or the Prospectus (as then amended or supplemented) untrue or which
requires the making of any additions to or changes in the Registration
Statement or the Prospectus (as then amended or supplemented) in order
to state a material fact
2
<PAGE> 3
required by the Act or the regulations thereunder to be stated therein
or necessary in order to make the statements therein not misleading,
or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If
at any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, the Company will make
every reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Company will furnish to you, without charge (i)
four signed copies of the registration statement as originally filed
with the Commission and of each amendment thereto, including financial
statements and all exhibits to the registration statement, (ii) such
number of conformed copies of the registration statement as originally
filed and of each amendment thereto, but without exhibits, as you may
request, (iii) such number of copies of the Indenture and of the
Incorporated Documents, without exhibits, as you may request, and (iv)
four copies of the exhibits to the Incorporated Documents.
(d) The Company will not file any amendment to the
Registration Statement or make any amendment or supplement to the
Prospectus or, prior to the end of the period of time referred to in
the first sentence in subsection (f) below, file any document which,
upon filing becomes an Incorporated Document, of which you shall not
previously have been advised or to which, after you shall have
received a copy of the document proposed to be filed, you shall
reasonably object.
(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such
quantities as you have requested, copies of each form of the
Prepricing Prospectus. The Company consents to the use, in accordance
with the provisions of the Act and with the securities or Blue Sky
laws of the jurisdictions in which the Notes are offered by the
several Underwriters and by dealers, prior to the date of the
Prospectus, of each Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period
as in the opinion of counsel for the Underwriters a prospectus is
required by the Act to be delivered in connection with sales by any
Underwriter or dealer, the Company will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the
Prospectus (and of any amendment or supplement thereto) as you may
request. The Company consents to the use of the Prospectus (and of
any amendment or supplement thereto) in accordance with the provisions
of the Act and with the securities or Blue Sky laws of the
jurisdictions in which the Notes are offered by the several
Underwriters and by all dealers to whom Notes may be sold, both in
connection with the offering and sale of the Notes and for such period
of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. If
during such period of time any event shall occur that in the judgment
of the Company or in the opinion of counsel for the Underwriters is
required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or
amend the Prospectus (or to file under the Exchange Act any document
which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Company will forthwith
prepare and, subject to the provisions of paragraph (d) above, file
with the Commission an appropriate supplement or amendment thereto (or
to such document), and will expeditiously furnish to the Underwriters
and dealers a reasonable number of copies thereof. In the event that
the Company and you agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a
press release announcing or disclosing the matters to be covered by
the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel
for the Underwriters in connection with the registration or
qualification of the Notes for offering and sale by the several
Underwriters and by dealers under the securities or Blue Sky laws of
such jurisdictions as you may designate and will file such consents to
service of process or other documents necessary or appropriate in
order to effect such registration or qualification; provided that in
no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other
than those arising out of the offering or sale of the Notes, in any
jurisdiction where it is not now so subject.
3
<PAGE> 4
(h) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be
audited, covering a twelve-month period commencing after the effective
date of the Registration Statement and ending not later than 15 months
thereafter, as soon as practicable after the end of such period, which
consolidated earnings statement shall satisfy the provisions of
Section 11(a) of the Act.
(i) So long as any of the Notes are outstanding, the
Company will furnish to you (i) as soon as available, a copy of each
report of the Company mailed to stockholders or filed with the
Commission, and (ii) from time to time such other information
concerning the Company as you may reasonably request.
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provision hereof (otherwise
than pursuant to the second paragraph of Section 10 hereof or by
notice given by you terminating this Agreement pursuant to Section 10
or Section 11 hereof) or if this Agreement shall be terminated by the
Underwriters because of any failure or refusal on the part of the
Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Underwriters for
all out-of-pocket expenses reasonably incurred (including reasonable
fees and expenses of counsel for the Underwriters) incurred by you in
connection herewith.
(k) The Company will apply the net proceeds from the sale
of the Notes substantially in accordance with the description set
forth in the Prospectus.
(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and
will advise you of the time and manner of such filing.
(m) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, the Company has not taken, nor
will it take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Notes to facilitate the sale or
resale of the Notes.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the
registration statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the Act,
complied when so filed in all material respects with the provisions of
the Act. The Commission has not issued any order preventing or
suspending the use of any Prepricing Prospectus.
(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
Registration Statement in the form in which it became or becomes
effective and also in such form as it may be when any post-effective
amendment thereto or any Additional Registration Statement shall
become effective and the Prospectus and any supplement or amendment
thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply in all material respects with the
provisions of the Act and will not at any such times contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except that this representation and warranty does not
apply to statements in or omissions from the registration statement or
the prospectus made in reliance upon and in conformity with (i)
information relating to any Underwriter furnished to the Company in
writing by or on behalf of such Underwriter expressly for use therein,
or (ii) the Trustee's Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of 1939, as amended (the "1939
Act").
(c) The Incorporated Documents heretofore filed were
filed in a timely manner and, when they were filed (or, if any
amendment with respect to any such document was filed, when such
amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder, and any further Incorporated Documents so filed will, when
they are filed, conform in all material
4
<PAGE> 5
respects with the requirements of the Exchange Act and the rules and
regulations thereunder; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such
amendment was filed), contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and
no such further document, when it is filed, will contain an untrue
statement of a material fact or will omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) The Indenture has been duly and validly authorized
and, upon its execution and delivery by the Company and assuming due
execution and delivery by the Trustee, will be a valid and binding
agreement of the Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency
or other similar laws affecting creditors' rights generally and by
general equitable principles, and has been (or will have been) duly
qualified under the 1939 Act and conforms to the description thereof
in the Registration Statement and the Prospectus.
(e) The Notes have been duly authorized and, when
executed by the Company and authenticated by the Trustee in accordance
with the Indenture and delivered to you against payment therefor in
accordance with the terms hereof, will have been validly issued and
delivered, and will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles, and the Notes will conform to the description thereof in
the Registration Statement and the Prospectus.
(f) All the outstanding shares of Common Stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and are free of any preemptive or similar rights and
were issued and sold in compliance with all applicable federal and
state securities laws. The authorized and outstanding capital stock
of the Company conforms to the description thereof in the Registration
Statement and the Prospectus.
(g) The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the
conduct of its business requires such registration or qualification,
except where any failure or failures so to register or qualify, singly
or in the aggregate, would not have a material adverse effect on the
condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole.
(h) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in an exhibit to the Company's Annual Report
on Form 10-K which is incorporated by reference into the Registration
Statement. Each Subsidiary is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its incorporation,
with full corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or
place where the nature of its properties or the conduct of its business
requires such registration or qualification, except where any failure
or failures so to register or qualify, singly or in the aggregate,
would not have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of
such Subsidiary; all the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and, other than the subsidiaries of
Olsten International B.V. (certain of which are majority-owned
subsidiaries of the Company) and Subsidiaries which operate businesses
in Argentina and Mexico, are owned by the Company directly, or
indirectly through one of the other Subsidiaries, free and clear of any
lien, adverse claim, security interest, equity or other encumbrance.
Other than Olsten Home HealthCare, Inc., Kimberly Home Health Care,
Inc., Olsten Certified HealthCare Corp., IMI Systems, Inc. and Olsten
International B.V. (each, a "Material Subsidiary" and collectively, the
"Material Subsidiaries"), the other Subsidiaries of the Company would
not in the aggregate constitute a "significant subsidiary" as defined
in Regulation S-X promulgated under the Act.
5
<PAGE> 6
(i) There are no legal or governmental proceedings
pending or, to the knowledge of the Company, threatened, against the
Company or any of the Subsidiaries, or to which the Company or any of
the Subsidiaries or any of their respective properties is subject,
that are required to be described in the Registration Statement or the
Prospectus but are not described as required, and except as described
in the Registration Statement or the Prospectus, no pending or
threatened proceedings, individually or in the aggregate, are likely
to have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole. Neither the
Company nor any Subsidiary is involved in any material strike, job
action or labor dispute, and, to the best of the Company's knowledge,
no such action or dispute is threatened. There are no agreements,
contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to
be filed as an exhibit to the Registration Statement or any
Incorporated Document that are not described or filed as required by
the Act or the Exchange Act, and all such agreements and other
instruments are in full force and effect and are binding on the
parties thereto, except as otherwise described in the Prospectus.
(j) Neither the Company nor any of the Subsidiaries is in
violation of its certificate or articles of incorporation or by-laws,
or other organizational documents, or of any law, ordinance,
administrative or governmental rule or regulation applicable to the
Company or any of the Subsidiaries or of any decree of any court or
governmental agency or body having jurisdiction over the Company or
any of the Subsidiaries, or in default in any material respect in the
performance of any obligation, agreement or condition contained in any
bond, debenture, note or any other evidence of indebtedness or in any
material agreement, indenture, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them
or any of their respective properties may be bound, except where any
such violations or defaults, singly or in the aggregate, would not
have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole, and no condition or
state of facts exists, which, with the passage of time or the giving
of notice or both, would constitute such a violation or default.
(k) Neither the issuance, offer, sale or delivery of the
Notes, the execution, delivery or performance of this Agreement and
the Indenture by the Company, compliance by the Company with the
provisions hereof and thereof, nor the consummation by the Company of
the transactions contemplated hereby and thereby (i) requires any
consent, approval, authorization or other order of or registration or
filing with, any court, regulatory body, administrative agency or
other governmental body, agency or official (except such as may be
required for the registration of the Notes under the Act,
qualification of the Indenture under the 1939 Act, and compliance with
the securities or Blue Sky laws of various jurisdictions, all of which
have been or will be effected in accordance with this Agreement), or
(ii) conflicts or will conflict with or constitutes or will constitute
a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the
Company or any of the Subsidiaries or conflicts or will conflict with
or constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any
of their respective properties may be bound, or violates or will
violate any Permit (as hereinafter defined) or any statute, law,
regulation or filing or judgment, injunction, order or decree
applicable to the Company or any of the Subsidiaries or any of their
respective properties, except where any such conflicts, breaches,
defaults or violations, singly or in the aggregate, would not have a
material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole, or (iii) will result in
the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries pursuant
to the terms of any agreement or instrument to which any of them is a
party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
(l) The accountants, Coopers & Lybrand L.L.P., who have
certified or shall certify the financial statements and related
schedules included or incorporated by reference in the Registration
Statement and the Prospectus (or any amendment or supplement thereto)
are independent public accountants as required by the Act and the
Exchange Act.
6
<PAGE> 7
(m) The financial statements, together with related
schedules and notes, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or
supplement thereto), present fairly the consolidated financial
position, results of operations and changes in financial position of
the Company and the Subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective
periods to which they apply; such statements and related schedules and
notes have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and
statistical information and data included or incorporated by reference
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company and the Subsidiaries. The pro forma financial statements
and other pro forma financial information (including the notes
thereto) included or incorporated by reference in the Registration
Statement and the Prospectus (or any amendment or supplement thereto)
present fairly the information shown therein, have been prepared in
accordance with applicable requirements of the Act (including Article
11 of Regulation S-X), have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly computed on the basis described
therein. The assumptions used in preparation of the pro forma
financial statements and other pro forma financial information
included in the Registration Statement and the Prospectus (or any
amendment or supplement thereto) are reasonable, and the adjustments
used therein are reasonably appropriate to give effect to the
transactions or circumstances referred to therein.
(n) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement; the execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and
validly authorized by the Company; and this Agreement has been duly
executed and delivered by the Company and constitutes the valid and
legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as rights to indemnity
and contribution hereunder may be limited by federal or state
securities laws.
(o) Except as disclosed or contemplated in the
Registration Statement and the Prospectus (or any amendment or
supplement thereto), subsequent to the respective dates as of which
such information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), neither the
Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not
in the ordinary course of business, that is material to the Company
and the Subsidiaries taken as a whole, and there has not been any
change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Company or any of the Subsidiaries, or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse
change, in the condition (financial or other), business, prospects,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(p) Except as provided in the Amended and Restated Credit
Agreement, dated as of September 9, 1994, as amended, among the
Company, certain Subsidiaries, the banks signatory thereto and The
Chase Manhattan Bank, N.A., as Agent (the "Credit Agreement"), each of
the Company and the Material Subsidiaries has good and valid title to
all property (real and personal) described in the Prospectus as being
owned by it, free and clear of all liens, claims, security interests
or other encumbrances except such as are described in the Registration
Statement and the Prospectus or in a document filed as an exhibit to
the Registration Statement and except such as would not, singly or in
the aggregate, have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole, and
all the property described in the Prospectus as being held under lease
by each of the Company and the Subsidiaries is held by it under valid,
subsisting and enforceable leases, except where the failure of any
such lease or leases to be valid, subsisting and enforceable would
not, singly or in the aggregate, have a material adverse effect on the
condition (financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries taken as a
whole.
7
<PAGE> 8
(q) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the
distribution of the Notes, will not distribute any offering material
in connection with the offering and sale of the Notes other than the
Registration Statement, the Prepricing Prospectus, the Prospectus or
other materials, if any, permitted by the Act.
(r) The Company and each of the Material Subsidiaries has
such permits, qualifications, licenses, franchises and authorizations
of governmental or regulatory authorities ("Permits") as are necessary
to own its respective properties and to conduct its respective
business in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus and except where
the failure to have any such Permit or Permits would not, singly or in
the aggregate, have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; all
of such Permits are in full force and effect, no proceeding for the
suspension, censure, limitation or termination of any such Permits has
been initiated or threatened, the Company and each of the Material
Subsidiaries has fulfilled and performed all its material obligations
with respect to such Permits, and no event has occurred which allows,
or after notice or lapse of time would allow, revocation or
termination thereof or results, or would result, in any other material
impairment of the rights of the holder of any such Permit, subject in
each case to such qualification as may be set forth in the Prospectus;
and, except as described in the Prospectus, none of such Permits
contains any restriction that is materially burdensome to the Company
or any of the Subsidiaries.
(s) The property, assets and operations of the Company
and the Subsidiaries comply in all material respects with all
applicable federal, state or local laws (including foreign laws),
rules, orders, decrees, judgments, injunctions, licenses, permits or
regulations relating to environmental matters (the "Environmental
Laws"). None of the property, assets or operations of the Company or
the Subsidiaries is the subject of any federal, state or local
investigation evaluating whether any remedial action is needed to
respond to a release of any substance regulated by or form the basis
of liability under any Environmental Laws (a "Hazardous Material")
into the environment or is in contravention of any federal, state,
local or foreign law, order or regulation. Neither the Company nor
any Subsidiary has received any notice or claim, nor to the Company's
knowledge are there any pending or threatened lawsuits against the
Company or any Subsidiary with respect to violations of an
Environmental Law or in connection with the release of any Hazardous
Material into the environment. To the Company's knowledge, neither
the Company nor any Subsidiary has any material contingent liability
in connection with any release of Hazardous Material into the
environment.
(t) The Company and the Subsidiaries maintain insurance
of the types and in amounts generally deemed adequate for their
businesses, all of which insurance is in full force and effect.
(u) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(v) Neither the Company nor any of its Subsidiaries nor,
to the best of the Company's knowledge, any employee or agent of the
Company or any Subsidiary has made any payment of funds of the Company
or any Subsidiary or received or retained any funds in violation of
any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Prospectus.
(w) The Company and each of the Subsidiaries have filed
all tax returns required to be filed, except where the failure to have
filed any such return or returns would not, singly or in the
aggregate, have a material adverse effect on the condition (financial
or other), business, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole; the returns so
filed are complete and correct in all material
8
<PAGE> 9
respects; and neither the Company nor any Subsidiary is in default in
the payment of any taxes which were payable pursuant to said returns
or any assessments with respect thereto, except where any such default
or defaults would not, singly or in the aggregate, have a material
adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole.
(x) No holder of any security of the Company or any other
person has the right, contractual or otherwise, to cause the Company
to sell or otherwise issue to him, or to permit him to underwrite the
sale of, the Notes or the right to have any securities of the Company
included in the registration statement or the right, as a result of
the filing of the registration statement or consummation of the
transactions contemplated by this Agreement, to require registration
under the Act of any securities of the Company.
(y) The Company and the Subsidiaries own or possess
licenses or rights to use all patents, trademarks, trademark
registrations, service marks, service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described
in the Prospectus as being owned or used by any of them and necessary
for the conduct of their respective businesses, and the Company is not
aware of any claim to the contrary or any challenge by any other
person to the rights of the Company and the Subsidiaries with respect
to the foregoing.
(z) Neither the Company nor any of the Subsidiaries is
and, upon sale of the Notes to be issued and sold thereby in
accordance herewith and the application of the net proceeds by the
Company of such sale as described in the Prospectus under the caption
"Use of Proceeds," neither the Company nor any of the Subsidiaries
will be an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(aa) The Company is in compliance with all provisions of
Florida Statutes Section 517.075 and the regulations thereunder,
relating to issuers doing business with Cuba.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the agents, employees, officers and directors of
each Underwriter and each such controlling person, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs
of investigation) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any Prepricing Prospectus or
in the Registration Statement or the Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such Underwriter furnished in writing to the
Company by or on behalf of such Underwriter expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter or any agent, employee, officer or director of such Underwriter or
such controlling person) on account of any such loss, claim, damage, liability
or expense arising from the sale of the Notes by such Underwriter to any person
if a copy of the Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder, and
the untrue statement or alleged untrue statement or omission or alleged
omission of a material fact contained in such Prepricing Prospectus was
corrected in the Prospectus, provided that the Company has delivered the
Prospectus to the several Underwriters in requisite quantity on a timely basis
to permit such delivery or sending. The foregoing indemnity agreement shall be
in addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought against any
person entitled to indemnification pursuant to the preceding paragraph in
respect of which indemnity may be sought against the Company pursuant to the
provisions of the preceding paragraph, such indemnified party shall promptly
notify the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel and payment of all reasonable fees
9
<PAGE> 10
and expenses. Such indemnified party shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the Company has agreed in writing
to pay such fees and expenses, (ii) the Company has failed to assume the
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such indemnified
party and the Company and such indemnified party shall have been advised by its
counsel that representation of such indemnified party and the Company by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the Company shall not have the right to assume the defense of such action,
suit or proceeding on behalf of such Underwriter or such indemnified party).
It is understood, however, that the Company shall, in connection with any one
such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the reasonable
fees and expenses of only one separate firm of attorneys (in addition to any
local counsel) at any time for all such Indemnified Parties not having actual
or potential differing interests with you or among themselves, which firm shall
be designated in writing by Smith Barney Inc., and that all such reasonable
fees and expenses shall be reimbursed as they are incurred. The Company shall
not be liable for any settlement (or for indemnification of the Indemnified
Parties who are parties to such settlement in respect of the subject matter of
such settlement) of any such action, suit or proceeding effected without its
written consent, which consent shall not be unreasonably withheld, but if
settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the Company agrees to
indemnify and hold harmless, to the extent provided in the preceding paragraph,
any indemnified party from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
agents and employees of the Company and each such controlling person, to the
same extent as the foregoing indemnity from the Company to each Underwriter,
but only with respect to information relating to such Underwriter furnished in
writing by or on behalf of such Underwriter expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer, or any
such controlling person, or any agent or employee of the Company or any such
controlling person, based on the Registration Statement, the Prospectus or any
Prepricing Prospectus, or any amendment or supplement thereto, and in respect
of which indemnity may be sought against any Underwriter pursuant to this
paragraph (c), such Underwriter shall have the rights and duties given to the
Company by paragraph (b) above (except that if the Company shall have assumed
the defense thereof such Underwriter shall not be required to do so, but may
employ separate counsel therein and participate in the defense thereof, but the
fees and expenses of such counsel shall be at such Underwriter's expense), and
the Company, any of its directors, any such officer, and any such controlling
person, and any agents and employees of the Company and each such controlling
person shall have the rights and duties given to the Underwriters by paragraph
(b) above. The foregoing indemnity agreement shall be in addition to any
liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other hand from the
offering of the Notes, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company bear to the total underwriting discounts and
commissions
10
<PAGE> 11
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company on the one
hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Notes underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective principal amounts of
Notes set forth opposite their names in Schedule I hereto (or such principal
amounts of Notes increased as set forth in Section 10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any indemnified party, (ii) acceptance of
any Notes and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any indemnified party shall be entitled to the
benefits of the indemnity, contribution and reimbursement agreements contained
in this Section 7.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several obligations
of the Underwriters to purchase the firm Notes hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and
delivered, it is necessary for the registration statement or a
post-effective amendment thereto or an Additional Registration
Statement to be declared effective before the offering of the Notes
may commence, the registration statement or such post-effective
amendment or Additional Registration Statement shall have become
effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in
writing by you, and all filings, if any, required by Rules 424 and
430A under the Act shall have been timely made; no stop order
suspending the effectiveness of the registration statement shall have
been issued and no proceeding for that purpose shall have been
instituted or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for
additional information (to be included in the registration statement
or the prospectus or otherwise) shall have been complied with to your
satisfaction.
11
<PAGE> 12
(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development
involving a prospective change, in or affecting the condition
(financial or other), business, properties, net worth, or results of
operations of the Company or the Subsidiaries not contemplated by the
Prospectus, which in your reasonable opinion would materially
adversely affect the market for the Notes, or (ii) any event or
development relating to or involving the Company or any officer or
director of the Company which makes any material statement made in the
Prospectus untrue or which, in the opinion of the Company and its
counsel or you and your counsel, requires the making of any addition
to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary
in order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development
would, in your reasonable opinion, materially adversely affect the
market for the Notes.
(c) You shall have received on the Closing Date, an
opinion of Gordon Altman Butowsky Weitzen Shalov & Wein, special
counsel for the Company, dated the Closing Date and addressed to you,
to the effect that:
(i) No consent, approval, authorization
or other order of, or registration or filing with, any court,
regulatory body, administrative agency or other governmental
body, agency, or official is required on the part of the
Company (except as have been obtained under the Act, the 1939
Act, and such as may be required under state securities or
Blue Sky laws governing the purchase and distribution of the
Notes) for the valid issuance and sale of the Notes to the
Underwriters as contemplated by this Agreement;
(ii) The Company has corporate power and
authority to enter into this Agreement and to issue, sell and
deliver the Notes to the Underwriters as provided herein, and
this Agreement has been duly authorized, executed and
delivered by the Company and is a valid, legal and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by federal
or state securities laws or principles of public policy and
subject to the qualification that the enforceability of the
Company's obligations hereunder may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium,
and other laws relating to or affecting creditors' rights
generally and by general equitable principles;
(iii) The Indenture has been duly and validly
authorized, executed and delivered by the Company and,
assuming due execution and delivery by the Trustee, is a valid
and binding agreement of the Company, enforceable in
accordance with its terms, except as enforcement thereof may
be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or
affecting creditors' rights generally and by general equitable
principles, and has been duly qualified under the 1939 Act and
conforms in all material respects to the description thereof
in the Registration Statement and the Prospectus;
(iv) The Notes have been duly and validly
authorized and executed by the Company and, assuming due
authentication of the Notes by the Trustee in accordance with
the Indenture, upon delivery to the Underwriters against
payment therefor in accordance with the terms hereof, will
have been validly issued and delivered, and will constitute
valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable in accordance with
their terms, except as enforcement thereof may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors'
rights generally and by general equitable principles, and the
Notes conform in all material respects to the description
thereof in the Registration Statement and the Prospectus;
(v) The authorized and outstanding capital
stock of the Company is as set forth under the caption
"Capitalization" in the Prospectus; and the authorized capital
stock of the Company conforms in all material respects as to
legal matters to the description thereof contained in the
Prospectus;
(vi) The Registration Statement and all
post-effective amendments, if any, have become effective under
the Act and, to the best knowledge of such counsel after
reasonable inquiry, no stop order
12
<PAGE> 13
suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose
are pending before or contemplated by the Commission; and any
required filing of the Prospectus pursuant to Rule 424(b) has
been made in accordance with Rule 424(b); and
(vii) The Registration Statement and the Prospectus
and any supplements or amendments thereto (except for the
financial statements and the notes thereto and the schedules
and other financial and statistical data included therein, as
to which such counsel need not express any opinion) comply as
to form in all material respects with the requirements of the
Act.
In addition to the foregoing opinions, such counsel shall also
state that although they have not undertaken, except as otherwise
indicated in their opinion, to determine independently, and do not
assume any responsibility for, the accuracy, completeness or fairness
of the statements contained in the Registration Statement or the
Prospectus, such counsel have participated in the preparation of the
Registration Statement and the Prospectus, including review and
discussion of the contents thereof (including review and discussion of
the contents of all Incorporated Documents), and nothing has come to
the attention of such counsel that has caused them to believe that the
Registration Statement (including the Incorporated Documents), at the
time the Registration Statement became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus, as of its date and as
of the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or that any
amendment or supplement to the Prospectus, as of its respective date
and as of the Closing Date, included or includes an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no opinion with respect to
the financial statements and the notes thereto and the schedules and
other financial and statistical data included in the Registration
Statement or the Prospectus or any Incorporated Document).
(d) You shall have received on the Closing Date, an
opinion of William P. Costantini, General Counsel of the Company,
dated the Closing Date and addressed to you, to the effect that:
(i) The Company is a corporation validly
existing in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Registration Statement and the Prospectus
(and any amendment or supplement thereto), and is duly
registered and qualified to conduct its business and is in
good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such
registration or qualification, except where any failure or
failures so to register or qualify, singly or in the
aggregate, would not have a material adverse effect on the
condition (financial or other), business, properties, net
worth or results of operations of the Company and the
Subsidiaries taken as a whole;
(ii) Each of the Material Subsidiaries is
a corporation validly existing in good standing under the
laws of the jurisdiction of its organization, with full
corporate power and authority to own, lease, and operate its
properties and to conduct its business as described in the
Registration Statement and the Prospectus (and any amendment
or supplement thereto), and is duly registered and qualified
to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or
the conduct of its business requires such registration or
qualification, except where any failure or failures so to
register or qualify, singly or in the aggregate, would not
have a material adverse effect on the condition (financial or
other), business, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a
whole; and all of the outstanding shares of capital stock of
each of the Material Subsidiaries have been duly authorized
and validly issued, are fully paid and nonassessable, and are
owned by the Company directly, or indirectly through one of
the other Material Subsidiaries, free and clear of any
perfected security interest, or, to the best knowledge of such
counsel after reasonable inquiry, any other security interest,
lien, adverse claim, equity or other encumbrance;
13
<PAGE> 14
(iii) All the shares of capital stock of
the Company outstanding prior to the issuance of the Notes
have been duly authorized and validly issued, and are fully
paid and nonassessable;
(iv) To the best knowledge of such
counsel after reasonable inquiry, neither the Company nor any
of the Subsidiaries is in violation of its respective
certificate or articles of incorporation or bylaws, or other
organizational documents or in default in the performance of
any material obligation, agreement or condition contained in
any material bond, debenture, note or other evidence of
indebtedness, except as may be disclosed in the Prospectus;
(v) Neither the offer, sale or delivery
of the Notes, the execution, delivery or performance of this
Agreement and the Indenture by the Company, compliance by the
Company with the provisions hereof and thereof, nor
consummation by the Company of the transactions contemplated
hereby and thereby, (A) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default
under, the certificate or articles of incorporation or bylaws,
or other organizational documents, of the Company or any of
the Material Subsidiaries or any material agreement,
indenture, lease or other instrument to which the Company or
any of the Material Subsidiaries is a party or by which any of
them or any of their respective properties is bound, or (B)
will result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Company or
any of the Subsidiaries, or (C) will result in any violation
of any existing law, regulation, ruling (assuming compliance
with all applicable state securities and Blue Sky laws),
judgment, injunction, order or decree applicable to the
Company or any of the Material Subsidiaries or any of their
respective properties, except where any such violation or
violations, singly or in the aggregate, would not have a
material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of
the Company and the Subsidiaries taken as a whole;
(vi) Each of the Incorporated Documents
(except for the financial statements and the notes thereto and
the schedules and other financial and statistical data
included therein, as to which counsel need not express any
opinion), when filed, complied as to form in all material
respects with the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder;
(vii) The statements in the Registration
Statement and Prospectus, insofar as they are descriptions of
contracts, agreements or other legal documents, or refer to
statements of law or legal conclusions, are accurate in all
material respects and present fairly the information required
to be shown;
(viii) There are no legal or governmental
proceedings pending or, to such counsel's knowledge,
threatened against the Company or any of the Subsidiaries, or
to which the Company or any of the Subsidiaries or any of
their respective properties is subject, that are required to
be described in the Registration Statement or the Prospectus
but are not described as required, and there are no
agreements, contracts, indentures, leases or other instruments
known to such counsel that are required to be described in the
Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement or any Incorporated
Document that are not described or filed as required by the
Act or the Exchange Act;
(ix) To the best knowledge of such
counsel after reasonable inquiry, neither the Company nor any
of the Subsidiaries is in violation of any law, ordinance,
administrative or governmental rule or regulation applicable
to the Company or any of the Subsidiaries or of any decree of
any court or governmental agency or body having jurisdiction
over the Company or any of the Subsidiaries, except where any
such violation or violations, singly or in the aggregate,
would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or
results of operations of the Company and the Subsidiaries
taken as a whole;
(x) The Company and each of the
Subsidiaries has all such Permits as are necessary to own its
respective properties and to conduct its respective businesses
in the manner described in the Prospectus, subject to such
qualifications as may be set forth in the Prospectus (except
where the failure to so have any such Permits, individually or
in the aggregate, would not have a material adverse effect on
the
14
<PAGE> 15
business, properties, operations or financial condition of the
Company and the Subsidiaries taken as a whole); and to the
best knowledge of such counsel after reasonable inquiry, all
of such Permits are in full force and effect, no proceeding
for the suspension, censure, limitation or termination of any
thereof has been initiated or threatened and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results, or would
result, in any other material impairment of the rights of the
holder of any such Permit, subject in each case to such
qualification as may be set forth in the Prospectus;
(xi) The Company and the Subsidiaries own
or possess licenses or rights to use all patents, trademarks,
trademark registrations, service marks, service mark
registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights described in the Prospectus as being
owned or used by any of them and necessary for the conduct of
their respective businesses, and such counsel is not aware of
any claim to the contrary or any challenge by any other person
to the rights of the Company and the Subsidiaries with respect
to the foregoing;
(xii) Except for (i) long-term incentive
restricted stock awards to certain executive officers
which are subject to shareholder approval and (ii)
225,000 shares of Class B Common Stock issuable to a
franchisee of the Company in connection with a franchise
repurchase agreement, and other than as described in the
Prospectus, there are no outstanding options, warrants or
other rights calling for the issuance of, and such counsel
does not know of any commitment, plan or arrangement to issue,
any shares of capital stock of the Company or any security
convertible into or exchangeable or exercisable for capital
stock of the Company; and
(xiii) No holder of any security of the
Company or any other person has the right, contractual or
otherwise, to cause the Company to sell or otherwise issue to
him, or to permit him to underwrite the sale of, the Notes or
the right to have any securities of the Company included in
the registration statement or the right, as a result of the
filing of the registration statement, to require registration
under the Act of any securities of the Company.
(e) You shall have received on the Closing Date an
opinion of Dewey Ballantine, counsel for the Underwriters, dated the
Closing Date and addressed to you, with respect to the matters
referred to in clauses (ii) through (iv), (vi) and (vii) and the last
paragraph of Section 8(c) hereof and in clause (vi) of Section 8(d)
hereof and such other related matters as you may request.
(f) You shall have received letters addressed to you,
dated the date hereof and the Closing Date, from Coopers & Lybrand
L.L.P., independent certified public accountants, substantially in the
forms heretofore approved by you.
(g) (i) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings
for that purpose shall have been taken or, to the knowledge of the
Company, shall be contemplated by the Commission at or prior to the
Closing Date; (ii) there shall not have been any change in the capital
stock of the Company nor any material increase in the short-term or
long-term debt of the Company (other than in the ordinary course of
business) from that set forth or contemplated in the Registration
Statement or the Prospectus (or any amendment or Supplement thereto);
(iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or
any amendment or supplement thereto), any material adverse change in
the condition (financial or other), business, prospects, properties,
net worth or results of operations of the Company and the Subsidiaries
taken as a whole; (iv) the Company and the Subsidiaries shall not have
any liabilities or obligations, direct or contingent (whether or not
in the ordinary course of business), that are material to the Company
and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectus (or any amendment or
supplement thereto); and (v) all the representations and warranties of
the Company contained in this Agreement shall be true and correct on
and as of the date hereof and on and as of the Closing Date as if made
on and as of the Closing Date, and you shall have received a
certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other
officers as are acceptable to you), to the effect set forth in this
Section 8(g) and in Section 8(h) hereof.
15
<PAGE> 16
(h) There shall not have been any announcement by any
"nationally recognized statistical rating organization", as defined
for purposes of Rule 436(g) under the Act, that (i) it is downgrading
its rating assigned to any class of securities of the Company, or (ii)
it is reviewing its rating assigned to any class of securities of the
Company with a view to possible downgrading, or with negative
implications, or direction not determined.
(i) The Company shall not have failed at or prior to the
Closing Date in any material respect to have performed or complied
with any of its agreements herein contained and required to be
performed or complied with by it hereunder at or prior to the Closing
Date.
(j) You shall have received a certificate dated the
Closing Date signed by the chief accounting officer of the Company
substantially in the form heretofore approved by you, respecting the
Company's compliance with the financial covenants contained in the
Credit Agreement and certain other agreements to which the Company is
a party.
(k) The Company shall have furnished or caused to be
furnished to you such further certificates and documents as you shall
have reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you or to your counsel shall be deemed a representation and
warranty by the Company to each Underwriter as to the statements made therein.
9. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing (or reproduction), and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
each amendment or supplement to any of them, this Agreement, the Indenture and
the Statement of Eligibility and Qualification of the Trustee; (ii) the
printing (or reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Registration
Statement, each Prepricing Prospectus, the Prospectus, the Incorporated
Documents, and all amendments or supplements to any of them, as may be
reasonably requested for use in connection with the offering and sale of the
Notes; (iii) the preparation, printing, authentication, issuance and delivery
of the Notes, including any stamp taxes in connection with the original
issuance of the Notes; (iv) the printing (or reproduction) and delivery of this
Agreement, the preliminary and supplemental Blue Sky Memoranda and all other
agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Notes; (v) the registration or qualification of the
Notes for offer and sale under the securities or Blue Sky laws of the several
states as provided in Section 5(g) hereof (including the reasonable fees,
expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing (or reproduction), and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vi)
the filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc.; (vii) the transportation and other expenses
incurred by or on behalf of the Company and its representatives in connection
with presentations to prospective purchasers of the Notes; (viii) the fees and
expenses of the Trustee; (ix) the fees and expenses associated with obtaining
ratings for the Notes from nationally recognized statistical rating
organizations; (x) the fees and expenses of the Company's accountants; and (xi)
the fees and expenses of counsel (including local and special counsel) for the
Company. In no event shall the Company be liable to an Underwriter for loss of
anticipated profits from transactions contemplated by this Agreement.
10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto or an
Additional Registration Statement to be declared effective before the offering
of the Notes may commence, when notification of the effectiveness of the
registration statement or such post-effective amendment or Additional
Registration Statement has been released by
16
<PAGE> 17
the Commission. Until such time as this Agreement shall have become effective,
it may be terminated by the Company, by notifying each of you, or by you, by
notifying the Company.
If any one or more of the Underwriters shall fail or refuse to
purchase Notes which it or they have agreed to purchase hereunder, and the
aggregate principal amount of the Notes which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of Notes, each non-defaulting
Underwriter shall be obligated, severally, in the proportion which the
aggregate principal amount of Notes set forth opposite its name in Schedule I
hereto bears to the aggregate principal amount of Notes set forth opposite the
names of all non-defaulting Underwriters or in such other proportion as you may
specify in accordance with Section 20 of the Master Agreement Among
Underwriters of Smith Barney, Harris Upham & Co. Incorporated (predecessor to
Smith Barney Inc.), to purchase the Notes which such defaulting Underwriter or
Underwriters agreed, but failed or refused, to purchase. If any Underwriter or
Underwriters shall fail or refuse to purchase Notes and the aggregate principal
amount of Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Notes and arrangements
satisfactory to you and the Company for the purchase of such Notes are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any such
default of any such Underwriter under this Agreement.
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date, (i) trading in the Common Stock of the Company shall be suspended or
subject to any restriction or limitation not in effect on the date of this
Agreement; (ii) trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market shall have been
suspended or materially limited, (iii) a general moratorium on commercial
banking activities in New York shall have been declared by either federal or
state authorities, or (iv) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your
reasonable judgment, impracticable or inadvisable to commence or continue the
offering of the Notes on the terms set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Notes by the
Underwriters.
Notice of such termination may be given by telegram, telecopy or
telephone and shall be subsequently confirmed by letter.
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside cover page, and the statements in the first and third paragraphs under
the caption "Underwriting" in any Prepricing Prospectus and in the Prospectus,
constitute the only information furnished by or on behalf of the Underwriters
as such information is referred to in Sections 6(b) and 7 hereof.
13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to Company, at the office of
Company at 175 Broad Hollow Road, Melville, New York 11747, Attention: William
P. Costantini, Senior Vice President and General Counsel, fax no. (516)
844-7266, or (ii) if to you, in care of Smith Barney Inc., 388 Greenwich
Street, New York, New York 10013, Attention: Manager, Corporate Finance
Division, fax no. (212) 816-7780.
17
<PAGE> 18
This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall include a purchaser from any Underwriter of any of the Notes in
his status as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
18
<PAGE> 19
Please confirm that the foregoing correctly sets forth the agreement
between the Company and each of you.
Very truly yours,
OLSTEN CORPORATION
By ........................................
Chairman and Chief Executive Officer
Confirmed as of the date first
above mentioned.
SMITH BARNEY INC.
CHASE SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
By SMITH BARNEY INC.
By ...........................................
Managing Director
19
<PAGE> 20
SCHEDULE I
OLSTEN CORPORATION
<TABLE>
<CAPTION>
Principal Amount
Underwriter of Notes
- ----------- ----------------
<S> <C>
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . . . $
Chase Securities, Inc.
Prudential Securities Incorporated . . . . . . . . . . . . . . . .
------------
Total . . . . . . . . . . . . . . . . . . . . . . . . $200,000,000
============
</TABLE>
20
<PAGE> 1
Draft of 3/4/96
================================================================================
OLSTEN CORPORATION, as Issuer
and
FIRST UNION NATIONAL BANK, as Trustee
--------------------------
INDENTURE
Dated as of March 15, 1996
--------------------------
$200,000,000
_____% Senior Notes due 2006
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1105. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Miscellaneous Provisions . . . . . . . . . . . . 48
SECTION 1106. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
v
<PAGE> 7
OLSTEN CORPORATION
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- -------------- ---------
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . 1004
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . . 514
</TABLE>
vi
<PAGE> 8
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- -------------- ---------
<S> <C>
Section 316(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . Not
Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . 104(c)
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
- ------------------
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 ___% 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
<PAGE> 10
(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.
"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 in Newark, New Jersey or such other office at which at any
particular time its corporate trust business shall be administered.
"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 money secured by any mortgage, pledge or other lien or encumbrance
upon
3
<PAGE> 12
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 to this Indenture, other than any
such Securities in respect of which there shall have been
4
<PAGE> 13
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 ____% 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 a 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 its Corporate Trust Office, Attention:
Corporate Trust Administration 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
_____% 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 ___% 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.
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 in Newark, New Jersey or at such other office or agency
11
<PAGE> 20
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 _____% 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 in Newark, New Jersey 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 "_____%
Senior Notes due 2006" of the Company. Their Stated Maturity shall be March
15, 2006 and they shall bear interest at the rate of _____% 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 in Newark, New Jersey 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 in Newark, New Jersey 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; 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 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
23
<PAGE> 32
(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,
(C) to the extent that payment of such interest
is lawful, interest upon overdue interest at the rate borne by
the Securities, and
24
<PAGE> 33
(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 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
30
<PAGE> 39
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
(h) 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 and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith; and
31
<PAGE> 40
(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.
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 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.
32
<PAGE> 41
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 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.
33
<PAGE> 42
(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 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
34
<PAGE> 43
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 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
35
<PAGE> 44
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 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 ____________, 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 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 evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities; or
(4) to cause the Indenture and the Securities to comply
with applicable law, including the Trust Indenture Act; or
(5) 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 (5) 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
in Newark, New Jersey as its agent where Securities may be presented or
surrendered for payment, whereby 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 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 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
------------------------------
Name:
Title:
Attest:
- ---------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
--------------------------------
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
50
<PAGE> 59
STATE OF NEW YORK )
) ss.:
COUNTY OF NASSAU )
On the _______ day of ________________, 1996 before me
personally came ________________________, to me known, who, being by me duly
sworn, did depose and say that [HE/SHE] is ___________________________ of
Olsten Corporation, one of the corporations described in and which executed the
foregoing instrument; that [HE/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
[HE/SHE] signed [HIS/HER] name thereto by like authority.
---------------------------------
STATE OF )
) ss.:
COUNTY OF )
On the ___________ day of _________________, 1996, before me
personally came ________________________________, to me known, who, being by me
duly sworn, did depose and say that [HE/SHE] is ___________________________ of
First Union National Bank, one of the corporations described in and which
executed the foregoing instrument; that [HE/ 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 [HE/SHE] signed [HIS/HER] name thereto by like authority.
---------------------------------
51
<PAGE> 1
March 4, 1996
Olsten Corporation
175 Broad Hollow Road
Melville, NY 11747
Re: Olsten Corporation -- Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as special federal securities law counsel for Olsten
Corporation, a Delaware corporation (the "Company"), in connection with the
Company's registration statement on Form S-3 being filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the offering by the Company of $200,000,000
aggregate principal amount of ___% Senior Notes due 2006 (the "Notes"). The
Notes will be sold to the public in an underwritten public offering by Smith
Barney Inc., Chase Securities, Inc. and Prudential Securities Incorporated
(collectively, the "Underwriters").
We have examined such corporate records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, it is our opinion that when: (i)
the registration statement on Form S-3 relating to the Notes, as the same may be
amended from time to time (the "Registration Statement") has become effective
under the Act; (ii) the indenture (the "Indenture"), in the form as filed as
exhibit 4.1 to the Registration Statement, between the Company and First Union
National Bank (the "Trustee") relating to the Notes, has been duly authorized,
executed and delivered by the Company and the Trustee; (iii) the terms of the
Notes and of their issuance and sale have been duly established in conformity
with the Indenture so as not to violate any applicable law or
<PAGE> 2
Olsten Corporation
March 4, 1996
Page 2
result in a default under or breach of any agreement or instrument binding upon
the Company and so as to comply with any requirement or restriction by any court
or governmental body having jurisdiction over the Company; and (iv) the Notes
have been duly executed and authenticated in accordance with the Indenture and
issued and sold as contemplated in the Registration Statement, the Notes will
constitute valid and legally binding obligations of the Company, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and except that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and the discretion of the court before which any
proceedings may be brought.
In rendering the foregoing opinion, we are expressing no opinion as to
federal or state laws relating to fraudulent transfers. The foregoing opinion is
limited to the federal laws of the United States, the laws of the State of New
York and the General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other jurisdiction.
We have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to be
responsible, and we have assumed that the Indenture will be duly authorized,
executed and delivered by the Trustee thereunder.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Act or the rules and
regulations of the Commission thereunder.
<PAGE> 3
Olsten Corporation
March 4, 1996
Page 3
This opinion is solely for the benefit of the addressee hereof and may
not be relied upon by any other person without our prior written consent.
Very truly yours
/s/ GORDON ALTMAN BUTOWSKY WEITZEN
SHALOV & WEIN
<PAGE> 1
Exhibit 12.1
OLSTEN CORPORATION AND SUBSIDIARIES
-----------------------------------
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratio data)
<TABLE>
<CAPTION>
Dec. 29, Jan. 3, Jan. 2, Jan. 1, Dec. 31,
1991 1993 1994 1995 1995
-------- ------- ------- ------- --------
$ $ $ $ $
<S> <C> <C> <C> <C> <C>
Earnings available for fixed charges:
Income before income taxes, minority
interests and extraordinary charge 13,452 49,757 3,279 122,905 156,188
Add, fixed charges 31,462 34,107 34,766 21,653 20,248
------ ------ ------ ------- -------
Total (A) 44,914 83,864 38,045 144,558 176,436
====== ====== ====== ======= =======
Fixed charges:
Interest 20,462 22,107 21,244 9,178 8,564
Interest portion of net rent expense* 11,000 12,000 13,522 12,475 11,684
------ ------ ------ ------- -------
Total (B) 31,462 34,107 34,766 21,653 20,248
====== ====== ====== ======= =======
Earnings after fixed charges (A-B) 13,452 49,757 3,279 122,905 156,188
====== ====== ====== ======= =======
Coverage (A/B) 1.4x 2.5x 1.1x 6.7x 8.7x
====== ====== ====== ======= =======
</TABLE>
- -------------
*One-third of rent expense is deemed by the Company as representative of the
interest factor in the rentals.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement of
Olsten Corporation on Form S-3 (Registration No. 33- ) of our report dated
February 7, 1996, on our audits of the consolidated financial statements of
Olsten Corporation and Subsidiaries as of December 31, 1995 and January 1,
1995, and for each of the three years in the period ended December 31, 1995,
which report is included in the Company's Annual Report on Form 10-K. We also
consent to the reference to our Firm under the caption "Experts."
/s/ COOPERS & LYBRAND L.L.P.
New York, New York
March 1, 1996
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) __
FIRST UNION NATIONAL BANK
(Name of Trustee)
22-1147033
(I.R.S. Employer Identification No.)
101 NORTHSIDE PLAZA, ELKTON, MARYLAND
(Address of Principal Executive Offices)
21921
(Zip Code)
OLSTEN CORPORATION
(Exact name of registrans as specified in their charters)
DELAWARE
(State of Incorporation)
13-2610512
(I.R.S. Employer Identification No.)
175 Broad Hollow Road
Melville, NY 11747-8905
(Address of Principal Executive Offices)
<PAGE> 2
DEBT SECURITIES
(Title of Indenture Securities)
1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT:
Comptroller of the Currency
United States Department of the Treasury
Washington, D.C. 20219
Federal Reserve Bank (3rd District)
Philadelphia, Pennsylvania 19106
Federal Deposit Insurance Corporation
Washington, D.C. 20429
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE:
Not applicable - see answer to item 13.
2
<PAGE> 3
4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
Not applicable - see answer to item 13.
5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR
OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE
TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR REPRESENTATIVE
OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH PERSON
HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH CONNECTION.
Not applicable - see answer to item 13.
6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER, AND
EXECUTIVE OFFICER OF THE OBLIGOR:
Not applicable - see answer to item 13.
7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER, AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER:
Not applicable - see answer to item 13.
8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO SECURITIES OF THE OBLIGOR
OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT
BY THE TRUSTEE:
Not applicable - see answer to item 13.
9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE:
Not applicable - see answer to item 13.
3
<PAGE> 4
10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10 PERCENT OR MORE OF THE VOTING STOCK OF THE OBLIGOR OR
(2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON:
Not applicable - see answer to item 13.
11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF THE
TRUSTEE, OWNS 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH PERSON
ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE:
Not applicable - see answer to item 13.
12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
Not applicable - see answer to item 13.
4
<PAGE> 5
13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO
THE SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
None.
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER
WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY
OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN
ONE OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE
HAS BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE
OR SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
None.
14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
Not applicable - see answer to item 13.
15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE TRUSTEE IS AUTHORIZED
TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED UNDER THE
ACT.
Not applicable - trustee is a national banking association organized
under the laws of the United States.
16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
X 1. Copy of Articles of Association of the trustee as now in effect.
- ---
5
<PAGE> 6
2. Copy of the Certificate of the Comptroller of the Currency dated
- --- January 11, 1994, evidencing the authority of the trustee to
transact business.*
3. Copy of the authorization of the trustee to exercise fiduciary
- --- powers.*
X 4. Copy of existing by-laws of the trustee.
- ---
5. Copy of each indenture referred to in Item 4, if the obligor is in
- --- default, not applicable.
X 6. Consent of the trustee required by Section 321(b) of the Act.
- ---
X 7. Copy of report of condition of the trustee at the close of business
- --- on September 30, 1995, published pursuant to the requirements of its
supervising authority.
8. Copy of any order pursuant to which the foreign trustee is
- --- authorized to act as sole trustee under indentures qualified or to
be qualified under the Act, not applicable.
9. Consent to service of process required of foreign trustees pursuant
- --- to Rule 10a-4 under the Act, not applicable.
- ------------
*Previously filed with the Securities and Exchange Commission on
February 11, 1994 as an exhibit to Form T-1 in connection with Registration
Statement No. 22-73340 and incorporated herein by reference.
6
<PAGE> 7
NOTE
The trustee disclaims responsibility for the accuracy or completeness
of information contained in this Statement of Eligibility and Qualification not
known to the trustee and not obtainable by it through reasonable investigation
and as to which information it has obtained from the obligor and has had to
rely or will obtain from the principal underwriters and will have to rely.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, First Union National Bank, a national banking association organized
and existing under the laws of the United States of America, has duly caused
this Statement of Eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Elkton and State of Maryland, on
the 28th day of February 1996.
FIRST UNION NATIONAL BANK
By:
--------------------------------
Stephanie Roche
Vice President
7
<PAGE> 8
EXHIBIT 1
FIRST UNION NATIONAL BANK (EFF. 1/1/96)
(formerly First Fidelity Bank, National Association)
BYLAWS
ADOPTED: JANUARY 10, 1994; AMENDED APRIL 19, 1994
-----------
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meeting. The regular annual meeting of the
shareholders for the election of directors and transaction of whatever other
business may properly come before the meeting, shall be held at the Main Office
of the Association, or such other place as the Board of Directors may
designate, at 10:00 A.M., on the second Thursday of April of each year or such
other time within 90 days as may be set by the Board of Directors. If, from
any cause, an election of directors is not made on the said day, the Board of
Directors shall order the election to be held on some subsequent day, as soon
thereafter as practicable, according to the provisions of the law; and notice
thereof shall be given in the manner herein provided for the annual meeting.
Section 1.2. Special Meetings. Except as otherwise specifically provided
by statute, special meetings of the shareholders may be called for any purpose
at any time by the Board of Directors or by any one or more shareholders
owning, in the aggregate, not less than twenty-five percent of the stock of the
Association.
Section 1.3. Notice of Meetings. Notice of Annual and Special meetings
shall be mailed, postage prepaid, at least ten days prior to the date thereof,
addressed to each shareholder at his address appearing on the books of the
Association; but any failure to mail such notice, or any irregularity therein,
shall not affect the validity of such meeting,
<PAGE> 9
or of any of the proceedings thereat. A shareholder may waive any such notice.
Section 1.4. Organization of Meetings. The Chairman shall preside at all
meetings of shareholders. In his absence, the President, or a director
designated by the Chairman shall preside at such meeting.
Section 1.5. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing. Proxies shall be valid
only for one meeting to be specified therein, and any adjournments of such
meeting. Proxies shall be dated and shall be filed with the records of the
meeting.
Section 1.6. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law. A majority of the votes cast
shall decide every question or matter submitted to the shareholders at any
meeting, unless otherwise provided by law or by the Articles of Association.
ARTICLE II
Directors
Section 2.1. Board of Directors. The Board of Directors (hereinafter
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law,
all corporate powers of the Association shall be
9
<PAGE> 10
vested in and may be exercised by said Board.
Section 2.2. Number. The Board shall consist of not less than five nor
more than twenty-five persons, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full Board or by resolution of the shareholders at any meeting thereof;
provided, however, that a majority of the full Board may not increase the
number of directors to a number which: (a) exceeds by more than two the number
of directors last elected by shareholders where such number was fifteen or
less; and (b) to a number which exceeds by more than four the number of
directors last elected by shareholders where such number was sixteen or more,
but in no event shall the number of directors exceed twenty-five.
Section 2.3. Organization Meeting. A meeting shall be held for the
purpose of organizing the new Board and electing and appointing officers of the
Association for the succeeding year on the day of the Annual Meeting of
Shareholders or as soon thereafter as practicable, and, in any event, within
thirty days thereof. If, at the time fixed for such meeting, there shall not
be a quorum present, the directors present may adjourn the meeting, from time
to time, until a quorum is obtained.
Section 2.4. Regular Meetings. The regular meetings of the Board shall
be held on such days and time as the directors may, by resolution, designate;
and written notice of any change thereof shall be sent to each member. When
any regular meeting of the Board falls upon a legal holiday,
10
<PAGE> 11
the meeting shall be held on such other day as the Board may designate.
Section 2.5. Special Meetings. Special meetings of the Board may be
called by the Chairman of the Board, or President, or at the request of three
or more directors. Each director shall be given notice of each special
meeting, except the organization meeting, at least one day before it is to be
held by facsimile, telephone, telegram, letter or in person. Any director may
waive any such notice.
Section 2.6. Quorum. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but a less number
may adjourn any meeting, from time to time, and the meeting may be held, as
adjourned without further notice.
Section 2.7. Term of Office and Vacancy. Directors shall hold office for
one year and until their successors are elected and have qualified. No person
shall stand for election as a director of this Association if at the date of
his election he will have passed his seventieth birthday; provided, however,
this prohibition shall not apply to persons who are active officers of this
Association, an affiliate bank, or its parent corporation, or a former chief
executive officer of the Association. No person, who is not an officer or
former officer of this Association, an affiliate bank, or its parent
corporation and who has discontinued the principal position or activity the
person held when initially elected, shall be recommended to the shareholders
for reelection; provided, however, that exceptions may be made because of a
change in principal position or activity which would be compatible with
continued service to this Association. No person elected as a director may
exercise any of the powers of his office until he has taken the oath of office
as prescribed by law. When any vacancy occurs among the
11
<PAGE> 12
directors, the remaining members of the Board, in accordance with the laws of
the United States, may appoint a director to fill such vacancy at any regular
meeting of the Board, or at a special meeting called for that purpose.
Section 2.8. Nominations. Nominations for election to the Board may be
made by the Executive Committee or by any stockholder of any outstanding class
of capital stock of the Association entitled to vote for the election of
directors.
Section 2.9. Communications Equipment. Any or all directors may
participate in a meeting of the Board by means of conference telephone or any
means of communication by which all persons participating in the meeting are
able to hear each other.
Section 2.10. Action Without Meeting. Any action required or permitted
to be taken by the Board or committee thereof by law, the Association's
Articles of Association, or these Bylaws may be taken without a meeting, if,
prior or subsequent to the action, all members of the Board or committee shall
individually or collectively consent in writing to the action. Each written
consent or consents shall be filed with the minutes of the proceedings of the
Board or committee. Action by written consent shall have the same force and
effect as a unanimous vote of the directors, for all purposes. Any certificate
or other documents which relates to action so taken shall state that the action
was taken by unanimous written consent of the Board or committee without a
meeting.
ARTICLE III
Committees of the Board
Section 3.1. Executive Committee. The Board may by resolution
12
<PAGE> 13
adopted by a majority of the entire Board designate an Executive Committee
consisting of the Chairman of the Board, the President, and not less than two
other directors. Subject to the national banking laws and the Association's
Articles of Association, the Executive Committee may exercise all the powers of
the Board of Directors with respect to the affairs of the Association, except
that the Executive Committee may not:
1. (a) exercise such powers while a quorum of the Board of Directors is
actually convened for the conduct of business,
(b) exercise any power specifically required to be exercised by at
least a majority of all the directors,
(c) act on matters committed by the Bylaws or resolution of the Board
of Directors to another committee of the board, or
(d) amend or repeal any resolution theretofore adopted by the Board of
Directors which by its terms is amendable or repealable only by the Board;
2. amend the Articles of Association or make, alter or repeal any Bylaw
of the Association;
3. elect or appoint any director, create or fill any vacancies in the
Board of Directors or remove any director, or authorize or approve any change
in the compensation of any officer of the Association who is also a director of
the Association;
4. authorize or approve issuance or sale or contract for sale of shares
of stock of the Association, or determine the designation and relative rights,
preferences and limitations of a class or series of shares;
5. adopt an agreement of merger or consolidation, or submit to
shareholders any action that requires shareholder approval, including any
13
<PAGE> 14
recommendation to the shareholders concerning the sale, lease or exchange of
all or substantially all the Association's property and assets, a dissolution
of the Association or a revocation of a previously approved dissolution; or
6. authorize an expenditure by the Association in excess of $10 million
for any one item or group of related items. The committee shall hold regular
meetings at such times as the members shall agree and whenever called by the
chairman of the committee. A majority of the committee shall constitute a
quorum for the transaction of business. The committee shall keep a record of
its proceedings and shall report these proceedings to the Board at the regular
meetings thereof. The committee shall serve as the nominating committee for
nominations to the Board. The committee shall provide oversight on all
Community Reinvestment Act ("CRA") matters pertaining to the Association. The
committee shall also be responsible for monitoring the CRA activities of the
Association on an on-going basis and making periodic reports on such CRA
activity to the Board.
Section 3.2. Chairman of the Executive Committee. The Board may
designate one of its members to be Chairman of the Executive Committee who
shall preside at the meetings thereof and shall perform such duties as the
Board shall assign to him from time to time.
Section 3.3. Audit Committee. The Board shall appoint a committee of
three or more persons exclusive of the officers of this Association which
committee shall be known as the Audit Committee. It shall be the duty of this
committee at least once in every twelve months to examine the affairs of the
Association, and determine whether it is in a sound and solvent condition and
to recommend to the Board such changes in the manner
14
<PAGE> 15
of doing business, etc., as may seem to be desirable. The committee may cause
such examination to be made in its behalf and under its supervision by outside
accountants and may also use the services of any other persons either inside or
outside the Association to assist in its work. The results of each examination
shall be reported in writing to the Board.
Section 3.4. Audit of Trust Department. The Audit Committee shall, at
least once during each calendar year and within fifteen months of the last such
audit make suitable audits of the Trust Department or cause suitable audits to
be made by auditors responsible only to the Board, and at such time shall
ascertain whether the department has been administered in accordance with law,
Part 9 of the Regulations of the Comptroller of the Currency, and sound
fiduciary principles. In lieu of such periodic audit the Audit Committee, at
the election of the Board, may conduct or cause to be conducted by auditors
responsible only to the Board an adequate continuous audit system adopted by
the Board. A written report of such periodic or continuous audit shall be made
to the Board.
Section 3.5. Other Committees. The Board may appoint from time to time
other committees composed of one or more persons each, for such purposes and
with such powers as the Board may determine. The Chairman of the Board shall
have the power to designate another person to serve on any committee during the
absence or inability of any member thereof so to serve.
Section 3.6. Directors' Emeritus. The Board may designate one or more
persons to serve as Director Emeritus. Such Director Emeritus shall have the
right to attend any and all meetings of the Board, but shall have no vote at
such meetings. A person designated as Director Emeritus may
15
<PAGE> 16
serve in that capacity for a period of three years.
Section 3.7. Alternate Committee Members. The Board may, from time to
time, appoint one or more, but no more than three persons to serve as alternate
members of a committee, each of whom shall be empowered to serve on that
committee in place of a regular committee member in the event of the absence or
disability of that committee member. An alternate committee member shall, when
serving on a committee, have all of the powers of a regular committee member.
Alternate committee members shall be notified of, and requested to serve at, a
particular meeting or meetings, or for particular periods of time, by or at the
direction of the chairman of the committee or the Chairman of the Board.
ARTICLE IV
Officers
Section 4.1a. Appointment. The senior officers of this Association shall
be chosen by the Board and shall be the Chairman of the Board, one or more Vice
Chairmen, the President, the Chief Financial Officer and such other officers as
in the judgment of the Board may be from time to time required. The Chairman
of the Board and the President shall be chosen from the Directors. The Board
may designate a person to serve as secretary of all meetings of the Board and
of the shareholders and the persons so designated shall keep accurate minutes
of such meetings.
Section 4.1b. Other Officers. The Chairman, the President, the Chief
Executive Officer, any Vice Chairman or any Senior Executive Vice
16
<PAGE> 17
President may appoint such other officers with such titles and duties as he may
designate.
Section 4.2. Term of Office. The officers who are required by the
articles of association or the bylaws to be members of the Board shall hold
their respective offices until the Organization meeting of the Board following
the annual meeting of shareholders or until their respective successors shall
have been elected, unless they shall resign, become disqualified or be removed
from office. Each other officer shall hold office at the pleasure of the
Board. Any officer may be removed at any time by the Board.
Section 4.3. Chairman of the Board. The chairman of the board shall be
designated as Chairman of the Board. He shall preside at all meetings of the
stockholders and directors and he shall be a member of all committees of the
Board except the Audit Committee. He shall have such other powers and perform
such other duties as may be prescribed from time to time by the Board. He
shall be subject only to the direction and control of the Board.
Section 4.4. President. The president shall be the chief executive
officer of the Association and he shall be designated as President and Chief
Executive Officer. In the absence of the Chairman the President shall preside
at all meetings of the Board. The President shall be a member of each
committee of the Board except the Audit Committee. He shall have the powers
and perform the duties conferred or imposed upon the President by the national
banking laws, and he shall have such other powers and perform such other duties
as may from time to time be imposed
17
<PAGE> 18
upon or assigned to him by the Board.
Section 4.5. Chief Financial Officer. The Chief Financial Officer shall
have such title as may be designated by the Board and he shall be responsible
for all monies, funds and valuables of this Association, provide for the
keeping of proper records of all transactions of the Association, report to the
Board at each regular meeting the condition of the Association, submit to the
Board, when requested, a detailed statement of the income and expenses, be
responsible for the conduct and efficiency of all persons employed under him,
and perform such other duties as may be from time to time assigned to him by
the Board.
Section 4.6. Other Officers. All other officers shall respectively
exercise such powers and perform such duties as generally pertain to their
several offices, or as may be conferred upon or assigned to them by the Board,
the Chairman of the Board or the President.
Section 4.7. Bond. Each officer and employee, if so required by the
Board, shall give bond with surety to be approved by the Board, conditioning
for the honest discharge of his duties as such officer or employee. In the
discretion of the Board, such bonds may be individual, schedule or blanket
form, and the premiums may be paid by the Association.
ARTICLE V
Trust Department
Section 5.1. Trust Department. There shall be a department of the
Association known as the Trust Department which shall perform the fiduciary
responsibilities of the Association.
18
<PAGE> 19
Section 5.2. Trust Officer. There shall be a Trust Officer of this
Association whose duties shall be to manage, supervise and direct all the
activities of the Trust Department. Such persons shall do or cause to be done
all things necessary or proper in carrying on the business of the Trust
Department in accordance with the provisions of law and applicable regulations;
and shall act pursuant to opinion of counsel where such opinion is deemed
necessary. Opinions of counsel shall be retained on file in connection with
all important matters pertaining to fiduciary activities. The Trust Officer
shall be responsible for all assets and documents held by the Association in
connection with fiduciary matters. The Trust Officer shall perform such other
duties and possess such other powers as from time to time shall be delegated to
him by the Chief Executive Officer, the Board, the Executive Committee or these
bylaws. The President may appoint such other officers of the Trust Department
as it may deem necessary or advisable with such duties as may be assigned and
with such titles as may be designated.
Section 5.3. Trust Investment. Funds held in a fiduciary capacity shall
be invested in accordance with the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify the
character and class of the investments to be made and does not vest in the
Association a discretion in the matter, funds held pursuant to such instrument
shall be invested in investments in which corporate fiduciaries may invest
under local law.
ARTICLE VI
Stock Certificates and Transfers
19
<PAGE> 20
Section 6.1. Stock Certificates. Ownership of capital stock of the
Association shall be evidenced by certificates of stock signed by the Chairman
or President, and the Secretary, or an Assistant Secretary. Each certificate
shall state upon its face that the stock is transferable only upon the books of
the Association by the holder thereof, or by duly authorized attorney, upon the
surrender of such certificate, and shall meet the requirements of Section 5139,
United States Revised Statutes, as amended.
Section 6.2. Transfers. The stock of this Association shall be
assignable and transferable only on the books of this Association, subject to
the restrictions and provisions of the national banking laws; and a transfer
book shall be provided in which all assignments and transfers of stock shall be
made. When stock is transferred, the certificates thereof shall be returned to
the Association, canceled, preserved and new certificates issued.
Section 6.3. Dividends. Dividends shall be paid to the shareholders in
whose names the stock shall stand at the close of business on the day next
preceding the date when the dividends are payable, provided, however, that the
directors may fix another date as a record date for the determination of the
shareholders entitled to receive payment thereof.
ARTICLE VII
Increase of Stock
20
<PAGE> 21
Section 7.1. Capital Stock. Shares of the capital stock of the
Association, which have been authorized but not issued, may be issued from time
to time for such consideration, not less than the par value thereof, as may be
determined by the Board.
ARTICLE VIII
Corporate Seal
Section 8.1. Seal. The seal, an impression of which appears below, is
the seal of the Association as adopted by the Board of Directors:
[Seal]
The Chairman of the Board, the Vice Chairman, the President, Senior
Executive Vice President, Executive Vice President, Senior Vice President, Vice
President, each Assistant Vice President, the Chief Financial Officer, the
Secretary, each Assistant Secretary, each Trust Officer, each Assistant Trust
Officer or each Assistant Cashier, shall have the authority to affix the
corporate seal of this Association and to attest to the same.
ARTICLE IX
Miscellaneous Provisions
Section 9.1. Fiscal Year. The fiscal year of the Association shall be the
calendar year.
Section 9.2. Execution of Instruments. All agreements, contracts,
21
<PAGE> 22
indentures, mortgages, deeds, conveyances, transfers, certificates,
declarations, receipts, discharges, releases, satisfactions, settlements,
petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and
other instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the
Board, or any Vice Chairman, or the President, or Senior Executive Vice
President, or Executive Vice President, or Senior Vice President, or Vice
President, or Assistant Vice President, or Chief Financial Officer, or the
Secretary, or Assistant Secretary, or, if in connection with the exercise of
fiduciary powers of the Association, by any of said officers or by any Trust
Officer or Assistant Trust Officer, to the extent authorized by the corporate
policy of the Association, as adopted and modified from time to time. Any such
instruments may also be executed, acknowledged, verified, delivered, or
accepted in behalf of the Association in such other manner and by such other
officers as the Board may from time to time direct.
Section 9.3. Records. The organization papers of this Association, the
articles of association, the bylaws and any amendments thereto, the proceedings
of all regular and special meetings of the shareholders and of the directors,
the returns of the judges of elections, and the reports of the committees of
directors shall be recorded in an appropriate minute book, and the minutes of
each meeting shall be signed by the Secretary or any other officer appointed to
act as secretary of the meeting.
Section 9.4. Banking Hours. This Association and its branch offices
shall be open on such days and during such hours as shall be fixed from
22
<PAGE> 23
time to time by the Board.
Section 9.5. Voting Shares of Other Corporations. The Chairman, any Vice
Chairman, the President, or any Vice President is authorized to vote, represent
and exercise on behalf of this Association all rights incident to any and all
shares of stock of any other corporation standing in the name of the
Association. The authority granted herein may be exercised by such officers in
person or by proxy or by power of attorney duly executed by said officer.
ARTICLE X
Bylaws
Section 10.1. Inspection. A copy of the Bylaws, with all amendments
thereto, shall at all times be kept in a convenient place at the Head Office of
the Association, and shall be open for inspection to all shareholders, during
banking hours.
Section 10.2. Amendments. These Bylaws may be changed or amended at any
regular or special meeting of the Board by the vote of a majority of the
Directors.
23
<PAGE> 24
FIRST UNION NATIONAL BANK EXHIBIT 4
ARTICLES OF ASSOCIATION
(EFFECTIVE JANUARY 1,1996)
For purposes of organizing an Association to carry on the business of
banking under the laws of the United States, the undersigned do enter into the
following Articles of Association:
FIRST. The title of this Association shall be First Union National Bank.
SECOND. The Main Office of the Association shall be in Elkton, County of
Cecil, State of Maryland. The general business of the Association shall be
conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five persons, the exact number to be fixed
and determined from time to time by resolution of a majority of the full Board
of Directors or by resolution of the shareholders at any annual or special
meeting thereof. Each Director, during the full term of his directorship,
shall own a minimum of (a) $1,000 par value of stock of this Association or (b)
preferred or common stock of First Fidelity Bancorporation having (i) aggregate
par value equal to or greater than $1,000, (ii) aggregate shareholders' equity
equal to or greater than $1,000 or (iii) aggregate fair market value equal to
or greater than $1,000. Any vacancy in the Board of Directors may be filled by
action of the Board of Directors.
FOURTH. There shall be an annual meeting of the shareholders the purpose
of which shall be the election of Directors and the transaction of whatever
other business may be brought before said meeting. It shall be held at the
main office or other convenient place as the Board of
24
<PAGE> 25
Directors may designate, on the day of each year specified therefor in the
By-laws, but if no election is held on that day, it may be held on any
subsequent day according to such lawful rules as may be presented by the Board
of Directors.
FIFTH. (A) General. The amount of capital stock of this Association
shall be (i) 25,000,000 shares of common stock of the par value of twenty
dollars ($20.00) each (the "Common Stock") and (ii) 160,540 shares of preferred
stock of the par value of one dollar ($1.00) each (the "Non-Cumulative
Preferred Stock"), having the rights, privileges and preferences set forth
below, but said capital stock may be increased or decreased from time to time
in accordance with the provisions of the laws of the United States.
(B) Terms of the Non-Cumulative Preferred Stock.
1. General. Each share of Non-Cumulative Preferred Stock shall be
identical in all respects with the other shares of Non-Cumulative Preferred
Stock. The authorized number of shares of Non-Cumulative Preferred Stock may
from time to time be increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of Non-Cumulative Preferred
Stock redeemed by the Association shall be canceled and shall revert to
authorized but unissued shares of Non-Cumulative Preferred Stock.
25
<PAGE> 26
2. Dividends.
(a) General. The holders of Non-Cumulative Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, but
only out of funds legally available therefor, non-cumulative cash dividends at
the annual rate of $83.75 per share, and no more, payable quarterly on the
first days of December, March, June and September, respectively, in each year
with respect to the quarterly dividend period (or portion thereof) ending on
the day preceding such respective dividend payment date, to shareholders of
record on the respective date, not exceeding fifty days preceding such dividend
payment date, fixed for that purpose by the Board of Directors in advance of
payment of each particular dividend. Notwithstanding the foregoing, the cash
dividend to be paid on the first dividend payment date after the initial
issuance of Non-Cumulative Preferred Stock and on any dividend payment date
with respect to a partial dividend period shall be $83.75 per share multiplied
by the fraction produced by dividing the number of days since such initial
issuance or in such partial dividend period, as the case may be, by 360.
(b) Non-cumulative Dividends. Dividends on the shares of Non-Cumulative
Stock shall not be cumulative and no rights shall accrue to the holders of
shares of Non-Cumulative Preferred Stock by reason of the fact that the
Association may fail to declare or pay dividends on the shares of
Non-Cumulative Preferred Stock in any amount in any quarterly dividend period,
whether or not the earnings of the Association in any quarterly dividend period
were sufficient to pay such dividends in whole or in part, and the Association
shall have no obligation at any time to pay any such
26
<PAGE> 27
dividend.
(c) Payment of Dividends. So long as any share of Non-Cumulative
Preferred Stock remains outstanding, no dividend whatsoever shall be paid or
declared and no distribution made on any junior stock other than a dividend
payable in junior stock, and no shares of junior stock shall be purchased,
redeemed or otherwise acquired for consideration by the Association, directly
or indirectly (other than as a result of a reclassification of junior stock, or
the exchange or conversion of one junior stock for or into another junior
stock, or other than through the use of the proceeds of a substantially
contemporaneous sale of other junior stock), unless all dividends on all shares
of Non-Cumulative Preferred Stock and non-cumulative Preferred Stock ranking on
a parity as to dividends with the shares of Non-Cumulative Preferred Stock for
the most recent dividend period ended prior to the date of such payment or
declaration shall have been paid in full and all dividends on all shares of
cumulative Preferred Stock ranking on a parity as to dividends with the shares
of Non-Cumulative Preferred Stock for the most recent dividend period ended
prior to the date of such payment or declaration shall have been paid in full
and all dividends on all shares of Non-Cumulative Stock (not withstanding that
dividends on such stock are cumulative) for all past dividend periods shall
have been paid in full. Subject, to the foregoing, and not otherwise, such
dividends (payable in cash, stock or otherwise) as may be determined by the
Board of Directors may be declared and paid on any junior stock from time to
time out of any funds legally available therefor, and the Non-Cumulative Stock
shall not be entitled to
27
<PAGE> 28
participate in any such dividends, whether payable in cash, stock or otherwise.
No dividends shall be paid or declared upon any shares of any class or series
of stock of the Association ranking on a parity (whether dividends on such
stock are cumulative or non-cumulative) with the Non-Cumulative Preferred Stock
in the payment of dividends for any period unless at or prior to the time of
such payment or declaration all dividends payable on the Non-Cumulative
Preferred Stock for the most recent dividend period ended prior to the date of
such payment or declaration shall have been paid in full. When dividends are
not paid in full, as aforesaid, upon the Non-Cumulative Preferred Stock and any
other series of Preferred Stock ranking on a parity as to dividends (whether
dividends on such stock are cumulative or non-cumulative) with the
Non-Cumulative Preferred Stock, all dividends declared upon the Non-Cumulative
Preferred Stock and any other series of Preferred Stock ranking on a parity as
to dividends with the Non-Cumulative Preferred Stock shall be declared pro rata
so that the amount of dividends declared per share on the Non-Cumulative
Preferred Stock and such other Preferred Stock shall in all cases bear to each
other the same ratio that accrued dividends per share on the Non-Cumulative
Preferred Stock (but without any accumulation in respect of any unpaid
dividends for prior dividend periods on the shares of Non-Cumulative Stock) and
such other Preferred Stock bear to each other. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Non-Cumulative Preferred Stock which may be in arrears.
3. Voting. The holders of Non-Cumulative Preferred Stock shall not
28
<PAGE> 29
have any right to vote for the election of directors or for any other purpose.
4. Redemption.
(a) Optional Redemption. The Association, at the option of the Board of
Directors, may redeem the whole or any part of the shares of Non-Cumulative
Preferred Stock at the time outstanding, at any time or from time to time after
the fifth anniversary of the date of original issuance of the Non-Cumulative
Preferred Stock, upon notice given as hereinafter specified, at the redemption
price per share equal to $1,000 plus an amount equal to the amount of accrued
and unpaid dividends from the immediately preceding dividend payment date (but
without any accumulation for unpaid dividends for prior dividend periods on the
shares of Non-Cumulative Preferred Stock) to the redemption date.
(b) Procedures. Notice of every redemption of shares of Non-Cumulative
Preferred Stock shall be mailed by first class mail, postage prepaid, addressed
to the holders of record of the shares to be redeemed at their respective last
addresses as they shall appear on the books of the Association. Such mailing
shall be at least 10 days and not more than 60 days prior to the date fixed for
redemption. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the shareholder
receives such notice, and failure duly to give such notice by mail, or any
defect in such notice, to any holder of shares of Non-Cumulative Preferred
Stock designated for redemption shall not affect the validity of the
proceedings
29
<PAGE> 30
for the redemption of any other shares of Non-Cumulative Preferred Stock.
In case of redemption of a part only of the shares of Non-Cumulative
Preferred Stock at the time outstanding the redemption may be either pro rata
or by lot or by such other means as the Board of Directors of the Association
in its discretion shall determine. The Board of Directors shall have full
power and authority, subject to the provisions herein contained, to prescribe
the terms and conditions upon which shares of the Non-Cumulative Preferred
Stock shall be redeemed from time to time.
If notice of redemption shall have been duly given, and, if on or before
the redemption date specified therein, all funds necessary for such redemption
shall have been set aside by the Association, separate and apart from its other
funds, in trust for the pro rata benefit of the holders of the shares called
for redemption, so as to be and continue to be available therefor, then,
notwithstanding that any certificate for shares so called for redemption shall
not have been surrendered for cancellation, all shares so called for redemption
shall no longer be deemed outstanding on and after such redemption date, and
all rights with respect to such shares shall forthwith on such redemption date
cease and terminate, except only the right of the holders thereof to receive
the amount payable on redemption thereof, without interest.
If such notice of redemption shall have been duly given or if the
Association shall have given to the bank or trust company hereinafter referred
to irrevocable authorization promptly to give such notice, and, if on or before
the redemption date specified therein, the funds necessary
30
<PAGE> 31
for such redemption shall have been deposited by the Association with such bank
or trust company in trust for the pro rata benefit of the holders of the shares
called for redemption, then, notwithstanding that any certificate for shares so
called for redemption shall not have been surrendered for cancellation, from
and after the time of such deposit, all shares so called for redemption shall
no longer be deemed to be outstanding and all rights with respect to such
shares shall forthwith cease and terminate, except only the right of the
holders thereof to receive from such bank or trust company at any time after
the time of such deposit the funds so deposited, without interest. The
aforesaid bank or trust company shall be organized and in good standing under
the laws of the United States of America or any state thereof, shall have
capital, surplus and undivided profits aggregating at least $50,000,000
according to its last published statement of condition, and shall be identified
in the notice of redemption. Any interest accrued on such funds shall be paid
to the Association from time to time. In case fewer than all the shares of
Non-Cumulative Preferred Stock represented by a stock certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares without
cost to the holder thereof.
Any funds so set aside or deposited, as the case may be, and unclaimed at
the end of the relevant escheat period under applicable state law from such
redemption date shall, to the extent permitted by law, be released or repaid to
the Association, after which repayment the holders of the shares so called for
redemption shall look only to the Association for payment thereof.
31
<PAGE> 32
5. Liquidation.
(a) Liquidation Preference. In the event of any voluntary liquidation,
dissolution or winding up of the affairs of the Association, the holders of
Non-Cumulative Preferred Stock shall be entitled, before any distribution or
payment is made to the holders of any junior stock, to be paid in full an
amount per share equal to an amount equal to $1,000 plus an amount equal to the
amount of accrued and unpaid dividends per share from the immediately preceding
dividend payment date (but without any accumulation for unpaid dividends for
prior dividend periods on the shares of Non-Cumulative Preferred Stock) per
share to such distribution or payment date (the "liquidation amount").
In the event of any involuntary liquidation, dissolution or winding up of
the affairs of the Association, then, before any distribution or payment shall
be made to the holders of any junior stock, the holders of Non-Cumulative
Preferred Stock shall be entitled to be paid in full an amount per share equal
to the liquidation amount.
If such payment shall have been made in full to all holders of shares of
Non-Cumulative Preferred Stock, the remaining assets of the Association shall
be distributed among the holders of junior stock, according to their respective
rights and preferences and in each case according to their respective numbers
of shares.
(b) Insufficient Assets. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available assets of the
Association are insufficient to pay such liquidation amount
32
<PAGE> 33
on all outstanding shares of Non-Cumulative Preferred Stock, then the holders
of Non-Cumulative Preferred Stock shall share ratably in any distribution of
assets in proportion to the full amounts to which they would otherwise be
respectively entitled.
(c) Interpretation. For the purposes of this paragraph 5, the
consolidation or merger of the Association with any other corporation or
association shall not be deemed to constitute a liquidation, dissolution or
winding up of the Association.
6. Preemptive Rights. The Non-Cumulative Preferred Stock is not entitled
to any preemptive, subscription, conversion or exchange rights in respect of
any securities of the Association.
7. Definitions. As used herein with respect to the Non-Cumulative
Preferred Stock, the following terms shall have the following meanings:
(a) The term "junior stock" shall mean the Common Stock and any other
class or series of shares of the Association hereafter authorized over which
the Non-Cumulative Preferred Stock has preference or priority in the payment of
dividends or in the distribution of assets on any liquidation, dissolution or
winding up of the Association.
(b) The term "accrued dividends", with respect to any share of any class
or series, shall mean an amount computed at the annual dividend rate for the
class or series of which the particular share is a part, from, if such share is
cumulative, the date on which dividends on such share became cumulative to and
including the date to which such dividends are to be accrued, less the
aggregate amount of all dividends theretofore paid thereon and, if such share
is non-cumulative, the relevant date designated
33
<PAGE> 34
to and including the date to which such dividends are accrued, less the
aggregate amount of all dividends theretofore paid with respect to such period.
(c) The term "Preferred Stock" shall mean all outstanding shares of all
series of preferred stock of the Association as defined in this Article Fifth
of the Articles of Association, as amended, of the Association.
8. Restriction on Transfer. No shares of Non-Cumulative Preferred Stock,
or any interest therein, may be sold, pledged, transferred or otherwise
disposed of without the prior written consent of the Association. The
foregoing restriction shall be stated on any certificate for any shares of
Non-Cumulative Preferred Stock.
9. Additional Rights. The shares of Non-Cumulative Preferred Stock shall
not have any relative, participating, optional or other special rights and
powers other than as set forth herein.
SIXTH. The Board of Directors shall appoint one of its members President
of this Association, who shall be Chairperson of the Board, unless the Board
appoints another director to be the Chairperson. The Board of Directors shall
have the power to appoint one or more Vice Chairmen and Vice Presidents and
such other officers and employees as may be required to transact the business
of this Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the
34
<PAGE> 35
penalty thereof; to regulate the manner in which any increase of the capital of
the Association shall be made; to manage and administer the business and
affairs of the Association; to make all By-laws that it may be lawful for them
to make; and generally to do and perform all acts that it may be legal for a
Board of Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place permitted by law, but subject to
the approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of the Association
to any other location, without the approval of the shareholders, but subject to
the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any one or more
shareholders owning, in the aggregate, not less than 25 percent of the stock of
this Association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the laws of the United States, a notice of the
time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least ten days prior to the date of such meeting, to each shareholder of record
at his address as shown upon the books of this Association.
TENTH. (A) Indemnification of Directors.
The Association shall, to the fullest extent permitted by applicable
35
<PAGE> 36
banking, corporate and other law and regulation, indemnify any person who is or
was a director of the Association from and against any and all expenses,
liabilities or other losses arising in connection with any action, suit, appeal
or other proceeding, by reason of the fact that such person is or was serving
as a director of the Association and may, to the fullest extent permitted by
applicable banking, corporate and other law and regulation, advance monies to
such persons for expenses incurred in defending any such action, suit, appeal
or other proceeding on such terms as the Association's Board of Directors shall
determine and as are required by applicable banking, corporate and other law or
regulation or interpretation by the applicable banking regulators. The
Association may purchase insurance for the purpose of indemnifying such persons
and/or reimbursing the Association upon payment of indemnification to such
persons to the extent that indemnification is authorized by the preceding
sentences, except that insurance coverage and corporate indemnification shall
not be available in connection with a formal order by a court or judicial or
governmental body assessing civil money penalties against such person or in the
event that such coverage or indemnification would be prohibited by applicable
banking, corporate and other law or regulation.
(B) Indemnification of Officers, Employees and Agents.
The Association shall indemnify any person who is or was an officer,
employee or agent of the Association or who is or was a director, general
partner, trustee or principal of another entity serving as such at the request
of the Association from and against any and all expenses, liabilities or other
losses arising in connection with any action, suit,
36
<PAGE> 37
appeal or other proceeding, by reason of the fact that such person is or was
serving as an officer, employee or agent of the Association or as a director of
another entity at the request of the Association, to the extent authorized by
the corporate policy of the Association, as adopted and modified from time to
time by the shareholders of the Association, except to the extent that such
indemnification would be prohibited by applicable banking, corporate and other
law or regulation. The Association may advance monies to such persons for
expenses incurred in defending any such action, suit, appeal or other
proceeding in accordance with the corporate policy of the Association, as
adopted and modified from time to time by the shareholders of the Association,
under such terms and procedures as are required by applicable banking,
corporate and other law or regulation or interpretation by the applicable
banking regulators, except to the extent that such advancement would be
prohibited by applicable banking, corporate and other law or regulation. The
Association may purchase insurance for the purpose of indemnifying such persons
and/or reimbursing the Association upon payment of indemnification to such
person to the extent that indemnification is authorized by the preceding
sentence, except that insurance coverage and corporate indemnification shall
not be available in connection with a formal order by a court or judicial or
governmental body assessing civil money penalties against such person or in the
event that such coverage or indemnification would be prohibited by applicable
banking, corporate and other law or regulation.
ELEVENTH. These Articles of Association may be amended at any
37
<PAGE> 38
regular or special meeting of the shareholders by the affirmative vote of the
holders of a majority of the stock of this Association, unless the vote of the
holders of a greater amount of stock is required by law, and in that case by
the vote of the holders of such greater amount.
38
<PAGE> 39
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, and in connection with the proposed issue of Olsten Corporation,
we hereby consent that reports of examinations by Federal, State, Territorial
or District authorities may be furnished by such authorities to the Securities
and Exchange Commission upon request therefor.
FIRST UNION NATIONAL BANK
By: s/Stephanie Roche
------------------
Stephanie Roche
Vice President
Elkton, Maryland
February 28, 1996
39
<PAGE> 40
REPORT OF CONDITION EXHIBIT 7
Consolidating domestic and foreign subsidiaries of the First Fidelity Bank,
National Association (now First Union National Bank) of Elkton in the state of
Maryland, at the close of business on September 30, 1995, published in response
to call made by Comptroller of the Currency, under title 12, United States
Code, Section 161. Charter Number 33869 Comptroller of the Currency
Northeastern District.
STATEMENT OF RESOURCES AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS
Thousand of Dollars
-------------------
<S> <C>
Cash and balance due from depository institutions:
Noninterest-bearing balances and currency and coin......... 1,503,341
Interest-bearing balances.................................. 460,595
Securities................................................... /////////
Hold-to-maturity securities................................ 3,431,427
Available-for-sale securities.............................. 2,019,209
Federal funds sold and securities purchased under agreements //////////
to resell in domestic offices of the bank and of it //////////
Edge and Agreement subsidiaries, and in IBFs: //////////
Federal funds sold......................................... 425,000
Securities purchased under agreements to resell............ 355,567
Loans and lease financing receivables:
Loan and leases, net of unearned income..... 22,536,087
LESS: Allowance for loan and lease losses.......483,973
LESS: Allocated transfer risk reserve.................0
Loans and leases, net of unearned income, allowance, and
reserve...................................................... 22,052,114
Assets held in trading accounts.............................. 152,832
Premises and fixed assets (including capitalized leases)..... 378,375
Other real estate owned...................................... 116,168
Investment in unconsolidated subsidiaries and associated //////////
companies.................................................... 18,165
Customer's liability to this bank on acceptances outstanding. 176,233
Intangible assets............................................ 796,802
Other assets................................................. 786,706
Total assets................................................. 32,672,534
LIABILITIES
Deposits:
In domestic offices..................................... 24,725,866
Noninterest-bearing...................... 4,337,767
Interest-bearing........................ 20,388,099
In foreign offices, Edge and Agreement subsidiaries,
and IBFs................................................ 1,253,399
Noninterest-bearing.........................13,416
Interest-bearing.........................1,239,983
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and IBFs
Federal fund purchased.................................. 1,219,823
Securities sold under agreements to repurchase.......... 1,108,011
Demand notes issued to the U.S. Treasury..................... 190,208
Trading liabilities.......................................... 0
Other borrowed money:........................................ /////////
With original maturity of one year or less................... 75,481
With original maturity of more than one year............ 529
Mortgage indebtedness and obligations under capitalized leases 17,222
Bank's liability on acceptances executed and outstanding..... 176,425
Subordinated notes and debentures............................ 175,000
Other liabilities............................................ 633,215
Total liabilities............................................ 29,575,179
Limited-life preferred stock and related surplus............. 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus................ 160,540
Common Stock................................................. 452,156
Surplus...................................................... 1,300,080
Undivided profits and capital reserves....................... 1,189,821
Net unrealized holding gains (losses) on available-for-sale /////////
securities.................................................. ( 5,242)
Cumulative foreign currency translation adjustments.......... 0
Total equity capital......................................... 3,097,355
Total liabilities, limited-life preferred stock and equity... /////////
capital.................................................... 32,672,534
</TABLE>
40
