Registration No. 333-
As filed with the Securities and Exchange Commission on June 3, 1998
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
Registration Statement under
the Securities Act of 1933
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PROVIDIAN FINANCIAL CORPORATION
A DELAWARE CORPORATION
I.R.S. EMPLOYER NUMBER 94-2933952
PROVIDIAN FINANCING I PROVIDIAN FINANCING II
A DELAWARE STATUTORY BUSINESS TRUST A DELAWARE STATUTORY BUSINESS TRUST
I.R.S. EMPLOYER NUMBER: 94-6725806 I.R.S. EMPLOYER NUMBER: 94-6725807
PROVIDIAN FINANCING III PROVIDIAN FINANCING IV
A DELAWARE STATUTORY BUSINESS TRUST A DELAWARE STATUTORY BUSINESS TRUST
I.R.S. EMPLOYER NUMBER: 94-6725808 I.R.S. EMPLOYER NUMBER: 94-6725809
(Exact names of registrants as specified in their charters)
201 MISSION STREET
SAN FRANCISCO, CALIFORNIA 94105
(415) 543-0404
(Address, including zip code, and telephone numbers, including area code, of
registrant's principal executive offices)
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Ellen Richey
Executive Vice President, General Counsel and Secretary
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
(415) 543-0404
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Nathaniel M. Cartmell III Peter H. Darrow
Katharine A. Martin Cleary, Gottlieb, Steen & Hamilton
Pillsbury Madison & Sutro LLP One Liberty Plaza
235 Montgomery Street New York, Yew York 10006-1470
San Francisco, California 94104 (212) 225-2000
(415) 983-1000
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Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
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, please check the following box: [x]
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 statement for the same offering. [ ] __________
<PAGE>
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. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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Proposed maximum Proposed maximum
Amount to be aggregate offering aggregate offering Amount of
Title of each class of securities to be registered registered price per unit (1) price(1) registration fee
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<S> <C> <C> <C> <C>
Common Stock, par value $0.01 (2)
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Preferred Stock (3)
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Depositary Shares
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Debt Securities (4)
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Warrants (5)
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Stock Purchase Contracts (6)
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Stock Purchase Units (7)
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Preferred Securities of Providian Financing I (8)
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Preferred Securities of Providian Financing II (8)
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Preferred Securities of Providian Financing III
(8)
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Preferred Securities of Providian Financing IV
(8)
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Guarantees of Preferred Securities (9)
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Other Units (10)
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Total $2,000,000,000 100% (11) $590,000
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o).
(2) Subject to note (11) below, there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time
to time, by the Registrant, including, without limitation, sales upon
exercise of Warrants, Stock Purchase Contracts and Stock Purchase Units.
There are also being registered hereunder an indeterminate number of
shares of Common Stock as shall be issuable upon conversion, redemption or
exchange of Preferred Stock or Debt Securities registered hereby. The
Common Stock being registered includes associated Preferred Stock Purchase
Rights.
(3) Subject to note (11) below, there are registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the Registrant, including sales upon exercise of
Warrants, Stock Purchase Contracts and Stock Purchase Units, and an
indeterminate number of shares of Preferred Stock as shall be issuable
upon conversion, redemption or exchange of Debt Securities registered
hereby.
(4) Subject to note (11) below, there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by the Registrant, including sales upon the exercise of Warrants.
If any Debt Securities are being issued at an original issue discount,
then the offering price shall be in such greater principal amount as shall
result in an aggregate initial offering price not to exceed $2,000,000,000
less the dollar amount of any securities previously issued hereunder.
(5) Subject to note (11) below, there are being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Debt Securities, Preferred Stock, Common Stock, or shares of
capital stock or debt of another corporation or entity.
(6) Subject to note (11) below, there are being registered hereunder an
indeterminate amount and number of Stock Purchase Contracts, representing
rights to purchase Preferred Stock or Common Stock.
(7) Subject to note (11) below, there are being registered hereunder an
indeterminate amount and number of Stock Purchase Units, representing
ownership of Stock Purchase Contracts and Debt Securities, or debt
obligations of third parties, including U.S.
Obligations or Preferred Securities.
(8) Subject to note (11) below, there are being registered hereunder an
indeterminate amount of Preferred Securities as may be sold from time to
time, including sales pursuant to Stock Purchase Units.
(9) Subject to note (11) below, there are being registered hereunder an
indeterminate amount of Guarantees of Preferred Securities as may be sold
from time to time, including sales pursuant to Stock Purchase Units. In
addition, this registration is deemed to include the rights of holders of
the Preferred Securities under the Guarantees, the Declaration (including
the tax and expense undertakings), the Subordinated Securities and the
Indenture, together constituting the backup undertakings as described in
this Registration Statement. No separate consideration will be received
for the Guarantees or the backup undertakings.
(10) Subject to note (11) below, there are being registered hereunder an
indeterminate amount of Other Units as may be sold from time to time by
the Registrant. The Other Units may consist of any combination of the
following securities registered hereby: Common Stock, Preferred Stock,
Depositary Shares, Debt Securities, Warrants, Stock Purchase Contracts,
Stock Purchase Units, Preferred Securities of Providian Financing I,
Preferred Securities of Providian Financing II, Preferred Securities of
Providian Financing III, and Preferred Securities of Providian Financing
IV and Guarantees of Preferred Securities.
<PAGE>
(11) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$2,000,000,000. Any Securities registered hereunder may be sold separately
or as units with other securities registered hereunder.
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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 THAT STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ 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 JUNE 3, 1998
PROSPECTUS
$2,000,000,000
PROVIDIAN FINANCIAL CORPORATION
COMMON STOCK, PREFERRED STOCK, DEPOSITARY SHARES, DEBT SECURITIES,
COMMON STOCK WARRANTS,
PREFERRED STOCK WARRANTS, THIRD PARTY WARRANTS, DEBT WARRANTS, STOCK PURCHASE
CONTRACTS, STOCK PURCHASE UNITS AND OTHER UNITS
PROVIDIAN FINANCING I
PROVIDIAN FINANCING II
PROVIDIAN FINANCING III
PROVIDIAN FINANCING IV
PREFERRED SECURITIES, GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY PROVIDIAN FINANCIAL CORPORATION
Providian Financial Corporation (the "Company" or "Providian"), a
Delaware corporation, directly or through agents, dealers or underwriters
designated from time to time, or by third parties ("Third Parties") who have
acquired securities of the Company in private transactions or otherwise, or
counterparties with whom the Company may enter into hedging transactions (the
"Counterparties"), may sell from time to time up to $2,000,000,000 (or, if
applicable, the equivalent thereof in other currencies) in the aggregate,
subject to the limitations set forth below, of (a) shares of common stock, $0.01
par value per share, of the Company ("Common Stock"), (b) shares of preferred
stock, $0.01 par value per share, of the Company ("Preferred Stock"), in one or
more series, (c) depositary shares of the Company ("Depositary Shares"), (d)
unsecured senior or subordinated debt securities of the Company ("Debt
Securities"), (e) options, warrants and other rights to purchase shares of
Common Stock ("Common Stock Warrants") or shares of Preferred Stock ("Preferred
Stock Warrants"), (f) options, warrants and other rights to purchase shares of
capital stock or debt of another corporation or other entity ("Third Party
Warrants"), (g) options, warrants and other rights to purchase Debt Securities
("Debt Warrants"), (h) stock purchase contracts ("Stock Purchase Contracts") to
purchase Common Stock or Preferred Stock (i) stock purchase units ("Stock
Purchase Units") each representing ownership of a Stock Purchase Contract and
Preferred Stock, Debt Securities, debt obligations of third parties, including
the United States of America or agencies or instrumentalities thereof ("U.S.
Obligations") or Preferred Securities (as defined below), securing the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contract or (j) other units ("Other Units"), each of which may represent any
combination of the following: Common Stock, Preferred Stock, Depositary Shares,
Debt Securities, Common Stock Warrants, Preferred Stock Warrants, Third Party
Warrants, Debt Warrants, Stock Purchase Contracts, Stock Purchase Units,
Preferred Securities or Guarantees.
Providian Financing I, Providian Financing II, Providian Financing III
and Providian Financing IV, each of which is a statutory business trust formed
under the laws of the State of Delaware (each a "Financing Trust"), the Common
Securities (as defined herein) of which will be wholly-owned by the Company at
the time of issuance of Preferred Securities, may offer preferred securities
representing undivided beneficial interests in the assets of the respective
Financing Trust ("Preferred Securities"). The payment of periodic cash
distributions with respect to Preferred Securities of each of the Financing
Trusts out of moneys held by each of the Financing Trusts, and payments on
liquidation, redemption or otherwise with respect to such Preferred Securities,
will be guaranteed by the Company to the extent described herein (each a
"Guarantee"). See "Description of the Guarantees." The Company's obligations
under the Guarantees are subordinate and junior in right of payment to all
senior liabilities of the Company and rank PARI PASSU with the obligations of
the Company under any similar guarantee agreements issued by the Company on
behalf of holders of Subordinated Debt Securities. In the event a Financing
Trust issues Preferred Securities or Common Securities, the proceeds to such
Financing Trust from such offering will be invested in subordinated Debt
Securities, which will be issued and sold in one or more series by the Company
to such Financing Trust or the trustee of such trust. The subordinated Debt
Securities purchased by a Financing Trust may be subsequently distributed pro
rata to holders of Preferred Securities or Common Securities in connection with
the dissolution of such Financing Trust upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement.
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.
ADDITIONAL INFORMATION REGARDING THE SECURITIES IS SET FORTH ON THE
INSIDE FRONT COVER.
FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH AN INVESTMENT IN THE
SECURITIES, SEE "GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS" ON PAGE 6.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The date of this Prospectus is _____________
<PAGE>
The Common Stock, Preferred Stock, Depositary Shares, Debt Securities,
Common Stock Warrants, Preferred Stock Warrants, Third Party Warrants, Debt
Warrants, Stock Purchase Contracts, Stock Purchase Units, Preferred Securities,
Guarantees and Other Units are collectively referred to herein as the
"Securities."
The Company, either Financing Trust, Third Parties or Counterparties
may sell the Securities to or through underwriters, dealers or agents or
directly to purchasers. See "Plan of Distribution." The Company and each
Financing Trust reserve the sole right to accept and, together with their
respective agents from time to time, to reject in whole or in part any proposed
purchase of Securities to be made directly or through agents. The accompanying
Prospectus Supplement sets forth, among other things, the names of any
underwriters, dealers or agents involved in the sale of the Securities in
respect of which this Prospectus is being delivered, and any applicable fee,
commission or discount arrangements with them.
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All specific terms of the offering and sale of Securities, including
the initial public offering price, aggregate amount, listing on any securities
exchange or quotation system, risk factors and the agents, dealers or
underwriters, if any, to be utilized in connection with the sale of the
Securities, will be set forth in an accompanying Prospectus Supplement
("Prospectus Supplement"). With respect to the Preferred Stock, the related
Prospectus Supplement will set forth, among other things, the specific
designation, rights, preferences, privileges and restrictions thereof, including
dividend rate or rates (or method of ascertaining the same), dividend payment
dates, voting rights, liquidation preference, and any conversion, exchange,
redemption or sinking fund provisions. With respect to the Debt Securities, the
related Prospectus Supplement will set forth, among other things, the specific
designation, rights and restrictions, including whether they are senior or
subordinated, the currencies or currency units in which they are denominated,
the aggregate principal amount, the maturity, rate or rates of interest (or
method of ascertaining the same) and time of payment thereof, and any
conversion, exchange, redemption or sinking fund provisions. With respect to the
Common Stock Warrants, Preferred Stock Warrants, Third Party Warrants and Debt
Warrants, the related Prospectus Supplement will contain, among other things, a
description of the Common Stock, Preferred Stock, capital stock or debt of such
third party and Debt Securities, respectively, for which each warrant will be
exercisable and the exercise price, duration, detachability, call provisions and
other principal terms of such Warrants. With respect to the Stock Purchase
Contracts, the related Prospectus Supplement will set forth, among other things,
the designation and number of shares of Common Stock or Preferred Stock issuable
thereunder, the purchase price of the Common Stock or Preferred Stock, the date
or dates on which the Common Stock or Preferred Stock is required to be
purchased by the holders of the Stock Purchase Contracts, any periodic payments
required to be made by the Company to the holders of the Stock Purchase
Contracts or vice versa, and the terms of the offering and sale thereof. In the
case of Stock Purchase Units, the related Prospectus Supplement will set forth,
among other things, the specific terms of the Stock Purchase Contracts and any
Preferred Stock, Debt Securities or debt obligations of third parties or
Preferred Securities securing the holder's obligation to purchase the Preferred
Stock or Common Stock under the Stock Purchase Contracts, and the terms of the
offering and sale thereof. With respect to the Preferred Securities, the related
Prospectus Supplement will set forth, among other things, the specific
designation, rights, preferences, privileges and restrictions thereof, including
dividend rate or rates (or method of ascertaining the same), dividend payment
dates, voting rights, liquidation preference, and any conversion, exchange,
redemption or sinking fund provisions, the terms upon which the proceeds of the
sale of the Preferred Securities will be used to purchase a specific series of
subordinated Debt Securities of the Company and the terms upon which the
obligations of the relevant Financing Trust to make periodic cash distributions
on the Preferred Securities or make payments upon liquidation or dissolution of
such Financing Trust or upon redemption of the Preferred Securities, to the
extent funds are available therefor, shall be unconditionally guaranteed by
Providian. With respect to the Other Units, the related Prospectus Supplement
will set forth, among other things, the specific terms of any Common Stock,
Preferred Stock, Common Stock Warrants, Preferred Stock Warrants, Third Party
Warrants, Debt Warrants, Stock Purchase Contracts, Stock Purchase Units,
Preferred Securities and Guarantees, and the terms of the offering and sale
thereof.
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES AND THE COMMON STOCK OF THE COMPANY. SUCH TRANSACTIONS MAY INCLUDE
STABILIZING TRANSACTIONS, THE PURCHASE OF SECURITIES TO COVER SYNDICATE SHORT
POSITIONS
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<PAGE>
AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"PLAN OF DISTRIBUTION."
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS (IF ANY) MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE
SECURITIES ON NASDAQ IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "PLAN OF
DISTRIBUTION."
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<PAGE>
<TABLE>
INDEX OF TERMS
<CAPTION>
Page on Which Page on Which
Term Term is Defined Term Term is Defined
- ---- --------------- ---- ---------------
<C> <C> <C> <C>
Acquiring Party....................... 8 Preferred Stock.......................... 1
Administrators........................ 6 Preferred Stock Warrants................. 1
Certificate of Incorporation.......... 7 Prospectus Supplement.................... 2
Code..................................25 Property Trustee......................... 6
Commission............................ 5 Providian................................ 1
Common Securities..................... 6 Redemption Price......................... 8
Common Securities Guarantees..........22 Registration Statement................... 5
Common Stock.......................... 1 Rights................................... 8
Common Stock Warrants................. 1 Rights Plan ............................. 8
Company............................... 1 Securities............................... 2
Counterparties........................ 1 Securities Act........................... 5
Debt Depositary.......................13 Senior Debt Securities ..................12
Debt Securities ...................... 1 Senior Indenture.........................12
Debt Warrant Agent ...................19 Sponsor.................................. 6
Debt Warrant Agreement................19 Stock Purchase Contracts ................ 1
Debt Warrants ........................ 1 Stock Purchase Unit...................... 1
Declaration .......................... 6 Stock Warrant Agent......................17
Delaware Trustee ..................... 7 Stock Warrant Agreement .................16
Deposit Agreement.....................10 Stock Warrant Provisions ................17
Depositary............................10 Stock Warrants...........................16
Depositary Receipts ..................10 Subordinated Debt Securities ............12
Depositary Shares.....................10 Subordinated Indenture...................12
ERISA.................................25 Third Parties............................ 1
Event of Default......................14 Third Party Company......................13
Exchange Act.......................... 5 Third Party Registration Statement.......13
Financing Trust....................... 1 Third Party Securities ..................13
Financing Trustees.................... 6 Third Party Warrant Agent................18
Global Debt Securities................13 Third Party Warrant Agreement............18
Guarantees............................ 1 Third Party Warrants .................... 1
Guarantee Payments....................21 Trust Indenture Act...................... 6
Guarantee Trustee.....................21 Trust Securities ........................ 6
Indentures............................ 8 U.S. Dollar, Dollar, U.S. $, $........... 4
Junior Preferred Shares...............13 U.S. Obligations......................... 1
Mandatory Debt Securities............. 1 Voluntary Debt Securities................13
Other Units........................... 1
Preferred Securities.................. 1
</TABLE>
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References herein to "U.S. Dollar," "Dollar," "U.S. $" or "$" are to
the lawful currency of the United States of America.
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<PAGE>
AVAILABLE INFORMATION
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 and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information concerning Providian Financial Corporation can be inspected and
copied at the public reference facilities maintained by the Commission at its
offices at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, as well as the Regional Offices of the Commission located at Seven World
Trade Center, 13th Floor, New York, New York 10048 and CitiCorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. In addition, such reports, proxy statements and other
information may be accessed electronically at the Commission's site on the World
Wide Web at http://www.sec.gov. Such reports, proxy statements and other
information can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005 and at the offices of the
Pacific Exchange, 301 Pine Street, San Francisco, California 94104.
The Company and the Financing Trusts have filed with the Commission a
registration statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Securities. This Prospectus does not contain all of the information set forth in
the Registration Statement and the exhibits and schedules thereto, certain parts
of which are omitted in accordance with the rules and regulations of the
Commission. For further information we respect to the Company, the Financing
Trusts and the securities being offered hereby, reference is made to the
Registration Statement, which can be inspected at the public reference
facilities at the offices of the Commission set forth above. Any statements
contained herein concerning the provision of any document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission and
incorporated by reference herein are not necessarily complete, and, in each
instance, reference is made to the copy of such document so filed for a more
complete description of the matter involved. Each such reference is qualified in
its entirety by such referenced documents.
No separate financial statements of the Financing Trusts have been
included herein. The Company does not consider that such financial statements
would be material to holders of the Securities because: (i) the Company, a
reporting company under the Exchange Act, owns, directly or indirectly, all of
the voting securities of each Financing Trust, (ii) neither Financing Trust has
any independent operations but exists for the sole purpose of issuing securities
representing undivided beneficial interests in the assets of such Financing
Trust and investing the proceeds thereof in subordinated Debt Securities, and
(iii) the obligations of each Financing Trust to make periodic cash payments on
Preferred Securities and payments upon liquidation or dissolution of such
Financing Trust or upon redemption of the Preferred Securities, to the extent
funds are available therefor, are unconditionally guaranteed by the Company. See
"Description of the Guarantees," "Description of the Preferred Securities" and
"Description of the Debt Securities--Subordinated Debt Securities."
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company
pursuant to the Exchange Act are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) the Company's Current Report on Form 8-K dated February 13, 1998;
and
(c) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the effective date of the
Registration Statement shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
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<PAGE>
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, and who makes a written or oral request,
a copy of any and all of the information that has been incorporated by reference
in this Prospectus or any Prospectus Supplement, excluding exhibits. Requests
should be directed to: Investor Relations, Providian Financial Corporation, 201
Mission Street, San Francisco, California 94105, telephone number: (415)
543-0404.
PROVIDIAN FINANCIAL CORPORATION
Providian Financial Corporation is a diversified consumer lender,
offering a range of lending products, including unsecured credit cards,
revolving lines of credit, home loans, secured and partially secured credit
cards, and fee-based products. Through these products and services, the Company
seeks to achieve diversified earnings sources, with both spread-based and
fee-based income from loans and related products and services. The Company also
offers deposit products to customers nationwide.
The Company's executive offices are located at 201 Mission Street, San
Francisco, California, 94105, telephone number: (415) 543-0404.
THE FINANCING TRUSTS
Each of Providian Financing I, Providian Financing II, Providian
Financing III and Providian Financing IV is a statutory business trust formed
under Delaware law pursuant to (i) a separate declaration of trust executed by
the Company, as sponsor for such trust (the "Sponsor"), the Financing Trustees
(as defined herein) and the Administrators (as defined herein) of such trust and
(ii) the filing of a certificate of trust with the Secretary of State of the
State of Delaware on May 29, 1998. The declarations will be amended and restated
in their entirety (each, as so amended and restated, a "Declaration")
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus is a part and will be qualified as Indentures under the
Trust Indenture Act of 1939. Each Financing Trust exists for the exclusive
purposes of (i) issuing the Preferred Securities and common securities
representing undivided beneficial interests in the assets of the Trust (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) investing the proceeds received by such Financing Trust from
the sale of the Trust Securities in subordinated Debt Securities and (iii)
engaging in only those other activities necessary or incidental thereto. All of
the Common Securities will be directly or indirectly owned by the Company. The
Common Securities will rank PARI PASSU, and payments will be made thereon pro
rata, with the Preferred Securities, except that, upon an event of default under
a Declaration, the rights of the holders of the Common Securities to payment in
respect of distributions and payments upon liquidation, redemption and otherwise
will be subordinated to the rights of the holders of the Preferred Securities.
The Company will directly or indirectly acquire Common Securities in an
aggregate liquidation amount equal to ____% of the total capital of each
Financing Trust. Each Financing Trust has a term of approximately 55 years but
may terminate earlier, as provided in the relevant Declaration. Each Financing
Trust's business and affairs will be conducted by the trustees (the "Financing
Trustees") and persons who are employees or officers of or who are affiliated
with the Company (the "Administrators") appointed by the Company as the direct
or indirect holder of all the Common Securities. The holder of the Common
Securities of a Financing Trust will be entitled to appoint, remove or replace
any of, or increase or reduce the number of, the Financing Trustees and the
administrators therefor. The duties and obligations of the Financing Trustees
shall be governed by the Declaration of such Financing Trust. A financial
institution that is not affiliated with the Company and has combined capital and
surplus of not less than $100,000,000 shall act as property trustee and as
indenture trustee for each Financing Trust for the purposes of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), pursuant to the
terms set forth in a Prospectus Supplement (the "Property Trustee"). In
addition, unless the Property Trustee maintains a principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
each Financing Trust will have a
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<PAGE>
trustee which has a principal place of business or reside in the State of
Delaware (the "Delaware Trustee"). The Company will pay all fees and expenses
related to the Financing Trusts and the offering of the Trust Securities.
The office of the Delaware Trustee for each Financing Trust is The Bank
of New York (Delaware), White Clay Center, Route 273, Newark, Delaware. The
address for each Financing Trust is c/o the Company, the Sponsor of each Trust,
at 201 Mission Street, San Francisco, California 94105.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
net proceeds from the sale of Securities offered hereby will be used for general
corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
The following table sets forth the ratio of earnings to fixed charges
and ratio of earnings to combined fixed charges and preferred stock dividend
requirements for the Company for the quarter ended March 31, 1998 and for each
of the years in the five-year period ended December 31, 1997. The ratio of
earnings to fixed charges is computed by dividing (i) income before income taxes
and fixed charges by (ii) fixed charges. The ratio of earnings to combined fixed
charges and preferred stock dividend requirements is computed by dividing (i)
income before income taxes and fixed charges by (ii) fixed charges and preferred
stock dividend requirements. Fixed charges consist of interest expense on
borrowings (including or excluding deposits, as the case may be), and the
portion of rental expense which is deemed representative of interest. The
preferred stock dividend requirements represent the pretax earnings which would
be required to cover such dividend requirements on the Company's preferred stock
outstanding. In February 1997, the Company redeemed its outstanding preferred
stock and accordingly there are no preferred stock dividend requirements for the
periods following such redemption.
<TABLE>
<CAPTION>
Three Months
Ended
March 31, Year Ended December 31,
--------------- ---------------------------------------------------
1998 1997 1996 1995 1994 1993
--------------- --------- --------- --------- --------- ---------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
EARNINGS TO FIXED CHARGES:
Excluding interest on deposits 10.26 14.20 5.93 4.90 5.17 3.51
Including interest on deposits 2.65 2.66 2.34 2.34 2.69 2.26
EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS (a)
Excluding interest on deposits 10.26 13.28 5.19 4.32 4.40 3.09
Including interest on deposits 2.65 2.63 2.25 2.24 2.51 2.11
- ------------
(a) Preferred Stock dividend requirements are adjusted to represent a pretax
earnings equivalent.
</TABLE>
GENERAL DESCRIPTION OF SECURITIES AND RISK FACTORS
The Company may offer under this Prospectus shares of Common Stock or
Preferred Stock, Depositary Shares, Debt Securities, Common Stock Warrants,
Preferred Stock Warrants, Third Party Warrants, Debt Warrants, Stock Purchase
Contracts, Stock Purchase Units or Other Units or any combination of the
foregoing, either individually or as units consisting of one or more Securities.
Each Financing Trust may offer Preferred Securities under this Prospectus. The
aggregate offering price of Securities offered by the Company or any Financing
Trust under this Prospectus will not exceed $2,000,000,000 (or the equivalent
thereof in other currencies). CERTAIN OF THE SECURITIES TO BE OFFERED HEREBY
THEMSELVES INVOLVE A HIGH DEGREE OF RISK. SUCH RISKS WILL BE SET FORTH IN THE
PROSPECTUS SUPPLEMENT RELATING TO SUCH SECURITY. IN ADDITION, CERTAIN RISK
FACTORS RELATING TO THE COMPANY'S BUSINESS ARE SET FORTH IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997, BEGINNING ON
PAGE 14 UNDER THE HEADING "CAUTIONARY STATEMENTS."
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DESCRIPTION OF THE COMMON STOCK
GENERAL
Under the Company's Amended and Restated Certificate of Incorporation
(the "Certificate of Incorporation"), the Company is authorized to issue up to
400 million shares of Common Stock. The Common Stock is not redeemable, does not
have any conversion rights and is not subject to call. Holders of shares of
Common Stock have no preemptive rights to maintain their percentage of ownership
in future offerings or sales of stock of the Company. Holders of shares of
Common Stock have one vote per share in all elections of directors and on all
other matters submitted to a vote of stockholders of the Company. The holders of
Common Stock are entitled to receive dividends, if any, as and when declared
from time to time by the Board of Directors of the Company out of funds legally
available therefor. Upon liquidation, dissolution or winding up of the affairs
of the Company, the holders of Common Stock will be entitled to participate
equally and ratably, in proportion to the number of shares held, in the net
assets of the Company available for distribution to holders of Common Stock. The
shares of Common Stock currently outstanding are fully paid and nonassessable.
CERTAIN CERTIFICATE OF INCORPORATION PROVISIONS
Certain provisions in the Company's Certificate of Incorporation and
Bylaws may have the effect of delaying, deferring or preventing a change in
control of the Company. These provisions require that the Company's Board of
Directors be divided into three classes that are elected for staggered
three-year terms; provide that stockholders may act only at annual or special
meetings and may not act by written consent; do not provide for cumulative
voting in the election of directors; authorize the directors of the Company to
determine the size of the Board of Directors; require a vote of 80% of the
shares outstanding for the amendment of any of the foregoing provisions; require
that stockholder nominations for directors be made pursuant to timely notice;
provide that special meetings of stockholders may be called only by the Chairman
of the Board or by the Board of Directors; and authorize the Board of Directors
to establish one or more series of Preferred Stock, without any further
stockholder approval, having rights, preferences, privileges and limitations
that could impede or discourage the acquisition of control of the Company.
RIGHTS AGREEMENT
The Company's Board of Directors has adopted a share purchase rights
plan (the "Rights Plan") that provides for the distribution of rights ("Rights")
to holders of outstanding shares of Common Stock. Except as set forth below,
each Right, when exercisable, entitles the holder thereof to purchase from the
Company one one-hundredth of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share, of the Company (the "Junior Preferred Shares")
at a price of $150 per one one-hundredth share, subject to adjustment. Holders
of the Rights, as such, are not stockholders of the Company and do not have
voting rights or the right to receive dividends.
Initially, the Rights are attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will not separate from the Common Stock and will not
be exercisable until the earlier of either (i) 10 days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of securities
representing 15% or more of the outstanding shares of Common Stock (an
"Acquiring Party") or (ii) 10 business days (or such later date as may be
determined by the Company's Board of Directors) following the commencement of
(or a public announcement of an intention to make) a tender offer or exchange
offer which would result in any person or group of affiliated or associated
persons becoming an Acquiring Party. The Rights will expire on the earlier of
(x) June 30, 2007 unless such expiration date is extended or (y) redemption or
exchange by the Company, as described below.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Party, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the
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acquiring company which at the time of such transaction will have a market value
of two times the exercise price of the Right. In the event that any person or
group of affiliated or associated persons becomes an Acquiring Party, proper
provision will be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Party (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of shares of
Common Stock having a market value of two times the exercise price of the Right.
At any time after any person or group of affiliated or associated
persons becomes an Acquiring Party and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Stock, the Board of Directors
of the Company may, at its option, exchange the Rights (other than Rights owned
by such person or group which will have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, or one one-hundredth of a Junior
Preferred Share, per Right (subject to adjustment).
At any time prior to a person or group of affiliated or associated
persons becoming an Acquiring Party, the Board of Directors of the Company may,
at its option, redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis with such conditions as the Board of
Directors in its sole discretion may establish. Immediately upon any such
action by the Board of Directors ordering the redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Rights Plan may have the effect of delaying, deferring or
preventing a change in control of the Company without further action of the
stockholders and therefore could have a depressive effect on the price of the
Common Stock.
LISTING
The Common Stock is listed on the New York Stock Exchange and the
Pacific Exchange under the symbol "PVN."
DESCRIPTION OF THE PREFERRED STOCK
Under the Certificate of Incorporation, the Board of Directors of the
Company may direct the issuance of up to 50 million shares of Preferred Stock in
one or more series and with rights, preferences, privileges and restrictions,
including dividend rights, voting rights, conversion rights, terms of redemption
and liquidation preferences, that may be fixed or designated by the Board of
Directors from time to time pursuant to a certificate of designation without any
further vote or action by the Company's stockholders. The issuance of Preferred
Stock may have the effect of delaying, deferring or preventing a change in
control of the Company. Preferred Stock, upon issuance against full payment of
the purchase price therefor, will be fully paid and nonassessable. The specific
terms of a particular series of Preferred Stock will be described in the
Prospectus Supplement relating to that series. The description of Preferred
Stock set forth below and the description of the terms of a particular series of
Preferred Stock set forth in the related Prospectus Supplement do not purport to
be complete and are qualified in their entirety by reference to the certificate
of designation relating to that series. The related Prospectus Supplement will
contain a description of certain United States Federal income tax consequences
relating to the purchase and ownership of the series of Preferred Stock
described in such Prospectus Supplement.
The rights, preferences, privileges and restrictions of the Preferred
Stock of each series will be fixed by the certificate of designation relating to
such series. A Prospectus Supplement relating to each series will specify the
terms of the Preferred Stock as follows:
(a) The maximum number of shares to constitute the series and the
distinctive designation thereof;
(b) The annual dividend rate, if any, on shares of the series,
whether such rate is fixed or variable or both, the date or dates from
which dividends will begin to accrue or accumulate, the conditions for
payment of dividends, and whether dividends will be cumulative;
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<PAGE>
(c) The price at and the terms and conditions on which the shares
of the series may be redeemed, including the time during which shares
of the series may be redeemed and any accumulated dividends thereon
that the holders of shares of the series shall be entitled to receive
upon the redemption thereof;
(d) The liquidation preference, if any, and any accumulated
dividends thereon, that the holders of shares of the series shall be
entitled to receive upon the liquidation, dissolution or winding up of
the affairs of the Company;
(e) Whether or not the shares of the series will be subject to
operation of a retirement or sinking fund, and, if so, the extent and
manner in which any such fund shall be applied to the purchase or
redemption of the shares of the series, and the terms and provisions
relating to the operation of such fund;
(f) The terms and conditions, if any, on which the shares of the
series shall be convertible into or exchangeable for shares of any
other class or classes of capital stock of the Company or
a third party or any series of any other class or classes, or of any
other series of the same class, including the price or prices or the
rate or rates of conversion or exchange and the method, if any, of
adjusting the same;
(g) The voting rights, if any, on the shares of the series; and
(h) Any or all other preferences and relative, participating,
optional or other special rights or qualifications, limitations or
restrictions thereof.
As described under "Description of the Depositary Shares," the Company
may, at its option, elect to offer Depositary Shares evidenced by depositary
receipts ("Depositary Receipts"), each representing a fractional interest (to be
specified in the Prospectus Supplement relating to the particular series of the
Preferred Stock) in a share of the particular series of the Preferred Stock
issued and deposited with a Depositary (as defined below).
DESCRIPTION OF THE DEPOSITARY SHARES
The description set forth below and in the related Prospectus
Supplement of certain provisions of the Deposit Agreement (as defined below) and
of the Depositary Shares and Depositary Receipts does not purport to be complete
and is subject to and qualified in its entirety by reference to the forms of
Deposit Agreement and Depositary Receipts relating to each series of the
Preferred Stock which have been or will be filed with the Commission in
connection with the offering of fractional interests in such series of the
Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for Depositary Shares, each of which will
represent a fractional interest as set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock.
The shares of any series of the Preferred Stock underlying the
Depositary Shares will be deposited under a separate Deposit Agreement (the
"Deposit Agreement") between the Company and a bank or trust company selected by
the Company having its principal office in the United States and having a
combined capital and surplus of at least $100,000,000 (the "Depositary"). The
Prospectus Supplement relating to a series of Depositary Shares will set forth
the name and address of the Depositary. Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fractional interest in a share of the Preferred Stock underlying
such Depositary Shares, to all the rights and preferences of the Preferred Stock
underlying such Depositary Shares (including dividend, voting, redemption,
conversion and liquidation rights). The Depositary Shares relating to any series
of Preferred Stock will be evidenced by Depositary Receipts issued pursuant to
the related Deposit Agreement.
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<PAGE>
Pending the preparation of definitive Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the office of the Depositary
and upon payment of the charges provided in the related Deposit Agreement and
subject to the terms thereof, a holder of Depositary Shares is entitled to have
the Depositary deliver to such holder the whole shares of Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends and other cash
distributions received in respect of the Preferred Stock to the record holders
of the Depositary Shares relating to such Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all of the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
payments or other property to which the holders of such Depositary Shares are
entitled upon such redemption upon surrender to the Depositary of the Depositary
Receipts evidencing such Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock underlying the Depositary Shares are entitled to vote, the
Depositary will mail the information contained in such notice of meeting to the
record holders of such Depositary Shares. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The
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Depositary will abstain from voting shares of Preferred Stock to the extent it
does not receive specific instructions from the holders of Depositary Shares
relating to such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares
relating to any series of Preferred Stock and any provision of the related
Deposit Agreement may at any time be amended by agreement between the Company
and the Depositary named therein. However, any amendment which materially and
adversely alters the rights of the existing holders of Depositary Shares
relating to any series of Preferred Stock will not be effective unless such
amendment has been approved by the record holders of at least a majority of such
Depositary Shares then outstanding. A Deposit Agreement may be terminated by the
Company or the Depositary named therein only if (i) all outstanding Depositary
Shares relating thereto have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock underlying the Depositary Shares
relating thereto in connection with any liquidation, dissolution or winding up
of the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the depositary arrangements. The
Company will pay charges of the Depositary in connection with the initial
deposit of the Preferred Stock and any redemption of the Preferred Stock.
Holders of Depositary Shares will pay transfer and other taxes and governmental
charges and such other charges as are expressly provided in the related Deposit
Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders of the
underlying Preferred Stock.
Neither the Depositary nor the Company will be liable if it is
prevented or delayed by law or any circumstance beyond its control from
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Depositary under the Deposit Agreement will be limited to
performance in good faith of their duties thereunder and they will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or underlying Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, on
information provided by persons presenting Preferred Stock for deposit, holders
of Depositary Shares or other persons believed to be competent and on documents
believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary under a Deposit Agreement may resign at any time by
delivering to the Company notice of its election to do so, and the Company may
at any time with notice remove such Depositary, any such resignation or removal
to take effect upon the appointment of a successor Depositary and its acceptance
of such appointment. Such successor Depositary must be appointed within 90 days
after delivery of the notice of resignation or removal and must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $100,000,000.
DESCRIPTION OF THE DEBT SECURITIES
GENERAL
The Company may offer under this Prospectus Senior Debt Securities (as
defined below) or Subordinated Debt Securities (as defined below) or any
combination of the foregoing. The Debt Securities will represent unsecured
general obligations of the Company, and will either (i) rank prior to all
subordinated indebtedness of the Company and PARI PASSU with all other unsecured
indebtedness of the Company (the "Senior Debt Securities") or
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(ii) be subordinate in right of payment to certain other debt obligations of the
Company (the "Subordinated Debt Securities"). The Senior Debt Securities and the
Subordinated Debt Securities may be issued under indentures substantially in the
forms filed as exhibits to the Registration Statement. In this Prospectus, the
indenture relating to Senior Debt Securities is referred to as the "Senior
Indenture," the indenture relating to Subordinated Debt Securities is referred
to as the "Subordinated Indenture," and the Senior Indenture and the
Subordinated Indenture are collectively referred to as "Indentures." Neither of
the Indentures will limit the amount of Debt Securities that may be issued
thereunder, and each Indenture will provide that Debt Securities may be issued
thereunder up to an aggregate principal amount authorized from time to time by
the Company and may be payable in any currency or currency unit designated by
the Company or in amounts determined by reference to an index. The following
summaries of certain provisions in the Indentures pursuant to which Debt
Securities are issued and of the Debt Securities, as the case may be, do not
purport to be complete. Such summaries make use of certain terms defined in the
Indentures and are qualified in their entirety by reference to the applicable
form of Indenture or Debt Security, respectively, filed as an exhibit to the
Registration Statement.
Reference is made to the applicable Prospectus Supplement for any
series of Debt Securities for the following terms: (i) the designation of such
series of Debt Securities; (ii) the aggregate principal amount of such
series of Debt Securities; (iii) the stated maturity or maturities for payment
of principal of such series of Debt Securities and any sinking fund or analogous
provisions; (iv) the rate or rates at which such series of Debt Securities shall
bear interest or the method of calculating such rate or rates of interest and
the interest payment dates for such series of Debt Securities; (v) the
currencies, currency unit or index in or according to which principal of and
interest and any premium on such series of Debt Securities shall be payable (if
other than U.S. Dollars); (vi) the redemption date or dates, if any, and the
redemption price or prices and other applicable redemption provisions for such
series of Debt Securities; (vii) whether such series of Debt Securities shall be
issued as one or more global debt securities ("Global Debt Securities"), and, if
so, the identity of the depositary (the "Debt Depositary") for such Global Debt
Security or Debt Securities; (viii) if not issued as one or more Global Debt
Securities, the denominations in which such series of Debt Securities shall be
issuable (if other than denominations of $1,000 and any integral multiple
thereof); (ix) the date from which interest on such series of Debt Securities
shall accrue; (x) the basis upon which interest on such series of Debt
Securities shall be computed (if other than on the basis of a 360-day year of
twelve 30-day months); (xi) if other than the principal amount thereof, the
portion of the principal amount of such series of Debt Securities which shall be
payable upon declaration of acceleration of the maturity thereof pursuant to the
Indenture; (xii) if other than the trustee (the "Trustee"), the person or
persons who shall be registrar for such series of Debt Securities; (xiii) the
Record Date; (xiv) the identity of the Trustee; (xv) any covenants of the
Company with respect to a series of Debt Securities; (xvi) whether the Debt
Securities are convertible into or exchangeable for Securities, or other
securities of the Company or Third Party Securities (as herein defined), and the
terms of such conversion or exchange; (xvii) whether the Debt Securities will be
issued at an original issue discount and a description of such discount; and
(xviii) any other term or provision relating to such series of Debt Securities
which is not inconsistent with the provisions of the Indenture.
Except as described in this Prospectus or the accompanying Prospectus
Supplement, the Indentures do not contain any covenants specifically designed to
protect holders of the Debt Securities against a reduction in the
creditworthiness of the Company in the event of a highly leveraged transaction
or to prohibit other transactions which may adversely affect holders of the Debt
Securities.
In the event Debt Securities of any series are to be offered that are
convertible into or exchangeable for securities of third parties ("Third Party
Securities"), the Prospectus Supplement will identify the Third Party
Securities, the issuer of such Third Party Securities (the "Third Party
Company"), all documents filed by the Third Party Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act since the end of such Third Party
Company's last completed fiscal year for which a Form 10-K annual report has
been filed and the document or documents filed under the Securities Act or the
Exchange Act which contain a description of the Third Party Securities being
sold or, if no such document or documents exist, the Prospectus Supplement will
include a description of the Third Party Securities being sold. Third Party
Securities will only be securities of third parties that are eligible to use
Form S-3 (or any successor form) for primary offerings under the rules and
regulations of the Commission or securities that are registered under Section 12
of the Exchange Act. To the extent the Securities Act requires registration of
the Third Party Securities by the Third Party Company, such as where the Third
Party Company is an affiliate of the Company, in connection with the issuance,
conversion and/or exchange of such Debt
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Securities, the Company will cause the Third Party Company to file a third party
registration statement ("Third Party Registration Statement") under the
Securities Act. Where the conversion and/or exchange of the Debt Securities
would require an effective Third Party Registration Statement at the time of
such exchange or conversion, the exchange or conversion will be subject to the
effectiveness of such registration statement. For example, Debt Securities that
are convertible into or exchangeable for Third Party Securities may be
convertible or exchangeable by their terms at the election of the Company or
mandatorily at the expiration of a specified period or at other times under
specified circumstances ("Mandatory Debt Securities") or may be convertible or
exchangeable by their terms at the election of the Debt Holder at any time
during a specified period or periods or on a specified date or dates ("Voluntary
Debt Securities"). In the case of both Mandatory Debt Securities and Voluntary
Debt Securities, if the Company is an affiliate of the Third Party Company, the
Third Party Securities into which they may be converted or for which they may be
exchanged will be the subject of a registration statement filed under the
Securities Act by the Third Party Company prior to any offer of such Mandatory
or Voluntary Debt Securities, and a Third Party Registration Statement with
respect to such Third Party Securities will have been declared effective prior
to any sale of such Mandatory or Voluntary Debt securities, except in the case
of Voluntary Debt Securities that are not immediately exercisable or
convertible, in which case such a Third Party Registration Statement would have
to be effective, absent an exemption, when the Debt Holder elects to convert
such Voluntary Debt Securities into or exchange them for Third Party Securities.
EVENTS OF DEFAULT
Each Indenture defines an "Event of Default" with respect to a
particular series of the Debt Securities as being any one of the following
events: (1) default in the payment of interest on any Debt Security of such
series and the continuance of such default for a period of 30 days, or, in the
case of the Subordinated Debt Indenture, for a period of 90 days, (2) default in
the payment of all or any part of the principal of or any premium on any Debt
Security of such series when due whether at maturity, by proceedings for
redemption, by declaration or otherwise, (3) default in the satisfaction of any
sinking fund payment obligation relating to such series of Debt Securities, when
due and payable, (4) failure on the part of the Company to observe or perform in
any material respect any other agreements or covenants contained in the Debt
Securities of such series, the Indenture or any supplemental indenture relating
thereto, specifically contained for the benefit of the Holders of the Debt
Securities of such series, and continuance of the default for a period of 90
days after notice has been given to the Company by the Trustee, or to the
Company and the Trustee by the Holders of not less than 25% in principal amount
of the Debt Securities of such series and all other series so benefited (all
series voting as one class) at the time outstanding under the Indenture, or (5)
certain events of bankruptcy, insolvency or reorganization involving the
Company. An Event of Default with respect to a series of Debt Securities will
not necessarily constitute an Event of Default with respect to any other series
of Debt Securities. Except as may be described in the accompanying Prospectus
Supplement, the Indentures do not contain any Events of Default other than those
referred to herein.
If an Event of Default occurs with respect to the Debt Securities of
one or more series and is continuing, the Trustee, by notice to the Company, or
the Holders of not less than 25% in principal amount of the outstanding Debt
Securities of each such series, by notice in writing to the Company and to the
Trustee, may declare the principal amount (or, if the Debt Securities of any
such series are original issue discount Debt Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Debt Securities of such series, together with any accrued interest, to be
immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal amount of the Debt Securities of any one or
more series (or of all the Debt Securities, as the case may be) shall have been
so declared due and payable, and before any judgment or decree for the payment
of moneys due shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay any
matured installments of interest upon all the Debt Securities of such series (or
upon all the Debt Securities, as the case may be) and the principal of any and
all Debt Securities of such series (or of any and all the Debt Securities, as
the case may be) which shall have become due otherwise than by declaration (with
interest on overdue installments of interest to the extent permitted by law and
on such principal at the rate or rates of interest borne by, or prescribed
therefor in, the Debt Securities of such series to the date of such payment or
deposit) and any other amounts then payable to the Trustee under the Indenture,
and any and all defaults under the Indenture with respect to Debt Securities of
such series (or all Debt Securities, as the case may be), other than the
nonpayment of
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principal of and any accrued interest on Debt Securities of such series (or any
Debt Securities, as the case may be) which shall have become due by declaration
shall have been cured, remedied or waived as provided in the Indenture, then and
in every such case the Holders of a majority in principal amount of the Debt
Securities of such series (or of all the Debt Securities, as the case may be)
then outstanding (all series voting as one class if more than one series are so
entitled), by written notice to the Company and to the Trustee, may rescind and
annul such declaration and its consequences; but no such rescission and
annulment shall extend to or affect any subsequent default, or impair any right
consequent thereon.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal or any premium or interest on the Debt Securities of the series to
which the default relates or to enforce the performance of any provision of such
series of Debt Securities or the Indenture.
The Holders of a majority in principal amount of the outstanding Debt
Securities of any series may waive any past Event of Default with respect of
such series and its consequences, except a continuing default in the
payment of the principal of or any premium or interest on such Debt Securities
or in the satisfaction of any sinking fund obligation relating to such series of
Debt Securities or in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the Holder of each Debt
Security so affected.
MODIFICATIONS OF THE INDENTURE
Each of the Indentures provides that the Company and the Trustee may
enter into a supplemental indenture to amend the Indenture or the Debt
Securities without the consent of any Debt Holder: (1) to cure any ambiguity,
defect or inconsistency; (2) to permit a successor to assume the Company's
obligations under the Indenture as permitted by the Indenture; (3) to eliminate
or change any provision of the Indenture if such elimination or change does not
adversely affect the rights of any outstanding Debt Holder; (4) to provide for
the issuance and establish the terms and conditions of Debt Securities of any
series; (5) to add to the covenants of the Company further covenants,
restrictions or conditions for the protection of the Holders of all or any
particular series of Debt Securities and to make the occurrence, or the
occurrence and continuance, of a default in any such additional covenants,
restrictions or conditions an Event of Default permitting the enforcement of all
or any of the several remedies provided in the Indenture; or (6) to appoint, at
the request of the Trustee, a successor Trustee for a particular series of Debt
Securities to act as such pursuant to the provisions of the Indenture.
Each of the Indentures and the rights and obligations of the Company
and of the Holders of the Debt Securities may be modified or amended at any time
with the consent of the Holders of not less than a majority in aggregate
principal amount of all series of the Debt Securities at the time outstanding
under such Indenture and affected by such modification or amendment (voting as
one class); provided, however, that without the consent of the holder of the
Debt Securities affected, no such modification or amendment shall, among other
things, change the fixed maturity or redemption date thereof, reduce the rate of
interest thereon or alter the method of determining such rate of interest,
extend the time of payment of interest, reduce the principal amount thereof,
reduce any premium payable upon the redemption thereof, change the currency in
which any Debt Securities or the interest thereon are payable or impair the
right to institute suit for the enforcement of any such payment, reduce the
percentage of the Holders of such Debt Securities whose consent is required for
any such modification or amendment or change the time of payment, reduce the
amount of any minimum sinking fund payment, or modify any provisions of the
Indenture relating to the amendment thereof or the creation of a supplemental
indenture (unless the change increases the rights of the Holders).
DEFEASANCE AND DISCHARGE
All liability of the Company in respect to any outstanding Debt
Securities shall cease, terminate and be completely discharged if the Company
shall (a) deposit with the Trustee, in trust, at or before maturity, lawful
money or direct obligations of the United States of America (or, in the case of
Debt Securities denominated in a currency other than U.S. Dollars, of the
government that issued such currency), or obligations the principal of and
interest on which are guaranteed by the United States of America (or, in the
case of Debt Securities denominated in a currency other than U.S. Dollars,
guaranteed by the government that issued such currency), in such amounts and
maturing at
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such times that the proceeds of such obligations to be received upon
the respective maturities and interest payment dates will provide funds
sufficient to pay the principal of and interest and any premium to maturity or
to the redemption date, as the case may be, with respect to such Debt
Securities, and (b) deliver to the Trustee an opinion of counsel to the effect
that the Holders of such Debt Securities will not recognize income, gain or loss
for federal income tax purposes as a result of such discharge. All obligations
of the Company to comply with certain covenants applicable to any outstanding
Debt Securities shall cease if the Company shall deposit with the Trustee, in
trust, at or before maturity, lawful money or direct obligations of the United
States of America (or, in the case of Debt Securities denominated in a currency
other than U.S. Dollars, of the government that issued such currency), or
obligations the principal of and interest on which are guaranteed by the United
States of America (or, in the case of Debt Securities denominated in a currency
other than U.S. Dollars, by the government that issued such currency), in such
amounts and maturing at such times that the proceeds of such obligations to be
received upon the respective maturities and interest payment dates will provide
funds sufficient to pay the principal of and interest and any premium to
maturity or to the redemption date, as the case may be, with respect to such
Debt Securities.
CONCERNING THE TRUSTEE
The Trustee for the Senior Debt Securities and the Trustee for the
Subordinated Debt Securities will be identified in the relevant Prospectus
Supplement. In certain instances, the Company or the Holders of a majority of
the then outstanding principal amount of the Debt Securities issued under an
Indenture may remove the Trustee and appoint a successor Trustee. The Trustee
may become the owner or pledgee of any of the Debt Securities with the same
rights it would have if it were not the Trustee. The Trustee and any successor
trustee must be a corporation organized and doing business as a commercial bank
under the laws of the United States or of any state thereof or of the District
of Columbia, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000 and subject to
examination by federal or state or District of Columbia authority. From time to
time and subject to applicable law relating to conflicts of interest, the
Trustee may also serve as Trustee under other indentures relating to Debt
Securities issued by the Company or affiliated companies and may engage in
commercial transactions with the Company and affiliated companies.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured and will rank equally with
all other unsecured and unsubordinated indebtedness for borrowed money of the
Company.
SUBORDINATED DEBT SECURITIES
Subordinated Debt Securities may be issued from time to time in one or
more series under the Subordinated Debt Indenture. The Subordinated Debt
Securities will be subordinated and junior in right of payment to certain other
indebtedness of the Company to the extent set forth in the applicable Prospectus
Supplement.
In the event the Subordinated Debt Securities are issued to a Financing
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such Financing Trust, such Subordinated Debt Securities
subsequently may be distributed pro rata to the Holders of such Trust Securities
in connection with the dissolution of such Financing Trust upon the occurrence
of certain events described in the Prospectus Supplement relating to such Trust
Securities. Only one series of Subordinated Debt Securities will be issued to a
Financing Trust or a trustee of such trust in connection with the issuance of
Trust Securities by such Financing Trust.
Unless otherwise provided in the applicable Prospectus Supplement, if
Subordinated Debt Securities are issued to a Financing Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such Financing
Trust and (i) there shall have occurred an event that would constitute an Event
of Default with respect to such Subordinated Debt Securities; (ii) the Company
shall be in default with respect to its payment of any obligations under the
related Preferred Securities Guarantee or Common Securities Guarantee; or (iii)
the Company shall have given notice of its election to defer payments of
interest on such Subordinated Debt Securities by extending the interest payment
period as provided in the Indenture and such period, or any extension thereof,
shall be continuing, then (a) the Company shall not declare or pay any dividend
on, make any distributions with respect to, or redeem, purchase or make a
liquidation payment with respect to, any of its capital stock, and (b) the
Company shall not make
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any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any Debt Securities which rank junior to or PARI PASSU with such
Subordinated Debt Securities; PROVIDED that the foregoing restriction does not
apply to: (w) any stock dividends paid by the Company where the dividend stock
is of the same class as that of the stock held by the Holders receiving the
dividend, (x) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (y) payments under a Guarantee, and (z) purchases of Common
Stock related to the issuance of Common Stock or rights under any of the
Company's or its subsidiaries' benefit plans for their directors, officers or
employees.
DESCRIPTION OF THE WARRANTS TO PURCHASE COMMON STOCK OR PREFERRED STOCK
The following statements with respect to the Common Stock Warrants and
Preferred Stock Warrants (collectively, the "Stock Warrants") are summaries of,
and subject to, the detailed provisions of a warrant agreement ("Stock Warrant
Agreement") to be entered into by the Company and a warrant agent to be selected
at the time of issue (the "Stock Warrant Agent"), which Stock Warrant Agreement
may include or incorporate by reference standard warrant provisions
substantially in the form of the Standard Stock Warrant Provisions (the "Stock
Warrant Provisions") filed as an exhibit to the Registration Statement or other
provisions set forth in the Stock Warrant Agreement which will be filed as an
exhibit to or incorporated by reference in the Registration Statement.
GENERAL
The Stock Warrants may be issued under the Stock Warrant Agreement
independently or together with any other Securities offered by any Prospectus
Supplement and may be attached to or separate from such other Securities. If
Stock Warrants are offered, the related Prospectus Supplement will describe the
terms of the Stock Warrants, including without limitation the following: (i) the
offering price, if any; (ii) the designation and terms of the Common Stock or
Preferred Stock purchasable upon exercise of the Stock Warrants; (iii) the
number of shares of Common Stock or Preferred Stock purchasable upon exercise of
one Stock Warrant and the initial price at which such shares may be purchased
upon exercise; (iv) the date on which the right to exercise the Stock Warrants
shall commence, the date on which such right shall expire and whether the
Company has the ability to extend the exercise period; (v) federal income tax
consequences; (vi) call provisions, if any; (vii) the currency, currencies or
currency units in which the offering price, if any, and exercise price are
payable; (viii) the antidilution provisions of the Stock Warrants; and (ix) any
other terms of the Stock Warrants. The shares of Common Stock or Preferred Stock
issuable upon exercise of the Stock Warrants will, when issued in accordance
with the Stock Warrant Agreement, be fully paid and nonassessable. If the
Company maintains the ability to reduce the exercise price of any Stock Warrant
and such right is triggered, the Company will comply with the federal securities
laws, including Rule 13e-4 under the Exchange Act, to the extent applicable.
EXERCISE OF STOCK WARRANTS
Stock Warrants may be exercised in the manner set forth in the
applicable Prospectus Supplement. Duly exercised Stock Warrants will be
delivered by the Stock Warrant Agent to the transfer agent for the Common Stock
or the Preferred Stock, as the case may be. Upon receipt thereof, the transfer
agent shall deliver or cause to be delivered, to or upon the written order of
the exercising warrantholder, the number of shares of Common Stock or Preferred
Stock purchased. If fewer than all of the Stock Warrants held by a warrantholder
are exercised, the Stock Warrant Agent shall deliver to the exercising
warrantholder a new Stock Warrant representing the unexercised Stock Warrants.
ANTIDILUTION PROVISIONS
The exercise price payable and the number of shares of Common Stock or
Preferred Stock, as the case may be, purchasable upon the exercise of each Stock
Warrant will be subject to adjustment in certain events, including the issuance
of a stock dividend to holders of Common Stock or Preferred Stock, respectively,
or a combination, subdivision or reclassification of Common Stock or Preferred
Stock, respectively. In lieu of adjusting the number of shares of Common Stock
or Preferred Stock purchasable upon exercise of each Stock Warrant, the Company
may elect to adjust the number of Stock Warrants. No adjustment in the number of
shares purchasable upon exercise of
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the Stock Warrants will be required until cumulative adjustments require an
adjustment of at least 1% thereof. The Company may, at its option, reduce the
exercise price at any time. No fractional shares will be issued upon exercise of
Stock Warrants, but the Company will pay the cash value of any fractional shares
otherwise issuable. Notwithstanding the foregoing, in case of any consolidation,
merger, or sale or conveyance of the property of the Company as an entirety or
substantially as an entirety, the holder of each outstanding Stock Warrant shall
have the right upon the exercise thereof to the kind and number of shares of
stock and other securities and property (including cash) receivable by a holder
of the number of shares of Common Stock or Preferred Stock into which such Stock
Warrants were exercisable immediately prior thereto.
NO RIGHTS AS STOCKHOLDERS
Holders of Stock Warrants will not be entitled, by virtue of being such
holders, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of the Company or any other matter, or to exercise any rights
whatsoever as stockholders of the Company.
DESCRIPTION OF THE THIRD PARTY WARRANTS
The following statements with respect to the Third Party Warrants are
summaries of, and subject to, the detailed provisions of a warrant agreement
(the "Third Party Warrant Agreement") to be entered into by the Company and a
warrant agent to be selected at the time of issue (the "Third Party Warrant
Agent"), which Third Party Warrant Agreement may include or incorporate by
reference standard warrant provisions substantially in the form of the Stock
Warrant Provisions or the provisions set forth in the form of Debt Securities
Warrant Agreement filed as an exhibit to the Registration Statement or other
provisions set forth in the Third Party Warrant Agreement which will be filed as
an exhibit to or incorporated by reference in the Registration Statement.
GENERAL
The Third Party Warrants may be issued under the Third Party Warrant
Agreement independently or together with any other Securities offered by any
Prospectus Supplement and may be attached to or separate from such other
Securities. If Third Party Warrants are offered, the related Prospectus
Supplement will describe the terms of the warrants, including without limitation
the following: (i) the offering price, if any; (ii) the designation, aggregate
principal amount and terms of the Third Party Securities purchasable upon
exercise of the warrants; (iii) if applicable, the designation and terms of the
Third Party Securities with which the Third Party Warrants are issued and the
number of Third Party Warrants issued with each such Third Party Security, (iv)
if applicable, the date on and after which the Third Party Warrants and the
related Third Party Securities will be separately transferable; (v) the number
or principal amount of Third Party Securities purchasable upon exercise of one
Third Party Warrant and the price at which such number or principal amount of
Third Party Securities may be purchased upon exercise; (vi) the date on which
the right to exercise the Third Party Warrants shall commence, the date on which
such right shall expire and whether the Company has the ability to extend the
exercise period; (vii) federal income tax consequences; (viii) whether the Third
Party Warrants will be issued in registered or bearer form; (ix) the currency,
currencies or currency units in which the offering price, if any, and exercise
price are payable; (x) the antidilution provisions of the Third Party Warrants;
and (xi) any other terms of the Third Party Warrants. If the Company maintains
the ability to reduce the exercise price of any Third Party Warrant and such
right is triggered, the Company will comply with the federal securities laws,
including Rule 13e-4 under the Exchange Act, to the extent applicable.
The Prospectus Supplement will identify the Third Party Securities, the
Third Party Company, all documents filed by the Third Party Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act since the end of such
Third Party Company's last completed fiscal year for which a Form 10-K annual
report has been filed and the document or documents filed under the Exchange Act
which contain a description of the Third Party Securities being sold or, if no
such document or documents exist, the Prospectus Supplement will include a
description of the Third Party Securities being sold. Third Party Warrants may
be offered only with respect to Third Party Securities of Third Party Companies
that are eligible to use Form S-3 (or any successor form) for primary offerings
under the rules and regulations of the Commission and Third Party Securities
that are registered under Section 12 of the Exchange Act. To the extent the
Securities Act requires registration of the Third Party Securities by the Third
Party Company, such as where the Third Party is an affiliate of the Company, in
connection with the issuance and/or
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exercise of Third Party Warrants, the Company will cause the Third Party Company
to file a Third Party Registration Statement under the Securities Act. Where the
exercise of Third Party Warrants would require the Third Party to have an
effective Third Party Registration Statement at the time of exercise, the
exercise will be subject to the effectiveness of such registration statement.
For example, if the Company is an affiliate of the Third Party Company,
the Third Party Securities that can be acquired upon exercise of the Third Party
Warrants will be the subject of a registration statement filed under the
Securities Act by the Third Party Company prior to any offer of such Third Party
Warrants, and a Third Party Registration Statement will have been declared
effective prior to any sale of Third Party Warrants, except in the case of Third
Party Warrants which are not immediately exercisable, in which case such a
registration statement would have to be effective, absent an exemption, when the
holder of any Third Party Warrants elects to exercise them to acquire Third
Party Securities.
Third Party Warrants may be exchanged for new Third Party Warrants of
different denominations and may (if in registered form) be presented for
registration of transfer at the corporate trust office of the Third Party
Warrant Agent, which will be listed in the related Prospectus Supplement, or at
such other office as may be set forth therein. Warrantholders do not have any of
the rights of holders of Third Party Securities (except as may be otherwise set
forth in the Prospectus Supplement).
EXERCISE OF THIRD PARTY WARRANTS
Third Party Warrants may be exercised in the manner set forth in the
applicable Prospectus Supplement. Upon the exercise of Third Party Warrants, the
Third Party Warrant Agent will, as soon as practicable, deliver the Third Party
Securities in authorized denominations in accordance with the instructions of
the exercising warrantholder and at the sole cost and risk of such holder. If
less than all of the Third Party Warrants held by a warrantholder are exercised,
a new Third Party Warrant will be issued for the remaining amount of Third Party
Warrants.
DESCRIPTION OF THE WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the Debt Warrants are
summaries of, and subject to, the detailed provisions of a warrant agreement
(the "Debt Warrant Agreement") to be entered into by the Company and a warrant
agent to be selected at the time of issue (the "Debt Warrant Agent"), which Debt
Warrant Agreement may include or incorporate by reference standard warrant
provisions substantially in the form of the Standard Debt Securities Warrant
Provisions filed as an exhibit to the Registration Statement or other provisions
set forth in the Debt Warrant Agreement which will be filed as an exhibit to or
incorporated by reference in the Registration Statement.
GENERAL
The Debt Warrants may be issued under the Debt Warrant Agreement
independently or together with any Debt Securities offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities.
If Debt Warrants are offered, the related Prospectus Supplement will
describe the terms of the Debt Warrants, including without limitation the
following: (i) the offering price, if any; (ii) the designation, aggregate
principal amount and terms of the Debt Securities purchasable upon exercise of
the Debt Warrants; (iii) the principal amount of Debt Securities purchasable
upon exercise of the Debt Warrants and the price at which such principal amount
of Debt Securities may be purchased upon exercise; (iv) the date or dates on
which the right to exercise the Debt Warrants shall commence, the date on which
such right shall expire and whether the Company has the ability to extend the
exercise period; (v) federal income tax consequences, if any; (vi) the currency,
currencies or currency units in which the offering price, if any, and exercise
price are payable; and (vii) any other terms of the Debt Warrants.
Debt Warrants may be exchanged for new Debt Warrants of different
denominations and may be presented for registration of transfer at the corporate
trust office of the Debt Warrant Agent, which will be listed in the related
Prospectus Supplement, or at such other office as may be set forth therein.
Warrantholders do not have any of the
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rights of holders of Debt Securities and are not entitled to payments of
principal of and interest, if any, on the Debt Securities.
EXERCISE OF DEBT WARRANTS
Debt Warrants may be exercised in the manner set forth in the
applicable Prospectus Supplement. Upon the exercise of Debt Warrants, the Debt
Warrant Agent will, as soon as practicable, deliver the Debt Securities in
authorized denominations in accordance with the instructions of the exercising
warrantholder and at the sole cost and risk of such warrantholder.
DESCRIPTION OF THE STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, which are contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock or Preferred Stock at a
future date or dates. The price per share of Common Stock or Preferred Stock may
be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific formula set forth in the
Stock Purchase Contracts. Any such formula may include antidilution provisions
to adjust the number of shares issuable pursuant to Stock Purchase Contracts
upon certain events. The Stock Purchase Contracts may be issued separately or as
a part of Stock Purchase Units each representing ownership of a Stock Purchase
Contract and Debt Securities, Preferred Securities or debt obligations of a
Third Party Company, including U.S. Obligations, securing the holders'
obligations to purchase the Common Stock or the Preferred Stock under the
Purchase Contracts.
In the case of Stock Purchase Units that include debt obligations of a
Third Party Company, unless a holder of Stock Purchase Units settles its
obligations under the Stock Purchase Contracts early through the delivery of
consideration to the Company or its agent in the manner discussed below, the
principal of such debt obligations, when paid at maturity, will automatically be
applied to satisfy the holder's obligation to purchase Common Stock or Preferred
Stock under the Stock Purchase Contracts.
In the case of Stock Purchase Units that include Debt Securities or
Preferred Securities, in the absence of any such early settlement or the
election by a holder to pay the consideration specified in the Stock Purchase
Contracts prior to the stated settlement date, the Debt Securities or Preferred
Securities will automatically be presented to the applicable Financing Trust for
redemption at 100% of face or liquidation value and such Financing Trust will
present Subordinated Debt Securities in an equal principal amount to the Company
for redemption at 100% of principal amount. Amounts received in respect of such
redemption will automatically be transferred to the Company and applied to
satisfy in full the holder's obligation to purchase Common Stock or Preferred
Stock under the Stock Purchase Contracts. The Stock Purchase Contracts may
require the Company to make periodic payments to the holders of the Stock
Purchase Units or vice versa, and such payments may be unsecured or prefunded on
some basis. The Stock Purchase Contracts may require holders to secure their
obligations thereunder in a specified manner.
Holders of Stock Purchase Units may be entitled to settle the
underlying Stock Purchase Contracts prior to the stated settlement date by
surrendering the certificate evidencing the Stock Purchase Units, accompanied by
the payment due, in such form and calculated pursuant to such formula as may be
prescribed in the Stock Purchase Contracts and described in the applicable
Prospectus Supplement. Upon early settlement, the holder will receive the number
of shares of Common Stock or Preferred Stock deliverable under such Stock
Purchase Contracts, subject to adjustment in certain cases. Holders of Stock
Purchase Units may be entitled to exchange their Stock Purchase Units, together
with appropriate collateral, for separate Stock Purchase Contracts and Preferred
Securities, Debt Securities or debt obligations. In the event of such early
settlement or exchange, the Preferred Securities, Debt Securities or debt
obligations that were pledged as security for the obligation of the holder to
perform under the Stock Purchase Contracts will be transferred to the holder
free and clear of the Company's security interest therein.
The applicable Prospectus Supplement will describe the terms of any
Stock Purchase Contracts or Stock Purchase Units.
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DESCRIPTION OF THE PREFERRED SECURITIES
Each Financing Trust may issue only one series of Preferred Securities
having terms described in the Prospectus Supplement relating thereto. The
Declaration of each Financing Trust authorizes the Administrators of each
Financing Trust to issue on behalf of such Financing Trust one series of
Preferred Securities. Each Declaration will be qualified as an indenture under
the Trust Indenture Act. The Preferred Securities will have such terms,
including distributions redemption, voting, liquidation rights and such other
preferred, deferred or other special rights or such restrictions, as shall be
set forth in the Declaration or made part of the Declaration by the Trust
Indenture Act. Reference is made to the Prospectus Supplement relating to the
Preferred Securities for specific terms including: (i) the distinctive
designation of such Preferred Securities; (ii) the number of Preferred
Securities issued; (iii) the annual distribution rate (or method of determining
such rate) for such Preferred Securities and the date or dates upon which such
distributions shall be payable (provided, however, that distributions on such
Preferred Securities shall be payable on a quarterly basis to holders of such
Preferred Securities as of a record date in each quarter during which such
Preferred Securities are outstanding); (iv) whether distributions on Preferred
Securities shall be cumulative, and, in the case of Preferred Securities having
such cumulative distribution rights, the date or dates or method of determining
the date or dates from which distributions on Preferred Securities shall be
cumulative; (v) the amount or amounts which shall be paid out of the assets of
such Financing Trust to the holders of Preferred Securities upon voluntary or
involuntary dissolution of such Financing Trust; (vi) the obligation, if any, of
such Financing Trust to purchase or redeem Preferred Securities and the price or
prices at which, the period or periods within which and the terms and conditions
upon which Preferred Securities issued by such Financing Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation; (vii)
the voting rights, if any, of Preferred Securities issued by such Financing
Trust in addition to those required by law, including the number of votes per
Preferred Security and any requirement for the approval by the holders of
Preferred Securities, or of Preferred Securities issued by both Financing Trusts
as a condition to specified action or amendments to the Declaration of such
Financing Trust; (viii) whether the Preferred Securities will be issued in the
form of one or more global securities; and (ix) any other relevant rights,
preferences, privileges, limitations or restrictions of Preferred Securities
issued by such Financing Trust consistent with the Declaration of such trust or
with applicable law. All Preferred Securities offered hereby will be guaranteed
by the Company to the extent set forth below under "Description of the
Guarantees." Certain United States federal income tax considerations applicable
to any offering of Preferred Securities will be described in the Prospectus
Supplement relating thereto.
In connection with the issuance of Preferred Securities, each Financing
Trust will issue one series of Common Securities. The Declaration of each
Financing Trust authorizes the Administrators to issue on behalf of such
Financing Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities issued by a
Financing Trust will be substantially identical to the terms of the Preferred
Securities issued by such trust and the Common Securities will rank PARI PASSU,
and payments will be made thereon pro rata, with the Preferred Securities except
that, upon the occurrence and during the continuation of an event of default
under the Declaration, the rights of the holders of the Common Securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Preferred
Securities. Except in certain limited circumstances the Common Securities will
also carry the right to vote and to appoint, remove or replace any of the
Financing Trustees or the Administrators. All of the Common Securities will be
directly or indirectly owned by the Company.
DESCRIPTION OF THE GUARANTEES
Set forth below is a summary of information concerning the Guarantees
that will be executed and delivered by the Company for the benefit of the
Holders, from time to time, of Preferred Securities. Each Preferred Securities
Guarantee Agreement under which Guarantees are issued will be qualified as an
indenture under the Trust Indenture Act. The trustee under each Guarantee (the
"Guarantee Trustee") will be identified in the relevant Prospectus Supplement,
and will be a financial institution not affiliated with the Company that has a
combined capital and surplus of at least $100,000,000. The terms of each
Guarantee will be those set forth in such Guarantee and those made part of such
Guarantee by the Trust Indenture Act. The summary does not purport to be
complete. Such summary makes use of certain terms defined in the Guarantee and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the form of Guarantee, which is filed as an exhibit to
the Registration
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Statement of which this Prospectus forms a part, and the Trust Indenture Act.
Each Guarantee will be held by the Guarantee Trustee for the benefit of the
holders of the Preferred Securities of the applicable Financing Trust.
GENERAL
Pursuant to each Guarantee, the Company will unconditionally agree, to
the extent set forth therein, to pay in full to the holders of the Preferred
Securities issued by each Financing Trust, the Guarantee Payments (as defined
herein) (except to the extent paid by such Financing Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which such Financing
Trust may have or assert other than the defense of payment. The following
payments with respect to Preferred Securities issued by each Financing Trust
(the "Guarantee Payments"), to the extent not paid by or on behalf of such
Financing Trust, will be subject to the Guarantee (without duplication): (i) any
accrued and unpaid distributions that are required to be paid on such Preferred
Securities, but if and only to the extent that in each case the Company has made
a payment to the related Property Trustee of interest or principal on the
Subordinated Debt Securities held in such Financing Trust as trust assets; (ii)
the redemption price, including all accrued and unpaid distributions (the
"Redemption Price"), but if and only to the extent that in each case the Company
has made a payment to the related Property Trustee of interest or principal on
the Subordinated Debt Securities held in such Financing Trust as trust assets
with respect to any Preferred Securities called for redemption by such Financing
Trust; and (iii) upon a voluntary or involuntary dissolution, winding up or
termination of such Financing Trust (other than in connection with the
distribution of Subordinated Debt Securities to the holders of Preferred
Securities or the redemption of all of the Preferred Securities), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on such Preferred Securities to the date of payment to the extent
such Financing Trust has funds available therefor or (b) the amount of assets of
such Financing Trust remaining available for distribution to holders of such
Preferred Securities on liquidation of such Financing Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the holders of Preferred Securities or by
causing the applicable Financing Trust to pay such amounts to such holders.
Each Guarantee will be a guarantee with respect to the Preferred
Securities issued by the applicable Financing Trust from the time of issuance of
such Preferred Securities but will not apply to any payment of distributions
except to the extent the Company has made a payment to the related Property
Trustee of interest or principal on the Subordinated Debt Securities held in
such Financing Trust as trust assets. If the Company does not make interest
payments on the Subordinated Debt Securities purchased by a Financing Trust,
such Financing Trust will not pay distributions on the Preferred Securities
issued by such Financing Trust and will not have funds available therefor and
such payment obligation will therefore not be guaranteed by the Company under
the applicable Guarantee. See "Description of the Preferred Securities" and
"Description of the Debt Securities--Subordinated Debt Securities."
The Company's obligations under the Declaration for each Financing
Trust, the Preferred Securities Guarantee issued with respect to Preferred
Securities issued by such Financing Trust, the Subordinated Debt Securities
purchased by such Financing Trust and the related Subordinated Indenture in the
aggregate will provide a full and unconditional guarantee on a subordinated
basis by the Company of payments due on the Preferred Securities issued by such
Financing Trust.
The Company has also agreed to unconditionally guarantee the
obligations of the Financing Trusts with respect to the Common Securities (the
"Common Securities Guarantees") to the same extent as the Guarantees, except
that, upon an event of default under the Subordinated Indenture, holders of
Preferred Securities under the Guarantees shall have priority over holders of
Common Securities under the Common Securities Guarantee with respect to
distributions and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any
Preferred Securities issued by the applicable Financing Trust remain
outstanding, if there shall have occurred any event that would constitute an
event of default under such Guarantee or the Declaration of such Financing
Trust, then (a) the Company shall not declare or pay any dividend on, or make
any distribution with respect to, or redeem, purchase, acquire or make a
liquidation
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payment with respect to, any of its capital stock and (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Company which rank junior
to or PARI PASSU with such Subordinated Debt Securities. However, each Guarantee
will except from the foregoing any stock dividends paid by the Company or any of
its subsidiaries, where the dividend stock is of the same class as that on which
the dividend is being paid.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the
rights of holders of Preferred Securities (in which case no vote will be
required), each Guarantee may be amended only with the prior approval of the
holders of not less than a majority in liquidation amount of the outstanding
Preferred Securities issued by the applicable Financing Trust. The manner of
obtaining any such approval of holders of such Preferred Securities will be set
forth in an accompanying Prospectus Supplement. All guarantees and agreements
contained in a Guarantee shall bind the successors, assignees, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Preferred Securities of the applicable Financing Trust then
outstanding.
EVENTS OF DEFAULT
An Event of Default under the Guarantee will occur upon the failure of
the Company to perform any of its payments or other obligations thereunder. The
holders of a majority in liquidation amount of the Preferred Securities to which
a Guarantee relates have the right to (a) waive any past Events of Default and
its consequences, whereupon such event of default shall cease to exist and any
event of default under the Guarantee arising therefrom shall be deemed to have
been cured and (b) direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee.
If the Guarantee Trustee fails to enforce such Guarantee, any holder of
Preferred Securities relating to such Guarantee may, after a period of 30 days
has elapsed from such holder's written request to the Guarantee Trustee to
enforce the Guarantee, institute a legal proceeding directly against the Company
to enforce its rights under such Guarantee without first instituting a legal
proceeding against the applicable Financing Trust, the Guarantee Trustee or any
other person or entity.
The Company will be required to provide annually to the Guarantee
Trustee a statement as to the performance by the Company of certain of its
obligations under each of the Guarantees and as to any default in such
performance.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate as to the Preferred Securities issued by
the applicable Financing Trust upon full payment of all distributions relating
to the Preferred Securities or the Redemption Price of all Preferred Securities
of such Trust, upon distribution of the Subordinated Debt Securities held by
such Financing Trust to the holders of the Preferred Securities of such
Financing Trust or upon full payment of the amounts payable in accordance with
the Declaration of such Financing Trust upon liquidation of such Financing
Trust. Each Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any holder of Preferred Securities issued by the
applicable Financing Trust must restore payment of any sums paid under such
Preferred Securities or such Guarantee.
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all senior
liabilities of the Company; (ii) PARI PASSU with the obligations of the Company
under any similar guarantee agreements issued by the Company on behalf of
holders of Subordinated Debt Securities; and (iii) senior to the Company's
Common Stock. The terms of the Preferred Securities provide that each holder of
Preferred Securities issued by such Financing Trust by acceptance thereof agrees
to the subordination provisions and other terms of the applicable Guarantee.
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The Guarantee Trustee shall enforce the Guarantee on behalf of the
holders of the Preferred Securities issued by the applicable Financing Trust.
The holders of not less than a majority in aggregate liquidation amount of the
Preferred Securities issued by the applicable Financing Trust have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of the related Guarantee, including the giving of
directions of the Guarantee Trustee. If the Guarantee Trustee fails to enforce
such Guarantee, any holder of Preferred Securities relating to such Guarantee
may, after a period of 30 days has elapsed from such holder's written request to
the Guarantee Trustee to enforce the Guarantee, institute a legal proceeding
directly against the Company, as Guarantor, to enforce its rights under such
Guarantee without first instituting a legal proceeding against the applicable
Financing Trust, the Guarantee Trustee or any other person or entity.
Each Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under a Guarantee without
instituting a legal proceeding against any other person or entity).
DESCRIPTION OF THE OTHER UNITS
The Company may issue Other Units, which may include Common Stock,
Preferred Stock, Depositary Shares, Debt Securities, Common Stock Warrants,
Preferred Stock Warrants, Third Party Warrants, Debt Warrants, Stock Purchase
Contracts, Stock Purchase Units, Preferred Securities or Guarantees, or any
combination of the foregoing, either individually or as units consisting of one
or more of the foregoing, each on terms to be determined at the time of sale.
The related Prospectus Supplement will describe the terms of any Other
Units and the Securities which comprise such Other Units. See "Description of
the Common Stock," "Description of the Preferred Stock," "Description of the
Depositary Shares," "Description of the Debt Securities," "Description of the
Warrants to Purchase Common or Preferred Stock," "Description of the Third Party
Warrants," "Description of the Warrants to Purchase Debt Securities,"
"Description of Stock Purchase Contracts and Stock Purchase Units," "Description
of the Preferred Securities," and "Description of the Guarantees."
PLAN OF DISTRIBUTION
The Company or any Financing Trust may, from time to time, sell
Securities (1) through underwriters or dealers, (2) directly to one or more
purchasers, (3) through agents or (4) through a combination of any such methods
of sale. A Prospectus Supplement will set forth the terms of the offering of the
Securities offered thereby, including the name or names of any underwriters, the
purchase price of the Securities, and the proceeds to the Company or any
Financing Trust from the sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers, and any
securities exchange or market on which the Securities may be listed. Only
underwriters so named in such Prospectus Supplement are deemed to be
underwriters in connection with the Securities offered thereby.
If underwriters are used in the sale, the Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The
obligations of the underwriters to purchase the Securities will be subject to
certain conditions precedent, and the underwriters will be obligated to purchase
all the Securities of the series offered by the Prospectus Supplement if any of
the Securities are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
In connection with underwritten offerings of Securities, certain
underwriters and selling group members and their respective affiliates may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the Securities. Such transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M under the
Exchange Act, pursuant to which such persons may bid for or purchase Securities
for the purposes of stabilizing their market price. The underwriters also may
create a short position for their respective accounts by selling more Securities
in connection with this offering than they are committed to purchase from the
Company, and in such case may purchase Securities in the open market following
completion of the offering to cover
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all or a portion of such short position. The underwriters may also cover all or
a portion of such short position, up to a specified aggregate principal amount
or number of Securities, by exercising any underwriters' over-allotment option
that may be applicable with respect to the particular underwritten offering. In
addition, the managing underwriter for the particular offering, on behalf of the
underwriters, may impose "penalty bids" under contractual arrangements between
the underwriters whereby it may reclaim from an underwriter (or dealer
participating in this offering) for the account of the underwriters, the selling
concession with respect to Securities that are distributed in the relevant
offering but subsequently purchased for the account of the underwriters in the
open market. Any of the transactions described in this paragraph may result in
the maintenance of the price of the Securities at a level above that which might
otherwise prevail in the open market. None of the transactions described in this
paragraph is required, and, if any are undertaken, they may be discounted at any
time.
Securities may also be sold directly by the Company or a Financing
Trust or through agents designated by the Company or any Financing Trust from
time to time. Any agent involved in the offering and sale of Securities in
respect of which this Prospectus is delivered will be named, and any commissions
payable by the Company or a Financing Trust to such agent will be set forth in
the Prospectus Supplement. Unless otherwise indicated in the related Prospectus
Supplement, any such agent will be acting on a best-efforts basis for the period
of its appointment.
Securities offered other than Common Stock may be a new issue of
securities with no established trading market. Any underwriters to whom such
Securities are sold by the Company or a Financing Trust for public offering and
sale may make a market in such Securities, but such underwriters will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of or the trading markets
for any such Securities.
Agents and underwriters may be entitled under agreements entered into
with the Company or a Financing Trust to indemnification by the Company or such
Financing Trust against certain civil liabilities, including liabilities under
the Securities Act or to contribution with respect to payments which the agents
or underwriters may be required to make in respect thereof. Agents and
underwriters may engage in transactions with, or perform services for, the
Company or any Financing Trust in the ordinary course of business.
Sales of the Securities may be effected by or for the account of one or
more of the Third Parties from time to time in transactions (which may include
block transactions) on any exchange or market on which such Securities are
listed or quoted, as applicable, in negotiated transactions, through a
combination of such methods of sale, or otherwise, at fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
prevailing market prices, or at negotiated prices. The Third Parties may effect
such transactions by selling the Securities directly to purchasers, acting as
principals for their own accounts, or by selling their Securities to or through
broker-dealers acting as agents for the Third Parties, or to broker-dealers who
may purchase Securities as principals and thereafter sell such Securities from
time to time in transactions on any exchange or market on which such Securities
are listed or quoted, as applicable, in negotiated transactions, through a
combination of such methods of sale, or otherwise. In effecting sales,
broker-dealers engaged by Third Parties may arrange for other broker-dealers to
participate. Such broker-dealers, if any, may receive compensation in the form
of discounts, concessions or commissions from the Third Parties and/or the
purchasers of the Securities for whom such broker-dealers may act as agents or
to whom they may sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
In connection with distributions of shares of Common Stock or
otherwise, the Company may enter into hedging transactions with Counterparties
in connection with which such Counterparties may sell shares of Common Stock
registered hereunder in the course of hedging the positions they assume with the
Company. Such Counterparties may offer Common Stock through underwriters or
dealers, directly to one or more purchasers, or through agents, and may effect
sales in one or more transactions on the New York Stock Exchange or in
negotiated transactions or a combination of such methods of sale, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices or at other negotiated prices. The Company will not receive any of
the proceeds from the sale of Common Stock by Counterparties. A Counterparty may
be deemed to be an "underwriter" within the meaning of the Securities Act, and
any commission received by it and any profit on the resale of the Common Stock
purchased by it may be deemed to be underwriting commissions or discounts under
the Securities Act. The
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Company may agree to bear all expenses of registration of any Common Stock
offered by Counterparties and may indemnify such Counterparties against certain
civil liabilities, including certain liabilities under the Securities Act.
ERISA AND TAX CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended
("ERISA"), imposes certain restrictions on investments by employee benefit plans
that are subject to ERISA. The Internal Revenue Code of 1986, as amended (the
"Code"), imposes additional restrictions on investments by tax-exempt retirement
plans, individual retirement accounts, and similar entities. The Code also
provides that certain types of income received by organizations that generally
are exempt from federal income tax will nevertheless be subject to taxation.
Retirement plans, tax-exempt organizations and similar entities should consult
their tax and legal advisors and the applicable Prospectus Supplement before
acquiring Securities.
LEGAL MATTERS
The legality of the Securities (other than the Preferred Securities)
offered hereby will be passed upon by Pillsbury Madison & Sutro LLP, San
Francisco, California, counsel for the Company. Certain matters of Delaware law
regarding the legality of the Preferred Securities will be passed upon by
Morris, Nichols, Arsht & Tunnell, Delaware, special Delaware counsel for the
Financing Trusts. Certain legal matters will be passed upon for the underwriters
by Cleary, Gottlieb, Steen & Hamilton, New York, New York, except as otherwise
set forth in a Prospectus Supplement.
EXPERTS
The consolidated financial statements incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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<TABLE>
==================================================== ====================================================
NO DEALER, SALES REPRESENTATIVE, OR ANY OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY PROVIDIAN FINANCIAL
CORPORATION, PROVIDIAN FINANCING I, PROVIDIAN
FINANCING II, PROVIDIAN FINANCING III OR PROVIDIAN
FINANCING IV OR BY ANY AGENT. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE
SECURITIES TO WHICH IT RELATES OR AN OFFER TO, OR
A SOLICITATION OF, ANY PERSON IN ANY JURISDICTION
WHERE SUCH AN OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS,
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF PROVIDIAN
FINANCIAL CORPORATION, PROVIDIAN FINANCING I,
PROVIDIAN FINANCING II, PROVIDIAN FINANCING III OR
PROVIDIAN FINANCING IV OR THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF OR THEREOF.
----------
TABLE OF CONTENTS
$2,000,000,000
Page
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<S> <C>
Index of Terms.................................. 4 PROVIDIAN FINANCIAL CORPORATION
Available Information........................... 5
Incorporation of Certain Documents COMMON STOCK
by Reference................................. 5 PREFERRED STOCK
Providian Financial Corporation................. 6 DEPOSITARY SHARES
The Financing Trusts............................ 6 DEBT SECURITIES
Use of Proceeds................................. 7 COMMON STOCK WARRANTS
Ratio of Earnings to Fixed Charges.............. 7 PREFERRED STOCK WARRANTS
General Description of Securities THIRD PARTY WARRANTS
and Risk Factors.............................. 7 DEBT WARRANTS
Description of the Common Stock................. 8 STOCK PURCHASE CONTRACTS
Description of the Preferred Stock.............. 9 STOCK PURCHASE UNITS
Description of the Depositary Shares............10 OTHER UNITS
Description of the Debt Securities..............12
Description of the Warrants to Purchase
Common Stock or Preferred Stock..............17 PROVIDIAN FINANCING I
Description of the Third Party Warrants.........18 PROVIDIAN FINANCING II
Description of the Warrants to Purchase PROVIDIAN FINANCING III
Debt Securities..............................20 PROVIDIAN FINANCING IV
Description of the Stock Purchase Contracts
and Stock Purchase Units.....................20
Description of the Preferred Securities.........21 PREFERRED SECURITIES,
Description of the Guarantees...................21 GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
Description of the Other Units..................24 PROVIDIAN FINANCIAL CORPORATION
Plan of Distribution............................24
ERISA and Tax Considerations....................26
Legal Matters...................................26 [Date]
Experts.........................................26
==================================================== ====================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
<S> <C>
Securities and Exchange Commission Registration Fee........ $ 590,000
Printing Expenses.......................................... 200,000
Accounting Fees and Expenses............................... 300,000
Legal Fees and Expenses.................................... 400,000
Trustee Fees............................................... 40,000
Fees of Rating Agencies.................................... 200,000
Blue Sky Fees and Expenses................................. 25,000
Miscellaneous.............................................. 100,000
----------------
TOTAL...................................................... $ 1,855,000
================
* Estimated, except for the Securities and Exchange Commission Registration Fee.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "Delaware
GCL") permits the Company's Board of Directors to indemnify any person against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection with
any threatened, pending or completed action, suit or proceeding in which such
person is made a party by reason of his being or having been a director,
officer, employee or agent of the Company, in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Section 145 provides that indemnification
pursuant to its provisions is not exclusive of other rights of indemnification
to which a person may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise.
Article TENTH of the Company's Certificate of Incorporation provides
for indemnification of its directors and officers to the maximum extent
permitted by the Delaware GCL. The Company's Bylaws contain provisions
implementing such indemnification of directors and officers. The Company may, by
action of its Board of Directors, provide indemnification for its employees and
agents to the maximum extent provided by law.
As permitted by Sections 102 and 145 of the Delaware GCL, Article TENTH
of the Company's Certificate of Incorporation eliminates a director's personal
liability for monetary damage to the Company and its stockholders arising from a
breach of a director's fiduciary duty except to the extent not permitted under
the Delaware GCL.
The Declaration of each Financing Trust provides that no Financing
Trustee, affiliate of any Financing Trustee, or any officer, director,
shareholder, member, partner, employee, representative or agent of any Financing
Trustee, or any employee or agent of such Financing Trust or its affiliates
(each an "Indemnified Person"), shall be liable, responsible or accountable in
damages or otherwise to such Financing Trust or any employee or agent of the
trust or its affiliates for any loss, damage or claim incurred by reason of any
act or omission performed or admitted by such Indemnified Person in good faith
on behalf of such Financing Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by such Declaration or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's gross negligence (or, in the case of the Property
Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The Declaration of each Financing Trust also provides that to the
fullest extent permitted by applicable law, the Company shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage or claim
incurred by such Indemnified Person by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of such Financing
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of authority conferred on such Indemnified Person by such Declaration
except that no Indemnified Person shall be entitled to be
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indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions. The
Declaration of each Financing Trust further provides that, to the fullest extent
permitted by applicable law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Company prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by or
an undertaking by or on behalf of the Indemnified Person to repay such amount if
it shall be determined that the Indemnified Person is not entitled to be
indemnified for the underlying cause of action as authorized by such
Declaration.
The directors and officers of the Company and the Administrators are
covered by insurance policies indemnifying against certain liabilities,
including certain liabilities arising under the Securities Act, which might be
incurred by them in such capacities and against which they cannot be indemnified
by the Company or Financing Trusts.
Any agents, dealers or underwriters who execute any of the agreements
filed as Exhibit 1 to this registration statement will agree to indemnify the
Company's directors and their officers and the Financing Trustees who signed the
registration statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to the Company or any of
the Financing Trusts by or on behalf of any such indemnifying party.
ITEM 16. EXHIBITS.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated by reference as exhibits hereto.
1.1 Form of Underwriting Agreement (Debt Securities).
1.2 Form of Underwriting Agreement (Equity Securities).
4.1 Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, filed
on August 14, 1997, File No. 1-12897, and incorporated by
reference herein).
4.2 Amended and Restated Bylaws of the Company (filed as Exhibit
3.2 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, filed March 31, 1998, File No.
1-12897, and incorporated by reference herein).
4.3 Rights Agreement, dated as of June 1, 1997, between the
Company and First Chicago Trust Company of New York (filed as
Exhibit 10.1 to the Company's quarterly report on Form 10-Q
for the quarter ended June 30, 1997, filed on August 14, 1997,
File No. 1-12897, and incorporated by reference herein).
4.4 Certificate of Designation of Series A Junior Participating
Preferred Stock, dated June 1, 1997 (filed as Exhibit 4.1 to
the Company's quarterly report on Form 10-Q for the quarter
ended June 30, 1997, filed on August 14, 1997, File No.
1-12897, and incorporated by reference herein).
4.5 Certificate of Trust of Providian Capital I, dated as of
January 21, 1997 (filed as Exhibit 4.3 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997,
filed March 31, 1998, File No. 1-12897, and incorporated by
reference herein).
4.6 Amended and Restated Trust Agreement, dated as of February 4,
1997, among the Company, as Depositor, The Bank of New York,
as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee (filed as Exhibit 4.4 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997,
filed March 31, 1998, File No. 1-12897, and incorporated by
reference herein).
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4.7 Junior Subordinated Indenture, dated as of February 4, 1997,
between the Company and The Bank of New York, as Trustee
(filed as Exhibit 4.5 to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, filed March 31,
1998, File No. 1-12897, and incorporated by reference herein).
4.8 Guarantee Agreement, dated as of February 4, 1997, between the
Company, as Guarantor, and The Bank of New York, as Trustee
(filed as Exhibit 4.6 to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, filed March 31,
1998, File No. 1-12897, and incorporated by reference herein).
4.9 Certificate of Trust of Providian Financing I.
4.10 Certificate of Trust of Providian Financing II.
4.11 Certificate of Trust of Providian Financing III.
4.12 Certificate of Trust of Providian Financing IV.
4.13 Form of Amended and Restated Declaration of Trust of Providian
Financing I, Providian Financing II, Providian Financing III
and Providian Financing IV.
4.14 Form of Pledge Agreement.
4.15 Form of Senior Indenture.
4.16 Form of Standard Stock Warrant Provisions.
4.17 Form of Debt Securities Warrant Agreement.
4.18 Form of Deposit Agreement.
4.19 Form of Subordinated Indenture.
4.20 Form of Preferred Securities Guarantee Agreement.
4.21 Form of Stock Purchase Contract Agreement.
4.22 Form of Master Unit Agreement.
4.23 Form of Master Unit Pledge Agreement.
4.24 Form of Call Option Agreement.
5.1(a) Opinion of Pillsbury Madison & Sutro LLP.
5.1(b) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing I).
5.1(c) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing II).
5.1(d) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing III).
5.1(e) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing IV).
12.1 Statement re Computation of Ratios.
II-3
<PAGE>
23.1 Consent of Ernst & Young LLP, independent accountants.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit
5.1(a)).
23.3 Consent of Morris, Nichols, Arsht & Tunnell (included in
Exhibits 5.1(b), 5.1(c) and 5.1(d) and 5.1(e)).
24.1 Power of Attorney (Providian Financial Corporation) (included
on page II-6).
24.2 Power of Attorney (Providian Financing I) (included on page
II-8).
24.3 Power of Attorney (Providian Financing II) (included on page
II-8).
24.4 Power of Attorney (Providian Financing III) (included on page
II-8).
24.5 Power of Attorney (Providian Financing IV) (included on page
II-8).
ITEM 17. UNDERTAKINGS.
Providian Financial Corporation, Providian Financing I, Providian
Financing II, Providian Financing III and Providian Financing IV (the
"Registrants") hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by Providian Financial Corporation pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such 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.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
II-4
<PAGE>
The Registrants hereby undertake that, for purposes of determining any
liability under the Securities Act of 1933, each filing of Providian Financial
Corporation's annual report pursuant to Section 13(a) or 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.
Providian Financing I, Providian Financing II, Providian Financing III
and Providian Financing IV each hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrants pursuant to the provisions described in Item 15 or otherwise,
the Registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. If a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants 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 Registrants, will, unless
in the opinion of 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The Registrants hereby undertake to file an application for the purpose
of determining the eligibility of the trustee to act under Subsection (a) of
Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act of 1939.
The Registrants hereby undertake that:
(1) 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 a form
of Prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of Prospectus
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.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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, hereunto duly
authorized, in the City of San Francisco, State of California, on June 3, 1998.
PROVIDIAN FINANCIAL CORPORATION
By /s/ SHAILESH J. MEHTA
-------------------------------------------
Shailesh J. Mehta
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints David J. Petrini, Daniel Sanford, Ellen Richey, Ronald
Claveloux, and Clifford Shapiro, and each of them, his/her attorneys for him/her
in his stead, in each of his/her offices and capacities as an officer, director,
or both of the Company, to sign and to file with the Commission such
Registration Statements on Form S-3, and any and all amendments, modifications,
or supplements thereto, and any exhibits thereto, and grants to each of said
attorneys full power and authority to sign and file any and all other documents
and to perform and do all and every act and thing whatsoever requisite and
necessary to be done in and about the premises as fully, to all intents and
purposes, as he/she might or could do if personally present at the doing
thereof, and hereby ratifies and confirms all that said attorneys may or shall
lawfully do, or cause to be done, by virtue hereof in connection with the
registration of the aforesaid securities.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons and in the
capacities indicated on the 3rd day of June, 1998.
Name Title
/s/ SHAILESH J. MEHTA Chairman, President and Chief Executive
- -------------------------- Officer and Director
Shailesh J. Mehta
/s/ DAVID J. PETRINI Senior Vice President, Chief Financial
- -------------------------- Officer and Treasurer (Principal Financial
David J. Petrini Officer)
/s/ DANIEL SANFORD Vice President and Controller (Principal
- -------------------------- Accounting Officer)
Daniel Sanford
/s/ JOHN M. CRANOR III Director
- --------------------------
John M. Cranor III
/s/ CHRISTINA L. DARWALL Director
- --------------------------
Christina L. Darwall
II-6
<PAGE>
/s/ JAMES V. ELLIOTT Director
- --------------------------
James V. Elliott
/s/ LYLE EVERINGHAM Director
- --------------------------
Lyle Everingham
/s/ J. DAVID GRISSOM Director
- --------------------------
J. David Grissom
/s/ F. WARREN MCFARLAN Director
- --------------------------
F. Warren McFarlan
/s/ RUTH M. OWADES Director
- --------------------------
Ruth M. Owades
/s/ LARRY D. THOMPSON Director
- --------------------------
Larry D. Thompson
/s/ JOHN L. WEINBERG Director
- --------------------------
John L. Weinberg
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of
Providian Financing I, Providian Financing II, Providian Financing III and
Providian Financing IV certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, hereunto
duly authorized, in the City of San Francisco, State of California, on June 3,
1998.
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each of the undersigned hereby
constitutes and appoints David J. Petrini, Daniel Sanford, Ellen Richey, Ronald
Claveloux, and Clifford Shapiro, and each of them, his/her attorneys for him/her
in his/her stead, in each of his/her offices and capacities as an administrator
of Providian Financing I, Providian Financing II, Providian Financing III and
Providian Financing IV to sign and to file with the Commission such Registration
Statements on Form S-3, and any and all amendments, modifications or supplements
thereto, and any exhibits thereto, and grants to each of said attorneys full
power and authority to sign and file any and all other documents and to perform
and do all and every act and thing whatsoever requisite and necessary to be done
in and about the premises as fully, to all intents and purposes, as he/she might
or could do if personally present at the doing thereof, and hereby ratifies and
confirms all that said attorneys may or shall lawfully do, or cause to be done,
by virtue hereof in connection with the registration of the aforesaid
securities.
PROVIDIAN FINANCING I
By /s/ DAVID J. PETRINI
--------------------------------------
David J. Petrini, Administrator
By /s/ DANIEL SANFORD
--------------------------------------
Daniel Sanford, Administrator
By /s/ KIRK INGLIS
--------------------------------------
Kirk Inglis, Administrator
PROVIDIAN FINANCING II
By /s/ DAVID J. PETRINI
--------------------------------------
David J. Petrini, Administrator
By /s/ DANIEL SANFORD
--------------------------------------
Daniel Sanford, Administrator
By /s/ KIRK INGLIS
--------------------------------------
Kirk Inglis, Administrator
II-8
<PAGE>
PROVIDIAN FINANCING III
By /s/ DAVID J. PETRINI
--------------------------------------
David J. Petrini, Administrator
By /s/ DANIEL SANFORD
--------------------------------------
Daniel Sanford, Administrator
By /s/ KIRK INGLIS
--------------------------------------
Kirk Inglis, Administrator
PROVIDIAN FINANCING IV
By /s/ DAVID J. PETRINI
--------------------------------------
David J. Petrini, Administrator
By /s/ DANIEL SANFORD
--------------------------------------
Daniel Sanford, Administrator
By /s/ KIRK INGLIS
--------------------------------------
Kirk Inglis, Administrator
II-9
<PAGE>
EXHIBIT INDEX
1.1 Form of Underwriting Agreement (Debt Securities).
1.2 Form of Underwriting Agreement (Equity Securities).
4.1 Amended and Restated Certificate of Incorporation of the
Company (filed as Exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1997, filed
on August 14, 1997, File No. 1-12897, and incorporated by
reference herein).
4.2 Amended and Restated Bylaws of the Company (filed as Exhibit
3.2 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, filed March 31, 1998, File No.
1-12897, and incorporated by reference herein).
4.3 Certificate of Designation of Series A Junior Participating
Preferred Stock, dated June 1, 1997 (filed as Exhibit 4.1 to
the Company's quarterly report on Form 10-Q for the quarter
ended June 30, 1997, filed on August 14, 1997, File No.
1-12897, and incorporated by reference herein).
4.4 Rights Agreement, dated as of June 1, 1997, between the
Company and First Chicago Trust Company of New York (filed as
Exhibit 10.1 to the Company's quarterly report on Form 10-Q
for the quarter ended June 30, 1997, filed on August 14, 1997,
File No. 1-12897, and incorporated by reference herein).
4.5 Certificate of Trust of Providian Capital I, dated as of
January 21, 1997 (filed as Exhibit 4.3 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997,
filed March 31, 1998, File No. 1-12897, and incorporated by
reference herein).
4.6 Amended and Restated Trust Agreement, dated as of February 4,
1997, among the Company, as Depositor, The Bank of New York,
as Property Trustee, and The Bank of New York (Delaware), as
Delaware Trustee (filed as Exhibit 4.4 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997,
filed March 31, 1998, File No. 1-12897, and incorporated by
reference herein).
4.7 Junior Subordinated Indenture, dated as of February 4, 1997,
between the Company and The Bank of New York, as Trustee
(filed as Exhibit 4.5 to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, filed March 31,
1998, File No. 1-12897, and incorporated by reference herein).
4.8 Guarantee Agreement, dated as of February 4, 1997, between the
Company, as Guarantor, and The Bank of New York, as Trustee
(filed as Exhibit 4.6 to the Company's Annual Report on Form
10-K for the year ended December 31, 1997, filed March 31,
1998, File No. 1-12897, and incorporated by reference herein).
4.9 Certificate of Trust of Providian Financing I.
4.10 Certificate of Trust of Providian Financing II.
4.11 Certificate of Trust of Providian Financing III.
4.12 Certificate of Trust of Providian Financing IV.
4.13 Form of Amended and Restated Declaration of Trust of Providian
Financing I, Providian Financing II, Providian Financing III
and Providian Financing IV.
4.14 Form of Pledge Agreement.
II-10
<PAGE>
4.15 Form of Senior Indenture.
4.16 Form of Standard Stock Warrant Provisions.
4.17 Form of Debt Securities Warrant Agreement.
4.18 Form of Deposit Agreement.
4.19 Form of Subordinated Indenture.
4.20 Form of Preferred Securities Guarantee Agreement.
4.21 Form of Stock Purchase Contract Agreement.
4.22 Form of Master Unit Agreement.
4.23 Form of Master Unit Pledge Agreement.
4.24 Form of Call Option Agreement.
5.1(a) Opinion of Pillsbury Madison & Sutro LLP.
5.1(b) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing I).
5.1(c) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing II).
5.1(d) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing III).
5.1(e) Opinion of Morris, Nichols, Arsht & Tunnell (Providian
Financing IV).
12.1 Statement re Computation of Ratios.
23.1 Consent of Ernst & Young LLP, independent accountants.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in Exhibit
5.1(a)).
23.3 Consent of Morris, Nichols, Arsht & Tunnell (included in
Exhibits 5.1(b), 5.1(c) and 5.1(d) and 5.1(e)).
24.1 Power of Attorney (Providian Financial Corporation) (included
on page II-6).
24.2 Power of Attorney (Providian Financing I) (included on page
II-8).
24.3 Power of Attorney (Providian Financing II) (included on page
II-8).
24.4 Power of Attorney (Providian Financing III) (included on page
II-8).
24.5 Power of Attorney (Providian Financing IV) (included on page
II-8).
II-11
EXHIBIT 1.1
===============================================================================
PROVIDIAN FINANCIAL CORPORATION
DEBT SECURITIES
--------------------------
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
===============================================================================
<PAGE>
PROVIDIAN FINANCIAL CORPORATION
DEBT SECURITIES
------------
UNDERWRITING AGREEMENT STANDARD PROVISIONS
From time to time, Providian Financial Corporation, a Delaware
corporation ("Providian"), may enter into one or more underwriting agreements
that provide for the sale of certain debt securities (the "Securities"), to the
purchaser or purchasers named therein (the "Underwriters"). The standard
provisions set forth herein may be incorporated by reference in any such
underwriting agreement (the "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
referred to as "this Agreement." Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. Capitalized
terms not otherwise defined in this Agreement shall have the meaning ascribed
thereto in the Indenture (as hereinafter defined).
The terms governing of the issuance and sale of any particular series
of Securities shall be as provided in the applicable Underwriting Agreement
(with respect to each Underwriting Agreement, such series of Securities are
herein referred to as the "Designated Securities").
1. ISSUANCE OF DESIGNATED SECURITIES. Sales of the Designated
Securities may be made from time to time to the Underwriters of the Designated
Securities. Any firm or firms designated as the representative or
representatives, as the case may be, of the Underwriters of the Designated
Securities in the Underwriting Agreement relating thereto will act as the
representative or representatives (the "Representative"). The obligation of
Providian to issue and sell any of the Designated Securities and the obligation
of any Underwriters to purchase any of the Designated Securities shall be
evidenced by the Underwriting Agreement with respect to the Designated
Securities specified therein. Each Underwriting Agreement shall specify the
aggregate principal amount of the Designated Securities, the public offering
price of the Designated Securities, the purchase price to the Underwriters of
the Designated Securities, the names of the Underwriters of the Designated
Securities, the name of the Representative, if any, of such Underwriters, and
the principal amount of the Designated Securities to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of the
Designated Securities and payment therefor. The Underwriting Agreement shall
also specify, to the extent not set forth in the Registration Statement and
Prospectus (as hereinafter defined) with respect thereto, the general terms of
the Designated Securities. An Underwriting Agreement shall be in writing (which
may be in counterparts), and may be evidenced by an exchange of facsimile
transmissions. The obligations of the Underwriters under each Underwriting
Agreement shall be several and not joint.
2. REPRESENTATIONS AND COVENANTS. Providian represents to, and
covenants with, each Underwriter that:
-1-
<PAGE>
(a) Providian meets the requirements for the use of Form S-3 and a
registration statement on Form S-3 (Registration No. 333-__________, including a
prospectus, relating to the Securities of Providian has been filed with the
Securities and Exchange Commission (the "Commission") in accordance with
applicable regulations of the Commission under the Securities Act of 1933, as
amended (the "Act"), and has been declared effective under the Act. Such
registration statement, as amended to the date of this Agreement, is hereinafter
referred to as the "Registration Statement," and such prospectus as proposed to
be supplemented by a prospectus supplement (the "Prospectus Supplement")
relating to the Designated Securities to be filed pursuant to Rule 424 under the
Act is hereinafter referred to as the "Prospectus." Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the documents which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") on or before the date of this Agreement, and
incorporated by reference in the Prospectus pursuant to Item 12 of Form S-3,
excluding any documents or portions of such documents which are deemed under the
rules and regulations of the Commission under the Act not to be incorporated by
reference; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act deemed to be incorporated therein by reference after the date of this
Agreement. For purposes of this Agreement, "Effective Time" with respect to the
Registration Statement means (A) if Providian has not advised the Representative
that it proposes to amend such registration statement, the date and time as of
which such registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this Agreement,
was declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) under the Act, or (B) if Providian has advised the
Representative that it proposes to file an amendment or post-effective amendment
to such registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. "Effective Date" with respect
to the Registration Statement means the date of the Effective Time thereof.
(b) At the Effective Time, the Registration Statement and the
Prospectus conformed, and any amendments thereof and supplements thereto
relating to the Designated Securities will conform, in all material respects to
the requirements of the Act and the rules and regulations of the Commission
thereunder; each document filed pursuant to the Exchange Act and incorporated by
reference in the Prospectus complied when so filed as to form with the Exchange
Act and the rules and regulations of the Commission thereunder; the Indenture
conforms in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of
the Commission thereunder; and neither the Registration Statement on the
Effective Date nor the Prospectus as of the date thereof and on the Closing Date
included or will include any untrue statement of a material fact or omitted or
will omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the case of the Registration Statement, not
misleading, or in the case of the Prospectus, in light of the circumstances in
which they were made, not misleading; provided, however, that Providian makes no
representations as to (i) that part of the Registration Statement which shall
constitute a Trustee's Statement of
-2-
<PAGE>
Eligibility and Qualifications (Form T-1) under the Trust Indenture Act and (ii)
any statements or omissions made in reliance upon and in conformity with
information furnished to Providian by or on behalf of any Underwriter for use in
connection with the preparation of such documents.
(c) Neither Providian nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Designated
Securities shall be made at the offices of counsel for the Underwriters, on the
date and at the time specified in the Underwriting Agreement (the "Closing
Date"), which Closing Date may be postponed by agreement between the
Underwriters, or the Representative, as the case may be, and Providian. Delivery
of the Designated Securities shall be made to the Underwriters or, if
appropriate, the Representative for the respective accounts of the Underwriters,
in either case, against payment by the Underwriters directly or through the
Representative of the purchase price thereof to or upon the order of Providian
by certified or official bank check or checks payable in New York Clearing House
funds, unless otherwise agreed in the Underwriting Agreement. Certificates for
the Designated Securities shall be registered in such names and in such
denominations as the Representative may request in writing not less than one
full business day in advance of the Closing Date.
If so requested by the Underwriters or the Representative, as the
case may be, Providian agrees to have the Designated Securities available for
inspection, checking and packaging in New York, New York, at least one business
day prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Designated Securities for sale to the public upon the terms
and conditions set forth in the Prospectus.
5. AGREEMENTS. Providian agrees with the Underwriters that:
(a) Providian will cause the Prospectus Supplement to be filed
pursuant to Rule 424 under the Act and will promptly advise the Underwriters or
the Representative, as the case may be, when the Prospectus Supplement has been
so filed, and prior to the termination of the offering of the Designated
Securities will promptly advise such Underwriters or Representative (i) when any
amendment to the Registration Statement has been declared effective or has
become effective upon filing pursuant to Rule 462(c) under the Act or any
further supplement to the Prospectus has been filed, (ii) of any request by the
Commission for any amendment of the Registration Statement or the Prospectus or
for any additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (iv) of the
receipt by Providian of any notification with respect to the suspension of the
qualification of the Designated Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. Providian will use
its best
-3-
<PAGE>
efforts to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof. Providian will not file any
amendment to the Registration Statement or supplement to the Prospectus relating
to the Designated Securities unless it has furnished the Underwriters or the
Representative, as the case may be, a copy prior to filing and will not file any
such proposed amendment or supplement to which such Underwriters or
Representative reasonably objects.
(b) If, at any time when a prospectus relating to the Designated
Securities is required to be delivered under the Act or any other applicable
securities law, any event occurs as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
shall be necessary to amend or supplement the Prospectus to comply with the Act
or the Exchange Act or the respective rules thereunder, Providian will promptly
notify the Underwriters or the Representative, as the case may be, and will
promptly prepare and file with the Commission, subject to paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(c) Providian will make generally available to its security holders
and to the Underwriters or the Representative, as the case may be, as soon as
practicable, but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of Providian during which the filing
of the Prospectus Supplement pursuant to Rule 424 under the Act first occurs
(except not later than 90 days if such filing date is in the last fiscal
quarter), an earnings statement (which need not be audited) of Providian and its
consolidated subsidiaries, covering such 12-month period, which will satisfy the
provisions of Section 11(a) of the Act.
(d) Providian will furnish to the Underwriters or the Representative,
as the case may be, and counsel for such Underwriters or for such Representative
copies of the Registration Statement (including, if requested, the exhibits
thereto and the documents incorporated by reference in the Prospectus) and each
amendment or supplement thereto relating to the Designated Securities which is
thereafter filed pursuant to paragraph (a) or (b) of this Section 5 and to each
Underwriter, so long as delivery of a prospectus by an Underwriter or dealer may
be required by the Act or other applicable securities laws, as many copies of
the Prospectus and any amendments thereof and supplements thereto, relating to
the Designated Securities, as such Underwriters or such Representative may
reasonably request.
(e) Providian will pay (i) all expenses incurred by it in the
performance of its obligations under this Agreement, (ii) reasonable fees
charged for rating the Designated Securities and for preparing a Blue Sky and
Legal Investment Memorandum with respect to the sale of the Designated
Securities and (iii) the expenses of printing or otherwise producing and
delivering the Designated Securities, the documents specified in paragraph (d)
of this Section 5 and any Blue Sky and Legal Investment Memorandum.
-4-
<PAGE>
(f) Providian will use its best efforts to arrange and pay for the
qualification of the Designated Securities for sale under the laws of such
jurisdictions as the Underwriters or the Representative, as the case may be, may
designate and to maintain such qualifications in effect so long as required for
the distribution of the Designated Securities; provided, however, that Providian
shall not be required to qualify to do business in any jurisdiction where it is
not now qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so subject.
(g) If the sale of the Designated Securities provided for in an
Underwriting Agreement is not consummated by reason of any failure, refusal or
inability on the part of Providian to perform any agreement on its part to be
performed (except for any failure so to perform on the part of Providian
engendered by a failure, refusal or inability on the part of the Underwriters or
any Representative to perform any agreement on their part to be performed) or
the failure of any condition set forth in Section 6, Providian will reimburse
the several Underwriters who are named in such Underwriting Agreement for all
reasonable out-of-pocket disbursements incurred by the Underwriters in
connection with their investigation, marketing and preparing to market the
Designated Securities, and upon such reimbursement Providian shall have no
further liability to the Underwriters except as provided in Section 7.
(h) During the period beginning on the date of this Agreement and
terminating on the later of (i) the Closing Date or (ii) the date of notice to
Providian by the Representative or the Underwriters (which shall not exceed
forty-five days from the date of this Agreement), Providian will not offer,
sell, contract to sell or otherwise dispose of any debt securities of Providian
substantially similar to the Designated Securities covered by this Agreement,
without the prior written consent of such Representative or such Underwriters.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Designated Securities shall be subject to
the accuracy of the representations on the part of Providian contained herein as
of the date hereof and the Closing Date, to the performance by Providian of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted and be pending or threatened as of the Closing Date;
(b) Pillsbury Madison & Sutro LLP, counsel for Providian, shall have
furnished to the Representative their opinion, dated the Closing Date,
substantially in the form attached hereto as Exhibit A;
(c) The Underwriters or the Representative, as the case may be, shall
have received from counsel for the Underwriters such opinion or opinions, dated
the Closing Date, with respect to such matters as such Underwriters or
Representative may reasonably require;
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<PAGE>
(d) Providian shall have furnished to the Underwriters or the
Representative, as the case may be, a certificate, dated the Closing Date, of
Providian, signed by any executive officer of Providian, to the effect that the
signer of such certificate has carefully examined the Registration Statement,
the Prospectus and this Agreement and that:
(i) The representations of Providian in this Agreement are
true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date, and
Providian has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted and are pending or, to his or her
knowledge, threatened as of such date; and
(iii) Since the date of the most recent financial
statements included in the Prospectus, there has been no material
adverse change in the condition (financial or otherwise) of Providian
and its consolidated subsidiaries, taken as a whole, nor any material
increase in the debt of Providian and its consolidated subsidiaries,
except as set forth in or contemplated by the Prospectus.
(e) The Underwriters or the Representative, as the case may be, shall
have received from [Ernst &Young LLP] a letter, dated the Closing Date, which
letter shall be in form as may be agreed upon among such Underwriters or
Representative, Providian and [Ernst & Young LLP] and shall cover such matters
as may be reasonably requested by such Underwriters or Representative.
(f) Prior to the Closing Date, Providian shall have furnished to the
Underwriters or the Representative, as the case may be, such further
information, certificates and documents as they may reasonably request.
(g) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of Providian and its subsidiaries considered as a whole
which the Underwriters or the Representative, as the case may be, concludes, in
its judgment, after consultation with Providian, materially impairs the
investment quality of the Designated Securities so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities as contemplated by the Prospectus and there shall not have
been any decrease in the ratings of any of Providian's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act).
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<PAGE>
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Providian agrees to indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter, and each
person, if any, who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus, or in any amendment thereof or
supplement thereto relating to the Designated Securities, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by them, as so incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that Providian will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished in writing to Providian by or on behalf of any Underwriter
through the Representative or the Underwriters, as the case may be, for use in
connection with the preparation thereof. This indemnity agreement will be in
addition to any liability which Providian may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
Providian, each of its directors, officers, employees and agents, and each
person who controls Providian within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from Providian to
each Underwriter, but only with reference to information furnished in writing to
Providian by or on behalf of such Underwriter directly or through any
Representative for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties
-7-
<PAGE>
which are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel, to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
representatives representing the indemnified parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). An indemnifying party will not, without
the prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is due
in accordance with its terms but is for any reason held by a court to be
unavailable from Providian or the Underwriters on grounds of policy or
otherwise, Providian and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
Providian or one or more of the Underwriters may be subject in such proportion
so that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the public offering price appearing thereon and Providian is
responsible for the balance; provided that (y) in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the Designated Securities) be responsible for any amount in excess
of the underwriting discount applicable to the Designated Securities purchased
by such Underwriter hereunder and (z) 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. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person who
controls Providian within the meaning of either the Act or the Exchange Act,
each officer of Providian who shall have signed the Registration Statement and
each director of Providian shall have the same rights to
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<PAGE>
contribution as Providian, subject in each case to clause (y) of this paragraph
(d). Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or proceeding against such party in respect
of which a claim for contribution may be made against another party or parties
under this paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission to so notify in writing such party or parties
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
paragraph (d).
8. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters or the Representative, as the case may
be, by written notice given to Providian prior to delivery of and payment for
the Designated Securities, if prior to such time (i) trading in Providian's
Common Stock or securities generally on the New York Stock Exchange shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or New
York State authorities or (iii) there shall have occurred any material outbreak
or escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States is such as to make it, in the
reasonable judgment of such Underwriters or such Representative, impracticable
or inadvisable to proceed with the offering or delivery of the Designated
Securities as contemplated by the Prospectus and Prospectus Supplement.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, indemnities and other statements of Providian, or
its officers and of the Underwriters and/or any Representative set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter, Providian or any
of the officers, directors or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 5(e) and 7 hereof shall survive the termination or
cancellation of this Agreement.
10. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any Designated Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Designated
Securities set forth opposite their names in the appropriate schedule of the
Underwriting Agreement bears to the aggregate amount of Designated Securities
set forth opposite the names of all the remaining Underwriters) the Designated
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Designated Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the amount of Designated Securities
set forth in the appropriate schedule of the Underwriting Agreement, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Designated Securities, and if such
nondefaulting Underwriters do not purchase all the Designated Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
Providian. In the event of a default by any Underwriter as set forth in this
Section 10, the Closing Date shall be postponed for such period, not
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<PAGE>
exceeding seven days, as the Representative or Underwriters, as the case may be,
shall determine in order that the required changes in the Registration Statement
and the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to Providian and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
12. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
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<PAGE>
EXHIBIT A
---------
[FORM OF PILLSBURY MADISON & SUTRO LLP OPINION]
[Date]
Underwriter(s)
Ladies and Gentlemen:
We have acted as counsel to Providian Financial Corporation
("Providian") in connection with your purchase from Providian of $000,000,000 of
its Securities (the "Securities"). Such purchase is made pursuant to the
Underwriting Agreement dated ____________, 19__ (the "Underwriting Agreement")
between Providian and you, the Underwriter[s]. This opinion is furnished
pursuant to Section 6(b) of the Underwriting Agreement. Terms defined in the
Indenture have the same meanings when used in this opinion.
We have examined executed copies of the Securities, the Underwriting
Agreement, the Registration Statement (as hereinafter defined) and the
Prospectus (as hereinafter defined). We have also examined such other documents
and certificates of public officials and representatives of Providian as we have
deemed necessary as a basis for the opinions expressed herein. As to questions
of fact material to such opinions, we have, when relevant facts were not
independently established, relied upon certificates of officers or authorized
representatives of Providian.
We have assumed the genuineness of all signatures and documents
submitted to us as originals, that all copies submitted to us conform to the
originals, the legal capacity of all natural persons, and as to documents
executed by entities other than Providian, that each of such entities has the
power to enter into and perform its respective obligations thereunder, and that
such documents have been duly authorized, executed and delivered by, and are
binding upon and enforceable against, each of such entities.
We express no opinion as to the laws of any jurisdiction other than
California, New York and the general corporate law of Delaware and the Federal
laws of the United States of America, and, with respect to questions of New York
law, we have relied, with your permission, solely upon the opinion of
____________.
Based upon the foregoing and subject to the qualifications set forth
below, it is our opinion that:
1. Providian is validly existing and in good standing under the laws
of the State of Delaware and is duly qualified and in good standing to do
business in each other state identified in Attachment I hereto and possesses the
requisite corporate power and authority to own its properties and conduct its
business consistent with any description thereof in the prospectus dated
__________ and the prospectus supplement dated _________, filed with the
A-1
<PAGE>
Securities and Exchange Commission (the "Commission") pursuant to Rule 424(b)(2)
of Regulation C under the Securities Act of 1933, as amended (the "Act") (the
prospectus and the prospectus supplement, including the documents incorporated
by reference therein, are herein collectively referred to as the "Prospectus").
2. The Underwriting Agreement has been duly authorized, executed and
delivered by Providian.
3. The Securities have been duly authorized, executed and delivered
by Providian and when delivered to and paid for by the Underwriters pursuant to
the Underwriting Agreement will constitute valid and binding obligations of
Providian, enforceable in accordance with their respective terms.
4. The Indenture has been duly authorized, executed and delivered,
has been qualified under the Trust Indenture Act of 1939, as amended, and
constitutes a valid and binding obligation of Providian, enforceable in
accordance with its terms and when the Designated Securities have been executed
and authenticated in accordance with the provisions of the Indenture they will
be entitled to the benefits of the Indenture.
5. The Registration Statement on Form S-3 (File No. 333-__________)
filed by Providian with the Commission under Rule 415 of the Act on
____________, 1998 (such Registration Statement including the documents
incorporated by reference therein being herein collectively referred to as the
"Registration Statement") has become effective under the Act, and, to the best
of our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and, except as may be
otherwise indicated in the Prospectus or required by the blue sky or securities
laws of jurisdictions in which the Securities are offered or Securities or the
offer and sale of the Securities as described in the Prospectus, and the
execution, delivery and performance of the terms of the Underwriting Agreement,
the Indenture and the Securities by Providian will not contravene any provision
of the Restated Certificate of Incorporation, as amended, or Bylaws of
Providian, any Federal law or regulation or, to the best of our knowledge, any
applicable state law or any material agreement or instrument binding upon
Providian.
6. No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any federal or state court is required to be
obtained or made by Providian for the consummation of the transactions
contemplated by this Agreement in connection with the sale of the Designated
Securities, except (A) such as have been obtained and made under the Act or the
Exchange Act, or the rules and regulations thereunder, the bylaws and rules of
the National Association of Securities Dealers, Inc. and (B) such as may be
required under state or foreign securities laws.
7. To the best of our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitration involving Providian or any of its subsidiaries of a
character required to be disclosed in the
A-2
<PAGE>
Registration Statement which is not adequately disclosed in the Prospectus or
supplement relating thereto.
8. The Registration Statement and the Prospectus comply as to form in
all material respects with the requirements of the Act and the rules and
regulations of the Commission thereunder; each document filed by Providian under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied as to form in all material
respects when so filed with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; the statements in the Prospectus
with respect to the terms of the Securities fairly summarize the terms of such
instruments and to the best of our knowledge there are no other agreements or
instruments required to be described or referred to in the Registration
Statement which have not been described or referred to therein; and while we
have not ourselves checked the accuracy or completeness of, or otherwise
verified the information furnished in the Registration Statement, we have
considered the information required to be furnished therein and have generally
reviewed and had discussions with certain officers and employees of Providian
concerning the information so furnished, whether or not subject to our checking
and verification, and on the basis of such consideration, review and
discussions, but without independent checking or verification, we have no reason
to believe that the Registration Statement or any amendment thereto at the time
the Registration Statement or amendment 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 the
Prospectus or any supplement thereto at the time it was filed pursuant to Rule
424(b) of the Act, or on such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; it being understood that
with respect to the matters covered by this paragraph 8, we express no opinion
as to the financial statements and related schedules and other financial,
statistical or numerical data contained in the Registration Statement or the
Prospectus.
The opinions set forth in the foregoing are subject to the following
qualifications:
(a) Our opinions in paragraph 3 and 4 are subject to and limited by:
(i) the effect of bankruptcy, insolvency, reorganization, receivership,
conservatorship, arrangement, moratorium or other laws affecting or relating to
the rights of creditors generally; (ii) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in equity
or at law; (iii) to the extent applicable, the effect of court decisions
invoking statutes or principles of equity, which have held that certain
covenants and provisions of agreements are unenforceable where the breach of
such covenants or provisions imposes restrictions or burdens is necessary for
the protection of the creditor, or which have held that the creditor's
enforcement of such covenants or provisions under the circumstances would have
violated the creditor's covenants of good faith and fair dealing implied under
California law, and (iv) to the extent applicable, the effect of California
statutes and rules of law which cannot be waived prospectively by a borrower.
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(b) Whenever a statement herein is qualified by "known to us," "to
our knowledge" or similar phrase, it indicates that in the course of our
representation of Providian no information that would give us current actual
knowledge of the inaccuracy of such statement has come to the attention of the
attorneys in this firm who have rendered legal services in connection with this
transaction, including the principal partners of this firm who are familiar with
matters relating to Providian. We have not made any independent investigation to
determine the accuracy of such statement, except as expressly described herein.
No inference as to our knowledge of any matters bearing on the accuracy of such
statement should be drawn from the fact of our representation of Providian in
other matters in which such attorneys are not involved.
This opinion is rendered by us as counsel for Providian solely for
your benefit in connection with the transaction referred to herein and may not
be relied upon by you in connection with any other transaction and may not be
relied upon by any other person without our prior written consent.
Very truly yours,
A-4
EXHIBIT 1.2
===============================================================================
PROVIDIAN FINANCIAL CORPORATION
EQUITY SECURITIES
---------------
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
===============================================================================
<PAGE>
PROVIDIAN FINANCIAL CORPORATION
EQUITY SECURITIES
-------------
UNDERWRITING AGREEMENT STANDARD PROVISIONS
From time to time, Providian Financial Corporation, a Delaware
corporation ("Providian"), may enter into one or more underwriting agreements
that provide for the sale of certain equity securities (the "Securities"), to
the purchaser or purchasers named therein (the "Underwriters"). The standard
provisions set forth herein may be incorporated by reference in any such
underwriting agreement (the "Underwriting Agreement"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
referred to as "this Agreement." Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined. Capitalized
terms not otherwise defined in this Agreement shall have the meaning ascribed
thereto in the Indenture (as hereinafter defined).
The terms governing of the issuance and sale of any particular series
of Securities shall be as provided in the applicable Underwriting Agreement
(with respect to each Underwriting Agreement, such series of Securities are
herein referred to as the "Designated Securities").
1. ISSUANCE OF DESIGNATED SECURITIES. Sales of the Designated
Securities may be made from time to time to the Underwriters of the Designated
Securities. Any firm or firms designated as the representative or
representatives, as the case may be, of the Underwriters of the Designated
Securities in the Underwriting Agreement relating thereto will act as the
representative or representatives (the "Representative"). The obligation of
Providian to issue and sell any of the Designated Securities and the obligation
of any Underwriters to purchase any of the Designated Securities shall be
evidenced by the Underwriting Agreement with respect to the Designated
Securities specified therein. Each Underwriting Agreement shall specify the
aggregate principal amount of the Designated Securities, the public offering
price of the Designated Securities, the purchase price to the Underwriters of
the Designated Securities, the names of the Underwriters of the Designated
Securities, the name of the Representative, if any, of such Underwriters, and
the principal amount of the Designated Securities to be purchased by each
Underwriter and shall set forth the date, time and manner of delivery of the
Designated Securities and payment therefor. The Underwriting Agreement shall
also specify, to the extent not set forth in the Registration Statement and
Prospectus (as hereinafter defined) with respect thereto, the general terms of
the Designated Securities. An Underwriting Agreement shall be in writing (which
may be in counterparts), and may be evidenced by an exchange of facsimile
transmissions. The obligations of the Underwriters under each Underwriting
Agreement shall be several and not joint.
2. REPRESENTATIONS AND COVENANTS. Providian represents to, and
covenants with, each Underwriter that:
(a) Providian meets the requirements for the use of Form S-3 and a
registration statement on Form S-3 (Registration No. 333-_____), including a
prospectus, relating to the Securities of Providian has been filed with the
Securities and Exchange Commission (the "Commission") in accordance with
applicable regulations of the Commission under the Securities Act of 1933, as
amended (the "Act"), and has been declared effective under the Act. Such
registration statement, as amended to the date of this Agreement, is hereinafter
referred to as the "Registration Statement," and such prospectus as proposed to
be supplemented by a prospectus supplement (the "Prospectus Supplement")
relating to the Designated Securities to be filed pursuant to Rule 424 under the
Act is hereinafter referred to as the "Prospectus." Any reference herein to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the documents which were filed under the Securities Exchange Act of 1934 (the
"Exchange Act") on or before the date of this Agreement, and incorporated by
reference in the Prospectus pursuant to Item 12 of Form S-3,excluding any
documents or portions of such documents which are deemed under the rules
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and regulations of the Commission under the Act not to be incorporated by
reference; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement or the Prospectus shall
be deemed to refer to and include the filing of any document under the Exchange
Act deemed to be incorporated therein by reference after the date of this
Agreement. For purposes of this Agreement, "Effective Time" with respect to the
Registration Statement means (i) if Providian has not advised the Representative
that is proposes to amend such registration statement, the date and time as of
which such registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this Agreement,
was declared effective by the Commission or has become effective upon filing
pursuant to Rule 462(c) under the Act, or (ii) if Providian has advised the
Representative that it proposes to file an amendment or post-effective amendment
to such registration statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment, as the case
may be, is declared effective by the Commission. "Effective Date" with respect
to the Registration Statement means the date of the Effective Time thereof.
(b) At the Effective Time, the Registration Statement and the
Prospectus conformed, and any proposed amendments thereof and supplements
thereto relating to the Designated Securities will conform, in all material
respects to the requirements of the Act and the rules and regulations of the
Commission thereunder; each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus complied when so filed as to form
with the Exchange Act and the rules and regulations thereunder; on the Effective
Date neither the Registration Statement nor the Prospectus as of the date
thereof and on the Closing Date included or will include any untrue statement of
a material fact or omitted or will omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the case of
the Registration Statement, not misleading, or in the case of the Prospectus, in
light of the circumstances in which they were made, not misleading; provided,
however, that Providian makes no representations as to any statements or
omissions made in reliance upon and in conformity with information furnished to
Providian by or on behalf of any Underwriter for use in connection with the
preparation of such documents.
(c) Neither Providian nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes.
3. DELIVERY PAYMENT. Delivery of and payment for the Designated
Securities shall be made at the office, on the date and at the time specified in
the Underwriting Agreement (the "Closing Date"), which Closing Date may be
postponed by agreement between the Underwriters, or the Representative, as the
case may be, and Providian. Delivery of the Designated Securities shall be made
to the Underwriters or, if appropriate, the Representative for the respective
accounts of the Underwriters, in either case, against payment by the
Underwriters directly or through the Representative of the purchase price
thereof to or upon the order of Providian by certified or official bank check or
checks payable in New York Clearing House funds, unless otherwise agreed in the
Underwriting Agreement. Certificates for the Designated Securities shall be
registered in such names and in such denominations as the Representative may
request in writing not less than one full business day in advance of the Closing
Date.
If so requested by the Underwriters or the Representative, as the
case may be, Providian agrees to have the Designated Securities available for
inspection, checking and packaging in New York, New York, at least one business
day prior to the Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the Underwriters
propose to offer the Designated Securities for sale to the public upon the terms
and conditions set forth in the Prospectus.
5. AGREEMENTS. Providian agrees with the Underwriters that:
(a) Providian will cause the Prospectus Supplement to be filed
pursuant to Rule 424 under the Act and will promptly advise the Underwriters or
the Representative, as the case may be, when the Prospectus Supplement has been
so filed, and prior to the termination of the offering of the Designated
Securities will promptly advise such Underwriters or Representative (i) when any
amendment to the Registration Statement has been declared effective or has
become effective upon filing pursuant to Rule 462(c) under the Act or any
further supplement to the
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Prospectus has been filed, (ii) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (iv) of the receipt by
Providian of any notification with respect to the suspension of the
qualification of the Designated Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. Providian will use
its best efforts to prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof. Providian will not file
any amendment to the Registration Statement or supplement to the Prospectus
relating to the Designated Securities unless it has furnished the Underwriters
or the Representative, as the case may be, a copy prior to filing and will not
file any such proposed amendment or supplement to which such Underwriters or
Representative reasonably objects.
(b) If, at any time when a prospectus relating to the Designated
Securities is required to be delivered under the Act or any other applicable
securities law, any event occurs as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if it
shall be necessary to amend or supplement the Prospectus to comply with the Act
or the Exchange Act or the respective rules thereunder, Providian will promptly
notify the Underwriters or the Representative, as the case may be, and will
promptly prepare and file with the Commission, subject to paragraph (a) of this
Section 5, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(c) Providian will make generally available to its security holders
and to the Underwriters or the Representative, as the case may be, as soon as
practicable, but not later than 45 days after the end of the 12-month period
beginning at the end of the fiscal quarter of Providian during which the filing
of the Prospectus Supplement pursuant to Rule 424 under the Act first occurs
(except not later than 90 days if such filing date-is in the last fiscal
quarter), an earnings statement (which need not be audited) of Providian and its
consolidated subsidiaries, covering such 12-month period, which will satisfy the
provisions of Section 11 (a) of the Act.
(d) Providian will furnish to the Underwriters or the Representative,
as the case may be, and counsel for such Underwriters or for such Representative
copies of the Registration Statement (including, if requested, the exhibits
thereto and the documents incorporated by reference in the Prospectus) and each
amendment or supplement thereto relating to the Designated Securities which is
thereafter filed pursuant to paragraph (a) or (b) of this Section 5 and to each
Underwriter, so long as delivery of a prospectus by an Underwriter or dealer may
be required by the Act or other applicable securities laws, as many copies of
the Prospectus and any amendments thereof and supplements thereto, relating to
the Designated Securities, as such Underwriters or such Representative may
reasonably request.
(e) Providian will pay (i) all expenses incurred by it in the
performance of its obligations under this Agreement, (ii) reasonable fees
charged for rating the Designated Securities and for preparing a Blue Sky and
Legal Investment Memorandum with respect to the sale of the Designated
Securities and (iii)the expenses of printing or otherwise producing and
delivering the Designated Securities, the documents specified in paragraph (d)
of this Section 5 and any Blue Sky and Legal Investment Memorandum.
(f) Providian will use its best efforts to arrange and pay for the
qualification of the Designated Securities for sale under the laws of such
jurisdictions as the Underwriters or the Representative, as the case may be, may
designate and to maintain such qualifications in effect so long as required for
the distribution of the Designated Securities; provided, however, that Providian
shall not be required to qualify to do business in any jurisdiction where it is
not now qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so subject.
(g) If the sale of the Designated Securities provided for in an
Underwriting Agreement is not consummated by reason of any failure, refusal or
inability on the part of Providian to perform any agreement on its part to be
performed (except for any failure so to perform on the part of Providian
engendered by a failure, refusal or inability on the part of the Underwriters or
any Representative to perform any agreement on their part to be performed) or
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<PAGE>
the failure of any condition set forth in Section 6, Providian will reimburse
the several Underwriters who are named in such Underwriting Agreement for all
reasonable out-of-pocket disbursements incurred by the Underwriters in
connection with their investigation, marketing and preparing to market the
Designated Securities, and upon such reimbursement Providian shall have no
further liability to the Underwriters except as provided in Section 7.
(h) During the period beginning on the date of this Agreement and
terminating on the later of (i) the Closing Date or (ii) the date of notice to
Providian by the Representative or the Underwriters, (which shall not exceed
forty-five days from the date of this Agreement), Providian will not offer,
sell, contract to sell or otherwise dispose of any Designated Securities of
Providian, or securities convertible into or exchangeable for Designated
Securities, without the prior written consent of such Representative or such
Underwriters.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the Underwriters to purchase the Designated Securities shall be subject to
the accuracy of the representations on the part of Providian contained herein as
of the date hereof and the Closing Date, to the performance by Providian of its
obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted and be pending or threatened as of the Closing Date;
(b) Pillsbury Madison & Sutro LLP, counsel for Providian, shall have
furnished to the Representative their opinion, dated the Closing Date,
substantially in the form attached hereto as Exhibit A;
(c) The Underwriters or the Representative, as the case may be, shall
have received from counsel for the Underwriters such opinion or opinions, dated
the Closing Date, with respect to such matters as such Underwriters or
Representative may reasonably require;
(d) Providian shall have furnished to the Underwriters or the
Representative, as the case may be, a certificate, dated the Closing Date, of
Providian, signed by any executive officer of Providian, to the effect that the
signer of such certificate has carefully examined the Registration Statement,
the Prospectus and this Agreement and that:
(i) The representations of Providian in this Agreement are
true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date, and
Providian has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to
the Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted and are pending or, to his or her
knowledge, threatened as of such date; and
(iii) Since the date of the most recent financial
statements included in or incorporated by reference into the
Prospectus, there has been no material adverse change in the
condition (financial or otherwise) of Providian and its consolidated
subsidiaries, taken as a whole.
(e) The Underwriters or the Representative, as the case may be, shall
have received from Ernst & Young LLP a letter, dated the Closing Date, which
letter shall be in form as may be agreed upon among such Underwriters or
Representative, Providian and Ernst & Young LLP, and shall cover such matters as
may be reasonably requested by such Underwriters or Representative.
(f) Prior to the Closing Date, Providian shall have furnished to the
Underwriters or the Representative, as the case may be, such further
information, certificates and documents as they may reasonably request.
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(g) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of Providian and its subsidiaries considered as a whole
which the Underwriters or the Representative, as the case may be, concludes, in
its judgment, after consultation with Providian, materially impairs the
investment quality of the Designated Securities so as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities as contemplated by the Prospectus and there shall not have
been any decrease in the ratings of any of Providian's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act).
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Providian agrees to indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter, and each
person, if any, who controls any Underwriter within the meaning of either the
Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus, or in any amendment thereof or
supplement thereto relating to the Designated Securities, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party for any legal or
other expenses reasonably incurred by them, as so incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that Providian will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
information furnished in writing to Providian by or on behalf of any Underwriter
through the Representative or the Underwriters, as the case may be, for use in
connection with the preparation thereof. This indemnity agreement will be in
addition to any liability which Providian may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
Providian, each of its directors, officers, employees and agents, and each
person who controls Providian within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from Providian to
each Underwriter, but only with reference to information furnished in writing to
Providian by or on behalf of such Underwriter directly or through any
Representative for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel satisfactory to
such indemnified party; provided that, if the defendants in any such action
include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel, to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next
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<PAGE>
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel, approved
by the representatives representing the indemnified parties who are parties to
such action), (ii) the indemnifying- party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii). An indemnifying party will not, without
the prior written consent of each indemnified party, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is due
in accordance with its terms but is for any reason held by a court to be
unavailable from Providian or the Underwriters on grounds of policy or
otherwise, Providian and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to which
Providian or one or more of the Underwriters may be subject in such proportion
so that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus bears to the public offering price appearing thereon and Providian is
responsible for the balance; provided that (y) in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to the
offering of the Designated Securities) be responsible for any amount in excess
of the underwriting discount applicable to the Designated Securities purchased
by such Underwriter hereunder and (z) 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. For purposes of this Section 7, each person who controls an
Underwriter within the meaning of either the Act or the Exchange Act shall have
the same rights to contribution as such Underwriter, and each person who
controls Providian within the meaning of either the Act or the Exchange Act,
each officer of Providian who shall have signed the Registration Statement and
each director of Providian shall have the same rights to contribution as
Providian, subject in each case to clause (y) of this paragraph (d). Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
paragraph (d), notify such party or parties from whom contribution may be
sought, but the omission to so notify in writing such party or parties shall not
relieve the party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this paragraph
(d).
8. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Underwriters or the Representative, as the case may
be, by written notice given to Providian prior to delivery of and payment for
the Designated Securities, if prior to such time (i) trading in Providian's
Common Stock or securities generally on the New York Stock Exchange shall have
been suspended or materially limited, (ii) a general moratorium on commercial
banking activities in New York shall have been declared by either Federal or New
York State authorities or (iii) there shall have occurred any material outbreak
or escalation of hostilities or other calamity or crisis the effect of which on
the financial markets of the United States is such as to make it, in the
reasonable judgment of such Underwriters or such Representative, impracticable
or inadvisable to proceed with the offering or delivery of the Designated
Securities as contemplated by the Prospectus and Prospectus Supplement.
9. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, indemnities and other statements of Providian, or
its officers and of the Underwriters and/or any Representative set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter, Providian or any
of the officers, directors or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections S(e) and 7 hereof shall survive the termination or
cancellation of this Agreement.
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10. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any Designated Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Designated
Securities set forth opposite their names in the appropriate schedule of the
Underwriting Agreement bears to the aggregate amount of Designated Securities
set forth opposite the names of all the remaining Underwriters) the Designated
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Designated Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the amount of Designated Securities
set forth in the appropriate schedule of the Underwriting Agreement, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Designated Securities, and if such
nondefaulting Underwriters do not purchase all the Designated Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
Providian. In the event of a default by any Underwriter as set forth in this
Section 10, the Closing Date shall be postponed for such period, not exceeding
seven days, as the Representative or Underwriters, as the case may be, shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to Providian and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7 hereof, and no
other person will have any right or obligation hereunder.
12. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
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EXHIBIT A
[FORM OF PILLSBURY MADISON & SUTRO LLP OPINION]
[Date]
Underwriter(s)
Gentlemen and Mesdames:
We have acted as counsel to Providian Financial Corporation
("Providian") in connection with your purchase from Providian of $000,000,000 of
its Securities (the "Securities"). Such purchase is made pursuant to the
Underwriting Agreement dated , 19_ (the "Underwriting Agreement") between
Providian and you, the Underwriter[s]. This opinion is furnished pursuant to
Section 6(b) of the Underwriting Agreement. Terms defined in the Indenture have
the same meanings when used in this opinion.
We have examined executed copies of the Securities, the Underwriting
Agreement, the Registration Statement (as hereinafter defined) and the
Prospectus (as hereinafter defined). We have also examined such other documents
and certificates of public officials and representatives of Providian as we have
deemed necessary as a basis for the opinions expressed herein. As to questions
of fact material to such opinions, we have, when relevant facts were not
independently established, relied upon certificates of officers or authorized
representatives of Providian.
We have assumed the genuineness of all signatures and documents
submitted to us as originals, that all copies submitted to us conform to the
originals, the legal capacity of all natural persons, and as to documents
executed by entities other than Providian, that each of such entities has the
power to enter into and perform its respective obligations thereunder, and that
such documents have been duly authorized, executed and delivered by, and are
binding upon and enforceable against, each of such entities.
We express no opinion as to the laws of any jurisdiction other than
California, New York and the general corporate law of Delaware and the Federal
laws of the United States of America, and, with respect to questions of New York
law, we have relied, with your permission, solely upon the opinion of [_____].
Based upon the foregoing and subject to the qualifications set forth
below, it is our opinion that:
1. Providian is validly existing and in good standing under the laws
of the State of Delaware and is duly qualified and in good standing to do
business in each other state identified in Attachment I hereto and possesses the
requisite corporate power and authority to own its properties and conduct its
business consistent with any description thereof in the prospectus dated _____
and the prospectus supplement dated _____, filed with the Securities and
Exchange Commission (the "Commission") pursuant to Rule 424(b)(2) of Regulation
C under the Securities Act of 1933, as amended (the "Act") (the prospectus and
the prospectus supplement, including the documents incorporated by reference
therein, are herein collectively referred to as the "Prospectus").
2. The Underwriting Agreement has been duly authorized, executed and
delivered by Providian.
3. The [Common/Preferred] Stock has been duly authorized and validly
issued, and when paid for in accordance with the terms of the Underwriting
Agreement, will be fully paid and nonassessable and/or the [Securities] have
been duly authorized, executed and delivered by Providian and constitute valid
and binding obligations of Providian, enforceable in accordance with their
terms.
4. The Registration Statement of Form S-3 (File No. _______) filed by
Providian with the Commission under Rule 415 of the Act on _________, 1995 (such
Registration Statement including the documents incorporated
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by reference therein being herein collectively referred to as the "Registration
Statement") has become effective under the Act, and, to the best of our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Act, and, except as may be
otherwise indicated in the Prospectus or required by the blue sky or securities
laws of jurisdictions in which the Securities are offered or Securities or the
offer and sale of the Securities as described in the Prospectus, and the
execution, delivery and performance of the terms of the Underwriting Agreement,
the Indenture and the Securities by Providian will not contravene any provision
of the Restated Certificate of Incorporation, as amended, or By-Laws of
Providian, any Federal law or regulation or, to the best of our knowledge, any
applicable state law or any material agreement or instrument binding upon
Providian.
5. No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any federal or state court is required to be
obtained or made by Providian for the consummation of the transactions
contemplated by this Agreement in connection with the sale of the Designated
Securities, except (i) such as have been obtained and made under the Act or the
Exchange Act, or the rules and regulations thereunder, the bylaws and rules of
the National Association of Securities Dealers, Inc. and (ii) such as may be
required under state or foreign securities laws.
6. To the best of our knowledge, there is no pending or threatened
action, suit or proceeding before any court or governmental agency, authority or
body or any arbitrator involving Providian or any of its subsidiaries of a
character required to be disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus or supplement relating thereto.
7. The Registration Statement and the Prospectus comply as to form in
all material respects with the requirements of the Act and the rules and
regulations of the Commission thereunder; each document filed by Providian under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in the Prospectus complied as to form in all material
respects when so filed with the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder; the statements in the Prospectus
with respect to the terms of the Securities fairly summarize the terms of such
instruments and to the best of our knowledge there are no other agreements or
instruments required to be described or referred to in the Registration
Statement which have not been described or referred to therein; and while we
have not ourselves checked the accuracy or completeness of, or otherwise
verified the information furnished in the Registration Statement, we have
considered the information required to be furnished therein and have generally
reviewed and had discussions with certain officers and employees of Providian
concerning the information so furnished, whether or not subject to our checking
and verification, and on the basis of such consideration, review and
discussions, but without independent checking or verification, we have no reason
to believe that the Registration Statement or any amendment thereto at the time
the Registration Statement or amendment 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 the
Prospectus or any supplement thereto at the time it was filed pursuant to Rule
424(b) of the Act, or on such Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; it being understood that
with respect to the matters covered by this paragraph 7, we express no opinion
as to the financial statements and related schedules and other financial,
statistical or numerical data contained in the Registration Statement or the
Prospectus.
The opinions set forth in the foregoing are subject to the following
qualifications:
(a) Our opinions in paragraph 3 are subject to and limited by: (i)
the effect of bankruptcy, insolvency, reorganization, receivership,
conservatorship, arrangement, moratorium or other laws affecting or relating to
the rights of creditors generally; (ii) the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a proceeding in equity
or at law; (iii) to the extent applicable, the effect of court decisions
invoking statutes or principles of equity, which have held that certain
covenants and provisions of agreements are unenforceable where the breach of
such covenants or provisions imposes restrictions or burdens is necessary for
the protection of the creditor, or which have held that the
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creditor's enforcement of such covenants or provisions under the circumstances
would have violated the creditor's covenants of good faith and fair dealing
implied under California law, and (iv) to the extent applicable, the effect of
California statutes and rules of law which cannot be waived prospectively by a
borrower.
(b) Whenever a statement herein is qualified by "known to us", "to
our knowledge" or similar phrase, it indicates that in the course of our
representation of Providian no information that would give us current actual
knowledge of the inaccuracy of such statement has come to the attention of the
attorneys in this firm who have rendered legal services in connection with this
transaction, including the principal partners of this firm who are familiar with
matters relating to Providian. We have not made any independent investigation to
determine the accuracy of such statement, except as expressly described herein.
No inference as to our knowledge of any matters bearing on the accuracy of such
statement should be drawn from the fact of our representation of Providian in
other matters in which such attorneys are not involved.
This opinion is rendered by us as counsel for Providian solely for
your benefit in connection with the transaction referred to herein and may not
be relied upon by you in connection with any other transaction and may not be
relied upon by any other person without our prior written consent.
Very truly yours,
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EXHIBIT 4.9
CERTIFICATE OF TRUST
OF
PROVIDIAN FINANCING I
This Certificate of Trust of Providian Financing I (the "Trust"),
dated May 29, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
DEL. C. sections 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is Providian
Financing I.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), a Delaware banking corporation, White Clay Center,
Route 273, Newark, Delaware.
3. EFFECTIVE DATE. This certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK, as Trustee
By /s/ VAN K. BROWN
------------------------------------
Name VAN K. BROWN
----------------------------------
Title Assistant Vice President
---------------------------------
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By /s/ FREDERICK W. CLARK
------------------------------------
Name FREDERICK W. CLARK
----------------------------------
Title Authorized Signatory
---------------------------------
EXHIBIT 4.10
CERTIFICATE OF TRUST
OF
PROVIDIAN FINANCING II
This Certificate of Trust of Providian Financing II (the "Trust"),
dated May 29, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
DEL. C. sections 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is Providian
Financing II.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), a Delaware banking corporation, White Clay Center,
Route 273, Newark, Delaware.
3. EFFECTIVE DATE. This certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK, as Trustee
By /s/ VAN K. BROWN
------------------------------------
Name VAN K. BROWN
----------------------------------
Title Assistant Vice President
---------------------------------
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By /s/ FREDERICK W. CLARK
------------------------------------
Name FREDERICK W. CLARK
----------------------------------
Title Authorized Signatory
---------------------------------
EXHIBIT 4.11
CERTIFICATE OF TRUST
OF
PROVIDIAN FINANCING III
This Certificate of Trust of Providian Financing III (the "Trust"),
dated May 29, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
DEL. C. sections 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is Providian
Financing III.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), a Delaware banking corporation, White Clay Center,
Route 273, Newark, Delaware.
3. EFFECTIVE DATE. This certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK, as Trustee
By /s/ VAN K. BROWN
------------------------------------
Name VAN K. BROWN
----------------------------------
Title Assistant Vice President
---------------------------------
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By /s/ FREDERICK W. CLARK
------------------------------------
Name FREDERICK W. CLARK
----------------------------------
Title Authorized Signatory
---------------------------------
EXHIBIT 4.12
CERTIFICATE OF TRUST
OF
PROVIDIAN FINANCING IV
This Certificate of Trust of Providian Financing IV (the "Trust"),
dated May 29, 1998, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
DEL. C. sections 3801 ET SEQ.).
1. NAME. The name of the business trust formed hereby is Providian
Financing IV.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delaware are The
Bank of New York (Delaware), a Delaware banking corporation, White Clay Center,
Route 273, Newark, Delaware.
3. EFFECTIVE DATE. This certificate of Trust shall be effective as of
its filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
THE BANK OF NEW YORK, as Trustee
By /s/ VAN K. BROWN
------------------------------------
Name VAN K. BROWN
----------------------------------
Title Assistant Vice President
---------------------------------
THE BANK OF NEW YORK (DELAWARE), as
Trustee
By /s/ FREDERICK W. CLARK
------------------------------------
Name FREDERICK W. CLARK
----------------------------------
Title Authorized Signatory
---------------------------------
EXHIBIT 4.13
===============================================================================
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
PROVIDIAN FINANCING [ ]
Dated as of_____________, 199_
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)...................................... 5.3(a)
310(b)...................................... 5.3(d)
310(c)...................................... Inapplicable
311(a)...................................... 2.2(b)
311(b)...................................... 2.2(b)
311(c)...................................... Inapplicable
312(a)...................................... 2.2(a)
312(b)...................................... 2.2(c)
312(c)...................................... 2.2(d)
313......................................... 2.3
314(a)...................................... 2.4
314(b)...................................... Inapplicable
314(c)...................................... 2.5
314(d)...................................... Inapplicable
314(e)...................................... 2.4
314(f)...................................... Inapplicable
315(a)...................................... 3.9(b)
315(c)...................................... 3 9(a)
315(d)...................................... 3.9(b)
315(e)...................................... 2.6
316(a)...................................... Exhibit A, 2.6
315(b)...................................... 2.8
316(b)...................................... 2.6(e)
316(c)...................................... 3.6(e)
317(a)...................................... 3.8(g)
317(b)...................................... 3.8(h)
318(a)...................................... 2.1(c)
318(b)...................................... Inapplicable
318(c)...................................... 2.1(c)
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PROVIDIAN FINANCING [ ]
__________, 199__
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated
and effective as of __________, 199__ by the undersigned trustees (together with
all other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, collectively the
"Trustees"), Providian Financial Corporation, a Delaware corporation, as trust
sponsor (the "Sponsor"), the Administrators (as defined herein) and the holders,
from time to time, of undivided beneficial interests in the assets of the Trust
to be issued pursuant to this Declaration;
WHEREAS, the Trustees, the Administrators and the Sponsor established a
trust (the "Trust") under the Delaware Business Trust Act pursuant to a
Declaration of Trust, dated as of May 29, 1998 (the "Original Declaration"), and
a Certificate of Trust was filed with the Secretary of State of Delaware on May
29, 1998, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Subordinated Notes of the Subordinated
Note Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees, the Administrators and the Sponsor, by
this Declaration, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
1.1 DEFINITIONS.
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) A term defined anywhere in this Declaration has the same meaning
throughout;
(c) All references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended from time to
time;
(d) All references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) A term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires;
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<PAGE>
(f) A term defined in the Indenture (as defined herein) and the Master
Unit Agreement (as defined herein) has the same meaning when used in this
Declaration unless otherwise defined in this Declaration or the context
otherwise requires;
(g) A reference to "including" means "including, but not limited to";
and
(h) A reference to the singular includes the plural and vice versa.
"Administrators" means each of David J. Petrini, Daniel Sanford and
Kirk Inglis solely in such Person's capacity as Administrator of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Appointment Event" means an event defined in the terms of the
Preferred Securities as set forth in Exhibit A, as such Exhibit A may be amended
in accordance with the terms of this Declaration.
"Authorized Officer" of a Person means any other Person that is
authorized to bind such Person.
"Bankruptcy" means, with respect to an entity, (a) the entry by a court
having jurisdiction in the premises of a decree or order for relief in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidation, assignee,
custodian, trustee, sequestration (or similar official) of such entity or for
any substantial party of its property, or ordering the winding up or liquidation
of its affairs, if such decree or order shall remain unstayed and in effect for
a period of 60 consecutive days or (b) the commencement by such entity of a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or such entity's consent to the entry of an order
for relief in any involuntary case under any such law, or its consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestration (or similar official) of such entity or for
any substantial part of its property, or the making by such entity of any
general assignment for the benefit of creditors, or its failure generally to pay
its debts as they become due or the taking by such entity of any corporate
action in furtherance of any of the foregoing.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized or
required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Sections 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Closing Date" means __________, 199_.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and performing the duties now
assigned to it under applicable federal securities laws, then the body
performing such duties at such time.
["Common Securities Guarantee" means the guarantee agreement dated as
of ________, 199_ of the Sponsor in respect of the Common Securities.]
"Common Security" has the meaning specified in Section 7.1.
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<PAGE>
"Covered Person" means:
(a) any officer, director, shareholder, partner, member,
representative, employee or agent of:
(i) the Trust; or
(ii) the Trust's Affiliates; and
(b) any Holder of Securities.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Depository" means DTC or its successor.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or
more Authorized Officers of that Person.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Depository.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Subordinated Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Preferred Security" means a certificate representing all or a
portion of the Preferred Securities issued hereunder and delivered to the
Depository in accordance with Section 9.4 and bearing the legend set forth in
Section 9.4.
"Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means:
(a) any Trustee;
(b) any Affiliate of any Trustee;
(c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or
(d) any employee or agent of the Trust or its Affiliates.
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<PAGE>
"Indenture" means the Subordinated Indenture dated as of __________,
199_, [as supplemented by the First Supplemental Indenture dated as of
_________, 199__, each being] between the Subordinated Note Issuer and The Bank
of New York, as trustee, as such Indenture may be further amended, supplemented
or modified in accordance with the provisions thereof.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidation Amount" means, with respect to a Preferred Security,
$__________.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Exhibit A, as such exhibit may be amended or modified
in accordance with this Declaration.
"Majority in Liquidation Amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, a vote by Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holder(s) of outstanding Preferred
Securities or Common Securities voting separately as a class and voting their
respective classes of Securities, where the aggregate liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of the Securities voted by such Holders
represents more than 50% of such Liquidation Amount of all Securities, or all
Securities of such class, as the case may be. In determining whether the Holders
of the requisite amount of Preferred Securities have voted, Preferred Securities
which are owned by the Sponsor, the Trust or any other obligor on the Preferred
Securities or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Sponsor, the Trust or any
other obligor on the Preferred Securities shall be disregarded.
["Master Unit Agreement" shall mean the Master Unit Agreement between
Providian Financial Corporation and ______, as Unit Agent, dated as of
_________________, 19__.]
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. To the extent
required by the Trust Indenture Act, any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that the officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation on which the statements or opinions
contained in such Certificate are based;
(c) a statement that, in the opinion of such officer, he or
she has made such examination or investigation as is necessary to
enable such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning set forth in Section 6.1.
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<PAGE>
"Person" means a natural or legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated organization, or
government or any agency, authority or political subdivision thereof, or any
other entity of whatever nature.
"Preferred Securities Guarantee" means the Preferred Securities
Guarantee Agreement to be dated as of __________, 199__ of the Sponsor in
respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1.
["Pricing Agreement" means the pricing agreement between the Trust, the
Subordinated Note Issuer, and the underwriter(s) designated by the
Administrators with respect to the offer and sale of the Preferred Securities.]
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Pro Rata" shall have the meaning assigned to such term in paragraph 8
of Exhibit A, as such Exhibit A may be amended from time to time in accordance
with this Declaration.
"Quorum" means a majority of the Administrators or, if there
are only two Administrators, both of them.
"Register" means the books for the registration and transfer of
Securities, which books are kept by the Trustee in accordance with Section 9.2.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person which owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee, the
chairman of the board of directors, the president, any vice-president, any
assistant vice-president, the secretary, any assistant secretary, the treasurer,
any assistant treasurer, any trust officer or assistant trust officer or any
other officer of the Property Trustee customarily performing functions similar
to those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"66-2/3% in Liquidation Amount of the Securities" means a vote by
Holder(s) of Securities voting together as a single class or, as the context may
require, Holder(s) of Preferred Securities or Common Securities, voting
separately as a class and voting their respective classes of Securities, where
the aggregate liquidation amount (including the stated amount that would be paid
on redemption, liquidation or otherwise, plus accrued and unpaid Distributions,
to the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents 66-2/3% of such liquidation amount of all
Securities, or all Securities of such class, as the case may be. In determining
whether the Holders of the requisite amount of Preferred Securities have voted,
Preferred Securities which are owned by the Sponsor, the Trust or any other
obligor on the Preferred Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Sponsor, the Trust or any other obligor on the Preferred Securities shall be
disregarded.
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<PAGE>
"Special Event" has the meaning set forth in the terms of the
Securities set forth in Exhibit A, as such Exhibit A may be amended or modified
in accordance with this Declaration.
"Sponsor" means Providian Financial Corporation, a Delaware
corporation, in its capacity as sponsor of the Trust, or any permitted successor
entity.
"Subordinated Note Issuer" means Providian Financial Corporation, a
Delaware corporation, in its capacity as issuer of the Subordinated Notes, or
any permitted successors or assigns under the Indenture.
"Subordinated Note Trustee" means The Bank of New York, as trustee
under the Indenture until a successor is appointed thereunder and thereafter
means such successor trustee.
"Subordinated Notes" means the series of Subordinated Notes to be
issued by the Subordinated Note Issuer under the Indenture and purchased for the
account of and held by the Property Trustee pursuant to Section 3.6(c).
"Successor Delaware Trustee" has the meaning set forth in Section
5.6(c).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Successor Property Trustee" means a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3.
"Successor Securities" has the meaning set forth in Section
3.15(b)(i)(B).
"10% in Liquidation Amount of the Securities" means a vote by Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common Securities, voting
separately as a class and voting their respective classes of Securities, where
the Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents 10% of such Liquidation Amount of all
Securities, or all Securities of such class, as the case may be. In determining
whether the Holders of the requisite amount of Preferred Securities have voted,
Preferred Securities which are owned by the Sponsor, the Trust or any other
obligor on the Preferred Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Sponsor, the Trust or any other obligor on the Preferred Securities shall be
disregarded.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office as
such in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees
hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
as of the date of this Agreement.
"25% in Liquidation Amount of the Securities" means a vote by Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holder(s) of Preferred Securities or Common Securities, voting
separately as a class and voting their respective classes of Securities, where
the Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of the Securities
voted by such Holders represents 25% of such Liquidation Amount of all
Securities, or all Securities of such class, as the case may be. In determining
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<PAGE>
whether the Holders of the requisite amount of Preferred Securities have voted,
Preferred Securities which are owned by the Sponsor, the Trust or any other
obligor on the Preferred Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Sponsor, the Trust or any other obligor on the Preferred Securities shall be
disregarded.
["Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities.]
"Units" mean any securities designated as Units, which may include, but
are not limited to, stock purchase contracts and Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
2.1 TRUST INDENTURE ACT; APPLICATION.
(a) So long as the Preferred Securities are outstanding, this
Declaration shall be subject to the provisions of the Trust Indenture Act that
are required to be part of this Declaration and shall, to the extent applicable,
be governed by such provisions; provided, however, that any provisions of the
Trust Indenture Act which may in accordance therewith be excluded are hereby
excluded. At such time as the Preferred Securities are no longer outstanding,
the Trust Indenture Act shall no longer govern this Declaration and all
provisions requiring compliance with specified provisions of the Trust Indenture
Act shall be of no further force and effect;
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act;
(c) If and to the extent that any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Administrators, on behalf of the Trust,
shall provide the Property Trustee not less than 45 days nor more than 60 days
after each (month and day) that is a Distribution payment date, but in no event
less frequently than semiannually, and at such other times as the Property
Trustee may request in writing, within 30 days after receipt by the Sponsor and
Administrators of any such request, a list in such form as the Property Trustee
may reasonably require containing all the information in the possession or
control of the Sponsor and the Administrators, or any of its Paying Agents other
than the Property Trustee, as to the names and addresses of the Holders of
Securities, obtained since the date as of which the next previous list, if any,
was furnished, excluding from any such list the names and addresses received by
the Property Trustee in its capacity as registrar (if so acting). Any such list
may be dated as of a date not more than 15 days prior to the time such
information is furnished and need not include information received after such
date.
(b) The Property Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Securities (i)
contained in the most recent list furnished to it as provided in this Section
2.2, (ii) received by the Property Trustee in the capacity of Paying Agent or
registrar (if so acting) and (iii) filed with the Property Trustee within the
two preceding years as provided for in Section 2.2(a). The Property Trustee may
destroy any list furnished to it as provided in this Section 2.2 upon receipt of
a new list so furnished.
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(c) If three or more Holders of the Common Securities or the Preferred
Securities (hereinafter referred to as "applicants") apply in writing to the
Property Trustee, and furnish to the Property Trustee reasonable proof that each
such applicant has owned a Security of such class for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders of Securities of such
class with respect to their rights under this Declaration or under such
Securities, and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Property
Trustee shall, within five Business Days after the receipt of such application,
at its election, either:
(i) afford such applicants access to the information preserved
at the time by the Property Trustee in accordance with the provisions
of this Section 2.2 or
(ii) inform such applicants as to the approximate number of
Holders of such Securities whose names and addresses appear in the
information preserved at the time by the Property Trustee in accordance
with the provisions of Section 2.2(b), and as to the approximate cost
of mailing to such Holders the form of proxy or other communications,
if any, specified in such application.
If the Property Trustee shall elect not to afford such applicants
access to such information, the Property Trustee shall, upon the written request
of such applicants, mail to each of the Holders of such Securities whose name
and address appear in the information preserved at the time by the Property
Trustee in accordance with the provisions of Section 2.2(b), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Property Trustee of the material to
be mailed and of payment, or provision for the payment, of the reasonable
expenses of mailing, unless within five days after such tender, the Property
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Property Trustee, such mailing would be contrary to
the best interests of the Holders of Securities or would be in violation of
applicable law. Such written statement shall specify the basis of such opinion.
If the Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Property Trustee shall mail copies of such material to
all such Holders of Securities with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(d) Each and every Holder of the Securities, by receiving and holding
the same, agrees with the Sponsor, the Administrators, and the Property Trustees
that none of them nor any Paying Agent nor any registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with the provisions of
Section 2.2(c), regardless of the source from which such information was
derived, and that the Property Trustee shall not be held accountable by reason
of mailing any material pursuant to a request made under Section 2.2(c).
(e) The Property Trustee shall comply with its obligations under
Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
2.3 REPORTS BY THE PROPERTY TRUSTEE. Within 60 days after May 15 of
each year commencing May 15, 1999, the Property Trustee shall provide to the
Holders of the Securities such reports, if any, as are required by Section
313(a), (b)and (c) of the Trust Indenture Act, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE. Each of the Sponsor, the
Subordinated Note Issuer, the Administrators and any other obligor on behalf of
the Trust shall provide to the Property Trustee such documents, reports and
information (if any), and the compliance certificate, required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
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2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of the
Sponsor, the Subordinated Note Issuer and the Administrators on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration which relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officer's Certificate.
2.6 EVENTS OF DEFAULT; WAIVER. The occurrence and continuance of an
Event of Default under the Indenture shall constitute an Event of Default
hereunder.
(a) The Holders of a Majority in Liquidation Amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default in respect of the Preferred
Securities and its consequences; provided that if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of (1) Holders (as such term
is defined in the Indenture) of Subordinated Notes representing a
specified percentage greater than a majority in principal amount of the
Subordinated Notes or (2) each Holder of Subordinated Notes, the Event
of Default under this Declaration may only be waived by, in the case of
clause (1) hereof, the vote of Holders of Preferred Securities
representing such specified percentage of the aggregate liquidation
amount of the Preferred Securities or, in the case of clause (2)
hereof, each Holder of Preferred Securities.
(b) Upon such waiver meeting the requirements of the foregoing
subsections (a)(i) or (a)(ii) of this Section 2.6, any such default or resulting
Event of Default shall cease to exist and shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities. Each Holder of Common
Securities will be deemed to have waived any Event of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated. Until such Events of Default have been so cured, waived or otherwise
eliminated, the Property Trustee will be deemed to be acting solely on behalf of
the Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee in accordance with
the terms of the Securities. Subject to the foregoing provisions of this Section
2.6(b), upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of any Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the applicable Liquidation
Amount of Preferred Securities constitutes a waiver of the corresponding Event
of Default under this Declaration.
(d) All parties to this Declaration agree, and each Holder of any
Security by such Holder's acceptance thereof shall be deemed to have agreed, in
any suit for the enforcement of any right or remedy under this Declaration, or
in any suit against the Property Trustee for any action taken or omitted by it
as Property Trustee, that any court may in its discretion require the filing by
any party in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant.
The provisions of this Section 2.6(d) shall not apply to any suit instituted by
the Property Trustee, to any suit instituted by any Holder of Securities, or
group of such Holders, holding in the aggregate more than 10%
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percent in Liquidation Amount of the Securities, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or any
interest or premium on any Security, on or after the due date expressed in such
Security or for such interest (or in the case of any redemption, on or after the
Redemption Date).
(e) No Holder of any Preferred Security or of any Common Security shall
have any right by virtue of any provision of this Declaration to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
this Declaration or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless such Holder previously shall have given to the
Property Trustee written notice of a continuing Event of Default, and unless
also the Holders of not less than 25% in Liquidation Amount of the Preferred
Securities or of the Common Securities, as the case may be, then outstanding
shall have made written request upon the Property Trustee to institute such
action, suit or proceeding in its own name as Property Trustee hereunder and
shall have offered to the Property Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby (including the reasonable fees of counsel for the Property Trustee), and
the Property Trustee, for 60 days after its receipt of such notice, request and
offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding and no direction inconsistent with such written
request shall have been given to the Property Trustee pursuant to this 2.2(e);
it being understood and intended, and being expressly covenanted by the taker
and Holder of every Security with every other taker and Holder and the Property
Trustee, that no one or more Holders of Securities shall have any right in any
manner whatever by virtue of any provision of this Declaration to affect,
disturb or prejudice the rights of the Holders of any other of such Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Declaration, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders of
Securities. For the protection and enforcement of the provisions of this Section
2.2(d), each and every Holder and the Property Trustee shall be entitled to such
relief as can be given either at law or in equity.
(f) The provisions of Section 315(e) of the Trust Indenture Act shall
be excluded from this Declaration.
Notwithstanding any other provisions in this Declaration, the right of
any Holder of any Security to receive payment of the Distributions on such
Security on or after the respective due dates expressed in such Security (or, in
the case of redemption, on or after the date fixed for redemption), or to
institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of such
Holder.
2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default hereunder, give to the Holders of the Securities notice of
such Event of Default known to the Trustee unless such Event of Default shall
have been cured, remedied or waived before the giving of such notice (the term
"Event of Default" for the purposes of this Section 2.7(a) being hereby defined
to be an Event of Default irrespective of the giving of written notice specified
therein); provided, that except in the case of an Event of Default resulting
from the failure of payment of the principal of or interest on any of the
Subordinated Notes, the Property Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee, or a
trust committee of directors and/or Responsible Officers of the Property Trustee
in good faith determines that the withholding of such notice is in the interest
of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) A default under Sections 6.01(a) and (b) of the
Indenture; or
(ii) Any default as to which the Property Trustee shall have
received written notice or a Responsible Officer charged with the
administration of the Declaration shall have obtained written notice
of.
(c) The Sponsor and the Administrators covenant that, as soon as is
practicable, they will furnish the Property Trustee notice of any event which is
an Event of Default or which with the giving of notice or the passage
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of time or both would constitute an Event of Default which has occurred and is
continuing on the date of such notice, which notice shall set forth the nature
of such event and the action which the Sponsor proposes to take with respect
thereto.
ARTICLE III
ORGANIZATION
3.1 NAME. The Trust is named "Providian Financing [ ]", as such name
may be modified from time to time by the Administrators following written notice
to the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Administrators.
3.2 OFFICE. The address of the principal office of the Trust is c/o
Providian Financial Corporation, 201 Mission Street, San Francisco, California
94105. On ten Business Days written notice to the Holders of Securities, the
Administrators may from time to time designate another principal office of the
Trust.
3.3 PURPOSE. The exclusive purposes and functions of the Trust are (a)
to issue and sell Securities and use the proceeds from such sale to acquire the
Subordinated Notes, and (b) except as otherwise limited herein, to engage in
only those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments, pledge
any of its assets, or otherwise undertake (or permit to be undertaken) any
activity that would (i) cause the Trust to be classified for United States
federal income tax purposes as an association taxable as a corporation or a
partnership or (ii) cause any Holder of Securities not to be treated as owning
an undivided beneficial interest in the Subordinated Notes at any time the
Securities are outstanding.
3.4 AUTHORITY. Subject to the limitations provided in this Declaration
and to the specific duties of the Property Trustee, the Administrators shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrators in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Property Trustee in accordance with its powers shall constitute the act of and
serve to bind the Trust. In dealing with the Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
3.5 TITLE TO PROPERTY OF THE TRUST. Except as provided in Section 3.8
with respect to the Subordinated Notes and the Property Trustee Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.
3.6 POWERS AND DUTIES OF THE ADMINISTRATORS. The Administrators shall
have the exclusive power and authority and duty to cause the Trust to engage in
the following activities:
(a) To issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, provided further, there shall be no
interests in the Trust other than the Securities and the issuance of Securities
shall be limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities on the Closing Date;
(b) In connection with the issue and sale of the Preferred Securities,
at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor in relation to the
Preferred Securities, including any amendments thereto prepared by the
Sponsor;
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(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor as necessary in order to
qualify or register all or part of the Preferred Securities in any
State in which the Sponsor has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application prepared by the Sponsor
to the New York Stock Exchange or any other national stock exchange or
the Nasdaq Stock Market for listing upon notice of issuance of any
Preferred Securities [or Units];
(iv) execute and file with the Commission a registration
statement on Form 8-A prepared by the Sponsor relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto prepared by the Sponsor;
and
(v) execute and enter into the Underwriting Agreement and
Pricing Agreement providing for the sale of the Preferred Securities;
(c) To acquire the Subordinated Notes with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Administrators shall cause legal title to the Subordinated Notes to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Common Securities;
(d) To give the Subordinated Note Issuer, the Sponsor and the Property
Trustee prompt written notice of the occurrence of a Special Event; provided
that the Administrators shall consult with the Subordinated Note Issuer, the
Sponsor and the Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
(e) To establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including for the purposes
of Section 316(c) of the Trust Indenture Act and with respect to Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Preferred Securities and Common Securities as to such actions and
applicable record dates;
(f) To take all actions and perform such duties as may be required of
the Administrators pursuant to the terms of the Securities;
(g) To bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) To employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) To cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) To give the certificate to the Property Trustee required by Section
314(a)(4) of the Trust Indenture Act, which certificate may be executed by any
Administrator;
(k) To incur expenses which are necessary or incidental to carry out
any of the purposes of the Trust;
(l) To act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) To give prompt written notice to the Holders of the Securities of
any notice received from the Subordinated Note Issuer of its election (i) to
defer payments of interest on the Subordinated Notes by extending
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the interest payment period under the Indenture, or (ii) to extend the scheduled
maturity date on the Subordinated Notes;
(n) To execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) To take all actions which may be necessary or appropriate for the
preservation and continuation of the Trust's valid existence, rights, franchises
and privileges as a statutory business trust under the laws of the State of
Delaware and of each other jurisdiction in which such existence is necessary to
protect the limited liability of the Holders of the Securities or to enable the
Trust to effect the purposes for which the Trust was created;
(p) To take any action, not inconsistent with this Declaration or with
applicable law, which the Administrators determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6 including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust not to be characterized for United
States federal income tax purposes as an association taxable as a
corporation or a partnership but for each Holder of Securities to be
treated as owning an undivided beneficial interest in the Subordinated
Notes; and
(iii) cooperating with the Subordinated Note Issuer to ensure
that the Subordinated Notes will be treated as indebtedness of the
Subordinated Note Issuer for United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders; and
(q) To take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrators, on behalf of the
Trust.
The Administrators must exercise the powers set forth in this Section
3.6 in a manner which is consistent with the purposes and functions of the Trust
set out in Section 3.3 and the Administrators shall not take any action which is
inconsistent with the purposes and functions of the Trust set forth in Section
3.3.
Subject to this Section 3.6, the Administrators shall have none of the
powers or the authority of the Property Trustee set forth in Section 3.8.
3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES. The Trust
shall not, and the Trustees (including the Property Trustee) shall cause the
Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Trustees (including
the Property Trustee) shall cause the Trust not to:
(a) Invest any proceeds received by the Trust from holding the
Subordinated Notes, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(b) Acquire any assets other than as expressly provided herein;
(c) Possess Trust property for other than a Trust purpose;
(d) Make any loans or incur any indebtedness other than loans
represented by the Subordinated Notes;
(e) Possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
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(f) Issue any securities or other evidences of beneficial ownership of,
or beneficial interest in, the Trust other than the Securities; or
(g) Direct the time, method and place of exercising any trust or power
conferred upon the Trustee [with respect to the Subordinated Notes], (B) waive
any past default that is waivable under Section 6.06 of the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal of all
the Subordinated Notes shall be due and payable or (D) consent to any amendment,
modification or termination of the Indenture or the Subordinated Notes, where
such consent shall be required, unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the Trust
will be characterized as an association taxable as a corporation or a
partnership and that each Holder of Securities will not be treated as owning an
undivided beneficial interest in the Subordinated Notes.
3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.
(a) The legal title to the Subordinated Notes shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Subordinated Notes shall vest automatically in each Person who
may hereafter be appointed as Property Trustee as set forth in Section 5.6. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered;
(b) The Property Trustee shall not transfer its right, title and
interest in the Subordinated Notes to the Administrators or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee);
(c) The Property Trustee shall:
(i) establish and maintain a bank account (the "Property
Trustee Account") in the name of and under the exclusive control of the
Property Trustee on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Subordinated
Notes held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the
Preferred Securities and the Common Securities from the Property
Trustee Account in accordance with Section 6.1. Funds in the Property
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. If the Preferred Securities are not represented
by a Global Preferred Security, the Property Trustee shall hold such
funds in an interest-bearing bank account, and any interest earned on
such funds shall be paid by the Property Trustee to the Sponsor. The
Property Trustee Account shall be an account which is maintained with a
banking institution either (a) the rating on whose long term unsecured
indebtedness is rated "A" or above by a "nationally recognized
statistical rating organization," as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act, or (b) which has capital
and surplus of at least $100,000,000;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Subordinated
Notes are redeemed or mature; and
(iii) upon notice of distribution issued by the Administrators
in accordance with the terms of the Preferred Securities and the Common
Securities, engage in such ministerial activities as shall be necessary
or appropriate to effect the distribution of the Subordinated Notes to
Holders of Securities upon the occurrence of certain Special Events (as
may be defined in the terms of the Securities) arising from a change in
law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities;
(d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
the Securities;
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(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default or the Property Trustee's duties
and obligations under this Declaration or the Trust Indenture Act;
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and
accepted that appointment in accordance with Section 5.6;
(g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Subordinated Notes under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for the benefit of Holders of the Securities, enforce its rights
as holder of the Subordinated Notes, subject to the rights of the Holders
pursuant to the terms of such Securities;
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to the Preferred Securities and any
such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee;
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the powers or the authority of the Administrators set forth in Section 3.6;
and
(j) The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner which is consistent with the purposes and functions of
the Trust set forth in Section 3.3 and the Property Trustee shall not take any
action which is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of Default
and after the curing or waiver of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration in Sections 2.2, 2.3, 2.7, 3.8, 3.9, 3.10 and 6.1 and in the
terms of the Securities, and no implied covenants shall be read into this
Declaration against the Property Trustee. If an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6), the Property
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs;
(b) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) Prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration in Sections 2.2, 2.3, 2.7, 3.8, 3.9, 3.10
and 6.1 and in the terms of the Securities, and the Property
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be
read into this Declaration against the Property Trustee; and
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(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Property Trustee,
the Property Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements
of this Declaration;
(ii) The Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Property 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 not less than a
Majority in Liquidation Amount of the Securities at the time
outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under
this Declaration; and
(iv) No provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable ground for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Declaration or adequate indemnity against such risk or liability is not
reasonably assured to it.
3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the provisions of
Section 3.9:
(a) The Property Trustee may conclusively rely and shall be fully
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, sent or presented
by the proper party or parties;
(b) Any direction or act of the Sponsor or the Administrators
contemplated by this Declaration shall be sufficiently evidenced by a Direction
or an Officer's Certificate;
(c) Whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Property Trustee (unless
other evidence is herein specifically prescribed) may, in the absence of bad
faith on its part and, if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7, subject to the requirements of
Rule 3a-7, request and rely upon an Officer's Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Administrators;
(d) The Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (or any rerecording, refiling or
registration thereof);
(e) The Property Trustee may consult with counsel of its selection and
the advice or opinion of such counsel with respect to legal matters 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 accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees The Property Trustee shall have
the right at any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;
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(f) The Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall have provided to the Property
Trustee adequate security and indemnity which would satisfy a reasonable person
in the position of the Property Trustee, against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable advances as
may be requested by the Property Trustee; provided that nothing contained in
this Section 3.10(f) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Declaration;
(g) The Property 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 Property Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(h) The Property 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 Property 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;
(i) Any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the signature of the
Property Trustee or its agents alone shall be sufficient and effective to
perform any such action; and no third party shall be required to inquire as to
the authority of the Property Trustee to so act, or as to its compliance with
any of the terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking such
action;
(j) Whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same portion in Liquidation
Amount of the Securities as would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(k) Except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Declaration.
No provision of this Declaration shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
3.11 DELAWARE TRUSTEE. Notwithstanding any other provision of this
Declaration other than Section 5.2, the Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of the Administrators and the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act and taking such actions as are required
to be taken by the Delaware Trustee under the Business Trust Act.
3.12 EXECUTION OF DOCUMENTS. Unless otherwise determined by the
Administrators and except as otherwise required by the Business Trust Act, a
majority of, or if there are only two, both of the Administrators, are
authorized to execute on behalf of the Trust any documents which the
Administrators have the power and authority to execute pursuant to Section 3.6,
provided that any listing application prepared by the Sponsor referred to in
Section 3.6(b)(iii) may be executed by any Administrator.
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3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration or the
Securities.
3.14 DURATION OF TRUST. The Trust, unless terminated pursuant to the
provisions of Article VIII hereof, shall have existence for 55 years from the
Closing Date.
3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c);
(b) The Trust may, with the consent of a majority of the Administrators
or, if there are only two Administrators, with the consent of both
Administrators, and without the consent of the Holders of the Securities, the
Delaware Trustee or the Property Trustee, consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws of any State;
provided, that:
(i) Such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Preferred Securities
rank with respect to Distributions and payments upon
liquidation, redemption and maturity;
(ii) The Subordinated Note Issuer expressly acknowledges a
trustee of the Successor Entity which possesses the same powers and
duties as the Property Trustee as the Holder of the Subordinated Note;
(iii) The Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or other organization on
which the Preferred Securities are then listed;
(iv) Such merger, consolidation, amalgamation or replacement
does not cause the Preferred Securities (including any Successor
Securities) [or Units] to be downgraded by any nationally recognized
statistical rating organization;
(v) Such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the
Holders' interest in the new entity);
(vi) Such successor entity has a purpose identical to that of
the Trust;
(vii) Prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
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(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities
(including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders'
interest in the new entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(viii) The Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee; and
(c) Notwithstanding Section 3.15(b), the Trust shall not consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger or replacement would cause the (i)
Trust or Successor Entity for United States federal income tax purposes to be
classified as an association taxable as a corporation or a partnership, or (ii)
except with the consent of Holders of 100% in Liquidation Amount of the
Securities, any Holder of the Securities not to be treated as owning an
undivided beneficial interest in the Subordinated Notes..
ARTICLE IV
SPONSOR
4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES. On the Closing Date the
Sponsor will purchase all the Common Securities issued by the Trust, at the same
time as the Preferred Securities are sold, in an amount equal to 3% of the
capital of the Trust.
4.2 RESPONSIBILITIES OF THE SPONSOR. In connection with the issue and
sale of the Preferred Securities, the Sponsor shall have the exclusive right and
responsibility to engage in the following activities:
(a) To prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred Securities, and
any amendments thereto;
(b) To determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to take
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) To prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq Stock Market
for listing upon notice of issuance of any Preferred Securities;
(d) To prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) To negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the Preferred Securities.
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4.3 EXPENSES.
(a) The Sponsor shall be responsible for and shall pay all debts and
obligations (other than with respect to the Securities) and all costs and
expenses of the Trust (including (i) costs and expenses relating to the
organization of the Trust and the issuance and sale of the Preferred Securities,
(ii) the fees and expenses (including reasonable counsel fees and expenses) of
the Trustees, and (iii) costs and expenses relating to the operation of the
Trust, including costs and expenses of accountants, attorneys, paying agent(s),
registrant(s) and transfer agent(s), statistical or bookkeeping services,
expenses for printing, engraving and duplication and computing or accounting
equipment, travel and telephone and other telecommunications expenses, and costs
and expenses incurred in connection with the disposition of Trust assets).
(b) The Sponsor will pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
(c) The Sponsor's obligations under this Section 4.3 shall be for the
benefit of, and shall be enforceable by, any Person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "Creditor"), whether or not
such Creditor has received notice hereof. Any Creditor may enforce the Sponsor's
obligations under this Section 4.3 directly against the Sponsor and the Sponsor
irrevocably waives any right or remedy to require that any Creditor take any
action against the Trust or any other Person before proceeding against the
Sponsor. The Sponsor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 4.3.
ARTICLE V
TRUSTEES AND ADMINISTRATORS
5.1 NUMBER OF TRUSTEES. The number of Trustees and Administrators shall
initially be two (2) and three (3), respectively, and:
(a) At any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees and
Administrators; and
(b) After the issuance of any Securities, the number of Trustees and
Administrators may be increased or decreased by vote of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; provided that in any case the number of
Trustees shall be at least two (2) unless the Trustee that acts as the Property
Trustee also acts as the Delaware Trustee pursuant to Section 5.2, in which case
the number of Trustees shall be at least one (1).
5.2 DELAWARE TRUSTEE. If required by the Business Trust Act, one
Trustee (the "Delaware Trustee") shall be:
(a) A natural person who is a resident of the State of Delaware; or
(b) If not a natural person, an entity which has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, provided that if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements of
applicable law, then the Property Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
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5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as Property
Trustee which shall:
(i) Not be an Affiliate of the Sponsor;
(ii) Be a Person organized and doing business under the laws
of the United States of America or any State or Territory thereof or of
the District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000, and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published; and
(b) If the Trust is excluded from the definition of an Investment
Company solely by means of Rule 3a-7 and to the extent Rule 3a-7 requires a
trustee having certain qualifications to hold title to the "eligible assets" of
the Trust, the Property Trustee shall possess those qualifications; and
(c) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.6(c);
(d) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act; and
(e) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
5.4 QUALIFICATIONS OF ADMINISTRATORS AND DELAWARE TRUSTEE GENERALLY.
Each Administrator and the Delaware Trustee (unless the Property Trustee also
acts as Delaware Trustee) shall be either a natural person who is at least 21
years of age or a legal entity which shall act through one or more Authorized
Officers.
5.5 INITIAL ADMINISTRATORS.
(a) The initial Administrators shall be:
David J. Petrini
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Daniel Sanford
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
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Kirk Inglis
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
(i) Except as expressly set forth in this Declaration and
except if a meeting of the Administrators is called with respect to any
matter over which the Administrators have power to act, any power of
the Administrators may be exercised by, or with the consent of, any one
Administrator.
(ii) An Administrator may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age
of 21 his or her power for the purposes of signing any documents which
the Administrators have power and authority to cause the Trust to
execute pursuant to Section 3.6.
(iii) The Holder(s) of a Majority in Liquidation Amount of the
Securities may appoint or remove any Administrator without cause at any
time.
(iv) An Administrator appointed to office shall hold office
until his successor shall have been appointed or until his death,
removal or resignation. Any Administrator may resign from office
(without need for prior or subsequent accounting) by an instrument in
writing signed by the Administrator and delivered to the Sponsor and
the Property Trustee, which resignation shall take effect upon such
delivery or upon such later date as is specified therein.
(b) The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware
Attention: Corporate Trust Department
(c) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
5.6 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in Liquidation Amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.6(a) until a Successor Property Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Administrators and the
Sponsor.
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(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Administrators and the Sponsor.
(d) A Trustee appointed to office shall hold office until his or her
successor shall have been appointed or until his or her death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
(i) no such resignation of the Trustee that acts as the
Property Trustee shall be effective until:
(A) a Successor Property Trustee has been appointed
and has accepted such appointment by instrument executed by
such Successor Property Trustee and delivered to the Trust,
the Sponsor and the resigning Property Trustee; or
(B) if the Trust is excluded from the definition of
an Investment Company solely by reason of Rule 3a-7, until the
assets of the Trust have been completely liquidated and the
proceeds thereof distributed to the holders of the Securities;
and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(e) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of registration in accordance with this Section 5.6.
(f) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee may petition
any court of competent jurisdiction for appointment of a Successor Property
Trustee or Successor Delaware Trustee. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
5.7 VACANCIES AMONG TRUSTEES. If a Trustee ceases to hold office for
any reason and the number of Trustees is not reduced pursuant to Section 5.1, or
if the number of Trustees is increased pursuant to Section 5.1, a vacancy shall
occur. A resolution certifying the existence of such vacancy by a majority of
the Administrators shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance with
Section 5.6.
5.8 EFFECT OF VACANCIES. The death, resignation, retirement, removal,
bankruptcy, dissolution, liquidation, incompetence of a Trustee or a Trustee's
incapacity to perform the duties of a Trustee, or any one of them, shall not
operate to annul the Trust. Whenever a vacancy in the number of Administrators
shall occur, until such vacancy is filled by the appointment of a Administrator
in accordance with Section 5.6, the Administrators in office, regardless of
their number, shall have all the powers granted to the Administrators and shall
discharge all the duties imposed upon the Administrators by this Declaration.
5.9 MEETINGS. Meetings of the Administrators shall be held from time to
time upon the call of any Administrator. Regular meetings of the Administrators
may be held at a time and place fixed by resolution of the
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Administrators. Notice of any in-person meetings of the Administrators shall be
hand delivered or otherwise delivered in writing (including by facsimile,
provided that oral or written confirmation of receipt is obtained by the sender)
not less than 48 hours before such meeting. Notice of any telephonic meetings of
the Administrators or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, provided that oral or written
confirmation of receipt is obtained by the sender) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrator at a meeting shall constitute a waiver of notice
of such meeting except where an Administrator attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Administrators may be taken at a meeting by
vote of a majority of the Administrators present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Administrators.
5.10 DELEGATION OF POWER.
(a) Any Trustee or Administrator may, by power of attorney consistent
with applicable law, delegate to any natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission or making any other governmental filing; and
(b) The Trustees shall have power to delegate from time to time to such
of their number or to officers of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Trustees or otherwise as the Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
this Declaration.
5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person 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.
ARTICLE VI
DISTRIBUTIONS
6.1 DISTRIBUTIONS. If and to the extent that the Subordinated Note
Issuer makes a payment of interest (including any interest payments on interest
deferred in accordance with the terms of the Indenture) and/or principal on the
Subordinated Notes held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders in accordance with the
applicable terms of the Securities. Distributions shall be made on the Preferred
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms.
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ARTICLE VII
ISSUANCE OF SECURITIES
7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Administrators shall issue on behalf of the Trust securities in
fully registered form representing undivided beneficial interests in the assets
of the Trust in accordance with this Section 7.1 (a) and for the consideration
specified in the [Pricing Agreement]. The Administrators shall, on behalf of the
Trust, issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust (the "Preferred Securities") having such
terms as are set forth in Exhibit A, as such Exhibit A may be amended from time
to time in accordance with this Declaration which Exhibit A is incorporated
herein by reference, and one class of common securities representing undivided
beneficial interests in the assets of the Trust (the "Common Securities") having
such terms as are set forth in Exhibit A, as such Exhibit A may be amended from
time to time in accordance with this Declaration. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities;
(b) The Securities shall be signed on behalf of the Trust by the
Administrators (or if there are more than two Administrators by any two of the
Administrators). Such signatures may be the manual or facsimile signatures of
the present or any future Administrator. Typographical and other minor errors or
defects in any reproduction of any such signature shall not affect the validity
of any Security. In case any Administrator of the Trust who shall have signed
any of the Securities shall cease to be such Administrator before the Securities
so signed shall be delivered by the Trust, such Security nevertheless may be
delivered as though the person who signed such Security had not ceased to be
such Administrator; and any Certificate may be signed on behalf of the Trust by
such persons who shall, at the actual date of the execution of such Security, be
the Administrators of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such a Administrator;
Securities shall be printed, lithographed or engraved or may be produced in any
other manner as is reasonably acceptable to the Administrators, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Administrators may deem appropriate, or as may be required to comply with any
law or with any rule or regulation of any stock exchange on which Securities may
be listed, or to conform to usage;
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust;
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable; and
(e) Every Person, by virtue of having become a Holder in accordance
with the terms of this Declaration, shall be deemed to have expressly assented
and agreed to the terms of, and shall be bound by this Declaration.
ARTICLE VIII
DISSOLUTION OF TRUST
8.1 DISSOLUTION OF TRUST. This Declaration and the Trust shall
terminate and be of no further force or effect when:
(a) All of the Securities shall have been called for redemption and the
amounts necessary for redemption thereof shall have been paid to the Holders of
Securities in accordance with the terms hereof and of the Securities; or
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(b) All of the Subordinated Notes shall have been distributed to the
Holders of Securities in exchange for all of the Securities in accordance with
the terms hereof and of the Securities; or
(c) Liquidation Distributions shall have been paid to the Holders of
Securities or Subordinated Notes in an aggregate principal amount equal to the
aggregate Liquidation Amount of the Securities and shall have been distributed
to the Holders of Securities in accordance with the terms hereof and of the
Securities; or
(d) Upon the expiration of the term of the Trust as set forth in
Section 3.14 hereof; or
(e) Before the issuance of any Securities, with the consent of all of
the Administrators and the Sponsor,
and a certificate of cancellation is filed by the Trustees with the Secretary of
State of the State of Delaware. The Trustees shall so file such a certificate as
soon as practicable after the occurrence of an event referred to in this Section
8.1
The provisions of Sections 3.10, Section 4.2 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS; FORMS OF SECURITIES
9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void;
(b) Subject to this Article IX, the Preferred Securities shall be
freely transferable, provided, however, that the Global Preferred Security may
not be transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any nominee to a successor
Depository or a nominee of any successor Depository; and
(c) Subject to this Article IX, the Sponsor and any Related Party may
transfer Common Securities only to the Sponsor or a Related Party of the
Sponsor; provided that any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) The Trust would be classified for United States federal
income tax purposes as an association taxable as a corporation or a
partnership and each Holder of Securities would not be treated as
owning an undivided beneficial interest in the Subordinated Notes; and
(ii) The Trust or the transferee would be an Investment
Company.
9.2 REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES. Except as
specifically otherwise provided herein with respect to Global Preferred
Securities, Securities may be exchanged for Securities representing a like
aggregate liquidation amount. Securities to be exchanged shall be surrendered at
the offices or agencies of the Property Trustee and the Administrators shall
execute the Securities, and the Property Trustee shall authenticate and deliver
in exchange therefor the Securities or Securities which the Holder making the
exchange shall be entitled to receive.
The Property Trustee shall keep or cause to be kept, at its principal
corporate trust office, the Register in which, subject to such reasonable
regulations as it may prescribe, the Property Trustee shall provide for the
registration of the Securities and the transfer of Securities as in this Article
provided. The Register shall be in written form or in any other form capable of
being converted into written form within a reasonable time. At all
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reasonable times the Register shall be open for inspection by the Administrators
and the Sponsor. Upon due presentment for transfer of any Security at the
principal corporate trust office of the Property Trustee, the Administrators
shall execute a new Security and the Property Trustee shall authenticate and
deliver in the name of the transferee or transferees a new Security for a like
aggregate liquidation amount.
Notwithstanding any other provisions of this Section 9.2, unless and
until it is exchanged in whole or in part for Securities in definitive form, a
Global Preferred Security representing all or a portion of the Securities may
not be transferred except as a whole by the Depository to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
All Securities presented or surrendered for exchange, transfer,
redemption, conversion or payment shall, if so required by the Property Trustee,
be accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Administrators and the Property Trustee, duly executed by
the registered Holder or by such Person's attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Securities, but the Property Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
The Property Trustee shall not be required to exchange or transfer (a)
any Securities during a period beginning at the opening of business 15 days
before the day of the first publication or the mailing (if there is no
publication) of a notice of redemption of Securities and ending at the close of
business on the day of such publication or mailing or (b) any Securities called
or selected for redemption in whole or in part, except, in the case of
Securities called for redemption in part, the portion thereof not so called for
redemption in whole or in part or during a period beginning at the opening of
business on any record date and ending at the close of business on the relevant
Distribution payment date therefor.
9.3 DEEMED SECURITY HOLDERS. The Trustees may treat the Person in whose
name any Security shall be registered on the books and records of the Trust as
the sole holder of such Security for purposes of receiving Distributions and for
all other purposes whatsoever and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such Securities on the part of
any Person, whether or not the Trustees shall have actual or other notice
thereof.
9.4 GLOBAL SECURITIES.
(a) Unless otherwise specified in the terms of the Preferred
Securities, on original issuance, the Preferred Securities will be issued in the
form of one or more fully registered Global Preferred Securities, to be
delivered to the Depository by, or on behalf of, the Trust. Each Global
Preferred Security shall: (i) represent the aggregate liquidation amount of
Preferred Securities issued hereunder, (ii) be registered in the name of either
the Depository for such Global Preferred Security or the nominee of such
Depository, (iii) be delivered by the Trustee to such Depository or pursuant to
such Depository's written instruction and (iv) bear a legend substantially to
the following effect: "Unless and until it is exchanged in whole or in part for
Preferred Securities in definitive form, this Global Preferred Security may not
be transferred except as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any nominee to a successor
Depository or a nominee of any successor Depository." The notation of the record
owner's interest in such Global Preferred Security upon the original issuance
thereof shall be deemed to be delivery in connection with the original issuance
of each beneficial owner's interest in such Global Preferred Security. Without
limiting the foregoing, the Administrators, the Property Trustee, the Sponsor
and the Issuer of the Subordinated Notes shall have no responsibility,
obligation or liability with respect to: (x) the maintenance, review or accuracy
of the records of the Depository or of any of its participating organizations
with respect to any ownership interest in or payments with respect to such
Global Preferred Security, (y) any communication with or delivery of any notice
(including notices of redemption) with respect to the Preferred Securities
represented by the Global Preferred Security
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to any Person having any ownership interest in such Global Preferred Security or
to any of the Depository's participating organizations or (z) any payment made
on account of any beneficial ownership interest in such Global Preferred
Security.
(b) If Preferred Securities are issued in the form of a Global
Preferred Security or Securities, each such Global Preferred Security may
provide that it shall represent the aggregate amount of outstanding Preferred
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of outstanding Preferred Securities represented thereby may
from time to time be reduced to reflect exchanges. Any endorsement of a Global
Preferred Security to reflect the amount of outstanding Preferred Securities
represented thereby shall be made by the Trustee and in such manner as shall be
specified on such Global Preferred Security. Any instructions by the
Administrators with respect to a Global Preferred Security, after its initial
issuance, shall be in writing.
(c) The Depository hereunder shall be a clearing agency registered
under the Exchange Act, and any other applicable statute or regulation. If at
any time the Depository for the Preferred Securities notifies the Administrators
that it is unwilling or unable to continue as Depository or if at any time the
Depository shall no longer be eligible to serve as Depository, the
Administrators shall appoint a successor Depository. If a successor Depository
is not appointed by the Administrators within 90 days after they receive such
notice or learn of such ineligibility, the Administrators shall execute and
deliver definitive Preferred Securities in authorized liquidation amounts in
exchange for the Global Preferred Security or Securities (the "Definitive
Preferred Security Certificates") in the same aggregate liquidation amount as
the Global Preferred Security or Securities representing the Preferred
Securities in exchange for such Global Preferred Security or Securities, in
accordance with the provisions of Section 9.4(e), without any further corporate
action by the Trustees.
(d) The Administrators may at any time after consultation with the
Sponsor, determine that the Preferred Securities issued in the form of one or
more Global Preferred Securities shall no longer be represented by such Global
Preferred Security or Securities. In such event, the Administrators will execute
and deliver Preferred Securities in definitive form and in authorized
denominations in an aggregate principal amount equal to the principal amount of
the Global Preferred Security or Securities representing the Preferred
Securities in exchange for such Global Preferred Security or Securities, in
accordance with the provisions of Section 9.4(e) without any further corporate
action by the Administrators.
(e) Upon any exchange hereunder of the Global Preferred Security or
Securities for Preferred Securities in definitive form, such Global Preferred
Security or Securities shall be canceled by the Trust. Preferred Securities
issued hereunder in exchange for the Global Preferred Security or Securities
shall be registered in such names and in such authorized denominations as the
Depository for such Global Preferred Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Administrators.
The Administrators shall deliver such Definitive Preferred Security Certificate
in exchange for the Global Preferred Security or Securities to the persons in
whose name such definitive Preferred Securities have been registered in
accordance with the directions of the Depository.
(f) Unless otherwise specified in the terms of the Common Securities,
on original issuance, the Common Securities will be issued in the form of a
single fully registered Common Security Certificate which shall (i) represent
the aggregate liquidation amount of Common Securities issued hereunder and (ii)
be registered in the name of the Sponsor and delivered by the Trust to the
Sponsor.
9.5 NOTICES TO DEPOSITORY. Whenever a notice or other communication to
the Preferred Security Holders is required under this Declaration, unless and
until Definitive Preferred Security Certificates shall have been issued pursuant
to Section 9.4, the Administrators shall give all such notices and
communications specified herein to be given to the Preferred Security Holders,
to the Depository, and shall have no other notice obligations.
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9.6 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If:
(a) Any mutilated Securities shall be surrendered to the
Administrators, or if the Administrators shall receive evidence to their
satisfaction of the destruction, loss or theft of any Securities; and
(b) There shall be delivered to the Administrators, the Sponsor and the
Property Trustee such security or indemnity as may be required by them to keep
each of them harmless,
then in the absence of notice that such Security shall have been acquired by a
bona fide purchaser, the Administrators on behalf of the Trust shall execute and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Security, a new Security in the same aggregate Liquidation Amount as the
mutilated, destroyed, lost or stolen Security. In connection with the issuance
of any new Certificate under this Section 9.6, the Administrators may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Every new Security issued pursuant
to this Section 9.6 in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the Trust, whether
or not the destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all the security and benefits of this
Declaration equally and ratably with all other outstanding Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
10.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities, which shall be made solely from assets of the Trust; and
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise; and
(b) Pursuant to Section 3803(a) of the Business Trust Act, the Holders
of the Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
general corporation law of the State of Delaware.
10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence (or, in the
case of the Property Trustee except as otherwise set forth in Section 3.9) or
willful misconduct with respect to such acts or omissions; and
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or
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statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration, subject to any duties or obligations imposed on the Property
Trustee under Rule 3a-7, shall not be liable to the Trust or to any other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than duties imposed on the Property Trustee under the
Trust Indenture Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) Unless otherwise expressly provided herein:
(i) Whenever a conflict of interest exists or arises between
an Indemnified Person and any Covered Persons; or
(ii) Whenever this Declaration or any other agreement
contemplated herein or therein provide that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
(c) The Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
whenever in this Declaration an Indemnified Person is permitted or required to
make a decision
(i) In its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of, or
factors affecting, the Trust or any other Person; or
(ii) In its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
10.4 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
except as otherwise set forth in Section 3.9) or willful misconduct with respect
to such acts or omissions; and
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced
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by the Sponsor prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Sponsor of an undertaking by or on behalf
of the Indemnified Person to repay such amount if it shall be determined that
the Indemnified Person is not entitled to be indemnified as authorized in
Section 10.4(a).
10.5 OUTSIDE BUSINESSES. Any Covered Person, the Sponsor, the
Subordinated Note Issuer, the Delaware Trustee and the Property Trustee may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the Holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Subordinated Note Issuer, the
Delaware Trustee, or the Property Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, the Sponsor, the Subordinated Note Issuer, the Delaware
Trustee and the Property Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as Depository for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
11.1 FISCAL YEAR. The fiscal year ("Fiscal Year") of the Trust shall be
the calendar year, or such other year as is required by the Code.
11.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Trust, the Administrators
shall keep, or cause to be kept, full books of account, records and supporting
documents, which shall reflect in reasonable detail each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon, as of the end of each
Fiscal Year, by a firm of independent certified public accountants selected by
the Administrators;
(b) The Administrators shall cause to be prepared and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year and the related statements of income or loss;
(c) The Administrators shall cause to be duly prepared and delivered to
each of the Holders of Securities any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrators shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of the Trust;
and
(d) The Administrators shall cause to be duly prepared and filed with
the appropriate taxing authority an annual United States federal income tax
return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Administrators on behalf of the Trust with any state or local taxing
authority.
11.3 BANKING. The Trust shall maintain one or more bank accounts in the
name and for the sole benefit of the Trust; provided, however, that all payments
of funds in respect of the Subordinated Notes held by the Property
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Trustee shall be made directly to the Property Trustee Account and no other
funds of the Trust shall be deposited in the Property Trustee Account. The sole
signatories for such accounts shall be designated by the Administrators;
provided, however, that the Property Trustee shall designate the sole
signatories for the Property Trustee Account.
11.4 WITHHOLDING. The Property Trustee and the Administrators shall
comply with all withholding requirements under United States federal, state and
local law. The Property Trustee shall request, and the Holders shall provide to
the Trust, such forms or certificates as are necessary to establish an exemption
from withholding with respect to each Holder, and any representations and forms
as shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrators
shall file required forms with applicable jurisdictions and, unless an exemption
from withholding is properly established by a Holder, shall remit amounts
withheld with respect to the Holder to applicable jurisdictions. To the extent
that the Property Trustee is required to withhold and pay over any amounts to
any authority with respect to distributions or allocations to any Holder, the
amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Holder. In the event of any claimed over-withholding, Holders
shall be limited to an action against the applicable jurisdiction. If the amount
required to be withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
12.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may be amended by, and only
by, a written instrument approved and executed by the Administrators (or, if
there are more than two Administrators, a majority of the Administrators);
provided, however, that:
(i) No amendment shall be made, and any such purported
amendment shall be void and ineffective, to the extent the result
thereof would be to:
(A) cause the Trust to be characterized for purposes
of United States federal income taxation as an association
taxable as a corporation or a partnership and any Holder of
Securities not to be treated as owning an undivided beneficial
interest in the Subordinated Notes;
(B) reduce or otherwise adversely affect the powers
of the Property Trustee; or
(C) cause the Trust to be deemed to be an Investment
Company which is required to be registered under the
Investment Company Act;
(ii) At such time after the Trust has issued any Securities
which remain outstanding, any amendment which would adversely affect
the rights, privileges or preferences of any Holder of Securities may
be effected only with such additional requirements as may be set forth
in the terms of such Securities;
(iii) Section 9. l(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(iv) Article IV shall not be amended without the consent of
the Holders of a Majority in Liquidation Amount of the Common
Securities; and
(v) the rights of the holders of the Common Securities under
Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent
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of the Holders of a Majority in Liquidation Amount of the Common
Securities (except to the extent that such amendment relates to the
Special Administrator, in which case such amendment may only be made in
accordance with the terms of the Preferred Securities).
(b) Notwithstanding Section 12.1 (a)(ii), this Declaration may be
amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; and
(iv) to add or change any of the provisions of this
Declaration to such extent as shall be necessary to facilitate the
issuance of Securities in definitive certificated form;
(v) conform to any change in Rule 3a-7 or written change in
interpretation or application of Rule 3a-7 by any legislative body,
court, government agency or regulatory authority, if such amendment
does not have a material adverse effect on the right, preferences or
privileges of the Holders.
(c) Prior to the issuance of the Securities, any terms of the
Securities may be amended by a written instrument approved and executed by the
Administrators (or, if there are more than two Administrators, a majority of the
Administrators) and the Sponsor.
12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Administrators (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
[or Units] are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities [or Units] are listed or admitted for trading. The Administrators
shall call a meeting of such class of Holders, if directed to do so by the
Holders of at least 10% in Liquidation Amount of such class of Securities. Such
direction shall be given by delivering to the Administrators one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those specified shall be counted for
purposes of determining whether the required percentage set forth in the second
sentence of this paragraph has been met; and
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings:
(i) Notice of any meeting of the Holders of any class of
Securities shall be given to all the Holders of Securities of such
class [or Units] having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a vote,
consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Preferred Securities [or Units] are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be taken at a meeting of
the Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the Holders
of Securities owning not less than the minimum amount of Securities in
Liquidation Amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were
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present and voting. Prompt notice of the taking of action without a
meeting shall be given to the Holders of Securities entitled to vote
who have not consented in writing. The Administrators may specify that
any written ballot submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned to the Trust
within the time specified by the Administrators;
(ii) Each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
(iii) Each meeting of the Holders of the Securities shall be
conducted by the Administrators or by such other Person that the
Administrators may designate; and
(iv) Unless the Business Trust Act, this Declaration, the
terms of the Securities or the listing rules of any stock exchange on
which the Preferred Securities or Units are then listed or trading
otherwise provides the Administrators, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by consent without a
meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND THE
DELAWARE TRUSTEE
13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE. The Trustee
which acts as initial Property Trustee represents and warrants to the Trust and
to the Sponsor at the date of this Declaration, and each Successor Property
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee's acceptance of its appointment as Property Trustee
that:
(a) The Property Trustee is a banking association with trust powers,
duly organized, validly existing and in good standing under the laws of the
State of New York, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration.
(b) The execution, delivery and performance by the Property Trustee of
the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Property Trustee.
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(d) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee of the Declaration.
(e) to add or change any of the provisions of this Declaration to such
extent as shall be necessary to facilitate the issuance of Securities in
definitive certificated form;
[(f) Pursuant to a Co-Trustee Agreement between the Property Trustee
and the Delaware Trustee dated as of __________, 199_ the Delaware Trustee has
been authorized to perform its obligations under the Certificate of Trust and
the Declaration.]
13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. The Trustee
which acts as initial Delaware Trustee represents and warrants to the Trust and
the Sponsor at the date of this Declaration, and each Successor Delaware Trustee
represents and warrants to the Trust and the Sponsor at the time of the
Successor Delaware Trustee's acceptance of its appointment as Delaware Trustee,
that it satisfies the qualifications set forth in Sections 5.2 and 5.4 and (b)
this Declaration has been duly executed and delivered by the Delaware Trustee,
and it constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
ARTICLE XIV
MISCELLANEOUS
14.1 NOTICES. All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be sent by
facsimile transmission or hand delivered or sent by overnight courier, addressed
to the relevant Person as provided in this Section 14.1:
If given to the Trust, in care of the Administrators at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders of the Securities):
PROVIDIAN FINANCING [ ]
201 Mission Street
San Francisco, California 94105
Attention: __________
If given to the Property Trustee, at the mailing address set forth
below (or such other address as the Property Trustee may give notice of to the
Holders of the Securities):
Attention: Corporate Trust Administration
If given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
Providian Financial Corporation
201 Mission Street
San Francisco,California 94105
Attention: ________
If given to any other Holder, at the address set forth on the books and
records of the Trust.
For all purposes of this Declaration, a notice or communication will be
deemed effective:
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(a) if delivered by hand or sent by overnight courier, on the day it is
delivered unless (i) that day is not a Business Day in the city specified (a
"Local Business Day") in the address for notice provided by the recipient or
(ii) if delivered after the close of business on a Local Business Day, then on
the next succeeding Local Business Day or
(b) if sent by facsimile transmission, on the date transmitted,
provided that oral or written confirmation of receipt is obtained by the sender,
unless the date of transmission is not a Local Business Day, in which case, on
the next succeeding Local Business Day.
Any notice, direction, request, demand, consent or waiver by the
Sponsor, or any Holder of Securities to or upon the Property Trustee shall be
deemed to have been sufficiently given, made or filed, for all purposes, if
given, made or filed in writing at the principal office of the Property Trustee
in accordance with the provisions of this Section 14.1.
Any notice, request, consent or waiver by the Sponsor, the
Administrators or the Property Trustee upon the Depository shall have been
sufficiently given, made or filed, for all purposes, if give or made in
accordance with the provisions of this Section 14.1 at the address shown for
such Depository in the Register or at such other address as the Depository shall
have provided for purposes of notice.
14.2 GOVERNING LAW. THIS DECLARATION AND THE RIGHTS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF DELAWARE OR
ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY
JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER, THAT THERE
SHALL NOT BE APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION ANY
PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING
TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS
HEREOF (a) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE
ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (b) AFFIRMATIVE REQUIREMENTS
TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (c) THE
NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE
ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (d) FEES OR
OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (e)
THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (f)
RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION
OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER
MANNER OF HOLDING OR INVESTING TRUST ASSETS, OR (g) THE ESTABLISHMENT OF
FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR
POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR
AUTHORITIES AND POWERS OF THE TRUSTEES HEREUNDER AS SET FORTH OR REFERENCED IN
THIS DECLARATION. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY
TO THE TRUST.
14.3 INTENTION OF THE PARTIES. It is the intention of the parties
hereto that the Trust not be characterized for United States federal income tax
purposes as an association taxable as a corporation or a partnership but rather,
as a grantor trust or otherwise in a manner that each Holder of Securities be
treated as owning an undivided beneficial interest in the Subordinated Notes.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
14.4 HEADINGS. Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
14.5 SUCCESSORS AND ASSIGNS. Whenever in this Declaration any of the
parties hereto is named or referred to, the successors and assigns of such party
shall be deemed to be included, and all covenants and agreements in this
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Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether so expressed.
14.6 PARTIAL ENFORCEABILITY. If any provision of this Declaration, or
the application of such provision to any Person or circumstance, shall be held
invalid, the remainder of this Declaration, or the application of such provision
to persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.
14.7 COUNTERPARTS. This Declaration may contain more than one
counterpart of the signature page and this Declaration may be executed by the
affixing of the signature of each of the Trustees to any one of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
14.8 LISTING. The Administrators shall use their best efforts to cause
the Preferred Securities to be listed for quotation on the New York Stock
Exchange Limited.
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
--------------------------------------------
David J. Petrini, as Administrator
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Daniel Sanford, as Administrator
--------------------------------------------
Kirk Inglis, as Administrator
THE BANK OF NEW YORK (DELAWARE), as
Delaware Trustee
By
------------------------------------------
Title
---------------------------------------
THE BANK OF NEW YORK, as Property Trustee
By
------------------------------------------
Title
---------------------------------------
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PROVIDIAN FINANCIAL CORPORATION, as Sponsor
By
------------------------------------------
Title
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<PAGE>
EXHIBIT A
TERMS OF
__% TRUST ORIGINATED PREFERRED SECURITIES
__% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 and subject to Section 2.1(c) of the Amended
and Restated Declaration of Trust, dated as of __________, 199__ (as amended
from time to time in accordance with the provisions thereof, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration):
1. DESIGNATION AND NUMBER.
(a) PREFERRED SECURITIES. Preferred Securities of the Trust with an
aggregate Liquidation Amount with respect to the assets of the Trust of $[____
million ($_________)] and a Liquidation Amount with respect to the assets of the
Trust of $__________ per Preferred Security are hereby designated for the
purposes of identification only as "______% Trust Originated Preferred
Securities" (the "Preferred Securities").
(b) COMMON SECURITIES. Common Securities of the Trust with an aggregate
Liquidation Amount with respect to the assets of the Trust of $[____ million
($________)] and a Liquidation Amount with respect to the assets of the Trust of
$____ per Common Security, are hereby designated for the purposes of
identification only as "_____% Trust Originated Common Securities" (the "Common
Securities").
2. DISTRIBUTIONS.
(a) Periodic Distributions payable on each Security will be at a rate
per annum of [*.*]% (the "Coupon Rate") of the stated Liquidation Amount of
$______ per Security, such rate being the rate of interest payable on the
Subordinated Notes to be held by the Property Trustee. Distributions in arrears
for more than one quarter will bear interest thereon at the Coupon Rate (to the
extent permitted by applicable law). The term "Distributions" as used in these
terms includes such periodic cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Subordinated Notes held by the Property
Trustee. The amount of Distributions payable for any period will be computed for
any full quarterly Distribution period on the basis of a 360-day year of twelve
30-day months.
(b) Distributions on the Securities will be cumulative, will accrue
from __________, 199_ and will be payable quarterly in arrears, on March 31,
June 30, September 30, and December 31 of each year, commencing on __________,
199_, except as otherwise described below. The Subordinated Note Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Subordinated Notes for a period
not exceeding [20] consecutive quarters (each, an "Extension Period") and, as a
consequence of such extension, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate during any such
Extension Period. Prior to the termination of any such Extension Period, the
Subordinated Note Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed [20] consecutive quarters. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
(c) Distributions on the Securities will be payable promptly by the
Property Trustee upon receipt of payment with respect to the Subordinated Notes
to the Holders thereof as they appear on the Register on the relevant record
dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall correspond with the record dates for the relevant
interest payment dates on the Subordinated Notes. If the Preferred Securities
are not in book-entry form, the relevant record date shall be the date that is
[15 Business Days] prior to
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the relevant interest payment date on the Subordinated Notes. The relevant
record dates for the Common Securities shall be the same record date as the
Preferred Securities. If the Preferred Securities shall not continue to remain
in book-entry-only form, the relevant record dates for the Preferred Securities
shall conform to the rules of any securities exchange on which the Securities
are listed and, if none, shall be selected by the Administrators, which dates
shall be at least one Business Day but less than 60 Business Days before the
relevant payment dates, which payment dates correspond to the interest payment
dates on the Subordinated Notes. Distributions payable on any Securities that
are not punctually paid on any Distribution payment date as a result of the
Subordinated Note Issuer or the Sponsor having failed to make a payment under
the Subordinated Notes will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date, and such defaulted
Distribution will instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified date determined in
accordance with the Indenture. If any date on which Distributions are payable on
the Securities is not a Business Day, then payment of the Distribution payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined in Section 8) among the Holders of the
Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
(a) In the event of any voluntary or involuntary dissolution, the
Holders of the Securities on the date of the dissolution will be entitled to
receive, out of the assets of the Trust available for distribution to Holders of
Securities after satisfaction of liabilities to creditors of the Trust
(including, without limitation, after paying or making reasonable provision to
pay all claims or obligations of the Trust in accordance with Section 3808(e) of
the Business Trust Act), an amount equal to the aggregate of the Liquidation
Amount of $_______ per Security plus accrued and unpaid Distributions thereon to
the date of payment (such amount being the "Liquidation Distribution"), unless,
in connection with such dissolution after satisfaction of liabilities to
creditors of the Trust (including, without limitation, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act), Subordinated Notes
in an aggregate principal amount equal to the aggregate Liquidation Amount of
such Securities shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
(b) If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Subordinated Notes in whole or in part,
whether at maturity or upon redemption, the proceeds from such repayment or
payment shall be simultaneously applied to redeem Securities having an aggregate
Liquidation Amount equal to the aggregate principal amount of the Subordinated
Notes so repaid or redeemed, at a redemption price of $_______ per Security plus
an amount equal to accrued and unpaid Distributions thereon at the date of the
redemption, payable in cash (the "Redemption Price"). Holders will be given not
less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata and
the Preferred Securities to be redeemed will be as described in Paragraph
4(f)(ii) below.
(c) On and from the date fixed by the Administrators for any
distribution of Subordinated Notes and dissolution of the Trust: (i) the
Securities will no longer be deemed to be outstanding, (ii) The Depository Trust
Company (the "Depository") or its nominee (or any successor Depository or its
nominee), as the record Holder of
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the Preferred Securities, will receive a registered global certificate or
certificates representing the Subordinated Notes to be delivered upon such
distribution and any certificates representing Common Securities, except for
certificates representing Preferred Securities held by the Depository or its
nominee (or any successor Depository or its nominee), will be deemed to
represent beneficial interests in the Subordinated Notes having an aggregate
principal amount equal to the aggregate stated Liquidation Amount until such
certificates are presented to the Subordinated Note Issuer or its agent for
transfer or reissue.
The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or before the date of
redemption.
(d) If the Subordinated Notes are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Subordinated Note Issuer
will use its best efforts to have the Subordinated Notes listed on the New York
Stock Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Subordinated Notes.
(e) REDEMPTION OR DISTRIBUTION PROCEDURES.
(i) Notice of any redemption of Securities or notice of
distribution of Subordinated Notes in exchange for the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to
each Holder of Securities to be redeemed or exchanged not fewer than 30
nor more than 60 days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date fixed for
redemption of the Subordinated Notes. For purposes of the calculation
of the date of redemption or exchange and the dates on which notices
are given pursuant to this paragraph 4(f)(i), a Redemption/Distribution
Notice shall be deemed to be given on the day such notice is first
mailed, by first-class mail, postage prepaid, to Holders of Securities.
Each Redemption/Distribution Notice shall be addressed to the Holders
of Securities at the address of each such Holder appearing in the
Register. No defect in the Redemption/Distribution Notice or in the
mailing of either thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings with respect to any
other Holder.
(ii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice (which notice will be irrevocable and
may only be issued if the Subordinated Notes are redeemed as set out in
this paragraph 4) then (a) while the Preferred Securities are in
book-entry only form by 12:00 noon, New York City time, on the
redemption date, provided that the Subordinated Note Issuer has paid
the Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Subordinated Notes, the Property
Trustee will transfer by wire to the Depository (or successor
Depository) funds sufficient to pay the applicable Redemption Price
with respect to the Preferred Securities, and (b) if the Preferred
Securities are issued in definitive form, provided that the
Subordinated Note Issuer has paid the Property Trustee a sufficient
amount of cash in connection with the related redemption or maturity of
the Subordinated Notes, the Property Trustee will pay the relevant
Redemption Price to the Holders of the Securities by check mailed to
the address of the relevant Holder appearing on the Register on the
record date of the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, if applicable,
then immediately prior to the close of business on the date of such
deposit, or on the redemption date, as applicable, Distributions will
cease to accrue on the Securities so called for redemption and all
rights of Holders of such Securities so called for redemption will
cease, except the right of the Holders of such Securities to receive
the Redemption Price, but without interest on such Redemption Price.
Neither the Administrators nor the Trust shall be required to register
or cause to be registered the transfer of any Securities which have
been so called for redemption. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and no interest shall accrue as a result of such delay),
except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately
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preceding Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of the Redemption
Price in respect of Securities is improperly withheld or refused and
not paid either by the Property Trustee or by the Sponsor as guarantor
pursuant to the Preferred Securities Guarantee or Common Securities
Guarantee, as relevant, Distributions on such Securities will continue
to accrue, from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption
Price.
(iii) Redemption/Distribution Notices shall be sent by the
Administrators on behalf of the Trust to the Holders of the Securities
as set forth on the Register.
(iv) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws), provided
the acquirer is not the Holder of the Common Securities or an obligor
under the Subordinated Indenture, the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private
agreement.
5. VOTING RIGHTS - PREFERRED SECURITIES.
(a) Except as provided under paragraphs 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.
(b) If (i) the Trust fails to make Distributions in full on the
Preferred Securities for 6 consecutive quarterly Distribution periods, or (ii)
an Event of Default occurs and is continuing (each of (i) and (ii) being an
"Appointment Event"), then the Holders of the Preferred Securities, acting as a
single class, will be entitled by the vote of a Majority in Liquidation Amount
of the Preferred Securities [or Units] to appoint a Special Administrator in
accordance with Section 5.6(a)(ii)(B) of the Declaration. Any Holder of
Preferred Securities (other than the Sponsor, or any entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Sponsor) will be entitled to nominate any person to be
appointed as Special Administrator. For purposes of determining whether the
Trust has failed to make Distributions in full for 6 consecutive quarterly
Distribution periods, Distributions shall be deemed to remain in arrears,
notwithstanding any payments in respect thereof, until full cumulative
Distributions have been or contemporaneously are paid with respect to all
quarterly Distribution periods terminating on or prior to the date of payment of
such cumulative Distributions.
(c) Not later than 30 days after such right to appoint a Special
Administrator arises, the Administrators will convene a meeting for the purpose
of appointing a Special Administrator. If the Administrators fail to convene
such meeting within such 30-day period, the Holders of 10% in Liquidation Amount
of the Preferred Securities will be entitled to convene such meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day which is one Business
Day before the day on which notice of the meeting is sent to Holders. The
provisions of the Declaration relating to the convening and conduct of the
meetings of the Holders will apply with respect to any such meeting.
(d) A Special Administrator may be removed without cause at any time by
vote of the Holders of a Majority in Liquidation Amount of the Preferred
Securities at a meeting of the Holders of the Preferred Securities in accordance
with Section 5.6(a)(ii)(B) of the Declaration. The Holders of 10% in Liquidation
Amount of the Preferred Securities will be entitled to convene such a meeting in
accordance with Section 12.2 of the Declaration. The record date for such
meeting will be the close of business on the Business Day which is one Business
Day before the day on which the notice of meeting is sent to Holders.
Notwithstanding the appointment of a Special Administrator, the Subordinated
Note Issuer shall retain all rights under the Indenture, including the right to
extend the interest payment period on the Subordinated Notes.
(e) Subject to the requirements of the second to last sentence of this
paragraph, the Holders of a Majority in Liquidation Amount of the Preferred
Securities voting separately as a class may direct the time, method, and place
of conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power
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conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Subordinated Note Trustee, or exercising any trust or power
conferred on the Subordinated Note Trustee with respect to the Subordinated
Notes, (ii) waive any past default and its consequences that is waivable under
Section 6.9 of the Subordinated Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Subordinated Notes
shall be due and payable. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities [or Units]. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Subordinated Note Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of the
Preferred Securities [or Units] under this paragraph unless the Property Trustee
has obtained an opinion of tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be classified as an
association taxable as a corporation or a partnership and that each Holder of
the Securities will be treated as owning an undivided beneficial interest in the
Subordinated Notes on account of such action. If the Property Trustee fails to
enforce its rights under the Declaration, any Holder of Preferred Securities
may, after a period of 30 days has elapsed from such holder's written request to
the Property Trustee to enforce such rights, institute a legal proceeding
directly against any Person to enforce the Property Trustee's rights under the
Declaration, without first instituting a legal proceeding against the Property
Trustee or any other Person.
(f) Any approval or direction of Holders of Preferred Securities [or
Units] may be given at a separate meeting of Holders of Preferred Securities [or
Units] convened for such purpose, at a meeting of all of the Holders of
Securities in the Trust or pursuant to written consent. The Property Trustee
will cause a notice of any meeting at which Holders of Preferred Securities [or
Units] are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
Preferred Securities [or Units]. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
(g) No vote or consent of the Holders of the Preferred Securities [or
Units] will be required for the Trust to redeem and cancel Preferred Securities
or to distribute the Subordinated Notes in accordance with the Declaration and
the terms of the Securities.
(h) In determining whether the Holders of the requisite amount of
Preferred Securities [or Units] have voted, Preferred Securities [or Units]
which are owned by the Sponsor, the Trust or any other obligor on the Preferred
Securities [or Units] or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Sponsor, the
Trust or any other obligor on the Preferred Securities [or Units] shall be
disregarded.
6. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under paragraphs 6(b), 6(c) and 7 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees, subject to the
exclusive right of the Holders of the Preferred Securities to appoint, remove or
replace a Special Administrator.
(c) Subject to Section 2.6 of the Declaration and only after all Events
of Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in Liquidation Amount of
the Common Securities voting separately as a class may direct the time, method,
and place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee
under the Declaration, including (i) directing the time, method, place of
conducting any proceeding for any remedy available to the Subordinated Note
Trustee, or exercising any trust or power conferred on the Subordinated Note
Trustee with respect
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to the Subordinated Notes, (ii) waive any past default and its consequences that
is waivable under Section 6.9 of the Subordinated Indenture, or (iii) exercise
any right to rescind or annul a declaration that the principal of all the
Subordinated Notes shall be due and payable, provided, however, that where a
consent or action under the Indenture would require the consent or act of the
Holders of greater than a majority in principal amount of Subordinated Notes
affected thereby (a "Super Majority"), the Property Trustee may give such
consent or take such action only at the direction of the Holders of at least the
proportion in Liquidation Amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Subordinated
Notes outstanding. Pursuant to this paragraph 6(c), the Property Trustee shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Property Trustee or
the Subordinated Note Trustee as set forth above, the Property Trustee shall not
take any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as an association taxable as
a corporation or a partnership and that each Holder of the Securities will be
treated as owning an undivided beneficial interest in the Subordinated Notes on
account of such action. If the Property Trustee fails to enforce its rights
under the Declaration, any Holder of Common Securities may, after a period of 30
days has elapsed from such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly against any Person to
enforce the Property Trustee's rights under the Declaration, without first
instituting a legal proceeding against the Property Trustee or any other Person.
(d) Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Administrators will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
(e) No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Subordinated Notes in accordance with the Declaration and the terms of the
Securities.
7. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrators otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the Preferred Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of the Preferred Securities as
a class will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Securities, voting together as a single class,
provided, however, that the rights of Holders of Preferred Securities under
Article V of the Declaration to appoint, remove or replace a Special
Administrator shall not be amended without the consent of each Holder of
Preferred Securities, provided, further, if any amendment or proposal referred
to in clause (i) above would adversely affect only the Preferred Securities or
the Common Securities, then only the affected class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in Liquidation Amount of such class of
Securities. In determining whether the Holders of the requisite amount of
Preferred Securities have voted, Preferred Securities which are owned by the
Sponsor, the Trust or any other obligor on the Preferred Securities or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Sponsor, the Trust or any other obligor on the
Preferred Securities shall be disregarded.
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(b) In the event the consent of the Property Trustee as the holder of
the Subordinated Notes is required under the Indenture with respect to any
amendment, modification or termination of the Subordinated Notes, the Property
Trustee shall request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a Majority
in Liquidation Amount of the Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of the holders of greater than a majority in aggregate principal amount
of the Subordinated Notes (a "Super Majority"), the Property Trustee may give
such consent only at the direction of the Holders of at least the proportion in
Liquidation Amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Subordinated Notes
outstanding; provided, further, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 7(b) unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United Stated federal income tax
the Trust will not be classified as an association taxable as a corporation or a
partnership and that each Holder of the Securities will be treated as owning an
undivided beneficial interest in the Subordinated Notes on account of such
action.
8. PRO RATA. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder of Securities according to the aggregate Liquidation Amount of the
Securities held by the relevant Holder in relation to the aggregate Liquidation
Amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Indenture has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate Liquidation Amount of
Preferred Securities held by the relevant Holder relative to the aggregate
Liquidation Amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate Liquidation
Amount of Common Securities held by the relevant Holder relative to the
aggregate Liquidation Amount of all Common Securities outstanding.
9. RANKING. The Preferred Securities rank pari passu, and payment
thereon shall be made Pro Rata, with the Common Securities except that where an
Event of Default occurs and is continuing under the Subordinated Indenture in
respect of the Subordinated Notes held by the Property Trustee, the rights of
Holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of the Holders of the Preferred Securities.
10. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE. Each Holder of
Preferred Securities and Common Securities, by the acceptance thereof, agrees to
the provisions of the Preferred Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions therein and to
the provisions of the Indenture.
11. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have no
preemptive rights to subscribe for any additional Securities.
12. MISCELLANEOUS. These terms constitute a part of the Declaration and
may be amended only in accordance with the terms of the Declaration.
The Securities shall be governed in accordance with the laws of the
State of Delaware.
The Trust will provide a copy of the Declaration, the Preferred
Securities Guarantee and the Indenture to a Holder without charge on written
request to the Trust at its principal place of business.
A-7
EXHIBIT 4.14
FORM OF
PLEDGE AGREEMENT
THIS FORM OF PLEDGE AGREEMENT, dated as of ___________, 199_ (this
"Agreement"), among PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation (the
"Company"), ________________, as collateral agent (in such capacity, together
with its successors in such capacity, the "Collateral Agent"), and
_____________, as purchase contract agent and as attorney-in-fact of the Holders
(as hereinafter defined) from time to time of the Securities (as hereinafter
defined) (in such capacity, together with its successors in such capacity, the
"Purchase Contract Agent") under the Purchase Contract Agreement (as hereinafter
defined).
RECITALS
A. The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there will be issued ___% ________________
Securities (the "Securities").
B. Each Security consists of (a) one Purchase Contract (as hereinafter
defined) and (b) ____% _______________ due _____________ ("Collateral
Securities") having a principal amount or liquidation preference equal to
$_________ (the "Stated Amount") and maturing on ________________ (the "Final
Settlement Date"), subject to the pledge of such Collateral Securities created
hereby.
C. Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders (as defined in the Purchase Contract Agreement)
from time to time of the Securities have irrevocably authorized the Purchase
Contract Agent, as attorney-in-fact of such Holders, among other things to
execute and deliver this Agreement on behalf of such Holders and to grant the
pledge provided hereby of the Collateral Securities constituting part of such
Securities as provided herein and subject to the terms hereof.
D. Accordingly, the Company, the Collateral Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the Holders from
time to time of the Securities, agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
1.1 the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and
1.2 the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
1.3 "ACT" has the meaning specified in the Purchase Contract Agreement.
1.4 "AGREEMENT" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
1.5 ["APPLICABLE TREASURY REGULATIONS" means Subpart O-Book-Entry
Procedure of Title 31 of the Code of Federal Regulations (31 CFR (S) 306.115 et.
seq.) and any other regulations of the United States Treasury Department from
time to time applicable to the transfer or pledge of book-entry U.S. Treasury
Securities.]
1.6 "BOARD RESOLUTION" has the meaning specified in the Purchase
Contract Agreement.
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1.7 "BUSINESS DAY" means any day that is not a Saturday, a Sunday or a
day on which the New York Stock Exchange or banking institutions or trust
companies in The City of New York are authorized or obligated by law or
executive order to be closed.
1.8 "COLLATERAL AGENT" has the meaning specified in the first paragraph
of this instrument.
1.9 "COLLATERAL SECURITIES" has the meaning specified in the Recitals.
1.10 "COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
1.11 "EARLY SETTLEMENT" has the meaning specified in the Purchase
Contract Agreement.
1.12 "EARLY SETTLEMENT AMOUNT" has the meaning specified in the
Purchase Contract Agreement.
1.13 "FINAL SETTLEMENT DATE" has the meaning specified in the Recitals.
1.14 "HOLDER" when used with respect to a Security, or a Purchase
Contract constituting a part thereof, has the meaning specified in the Purchase
Contract Agreement.
1.15 "OPINION OF COUNSEL" has the meaning specified in the Purchase
Contract Agreement.
1.16 "OUTSTANDING SECURITIES" has the meaning specified in the Purchase
Contract Agreement.
1.17 "OUTSTANDING SECURITY CERTIFICATES" has the meaning specified in
the Purchase Contract Agreement.
1.18 "PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
1.19 "PLEDGE" has the meaning specified in Section 2 hereof.
1.20 "PLEDGED COLLATERAL SECURITIES" has the meaning specified in
Section 2 hereof.
1.21 "PURCHASE CONTRACT" has the meaning specified in the Purchase
Contract Agreement.
1.22 "PURCHASE CONTRACT AGENT" has the meaning specified in the first
paragraph of this instrument.
1.23 "SECURITY" has the meaning specified in the Recitals.
1.24 "SECURITY CERTIFICATE" has the meaning specified in the Purchase
Contract Agreement.
1.25 "STATED AMOUNT" has the meaning specified in the Recitals.
1.26 "TERMINATION EVENT" has the meaning specified in the Purchase
Contract Agreement.
2. THE PLEDGE. The Holders from time to time of the Securities acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby pledge
and grant to the Collateral Agent, as collateral security for the performance
when due by such Holders of their respective obligations under the Purchase
Contracts constituting part of such Securities, for the benefit of the Company,
a security interest in all of the right, title and interest of such Holders in
the Collateral Securities constituting a part of such Securities. Prior to or
concurrently with the execution and delivery of this Agreement, the initial
Holders and the Collateral Agent shall (i) cause the Collateral Securities to be
delivered to the Collateral Agent by Federal Reserve BankWire or by book-entry
transfer through the facilities
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of the Depositary Trust Company, as the case may be, to the account of the
Collateral Agent designated by it for such purpose and (ii) take appropriate
action so that the applicable Federal Reserve Bank through which such Collateral
Securities have been purchased will reflect such transfer and the Pledge by
appropriate entries in its records in accordance with Applicable Treasury
Regulations. In addition, the execution and delivery hereof by the Purchase
Contract Agent and the Collateral Agent shall constitute (i) the notification to
the Collateral Agent (as bailee or otherwise) of the Pledge and (ii) an
acknowledgment by the Collateral Agent (as third party in possession or
otherwise) of the Pledge and of its holding of such Collateral Securities
subject to the Pledge, in each case, for purposes of perfecting the Pledge under
Applicable Treasury Regulations and other applicable law, as the case may be,
including, to the extent applicable, the Uniform Commercial Code as adopted and
in effect in any applicable jurisdiction. The pledge provided in this Section 2
is herein referred to as the "Pledge" and the Collateral Securities subject to
the Pledge, excluding any Collateral Securities released from the Pledge as
provided in Section 4 hereof, are hereinafter referred to as the "Pledged
Collateral Securities." Subject to the Pledge, the Holders from time to time of
the Securities shall have full beneficial ownership of the Collateral Securities
constituting a part of such Securities.
3. PAYMENTS OF PRINCIPAL, REDEMPTION PRICE AND DISTRIBUTIONS. All
payments of principal or redemption price of, or distributions on, any
Collateral Securities constituting part of the Securities received by the
Collateral Agent shall be paid by the Collateral Agent by wire transfer in same
day funds no later than 2:00 p.m., New York City time on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
interest payment is received by the Collateral Agent on a day that is not a
Business Day or after 2:00 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 9:00 a.m., New York City time, on the
next succeeding Business Day) (i) in the case of (A) distributions with respect
to any Collateral Securities and (B) any principal or redemption payments with
respect to any Collateral Securities that have been released from the Pledge
pursuant to Section 4 hereof, to the Purchase Contract Agent to the account
designated by it for such purpose and (ii) in the case of principal or
redemption payments on any Pledged Collateral Securities, to the Company, in
full satisfaction of the respective obligations of the Holders of the Securities
of which such Pledged Collateral Securities are a part under the Purchase
Contracts forming a part of such Securities. All such payments received by the
Purchase Contract Agent as provided herein shall be applied by the Purchase
Contract Agent pursuant to the provisions of the Purchase Contract Agreement.
If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any
payments of principal or in respect of redemption on account of any Pledged
Collateral Securities, the Purchase Contract Agent shall hold the same as
trustee of an express trust for the benefit of the Company (and promptly deliver
over to the Company) for application to the obligations of the Holders of the
Securities of which such Collateral Securities are a part under the Purchase
Contracts relating to the Securities of which such Collateral Securities are a
part, and such Holders shall acquire no right, title or interest in any such
payments of principal or in respect of redemption so received.
4. RELEASE OF PLEDGED COLLATERAL SECURITIES.
(a) Upon notice to the Collateral Agent by the Company or the Purchase
Contract Agent that there has occurred a Termination Event, the Collateral Agent
shall release all Pledged Collateral Securities from the Pledge and shall
transfer all such Collateral Securities, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent.
(b) Upon notice to the Collateral Agent by the Purchase Contract Agent
that one or more Holders of Securities have elected to effect Early Settlement
of their respective obligations under the Purchase Contracts forming a part of
such Securities in accordance with the terms of the Purchase Contracts and the
Purchase Contract Agreement, and that the Purchase Contract Agent has received
from such Holders, and paid to the Company, the related Early Settlement Amounts
pursuant to the terms of the Purchase Contracts and the Purchase Contract
Agreement and that all conditions to such Early Settlement have been satisfied,
then the Collateral Agent shall release from the Pledge Pledged Collateral
Securities with a principal amount or liquidation preference equal to the
product of (i) the Stated Amount times (ii) the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement.
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(c) Transfers of Collateral Securities pursuant to Section 4(a) or (b)
shall be by Federal Reserve Bank-Wire, book-entry transfer through the
facilities of the Depository Trust Company or in another appropriate manner, (i)
if the Collateral Agent shall have received such notification at or prior to
1:00 p.m., New York City time, on a Business Day, then no later than 2:00 p.m.,
New York City time, on such Business Day and (ii) if the Collateral Agent shall
have received such notification on a day that is not a Business Day or after
1:00 p.m., New York City time, on a Business Day, then no later than 9:00 a.m.,
New York City time, on the next succeeding Business Day.
5. RIGHTS AND REMEDIES.
(a) The Collateral Agent shall have all of the rights and remedies with
respect to the Pledged Collateral Securities of a secured party under the
Uniform Commercial Code as in effect in the State of New York (the "Code")
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of principal payments of, or in
respect of the redemption of, any Pledged Collateral Securities as provided in
Section 3 hereof in satisfaction of the obligations of the Holder of the
Securities of which such Pledged Collateral Securities are a part under the
Purchase Contracts forming a part of such Securities, the Collateral Agent shall
have and may exercise, with reference to such Pledged Collateral Securities and
such obligations of such Holder, any and all of the rights and remedies
available to a secured party under the Code after default by a debtor, and as
otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of principal of, in respect of
redemptions of or distributions on the Pledged Collateral Securities.
(d) The Purchase Contract Agent agrees that, from time to time, upon
the written request of the Collateral Agent, the Purchase Contract Agent shall
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order to maintain the Pledge, and
the perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder.
6. THE COLLATERAL AGENT. The Collateral Agent and the Company hereby
agree between themselves as follows (it being understood and agreed that neither
the Purchase Contract Agent nor any Holder of Securities shall have any rights
under this Section 6):
6.1 APPOINTMENT, POWERS AND IMMUNITIES. The Collateral Agent shall act
as agent for the Company hereunder with such powers as are specifically vested
in the Collateral Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Collateral Agent: (a) shall
have no duties or responsibilities except those expressly set forth in this
Agreement and no implied covenants or obligations shall be inferred from this
Agreement against the Collateral Agent, nor shall the Collateral Agent be bound
by the provisions of any agreement by any party hereto beyond the specific terms
hereof; (b) shall not be responsible to the Company for any recitals contained
in this Agreement, or in any certificate or other document referred to or
provided for in, or received by it under, this Agreement, the Securities or the
Purchase Contract Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement (other than as
against the Collateral Agent), the Securities or the Purchase Contract Agreement
or any other document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral Agent) to
perform any of its obligations hereunder or thereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under Section 6.02 hereof);
(d) shall not be responsible for any action taken or omitted to be taken by it
hereunder or under any other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its own negligence;
and (e) shall not be required to advise any party as to selling or retaining, or
taking or refraining from taking any action with
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respect to, any securities or other property deposited hereunder. Subject to the
foregoing, during the term of this Agreement the Collateral Agent shall take all
reasonable action in connection with the safe keeping and preservation of the
Pledged Collateral Securities hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the value of the Pledged Collateral
Securities.
6.2 INSTRUCTIONS OF THE COMPANY. The Company shall have the right, by
one or more instruments in writing executed and delivered to the Collateral
Agent, to direct the time, method and place of conducting any proceeding for any
right or remedy available to the Collateral Agent, or of exercising any power
conferred on the Collateral Agent, or to direct the taking or refraining from
taking of any action authorized by this Agreement; provided, however, that (i)
such direction shall not conflict with the provisions of any law or of this
Agreement and (ii) the Collateral Agent shall be adequately indemnified as
provided herein. Nothing in this Section 6.02 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to take any action
which it deems proper and which is not inconsistent with such direction.
6.3 RELIANCE BY COLLATERAL AGENT. The Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated
therein), and upon advice and statements of legal counsel and other experts
selected by the Collateral Agent. As to any matters not expressly provided for
by this Agreement, the Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company in accordance with this Agreement.
6.4 RIGHTS IN OTHER CAPACITIES. The Collateral Agent and its affiliates
may (without having to account therefor to the Company) accept deposits from,
lend money to, make investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent and any Holder of
Securities (and any of their subsidiaries or affiliates) as if it were not
acting as the Collateral Agent, and the Collateral Agent and its affiliates may
accept fees and other consideration from the Purchase Contract Agent and any
Holder of Securities without having to account for the same to the Company,
provided that the Collateral Agent covenants and agrees with the Company that
the Collateral Agent shall not accept, receive or permit there to be created in
its favor any security interest, lien or other encumbrance of any kind in or
upon the Pledged Collateral Securities.
6.5 NON-RELIANCE ON COLLATERAL AGENT. The Collateral Agent shall not be
required to keep itself informed as to the performance or observance by the
Purchase Contract Agent or any Holder of Securities of this Agreement, the
Purchase Contract Agreement, the Securities or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Purchase Contract Agent or any Holder of Securities. The Collateral Agent shall
not have any duty or responsibility to provide the Company with any credit or
other information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their affiliates)
that may come into the possession of the Collateral Agent or any of its
affiliates.
6.6 COMPENSATION AND INDEMNITV. The Company agrees: (i) to pay the
Collateral Agent from time to time reasonable compensation for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of such powers and
duties.
6.7 FAILURE TO ACT. In the event of any ambiguity in the provisions of
this Agreement or any dispute between or conflicting claims by or among the
undersigned and/or any other person or entity with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, at its
sole option, to refuse to comply
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with any and all claims, demands or instructions with respect to such property
or funds so long as such dispute or conflict shall continue, and the Collateral
Agent shall not be or become liable in any way to any of the undersigned for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent shall be entitled to refuse to act until
either (i) such conflicting or adverse claims or demands shall have been finally
determined by a court of competent jurisdiction or settled by agreement between
the conflicting parties as evidenced in a writing, satisfactory to the
Collateral Agent or (ii) the Collateral Agent shall have received security or an
indemnity satisfactory to the Collateral Agent sufficient to save the Collateral
Agent harmless from and against any and all loss, liability or expense which the
Collateral Agent may incur by reason of its acting. The Collateral Agent may in
addition elect to commence an interpleader action or seek other judicial relief
or orders as the Collateral Agent may deem necessary. Notwithstanding anything
contained herein to the contrary, the Collateral Agent shall not be required to
take any action that is in its opinion contrary to law or to the terms of this
Agreement, or which would in its opinion subject it or any of its of ricers,
employees or directors to liability.
6.8 RESIGNATION OF COLLATERAL AGENT. Subject to the appointment and
acceptance of a successor Collateral Agent as provided below, (a) the Collateral
Agent may resign at any time by giving notice thereof to the Company and the
Purchase Contract Agent, (b) the Collateral Agent may be removed at any time by
the Company and (c) if the Collateral Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving notice of such failure by the Purchase Contract Agent and
such failure shall be continuing, the Collateral Agent may be removed by the
Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Collateral Agent pursuant to clause (c) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed and shall have accepted
such appointment within 30 days after the retiring Collateral Agent's giving of
notice of resignation or such removal, then the retiring Collateral Agent may
petition any court of competent jurisdiction for the appointment of a successor
Collateral Agent. The Collateral Agent shall be a bank which has an office in
New York, New York with a combined capital and surplus of at least $50,000,000.
Upon the acceptance of any appointment as Collateral Agent hereunder by a
successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held by it hereunder
(including the Pledged Collateral Securities) to such successor Collateral
Agent. The retiring Collateral Agent shall, upon such succession, be discharged
from its duties and obligations as Collateral Agent hereunder. After any
retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions of this Section 6 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent.
Promptly following the removal or resignation of the Collateral Agent
the Company shall give written notice thereof to Moody's Investors Services,
Inc.
6.9 RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent shall have
the right to appoint agents or advisors in connection with any of its duties
hereunder, and the Collateral Agent shall not be liable for any action taken or
omitted by such agents or advisors selec good faith.
The provisions of this Section 6 shall survive termination of this
Agreement and resignation or removal of the Collateral Agent.
7. AMENDMENT.
7.1 AMENDMENT WITHOUT CONSENT OF HOLDERS. Without the consent of any
Hold Company, the Collateral Agent and the Purchase Contract Agent, at any time
and from ti time, may amend this Agreement, in form satisfactory to the Company,
the Collateral Ag the Purchase Contract Agent, for any of the following
purposes:
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company; or
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(b) to add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company; or
(c) to evidence and provide for the acceptance of appointment hereunder
by successor Collateral Agent or Purchase Contract Agent; or
(d) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
7.2 AMENDMENT WITH CONSENT OF HOLDERS. With the consent of the Holders
of not less than 66-2/3% of the Outstanding Securities, by Act of said Holders
delivered to the Company, the Agent and the Collateral Agent, the Company, when
authorized by a Board Resolution, the Agent and the Collateral Agent may amend
this Agreement for the purpose of modifying manner the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that no such supplemental agreement shall, without the consent of the
of each Outstanding Security affected thereby,
(a) change the amount or type of Collateral Securities underlying a
Security the right of the Holder of any Security to receive distributions on the
Unix Collateral Securities or otherwise adversely affect the Holder's rights in
such Collateral Securities; or
(b) otherwise effect any action that would require the consent of the
Holder Outstanding Security affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an agreement supplemental thereto; or
(c) reduce the percentage of Outstanding Securities the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
7.3 EXECUTION OF AMENDMENTS. In executing any amendment permitted by
this Section, the Collateral Agent and the Purchase Contract Agent shall be
entitled to receive and (subject to Section 6.01 hereof, with respect to the
Collateral Agent, and Section 701 of the Purchase Contract Agreement, with
respect to the Purchase Contract Agent) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement.
7.4 EFFECT OF AMENDMENTS. Upon the execution of any amendment under
this Section, this Agreement shall be modified in accordance therewith, and such
amendment shall form a part of this Agreement for all purposes; and every Holder
of Security Certificates theretofore or thereafter authenticated, executed on
behalf of the Holders and delivered under the Purchase Contract Agreement shall
be bound thereby.
7.5 REFERENCE TO AMENDMENTS. Security Certificates authenticated,
executed on behalf of the Holders and delivered after the execution of any
amendment pursuant to this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form approved by the
Purchase Contract Agent and the Collateral Agent as to any matter provided for
in such amendment. If the Company shall so determine, new Security Certificates
so modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for Outstanding Security Certificates.
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8. MISCELLANEOUS.
8.1 NO WAIVER. No failure on the part of the Collateral Agent or any of
its agents to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent or any
of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
8.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The Company, the Collateral
Agent and the Holders from time to time of the Securities, acting through the
Purchase Contract Agent as their attorney-in-fact, hereby submit to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the Collateral
Agent and the Holders from time to time of the Securities, acting through the
Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the
fullest extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.
8.3 NOTICES. All notices, requests, consents and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) and delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof or, as to any party, at such other address as shall be designated
by such party in a notice to the other parties. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telecopier or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
8.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Company,
the Collateral Agent and the Purchase Contract Agent, and the Holders from time
to time of the Securities, by their acceptance of the same, shall be deemed to
have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Purchase Contract
Agent.
8.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.6 SEVERABILITY. If any provision hereof is invalid and unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
8.7 EXPENSES, ETC. The Company agrees to reimburse the Collateral Agent
for: (a) all reasonable out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent), in connection with (i) the negotiation, preparation,
execution and delivery or performance of this Agreement and (ii) any
modification, supplement or waiver of any of the terms of this Agreement; (b)
all reasonable costs and expenses of the Collateral Agent (including, without
limitation, reasonable fees and expenses of counsel) in connection with (i) any
enforcement or proceedings resulting or incurred in connection with causing any
Holder of Securities to satisfy its obligations under the Purchase Contracts
forming a part of the Securities and (ii) the enforcement of this Section 8.07;
and (c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement
-8-
<PAGE>
or any other document referred to herein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated
hereby.
8.8 SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and
security interests hereunder, and all obligations of the Holders from time to
time of the Securities hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Securities or any other agreement or instrument
relating thereto;
(b) any change in the time, manner or place of payment of, or any other
term of, or any increase in the amount of, all or any of the obligations of
Holders of Securities uncle' the related Purchase Contracts, or any other
amendment or waiver of any term of, or any consent to any departure from any
requirement of, the Purchase Contract Agreement or any Purchase Contract or any
other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense
available to, or discharge of, a borrower, a guarantor or a pledger.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PROVIDIAN FINANCIAL CORPORATION
By
-----------------------------------
Title
--------------------------------
Address for Notices:
Providian Financial Corporation
201 Mission Street
28th Floor
San Francisco, CA 94105
(415) 543-0404
as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By
---------------------------------------
Title
------------------------------------
Address for Notices:
as Collateral Agent
By
---------------------------------------
Name
-------------------------------------
-9-
EXHIBIT 4.15
===============================================================================
INDENTURE
Between
PROVIDIAN FINANCIAL CORPORATION
and
____________________, AS TRUSTEE
Dated as of __________ __, 1998
===============================================================================
<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1 DEFINITIONS...............................................................................1
Section 1.1. Certain Terms Defined............................................................1
ARTICLE 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION,
TRANSFER AND EXCHANGE OF SECURITIES.......................................................7
Section 2.1. Amount, Series, Execution, Authentication and Delivery of Securities.............7
Section 2.2. Form of Securities and Trustee's Certificate of Authentication................. 12
Section 2.3. Denominations; Payment of Interest on Fully Registered Securities.............. 13
Section 2.4. Execution of Securities........................................................ 14
Section 2.5. Registration, Transfer and Exchange of Securities.............................. 15
Section 2.6. Temporary Securities........................................................... 16
Section 2.7. Mutilated, Destroyed, Lost or Stolen Securities................................ 17
Section 2.8. Cancellation and Destruction of Surrendered Securities......................... 17
Section 2.9. Securities in Global Form; Depositories........................................ 18
ARTICLE 3 REDEMPTION OF SECURITIES................................................................ 19
Section 3.1. Redemption of Securities....................................................... 19
Section 3.2. Notice of Redemption........................................................... 19
Section 3.3. Selection of Securities for Redemption......................................... 20
Section 3.4. Partial Redemption of Registered Security...................................... 20
Section 3.5. Effect of Redemption........................................................... 20
ARTICLE 4 PARTICULAR COVENANTS OF THE CORPORATION................................................. 21
Section 4.1. Payment of Principal of and Interest on Securities............................. 21
Section 4.2. Corporate Existence of the Corporation; Consolidation, Merger, Sale
or Transfer.................................................................... 21
Section 4.3. Maintenance of Offices or Agencies for Transfer, Registration,
Exchange and Payment of Securities............................................. 22
Section 4.4. Appointment to Fill a Vacancy in the Office of Trustee......................... 22
Section 4.5. Duties of Paying Agent......................................................... 22
Section 4.6. Notice of Default.............................................................. 23
ARTICLE 5 SECURITYHOLDERS' LISTS AND REPORTS BY THE
CORPORATION AND THE TRUSTEE............................................................. 23
Section 5.1. Corporation to Furnish Trustee Information As to the Names and
Addresses of Securityholders................................................... 23
Section 5.2. Preservation of Information; Communication to Securityholders.................. 24
Section 5.3. Reports by Corporation......................................................... 25
Section 5.4. Reports by Trustee............................................................. 26
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<PAGE>
ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT........................................................................ 28
Section 6.1. Events of Default; Acceleration, Waiver of Default and Restoration of
Position and Rights........................................................... 28
Section 6.2. Covenant of Corporation to Pay to Trustee Whole Amount Due on
Securities on Default in Payment of Interest or Principal..................... 30
Section 6.3. Trustee May File Proofs of Claim.............................................. 31
Section 6.4. Trustee May Enforce Claims Without Possession of Securities................... 32
Section 6.5. Application of Moneys Collected By Trustee.................................... 32
Section 6.6. Limitation on Suits By Holders of Securities.................................. 33
Section 6.7. Rights and Remedies Cumulative................................................ 33
Section 6.8. Delay or Omission Not Waiver.................................................. 34
Section 6.9. Control By Holders; Waiver of Past Defaults................................... 34
Section 6.10. Trustee to Give Notice of Defaults Known to It, But May Withhold in
Certain Circumstances......................................................... 35
Section 6.11. Requirement of an Undertaking to Pay Costs in Certain Suits Under
the Indenture or Against the Trustee.......................................... 35
ARTICLE 7 CONCERNING THE TRUSTEE.................................................................. 35
Section 7.1. Certain Duties and Responsibilities of Trustee................................ 35
Section 7.2. Certain Rights of Trustee..................................................... 37
Section 7.3. Trustee Not Responsible for Recitals or Application of Proceeds............... 38
Section 7.4. Trustee May Own Securities.................................................... 38
Section 7.5. Moneys Received by Trustee to be Held in Trust................................ 38
Section 7.6. Trustee Entitled to Compensation, Reimbursement and Indemnity................. 38
Section 7.7. Right of Trustee to Rely on Officer's Certificate Where No Other
Evidence Specifically Prescribed.............................................. 39
Section 7.8. Disqualification; Conflicting Interest........................................ 39
Section 7.9. Requirements for Eligibility of Trustee....................................... 46
Section 7.10. Resignation and Removal of Trustee; Appointment of Successor.................. 46
Section 7.11. Acceptance of Appointment by Successor Trustee................................ 47
Section 7.12. Successor to Trustee by Merger, Consolidation or Succession to
Business...................................................................... 48
Section 7.13. Preferential Collection of Claims Against Corporation......................... 49
ARTICLE 8 CONCERNING THE SECURITYHOLDERS.......................................................... 53
Section 8.1. Evidence of Action by Securityholders......................................... 53
Section 8.2. Proof of Execution of Instruments and of Holding of Securities................ 53
Section 8.3. Who May be Deemed Owners of Securities........................................ 54
Section 8.4. Securities Owned by the Corporation or Controlled or Controlling
Persons Disregarded for Certain Purposes...................................... 54
Section 8.5. Instruments Executed by Securityholders Bind Future Holders................... 55
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<PAGE>
ARTICLE 9 SECURITYHOLDERS' MEETINGS............................................................... 55
Section 9.1. Purposes for Which Meetings May be Called..................................... 55
Section 9.2. Manner of Calling Meetings.................................................... 56
Section 9.3. Call of Meeting by the Corporation or Securityholders......................... 56
Section 9.4. Who May Attend and Vote at Meetings........................................... 56
Section 9.5. Regulations May be Made by Trustee; Conduct of the Meeting;
Voting Rights - Adjournment................................................... 56
Section 9.6. Manner of Voting at Meetings and Record to be Kept............................ 57
Section 9.7. Exercise of Rights of Trustee and Securityholders Not to be Hindered
or Delayed.................................................................... 58
ARTICLE 10 SUPPLEMENTAL INDENTURES................................................................. 58
Section 10.1. Purposes for Which Supplemental Indentures May be Entered Into
Without Consent of Securityholders............................................ 58
Section 10.2. Modification of Indenture with Consent of Holders of Securities............... 59
Section 10.3. Effect of Supplemental Indentures............................................. 61
Section 10.4. Securities May Bear Notation of Changes by Supplemental Indentures............ 61
ARTICLE 11 DISCHARGE; DEFEASANCE................................................................... 61
Section 11.1. Discharge of Indenture........................................................ 61
Section 11.2. Discharge of Liability on Securities.......................................... 62
Section 11.3. Discharge of Certain Covenants and Other Obligations.......................... 62
Section 11.4. Discharge of Certain Obligations Upon Deposit of Money or
Securities with Trustee....................................................... 62
Section 11.5. Unclaimed Moneys.............................................................. 64
ARTICLE 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS........................................................................... 64
Section 12.1. Incorporators, Stockholders, Officers and Directors of Corporation
Exempt From Individual Liability.............................................. 64
ARTICLE 13 MISCELLANEOUS PROVISIONS................................................................ 65
Section 13.1. Successors and Assigns of the Corporation Bound by Indenture.................. 65
Section 13.2. Notices; Effectiveness........................................................ 65
Section 13.3. Compliance Certificates and Opinions.......................................... 66
Section 13.4. Days on Which Payment to be Made, Notice Given or Other Action
Taken......................................................................... 67
Section 13.5. Provisions Required by Trust Indenture Act of 1939 to Control................. 67
Section 13.6. Governing Law................................................................. 67
Section 13.7. Provisions of the Indenture and Securities for the Sole Benefit of the
Parties and the Securityholders............................................... 67
Section 13.8. Indenture May be Executed in Counterparts..................................... 67
</TABLE>
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<PAGE>
TABLE SHOWING REFLECTION IN THIS INDENTURE OF
CERTAIN PROVISIONS OF THE TRUST INDENTURE ACT OF 19391
<TABLE>
<CAPTION>
Section Section
of Act of Indenture
- ------- ------------
<C> <C>
310(a)(1) ..................................... 7.9
310(a)(2) ..................................... 7.9
310(a)(3) ..................................... Inapplicable
310(a)(4) ..................................... Inapplicable
310(a)(5) ..................................... 7.9
310(b) ..................................... 7.8, 7.10
310(c) ..................................... Inapplicable
311(a) ..................................... 7.13(a), 7.13(c)
311(b) ..................................... 7.13(b), 7.13(c)
311(c) ..................................... Inapplicable
312(a) ..................................... 5.1, 5.2(a)
312(b) ..................................... 5.2(b)
312(c) ..................................... 5.2(c)
313(a) ..................................... 5.4(a)
313(b)(1) ..................................... Inapplicable
313(b)(2) ..................................... 5.4(b)
313(c) ..................................... 5.4(c)
313(d) ..................................... 5.4(d)
314(a)(1) ..................................... 5.3(a)
314(a)(2) ..................................... 5.3(b)
314(a)(3) ..................................... 5.3(c)
314(a)(4) ..................................... 5.3(d)
314(b) ..................................... Inapplicable
314(c) ..................................... 13.3
314(d) ..................................... Inapplicable
314(e) ..................................... 13.3
314(f) ..................................... Omitted
315(a) ..................................... 7.1
315(b) ..................................... 6.10
315(c) ..................................... 7.1
315(d) ..................................... 7.1
315(e) ..................................... 6.11
316(a)(1) ..................................... 6.9
316(a)(2) ..................................... Omitted
316(b) ..................................... 6.6
316(c) ..................................... 6.9
317(a) ..................................... 6.2, 6.3
- --------
1 This Table is not part of the Indenture.
<PAGE>
317(b) ..................................... 4.8
318(a) ..................................... 13.5
</TABLE>
-v-
<PAGE>
INDENTURE
THIS INDENTURE, dated as of __________ __, 1998, between PROVIDIAN
FINANCIAL CORPORATION, a Delaware corporation (the "Corporation"), and
____________________, a ____________________ organized and existing under the
laws of ______________ (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Corporation has duly authorized the issuance, sale,
execution and delivery, from time to time, of its unsecured evidences of
indebtedness (hereinafter referred to as the "Securities"), without limit as to
principal amount, issuable in one or more Series, the amount and terms of each
such Series to be determined as hereinafter provided; and, to provide the terms
and conditions upon which the Securities are to be issued, authenticated and
delivered, the Corporation has duly authorized the execution of this Indenture;
and
WHEREAS, all acts and things necessary to make the Securities, when
executed by the Corporation and authenticated and delivered by the Trustee as in
this Indenture provided, the valid, binding and legal obligations of the
Corporation, and to constitute this Indenture a valid indenture and agreement
according to its terms, have been done and performed, and the execution of this
Indenture and the issuance hereunder of the Securities have in all respects been
duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Securities are to be issued, authenticated and delivered, and in consideration
of the premises and of the purchase and acceptance of the Securities by the
Holders thereof, the Corporation covenants and agrees with the Trustee, for the
equal and proportionate benefit of the respective Holders from time to time of
the Securities or of any Series thereof, as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. CERTAIN TERMS DEFINED. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article One have the meanings
assigned to them in this Article One, and include the plural as well as
the singular;
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<PAGE>
(b) all other terms used herein which are defined in the Trust
Indenture Act of 1939, either directly or by reference therein, have
the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein shall
have the meanings assigned to them and all computations herein provided
for shall be made, in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles"
shall mean such principles as they exist at the date of applicability
thereof; and
(d) 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.
BOARD OF DIRECTORS
The term "Board of Directors" shall mean the Board of Directors of the
Corporation, or any duly authorized committee of such Board of Directors.
BUSINESS DAY
The term "Business Day" shall mean any day which is not a Saturday or
Sunday or which in the City and County of San Francisco or in The City of New
York is neither a legal holiday nor a day on which banking institutions are
authorized by law or regulation to close.
CERTIFIED RESOLUTION
The term "Certified Resolution" shall mean a resolution of the Board of
Directors of the Corporation certified by the Secretary or by an Assistant
Secretary of the Corporation to have been duly adopted by the Board of Directors
of the Corporation and to be in full force and effect on the date of such
certification.
COMMISSION
The term "Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended, or if at any time after the execution of this
Indenture such Commission is not existing and performing the duties theretofore
assigned to it under the Trust Indenture Act of 1939, then the body performing
such duties at such time.
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<PAGE>
CORPORATION
The term "Corporation" shall mean Providian Financial Corporation, a
Delaware corporation, until a successor entity shall have become such pursuant
to the applicable provisions hereof, and thereafter "Corporation" shall mean
such successor entity.
DEPOSITORY
The term "Depository" shall mean, with respect to the Securities of any
Series issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depository by the Corporation pursuant to
Section 2.1 of this Indenture until a successor Depository shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter the
term "Depository" shall mean or include each Person who is then a Depository
hereunder, and if at any time there is more than one such Person, "Depository"
as used with respect to the Securities of any such Series shall mean the
Depository with respect to the Securities of that Series.
EVENT OF DEFAULT
The term "Event of Default" with respect to Securities of any Series
shall mean any event specified as such in Section 6.1 and any other event as may
be established with respect to the securities of such Series as permitted by
Section 2.1. An Event of Default shall "exist" if an Event of Default shall have
occurred and be continuing.
GLOBAL SECURITY
The term "Global Security" shall mean a Security evidencing all or a
portion of a Series of Securities, issued under the Indenture and delivered to
the Depository for such Series in accordance with Section 2.9 of this Indenture,
and bearing the legend prescribed in such Section 2.9.
INDENTURE
The term "Indenture" shall mean this instrument as originally executed,
or as it may from time to time be supplemented, modified or amended, as provided
herein, and shall include the form and terms of particular Series of Securities
established in accordance with the provisions of Sections 2.1 and 2.2.
INTEREST PAYMENT DATE
The term "Interest Payment Date" when used with respect to any Security
means the Stated Maturity of an installment of interest on such Security.
-3-
<PAGE>
OFFICER'S CERTIFICATE
The term "Officer's Certificate" shall mean a certificate signed by the
Chairman of the Board, any Vice-Chairman of the Board or the President, any
Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Corporation. Each such certificate shall include the
statements provided for in Section 13.3, if and to the extent required by the
provisions of such Section.
OPINION OF COUNSEL
The term "Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel to the Corporation. Each such opinion shall include the
statements provided for in Section 13.3, if and to the extent required by the
provisions of such Section.
ORIGINAL ISSUE DISCOUNT SECURITY
The term "Original Issue Discount Security" shall mean (a) any Security
which provides for an amount less than the principal amount thereof to be due
and payable upon declaration of acceleration of the maturity thereof pursuant to
Section 6.1 or (b) any other Security which for United States Federal income tax
purposes would be considered an original issue discount security.
OUTSTANDING
The term "Outstanding" when used with reference to Securities shall,
subject to the provisions of Section 8.4, mean, as of the date of determination,
all Securities theretofore authenticated and delivered under this Indenture,
except:
(a) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities for whose payment or redemption moneys in the
necessary amount have been theretofore deposited with the Trustee or
with any Paying Agent in trust for the Holders of such Securities,
provided that if such Securities are to be redeemed, notice of such
redemption has been duly given as provided in Article Three hereof, or
provision therefor satisfactory to the Trustee has been made;
(c) Securities in exchange for or in lieu of which other
Securities shall have been authenticated and delivered under this
Indenture; and
(d) Securities alleged to have been destroyed, lost or stolen
which have been paid as provided in Section 2.7 hereof.
-4-
<PAGE>
In determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination as if a declaration of acceleration of the maturity
thereof pursuant to Section 6.1 had been made.
PAYING AGENT
The term "Paying Agent" means any Person authorized by the Corporation
to pay the principal of and any interest and premium on any Securities on behalf
of the Corporation.
PERIODIC OFFERING
The term "Periodic Offering" means an offering from time to time of
Securities of a Series, the specific terms of which (including, without
limitation, the rate or rates of interest, if any, thereon or any methods of
calculating such, the maturity date or dates thereof and any redemption
provisions with respect thereto) are to be determined by the Corporation or its
agents upon the issuance of such Series of Securities.
PERSON
The term "Person" shall mean an individual, a corporation, a
partnership, a joint venture, an association, a joint stock company, a trust, an
unincorporated organization, or a government or any agency, authority or
political subdivision thereof.
PRINCIPAL OFFICE OF THE TRUSTEE
The term "Principal Office of the Trustee" shall mean the principal
office of the Trustee in ______________________ at which at any particular time
its corporate trust business shall be administered, except that with respect to
presentation of Securities for payment such term shall mean the office or agency
of the Trustee at which at any particular time its corporate agency business
shall be conducted. The present address of the principal office at which the
corporate trust business of the Trustee is administered is
- -------------------------------------------------.
RECORD DATE
The term "Record Date" for the interest payable on any Interest Payment
Date on any Series of Securities shall mean the date specified as such in the
Securities of such Series.
-5-
<PAGE>
REDEMPTION DATE
The term "Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption pursuant to this Indenture.
REDEMPTION PRICE
The term "Redemption Price" when used with respect to any Security to
be redeemed means the price at which it is to be redeemed pursuant to this
Indenture. It includes any applicable premium but does not include installments
of interest whose Stated Maturity is on or before the Redemption Date.
REGISTER
The term "Register" shall mean the books for the registration and
transfer of Securities which books are kept by the Trustee pursuant to Section
2.5.
RESPONSIBLE OFFICER
The term "Responsible Officer" when used with respect to the Trustee
shall mean the chairman and vice-chairman of the board of directors, the
chairman and vice-chairman of the executive committee of said board, the
president, any vice-president or second vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any corporate trust officer, the controller, any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer of
the Trustee to whom such matter is referred because of such Person's knowledge
of and familiarity with the particular subject.
SECURITY OR SECURITIES
The terms "Security" or "Securities" shall mean any security or
securities of the Corporation without regard to Series, authenticated and
delivered under this Indenture.
SECURITYHOLDER; HOLDER
The terms "Securityholder" or "Holder," whenever employed herein with
respect to a Security, shall mean the Person in whose name such Security shall
be registered on the Register.
SERIES
The term "Series" shall mean an issue of Securities under this
Indenture.
-6-
<PAGE>
STATED MATURITY
The term "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.
SUPPLEMENTAL INDENTURE
The term "Supplemental Indenture" shall mean an indenture supplemental
hereto as such Supplemental Indenture may be originally executed, or as it may
from time to time be supplemented, modified or amended, as provided herein and
therein.
TRUSTEE
The term "Trustee" shall mean ________________ 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 OF 1939
The term "Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939, as amended as of the date of this Indenture.
UNITED STATES DOLLARS
The term "United States Dollars" shall mean the lawful currency of the
United States of America.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION,
TRANSFER AND EXCHANGE OF SECURITIES
SECTION 2.1. AMOUNT, SERIES, EXECUTION, AUTHENTICATION AND DELIVERY OF
SECURITIES. The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is not limited. The Securities
may be issued in one or more Series.
(A) The following terms and provisions of each Series of Securities
shall be established by a resolution of the Board of Directors and set forth in
either a Certified Resolution or a Supplemental Indenture:
-7-
<PAGE>
(1) the designation of the Series of Securities (which shall
distinguish the Securities of such Series from all other Series of
Securities),
(2) any limit upon the aggregate principal amount of the particular
Series of Securities which may be executed, authenticated and
delivered under this Indenture; PROVIDED, HOWEVER, that nothing
contained in this Section 2.1 or elsewhere in this Indenture or in
the Securities or in such Certified Resolution or in a
Supplemental Indenture is intended to or shall limit execution by
the Corporation or authentication and delivery by the Trustee of
Securities under the circumstances contemplated by Sections 2.5,
2.6, 2.7, 3.4 and 10.4,
(3) the currency or currencies or composite currency in which
principal of and interest and any premium on such Series of
Securities shall be payable (if other than in United States
Dollars),
(4) the Stated Maturity for payment of principal of such Series of
Securities and any sinking fund or analogous provisions,
(5) the rate or rates at which such Series of Securities shall bear
interest or the method of calculating such rate or rates of
interest and the Interest Payment Dates for such Series of
Securities,
(6) the place or places where such Series of Securities may be
presented for payment and for the other purposes provided in
Section 4.6,
(7) any Redemption Price or Prices, the Redemption Date or Dates and
other applicable redemption or repurchase provisions for such
Series of Securities,
(8) whether such Series of Securities shall be issuable as one or more
Global Securities and the form of such Series of Securities,
(9) if the Securities of such Series shall be issued in whole or in
part as one or more Global Securities, the Depository for such
Global Security or Securities and any additional terms and
conditions relating to such Global Securities not set forth in
this Indenture,
-8-
<PAGE>
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which such Series of Securities
shall be issuable,
(11) the date from which interest on such Securities shall accrue,
(12) the basis upon which interest on such Series of Securities shall
be computed (if other than on the basis of a 360-day year of
twelve 30-day months),
(13) if other than the principal amount thereof, the portion of the
principal amount of such Series of Securities which shall be
payable upon declaration of acceleration of the maturity thereof
pursuant to Section 6.1,
(14) the Person or Persons who shall be registrar for such Series of
Securities, and the place or places where the Register of such
Series of Securities shall be kept,
(15) any additional events of default with respect to the Securities of
a particular Series not set forth herein,
(16) any additional covenants of the Corporation with respect to the
Securities of a particular Series not set forth herein,
(17) the terms and conditions, if any, upon which any Securities of
such Series may or shall be converted into other instruments or
other forms of property, and
(18) any other terms of such Series of Securities (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one Series shall be substantially identical
except that any Series may have serial maturities and different interest rates
for different maturities and except as to denomination and the differences
herein specified between Global Securities and Securities issued in definitive
form and except as may otherwise be provided in or pursuant to the Certified
Resolution or Supplemental Indenture relating to such Series of Securities. All
Securities of any one Series need not be issued at the same time, and, unless
otherwise provided in the Certified Resolution or Supplemental Indenture
relating to such Series, a Series may be reopened for issuances of additional
Securities of such Series.
(B) At any time and from time to time after the execution and delivery
of this Indenture, the Corporation may deliver any Series of Securities executed
by the Corporation to the Trustee for authentication by it, and the Trustee
shall thereupon authenticate and deliver said Securities (or if only a single
Global Security, such Global Security) to or upon
-9-
<PAGE>
the written order of the Corporation, signed by an officer of the Corporation,
without any further corporate action. In authenticating such Securities and
accepting the additional responsibilities under this Indenture in relation to
such Securities and except as hereinafter provided with respect to a Series of
Securities subject to a Periodic Offering, the Trustee shall be entitled to
receive, and (subject to Section 7.1) shall be fully protected in relying upon:
(1) each Certified Resolution relating to such Series of Securities,
(2) an executed Supplemental Indenture, if any, relating to such
Series of Securities,
(3) an Opinion of Counsel to the effect that:
(a) the terms and form of such Securities have been established
as permitted by Sections 2.1 and 2.2 in conformity with the
provisions of this Indenture,
(b) such Securities, when executed and issued by the Corporation
and authenticated and delivered by the Trustee in accordance
with the provisions of this Indenture and subject to any
conditions specified in such Opinion of Counsel, will
constitute valid and binding obligations of the Corporation,
except as any rights thereunder may be limited by the effect
of bankruptcy, insolvency, reorganization, receivership,
conservatorship, arrangement, moratorium or other laws
affecting or relating to the rights of creditors generally;
the rules governing the availability of specific performance,
injunctive relief or other equitable remedies and general
principles of equity, regardless of whether considered in a
proceeding in equity or at law; the effect of applicable
court decisions invoking statutes or principles of equity,
which have held that certain covenants and provisions of
agreements are unenforceable where the breach of such
covenants or provisions imposes restrictions or burdens upon
a borrower, and it cannot be demonstrated that the
enforcement of such restrictions or burdens is necessary for
the protection of the creditor, or which have held that the
creditor's enforcement of such covenants or provisions under
the circumstances would have violated the creditor's
covenants of good faith and fair dealing implied under
California law; and the effect of
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California statutes and rules of law which cannot be
waived prospectively by a borrower, and
(c) the Corporation has complied with all applicable Federal laws
and requirements in respect of the execution and delivery of
such Securities.
With respect to a Series of Securities subject to a Periodic Offering, the
Trustee shall be entitled to receive, and, subject to Section 7.1, shall be
fully protected in relying upon the documents described in the foregoing
subsections (1), (2) and (3) of this Section 2.1(B); PROVIDED THAT (i) the
Certified Resolution may be delivered to the Trustee prior to the delivery to
the Trustee of such Securities for authentication and delivery, (ii) the Trustee
shall authenticate and deliver Securities of such Series for original issue from
time to time, in an aggregate principal amount not exceeding the aggregate
principal amount, if any, established for such Series, pursuant to such
Certified Resolution or pursuant to such procedures as may be specified from
time to time by a Certified Resolution, (iii) the maturity date or dates,
original issue date or dates, interest rate or rates or the method or methods of
calculating such and any other terms of the Securities of such Series shall be
determined by the Certified Resolution or pursuant to such procedures, (iv) if
provided for in such procedures, such Certified Resolution may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Corporation or its duly authorized agent or agents, which oral instructions
shall be promptly confirmed in writing and (v) the Trustee shall be entitled to
receive an Opinion of Counsel only once at or prior to the time of the first
authentication of Securities of such Series and the opinions described in the
foregoing subsections (3)(a) and (3)(b) of this Section 2.1(B) may be to the
effect that:
(x) the form of the Securities of such Series has been duly
authorized by the Corporation and has been established in conformity
with the provisions of this Indenture and that, when the terms of such
Securities shall have been established pursuant to a Certified
Resolution or pursuant to such procedures as may be specified from time
to time by a Certified Resolution, such terms will have been duly
authorized by the Corporation and will have been established in
conformity with the provisions of this Indenture, and
(y) Securities of such Series, when executed and issued by the
Corporation and completed, authenticated and delivered by the Trustee
in accordance with the provisions of this Indenture and subject to any
conditions specified in such Opinion of Counsel and when paid for, all
as contemplated by and in accordance with the Certified Resolution or
specified procedures, as the case may be, will constitute valid and
binding obligations of the Corporation, except as any rights thereunder
may be limited by the effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium or other laws
affecting or relating to the rights of creditors generally; the rules
governing the availability of specific performance, injunctive relief
or other equitable remedies and general
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principles of equity, regardless of whether considered in a proceeding
in equity or at law; the effect of applicable court decisions invoking
statutes or principles of equity, which have held that certain
covenants and provisions of agreements are unenforceable where the
breach of such covenants or provisions imposes restrictions or burdens
upon a borrower, and it cannot be demonstrated that the enforcement of
such restrictions or burdens is necessary for the protection of the
creditor, or which have held that the creditor's enforcement of such
covenants or provisions under the circumstances would have violated the
creditor's covenants of good faith and fair dealing implied under
California law; and the effect of California statutes and rules of law
which cannot be waived prospectively by a borrower.
With respect to Securities of a Series offered in a Periodic Offering, the
Trustee may rely, as to the authorization by the Corporation of any such
Securities, the form and terms thereof and the valid and binding effect thereof,
upon the Opinion of Counsel and other documents delivered pursuant to this
Section 2.1 in connection with the first authentication of Securities of such
Series unless and until such Opinion of Counsel or other documents shall have
been superseded or revoked. In connection with the authentication and delivery
of Securities of a Series subject to a Periodic Offering, the Trustee shall be
entitled to assume that the instructions of the Corporation to authenticate and
deliver such Securities do not violate any rules, regulations or orders of any
governmental agency having jurisdiction over the Corporation.
Each fully registered Security shall be dated the date of its
authentication.
SECTION 2.2. FORM OF SECURITIES AND TRUSTEE'S CERTIFICATE OF
AUTHENTICATION. The Securities of each Series shall be substantially of the
tenor and purport as shall be authorized by the related Certified Resolution or
Supplemental Indenture, in each case 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 or designation and such legends or endorsements thereon as the
Board of Directors may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Securities of such Series may be listed, or
to conform to usage.
The definitive Securities and each Global Security may be printed,
lithographed or fully or partly engraved or produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution thereof.
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The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities, of the Series designated
herein, referred to in the within-mentioned Indenture.
____________________, as Trustee
By
------------------------------------
Authorized Officer
SECTION 2.3. DENOMINATIONS; PAYMENT OF INTEREST ON FULLY REGISTERED
SECURITIES. The Securities of each Series may be issued as fully registered
Securities in denominations as shall be specified as contemplated by Section
2.1. In the absence of such provisions with respect to the Securities of any
Series, the Securities of such Series (other than any Global Securities) shall
be issued in denominations of $1,000 and any integral multiple thereof.
If the Securities of any Series shall bear interest, each Security of
such Series shall bear interest from the applicable date at the rate per annum
specified in the Certified Resolution or Supplemental Indenture with respect to
such Series of Securities. Unless otherwise specified in the Certified
Resolution or Supplemental Indenture with respect to the Securities of any
Series, interest on the Securities of such Series shall be computed on the basis
of a 360-day year of twelve 30-day months. Such interest shall be payable on the
Interest Payment Dates specified in the Certified Resolution or Supplemental
Indenture with respect to such Series of Securities. The Person in whose name
any Security is registered at the close of business on the applicable Record
Date for the Series of which such Security is a part shall be entitled to
receive the interest payable thereon on such Interest Payment Date
notwithstanding the cancellation of such Security upon any transfer or exchange
thereof subsequent to such Record Date and prior to such Interest Payment Date
unless such Security shall have been called for redemption on a Redemption Date
which is subsequent to such Record Date and prior to such Interest Payment Date
or unless the Corporation shall default in the payment of interest due on such
Interest Payment Date on any Security of such Series.
Any interest on any Security of any Series 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
registered Holder on the relevant Record Date solely by virtue of such Holder
having been such Holder; and such Defaulted Interest may be paid by the
Corporation, at its election in each case, as provided in subsection A or B
below:
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A. The Corporation may elect to make payment of any Defaulted
Interest on the Securities of any Series to the Persons in whose names
such 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 Corporation 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 (which date shall be
such as will enable the Trustee to comply with the next sentence
hereof), and at the same time the Corporation 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
subsection provided. Thereupon the Trustee shall fix a special record
date (the "Special Record Date") for the payment of such Defaulted
Interest which shall be not more than 15 nor 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 Corporation of such Special Record
Date and, in the name and at the expense of the Corporation, 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 of a Security of such Series at such Holder's 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 mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Securities of such Series are registered on such
Special Record Date and shall no longer be payable pursuant to the
following subsection B.
B. The Corporation may make payment of any Defaulted Interest
on the Securities of any Series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed and upon such notice as may be required
by such exchange, if, after notice given by the Corporation to the
Trustee of the proposed payment pursuant to this subsection, such
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.3, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry all the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Security and each such Security
shall bear interest from such date, such that neither gain nor loss in interest
shall result from such transfer, exchange or substitution.
SECTION 2.4. EXECUTION OF SECURITIES. The Securities shall be executed
manually or in facsimile, by an officer and the Secretary or an Assistant
Secretary of the Corporation
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under its corporate seal, which may be affixed thereto or printed, engraved or
otherwise reproduced thereon, by facsimile or otherwise. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
recited herein, executed by the Trustee manually by an authorized officer, shall
be entitled to the benefits of this Indenture or be valid or obligatory for any
purpose. Such certificate of authentication of the Trustee upon any Security
executed by the Corporation shall be conclusive evidence that the Security so
authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture. Typographical or other
errors or defects in the seal or facsimile signature on any Security or in the
text thereof shall not affect the validity or enforceability of such Security if
it has been duly authenticated and delivered by the Trustee.
In case any officer of the Corporation who shall have signed any of the
Securities (manually or in facsimile) shall cease to be such officer before the
Securities so signed shall have been authenticated and delivered by the Trustee,
or disposed of by the Corporation, such Securities nevertheless may be
authenticated and delivered or disposed of as though the Person who signed such
Securities had not ceased to be such officer of the Corporation. Also, any
Security may be signed on behalf of the Corporation by such Persons as on the
actual date of execution of such Security shall be the proper officers of the
Corporation, although at the date of the execution of this Indenture or on the
nominal date of such Security any such Person was not such officer.
SECTION 2.5. REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES. Except
as specifically otherwise provided herein with respect to Global Securities,
Securities of any Series may be exchanged for a like aggregate principal amount
of Securities of the same Series of other authorized denominations. Securities
to be exchanged shall be surrendered at the offices or agencies to be maintained
in accordance with the provisions of Section 4.3 and the Corporation shall
execute the Security or Securities, and the Trustee shall authenticate and
deliver in exchange therefor the Security or Securities which the Securityholder
making the exchange shall be entitled to receive.
The Corporation shall keep or cause to be kept, at one or more of the
offices or agencies to be maintained by the Corporation in accordance with the
provisions of Section 4.3 with respect to the Securities of each Series, the
Register in which, subject to such reasonable regulations as it may prescribe,
the Corporation shall provide for the registration of the Securities of such
Series and the transfer of Securities of such Series as in this Article
provided. The Register shall be in written form or in any other form capable of
being converted into written form within a reasonable time. At all reasonable
times the Register shall be open for inspection by the Trustee and any registrar
of the Securities of such Series other than the Trustee. Upon due presentment
for transfer of any Security of any Series at the offices or agencies of the
Corporation to be maintained in accordance with Section 4.3 with respect to the
Securities of such Series, the Corporation shall execute a new Security and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same Series for a like aggregate
principal amount of authorized denominations.
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<PAGE>
Notwithstanding any other provisions of this Section 2.5, unless and
until it is exchanged in whole or in part for Securities in definitive form, a
Global Security representing all or a portion of the Securities of a Series may
not be transferred except as a whole by the Depository for such Series to a
nominee of such Depository or by a nominee of such Depository to such Depository
or another nominee of such Depository or by such Depository or any such nominee
to a successor Depository for such Series or a nominee of such successor
Depository.
All Securities of any Series presented or surrendered for exchange,
transfer, redemption, conversion or payment shall, if so required by the
Corporation or any registrar of the Securities of such Series, be accompanied by
a written instrument or instruments of transfer, in form satisfactory to the
Corporation and such registrar, duly executed by the registered Holder or by
such Person's attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
The Corporation shall not be required to exchange or transfer (a) any
Securities of any Series during a period beginning at the opening of business 15
days before the day of the first publication or the mailing (if there is no
publication) of a notice of redemption of Securities of such Series and ending
at the close of business on the day of such publication or mailing, (b) any
Securities called or selected for redemption in whole or in part, except, in the
case of Securities called for redemption in part, the portion thereof not so
called for redemption in whole or in part or during a period beginning at the
opening of business on any Record Date for such Series and ending at the close
of business on the relevant Interest Payment Date therefor.
SECTION 2.6. TEMPORARY SECURITIES. Pending the preparation of
definitive Securities of any Series, the Corporation may execute and the Trustee
shall authenticate and deliver temporary Securities of such Series which are
printed, lithographed, typewritten or otherwise produced, in any denomination
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form and with such appropriate omissions, insertions,
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 authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Securities. If temporary Securities are issued, the Corporation
will cause definitive Securities to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities of such
Series shall be exchangeable for definitive Securities upon surrender of the
temporary Securities without charge to the Holder at the offices or agencies to
be maintained by the Corporation as provided in Section 4.3 with respect to the
Securities of such Series. Upon surrender for cancellation of any one or more
temporary Securities the Corporation shall execute and the Trustee shall
authenticate and deliver in exchange for such temporary Securities an equal
aggregate principal amount of definitive Securities of such Series. Until so
exchanged, the
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temporary Securities of any Series shall in all respects be entitled to the
benefits of this Indenture and interest thereon, when and as payable, shall be
paid to the registered owners thereof.
SECTION 2.7. MUTILATED, DESTROYED, LOST OR STOLEN SECURITIES. If (i)
any mutilated Security is surrendered to the Trustee, or the Corporation and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Security, and (ii) there is delivered to the Corporation and the Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Corporation or the Trustee that
such Security has been acquired by a bona fide purchaser, the Corporation shall
execute and upon its request the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of the same Series and of like tenor and principal
amount, 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 Corporation in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section 2.7, the
Corporation 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 connected therewith.
Every new Security issued pursuant to this Section 2.7 in exchange for
or in lieu of any mutilated, destroyed, lost or stolen Security shall constitute
an original additional contractual obligation of the Corporation, whether or not
the mutilated, destroyed, lost or stolen Security shall be at any time
enforceable by anyone, and shall be entitled to all the security and benefits of
this Indenture equally and ratably with all other Outstanding Securities of such
Series.
The provisions of this Section 2.7 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 2.8. CANCELLATION AND DESTRUCTION OF SURRENDERED SECURITIES.
All Securities surrendered for payment, redemption, transfer, conversion or
exchange shall, if surrendered to the Corporation, the Trustee or any agent of
the Corporation or of the Trustee, be delivered to the Trustee, and the same,
together with Securities surrendered to the Trustee for cancellation, shall be
canceled by it and thereafter disposed of by it as directed by the Corporation,
and no Securities shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall destroy canceled
Securities and deliver a certificate of destruction thereof to the Corporation
unless by an Officer's Certificate of the Corporation, the Corporation shall
direct that canceled Securities be returned to it. If the Corporation shall
purchase or otherwise acquire any of the Securities, however, such purchase or
acquisition shall not operate as a payment,
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redemption or satisfaction of the indebtedness represented by such Securities
unless and until the Corporation, at its option, shall deliver or surrender the
same to the Trustee for cancellation.
SECTION 2.9. SECURITIES IN GLOBAL FORM; DEPOSITORIES.
(a) Each Global Security shall: (i) represent and be denominated in an
aggregate amount equal to the aggregate principal amount of the Securities of
the Series to be represented by such Global Security, (ii) be registered in the
name of either the Depository for such Global Security or the nominee of such
Depository, (iii) be delivered by the Trustee to such Depository or pursuant to
such Depository's written instruction and (iv) bear a legend substantially to
the following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive form, this Global Security may not be transferred
except as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the Depository
or by the Depository or any nominee to a successor Depository or a nominee of
any successor Depository." The notation of the record owner's interest in such
Global Security upon the original issuance thereof shall be deemed to be
delivery in connection with the original issuance of each beneficial owner's
interest in such Global Security. Without limiting the foregoing, the
Corporation and the Trustee shall have no responsibility, obligation or
liability with respect to: (x) the maintenance, review or accuracy of the
records of the Depository or of any of its participating organizations with
respect to any ownership interest in or payments with respect to such Global
Security, (y) any communication with or delivery of any notice (including
notices of redemption) with respect to the Series of Securities represented by
the Global Security to any Person having any ownership interest in such Global
Security or to any of the Depository's participating organizations or (z) any
payment made on account of any beneficial ownership interest in such Global
Security.
(b) If any Security of a Series is issuable in the form of one or more
Global Security or Securities, each such Global Security may provide that it
shall represent the aggregate amount of Outstanding Securities of such Series
from time to time endorsed thereon and may also provide that the aggregate
amount of Outstanding Securities of such Series represented thereby may from
time to time be reduced to reflect exchanges. Any endorsement of a Global
Security to reflect the amount of Outstanding Securities of a Series represented
thereby shall be made by the Trustee and in such manner as shall be specified on
such Global Security. Any instructions by the Corporation with respect to a
Global Security, after its initial issuance, shall be in writing but need not
comply with Section 13.3 of this Indenture.
(c) Each Depository designated pursuant to the provisions of Section
2.1 of this Indenture for a Global Security must, at the time of its designation
and at all times while it serves as a depositary, be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and any other
applicable statute or regulation. If at any time the Depository for the
Securities of a Series notifies the Corporation that it is unwilling or unable
to continue as Depository for the Securities of such Series or if at any time
the
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Depository for the Securities of such Series shall no longer be eligible under
this Section 2.9, the Corporation shall appoint a successor Depository with
respect to the Securities of such Series. If a successor Depository for the
Securities of such Series is not appointed by the Corporation within 90 days
after the Corporation receives such notice or learns of such ineligibility, the
Corporation shall execute, and the Corporation shall direct the Trustee to
authenticate and deliver, definitive Securities of such Series in authorized
denominations in exchange for the Global Security or Securities. Upon receipt of
such direction, the Trustee shall thereupon authenticate and deliver the
definitive Securities of such Series in the same aggregate principal amount as
the Global Security or Securities representing such Series in exchange for such
Global Security or Securities, in accordance with the provisions of subsection
(e) of this Section 2.9, without any further corporate action by the
Corporation.
(d) The Corporation may at any time and in its sole discretion
determine that the Securities of any Series issued in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities. In such event, the Corporation will execute and upon receipt of a
written order from the Corporation, the Trustee shall thereupon authenticate and
deliver Securities of such Series in definitive form and in authorized
denominations in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Series in exchange for such
Global Security or Securities, in accordance with the provisions of subsection
(e) of this Section 2.9 without any further corporate action by the Corporation.
(e) Upon any exchange hereunder of the Global Security or Securities
for Securities in definitive form, such Global Security or Securities shall be
canceled by the Trustee. Securities issued hereunder in exchange for the Global
Security or Securities shall be registered in such names and in such authorized
denominations as the Depository for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such definitive Securities in
exchange for the Global Security or Securities to the persons in whose name such
definitive Securities have been registered in accordance with the directions of
the Depository.
ARTICLE 3
REDEMPTION OF SECURITIES
SECTION 3.1. REDEMPTION OF SECURITIES. Securities of any Series may be
made subject to redemption prior to their Stated Maturity, as a whole or in
part, at such time or times, upon payment of the principal amount thereof plus
such premium or premiums, if any, as shall be set forth in the resolution of the
Board of Directors or the Supplemental Indenture relating to such Series.
SECTION 3.2. NOTICE OF REDEMPTION. In all cases other than redemption
at the option of the Holders of Securities, notice of redemption shall be
mailed, not less than 30 nor more than 60 days prior to the Redemption Date, to
each Person in whose name any
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Security called for redemption is registered on the Register as of the date of
such notice, but neither a failure to give notice by mail nor any defect in any
notice so mailed shall affect the validity of the proceedings for such
redemption. Each notice of redemption shall state the Redemption Date, the
Redemption Price, the place of redemption, the principal amount and, if less
than all, the distinctive numbers of the Securities to be redeemed and shall
also state that the interest on the Securities in such notice designated for
redemption shall cease to accrue from and after such Redemption Date.
Notice of redemption of Securities may be given by the Corporation or,
at the option of the Corporation, by the Trustee on behalf of the Corporation.
Upon receipt of any direction to give notice, the Trustee shall immediately give
such notice. The Trustee may rely upon such direction that all conditions
precedent to the giving of such direction have been complied with or done.
SECTION 3.3. SELECTION OF SECURITIES FOR REDEMPTION. Whenever provision
is made for the redemption of any Series of Securities or portion thereof and
less than all of the Securities of such Series or portion thereof are called for
redemption, the Trustee shall select the Securities to be redeemed, from the
Outstanding Securities of such Series or portion thereof not previously called
for redemption, in any manner which the Trustee deems fair and appropriate. For
the purpose of any such selection, the Trustee shall assign a separate number
for each $1,000 principal amount of each Security of a denomination of more than
$1,000 except that if the Securities of any Series are denominated in a currency
other than United States Dollars, the Trustee shall assign a separate number for
each principal amount equal to the minimum denomination of each Security of such
Series of a denomination greater than such minimum denomination.
SECTION 3.4. PARTIAL REDEMPTION OF REGISTERED SECURITY. Upon surrender
of any registered Security (including any Global Security) to be redeemed in
part only, the Corporation shall execute and the Trustee shall authenticate and
deliver to the registered owner thereof, without service charge, a new Security
or Securities (or in the case of a Global Security, a new Global Security) of
the same Series and maturity and of authorized denomination or denominations as
requested by such registered owners, in aggregate principal amount equal to and
in exchange for the unredeemed portion of the principal of the Security so
surrendered.
SECTION 3.5. EFFECT OF REDEMPTION. If notice of redemption shall have
been duly given as provided in Section 3.2, the Securities or portions of
Securities specified in such notice shall become due and payable on the
Redemption Date and at the place or places stated in such notice at the
Redemption Price specified in such notice, and on and after such Redemption Date
(unless the Corporation shall default in the payment of such Securities at the
applicable Redemption Price) such Securities or portions of Securities shall
cease to bear interest, and such Securities shall cease from and after the
Redemption Date to be entitled to any benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities except
the right to receive the Redemption Price thereof and any unpaid interest
accrued to the Redemption Date. Upon presentation and surrender of such
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Securities at said place of payment in said notice specified, the said
Securities or portions thereof shall be paid and redeemed by the Corporation at
the applicable Redemption Price, together with any interest accrued to the
Redemption Date; PROVIDED, HOWEVER, that any regular payment of interest
becoming due on any Securities on the Redemption Date shall be payable to the
registered owners of such Securities as of the Relevant Record Date as provided
in Article Two hereof. Upon presentation of any Security which is redeemed in
part only, the Corporation shall execute a new Security and the Trustee shall
authenticate and deliver at the expense of the Corporation a new Security of the
same Series of authorized denomination in principal amount equal to the
unredeemed portion of the Security so presented.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal thereof shall, to the extent
permitted by law, bear interest from the date fixed for redemption at the rate
borne by the Security, or, in the case of a Security which does not bear
interest, at the rate of interest set forth therefor in the Security, in either
case until paid.
ARTICLE 4
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 4.1. PAYMENT OF PRINCIPAL OF AND INTEREST ON SECURITIES. The
Corporation covenants that it will duly and punctually pay or cause to be paid
the principal of and any interest and premium on each of the Securities in
accordance with the terms of the Securities and this Indenture. Except with
respect to any Global Securities, if the Securities of any Series bear interest,
each installment of interest on the Securities of such Series may, at the option
of the Corporation, be paid by mailing a check or checks for such interest
payable to the Person entitled thereto pursuant to Section 2.3 to the address of
such Person as it appears on the Register of the Securities of such Series on
the applicable Record Date for such interest payment.
SECTION 4.2. CORPORATE EXISTENCE OF THE CORPORATION; CONSOLIDATION,
MERGER, SALE OR TRANSFER. The Corporation covenants that so long as any of the
Securities are Outstanding, it will maintain its existence, will not dissolve,
sell or otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another entity or permit one or more other
entities to consolidate with or merge into it; provided that the Corporation
may, without violating the covenants in this Section 4.2 contained, consolidate
with or merge into another entity or permit one or more other entities to
consolidate with or merge into it, or sell or otherwise transfer to another
entity all or substantially all of its assets as an entirety and thereafter
dissolve, if the surviving, resulting or transferee entity, as the case may be,
(i) shall be organized and existing under the laws of one of the States of the
United States of America, (ii) assumes, if such entity is not the Corporation,
all of the obligations of the Corporation hereunder and (iii) is not, after such
transaction, otherwise in default under any provisions hereof.
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SECTION 4.3. MAINTENANCE OF OFFICES OR AGENCIES FOR TRANSFER,
REGISTRATION, EXCHANGE AND PAYMENT OF SECURITIES. So long as any of the
Securities shall remain Outstanding, the Corporation covenants that it will
maintain an office or agency in either The City of New York, State of New York,
or the City and County of San Francisco, State of California, where the
Securities may be presented for registration, exchange and transfer as in this
Indenture provided, and where notices and demands to or upon the Corporation in
respect of the Securities or of this Indenture may be served, and where the
Securities may be presented for payment. In case the Corporation shall designate
and maintain some office or agency other than a previously designated office or
agency, it shall give the Trustee notice thereof. In case the Corporation shall
fail to maintain any such office or agency or shall fail to give such notice of
the location or of any change in the location thereof to the Trustee,
presentations and demands may be made and notices may be served at the principal
office of the Trustee.
In addition to such office or agency, the Corporation may from time to
time constitute and appoint one or more other offices or agencies for such
purposes with respect to Securities of any Series, and one or more paying agents
for the payment of Securities of any Series, in such cities or in one or more
other cities, and may from time to time rescind such appointments, as the
Corporation may deem desirable or expedient, and as to which the Corporation has
notified the Trustee.
SECTION 4.4. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE.
The Corporation, whenever necessary to avoid or fill a vacancy in the office of
Trustee, covenants that it will appoint, in the manner provided in Section 7.10,
a Trustee, so that there shall at all times be a Trustee with respect to the
Outstanding Securities.
SECTION 4.5. DUTIES OF PAYING AGENT.
(a) If the Corporation shall appoint a Paying Agent other than the
Trustee with respect to Securities of any Series, it will cause such Paying
Agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 4.5 and
Section 11.5,
(1) that it will hold all sums held by it as such agent for
the payment of the principal of or interest, if any, on the Securities
of such Series (whether such sums have been paid to it by the
Corporation or by any other obligor on the Securities of such Series)
in trust for the benefit of the Holders of the Securities entitled to
such principal or interest and will notify the Trustee of the receipt
of sums to be so held,
(2) that it will give the Trustee notice of any failure by the
Corporation (or by any other obligor on the Securities of such Series)
to make any payment of the principal of or interest on the Securities
of such Series when the same shall be due and payable, and
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(3) that it will at any time during the continuance of any
Event of Default, upon the written request of the Trustee, deliver to
the Trustee all sums so held in trust by it.
(b) Whenever the Corporation shall have one or more Paying Agents with
respect to the Securities of any Series, it will, prior to each due date of the
principal of or any interest on the Securities of such Series, deposit with a
Paying Agent of such Series a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Holders of
Securities entitled to such principal or interest, and (unless such Paying Agent
is the Trustee) the Corporation will promptly notify the Trustee of its action
or failure so to act.
(c) If the Corporation shall act as its own Paying Agent with respect
to the Securities of any Series, it will, on or before each Stated Maturity of
the principal of or any interest on the Securities of such Series, set aside,
segregate and hold in trust for the benefit of the Holders of the Securities of
such Series, a sum sufficient to pay such principal and any interest so becoming
due and will notify the Trustee of such action, or any failure by it or any
other obligor on the Securities of such Series to take such action and will at
any time during the continuance of any Event of Default, upon the written
request of the Trustee, deliver to the Trustee all sums so held in trust by it.
(d) Anything in this Section 4.5 to the contrary notwithstanding, the
Corporation may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture with respect to one or more or all Series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for such Series by it, or any Paying Agent
hereunder, as required by this Section 4.5, and such sums are to be held by the
Trustee upon the trust herein contained.
SECTION 4.6. NOTICE OF DEFAULT. The Corporation covenants that, as soon
as is practicable, the Corporation will furnish the Trustee notice of any event
which is an Event of Default or which with the giving of notice or the passage
of time or both would constitute an Event of Default which has occurred and is
continuing on the date of such notice, which notice shall set forth the nature
of such event and the action which the Corporation proposes to take with respect
thereto.
ARTICLE 5
SECURITYHOLDERS' LISTS AND REPORTS
BY THE CORPORATION AND THE TRUSTEE
SECTION 5.1. CORPORATION TO FURNISH TRUSTEE INFORMATION AS TO THE NAMES
AND ADDRESSES OF SECURITYHOLDERS. The Corporation will furnish or cause to be
furnished to the Trustee, not less than 45 days nor more than 60 days after each
(month and day) specified as an Interest Payment Date for the Securities of the
first Series issued under this Indenture
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(whether or not any Securities of that Series are then Outstanding), but in no
event less frequently than semiannually, and at such other times as the Trustee
may request in writing, within 30 days after receipt by the Corporation of any
such request, a list in such form as the Trustee may reasonably require
containing all the information in the possession or control of the Corporation,
or any of its Paying Agents other than the Trustee, as to the names and
addresses of the Holders of Securities, obtained since the date as of which the
next previous list, if any, was furnished, EXCLUDING from any such list the
names and addresses received by the Trustee in its capacity as registrar (if so
acting). Any such list may be dated as of a date not more than 15 days prior to
the time such information is furnished and need not include information received
after such date.
SECTION 5.2. PRESERVATION OF INFORMATION; COMMUNICATION TO
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Securities of each Series
(1) contained in the most recent list furnished to it as provided in Section
5.1, (2) received by the Trustee in the capacity of Paying Agent or registrar
(if so acting) and (3) filed with the Trustee within the two preceding years as
provided for in Section 5.4(c). The Trustee may destroy any list furnished to it
as provided in Section 5.1 upon receipt of a new list so furnished.
(b) If three or more Holders of Securities (hereinafter referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders of
Securities of any Series or with Holders of all Securities with respect to their
rights under this Indenture or under such Securities, and is accompanied by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Trustee shall, within five Business Days after the receipt
of such application, at its election, either:
(1) afford such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection
(a) of this Section 5.2 or
(2) inform such applicants as to the approximate number of Holders
of Securities of such Series or all Securities, as the case may be,
whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a)
of this Section 5.2, and as to the approximate cost of mailing to such
Securityholders the form of proxy or other communications, if any,
specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each of the Holders of Securities of such Series, or all Securities, as
the case may be, whose name and address
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appear in the information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 5.2, a copy of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Securities of such Series or all Securities, as the case may be, or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Securityholders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Each and every Holder of the Securities, by receiving and holding
the same, agrees with the Corporation and the Trustee that neither the
Corporation nor the Trustee nor any Paying Agent nor any registrar shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders of Securities in accordance with the provisions of
subsection (b) of this Section 5.2, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
SECTION 5.3. REPORTS BY CORPORATION.
(a) The Corporation covenants and agrees to file with the Trustee
within 15 days after the Corporation is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Corporation may be required to file with the Commission pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934; or, if the Corporation
is not required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Corporation covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and
reports with respect to
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compliance by the Corporation with the conditions and covenants provided for in
this Indenture as may be required from time to time by such rules and
regulations.
(c) The Corporation covenants and agrees to transmit to the Holders of
Securities within 30 days after the filing thereof with the Trustee, in the
manner and to the extent provided in subsection (c) of Section 5.4 with respect
to reports pursuant to subsection (a) of said Section 5.4, such summaries of any
information, documents and reports required to be filed by the Corporation
pursuant to subsections (a) and (b) of this Section 5.3 as may be required by
rules and regulations prescribed from time to time by the Commission.
(d) The Corporation and any other obligor on the Securities each
covenant and agree to furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Corporation's
compliance with all conditions and covenants of this Indenture (which compliance
shall be determined without regard to any period of grace or requirement of
notice as provided in this Indenture). Such certificates need not comply with
Section 13.3 of this Indenture.
SECTION 5.4. REPORTS BY TRUSTEE.
(a) On or before the first September 15th following the date of
execution of this Indenture, and on or before September 15 in every year
thereafter, if and so long as any Securities are Outstanding hereunder, the
Trustee shall transmit to the Securityholders as hereinafter in this Section 5.4
provided, a brief report dated as of the August 15 immediately preceding such
September 15 with respect to any of the following events which may have occurred
within the 12 months preceding such August 15 (but if no such event has occurred
within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.9, and its
qualifications under Section 7.8;
(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 7.8(d);
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may claim a
lien or charge, prior to that of the Securities of any Series, on any
property or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to state such advances if
such advances so remaining unpaid aggregate not more than one-half of
one percent of the principal amount of the Securities of such Series
Outstanding on the date of such report;
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(4) the amount, interest rate and maturity date of all other
indebtedness owing by the Corporation (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as
collateral security therefor, except indebtedness based upon a creditor
relationship arising in any manner described in paragraph (2), (3), (4)
or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically in
the possession of the Trustee (as such) on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported and
which in its opinion materially affects the Securities, except action
in respect of a default, notice of which has been or is to be withheld
by it in accordance with the provisions of Section 6.10.
(b) The Trustee shall transmit to the Securityholders, as hereinafter
provided, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
5.4 (or if no such report has yet been so transmitted, since the date of
execution of this Indenture), for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Securities of any Series on property
or funds held or collected by it as Trustee, and which it has not previously
reported pursuant to this subsection, except that the Trustee shall not be
required (but may elect) to report such advances if such advances remaining
unpaid at any time aggregate ten percent or less of the principal amount of
Securities of such Series Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) Reports pursuant to this Section 5.4 shall be transmitted by mail
(i) to all Holders of Securities of any Series, as the names and addresses of
such Holders shall appear upon the Register of the Securities of such Series,
(ii) to such Holders of Securities as have, within the two years preceding such
transmission, filed their names and addresses with the Trustee for that purpose
and (iii) except in the case of reports pursuant to subsection (b) of this
Section 5.4 to each Holder whose name and address are preserved at the time by
the Trustee as provided in Section 5.2(a) hereof.
(d) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with each stock exchange upon which
the Securities of any Series are listed and also with the Commission. The
Corporation will notify the Trustee when and as the Securities of any Series
become listed on any stock exchange.
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ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT; ACCELERATION, WAIVER OF DEFAULT AND
RESTORATION OF POSITION AND RIGHTS. The term "Event of Default" whenever used
herein with respect to any particular Series of Securities shall mean any one of
the following events:
(a) default in the payment of any installment of interest on any
Security of such Series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days, or
(b) default in the payment of all or any part of the principal of
or any premium on any Security of such Series as and when the same
shall become due and payable whether at maturity, by proceedings for
redemption, by declaration or otherwise, or
(c) default in the satisfaction of any sinking fund payment
obligation relating to such Series of Securities, when and as such
obligation shall become due and payable, or
(d) failure on the part of the Corporation to observe or perform
in any material respect any other of the covenants or agreements on its
part in the Securities or in this Indenture (including any Supplemental
Indenture or pursuant to any Certified Resolution, as contemplated by
Section 2.1) specifically contained for the benefit of the Holders of
the Securities of such Series, for a period of 90 days after there has
been given, by registered or certified mail, to the Corporation by the
Trustee, or to the Corporation and the Trustee by the Holders of not
less than 25% in principal amount of the Securities of such Series and
all other Series so benefitted (all Series voting as one class) at the
time Outstanding under this Indenture a written notice specifying such
failure and stating that such is a "Notice of Default" hereunder, or
(e) the entry by a court having jurisdiction in the premises of a
decree or order for relief in respect of the Corporation in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Corporation or for any substantial part of its
property, or ordering the winding up or liquidation of its affairs, if
such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days, or
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(f) the commencement by the Corporation of a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the Corporation's consent to the entry of an
order for relief in any involuntary case under any such law, or its
consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Corporation or for any substantial part of its
property, or the making by the Corporation of any general assignment
for the benefit of creditors, or its failure generally to pay its debts
as they become due or the taking by the Corporation of any corporate
action in furtherance of any of the foregoing.
If an Event of Default shall have occurred and be continuing with
respect to any one or more Series of Outstanding Securities, then and in each
and every such case, unless the principal amount of all the Securities of each
Series as to which there is an Event of Default shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in principal
amount of the Securities of such Series then Outstanding hereunder (each such
Series voting as a separate class) by notice in writing to the Corporation (and
to the Trustee if given by Securityholders) may declare the principal amount
(or, if the Securities of any such Series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such Series) of all the Securities of such Series, together with any
accrued interest, to be due and payable immediately, and upon any such
declaration the same shall be immediately due and payable, anything in this
Indenture or in the Securities of such Series contained to the contrary
notwithstanding. The foregoing provisions, however, are subject to the condition
that if, at any time after the principal amount of the Securities of any one or
more Series (or of all the Securities, as the case may be) shall have been so
declared due and payable, and before any judgment or decree for the payment of
moneys due shall have been obtained or entered as hereinafter provided, the
Corporation shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all the Securities of such Series (or
upon all the Securities, as the case may be) and the principal of any and all
Securities of such Series (or of any and all the Securities, as the case may be)
which shall have become due otherwise than by declaration (with interest on
overdue installments of interest to the extent permitted by law and on such
principal at the rate or rates of interest borne by, or prescribed therefor in
the Securities of such Series to the date of such payment or deposit) and the
amounts payable to the Trustee under Section 7.6 and any and all defaults under
the Indenture with respect to Securities of such Series (or all Securities, as
the case may be), other than the non-payment of principal of and any accrued
interest on Securities of such Series (or any Securities, as the case may be)
which shall have become due by declaration shall have been cured, remedied or
waived as provided in Section 6.9 -- then and in every such case the Holders of
a majority in principal amount of the Securities of such Series (or of all the
Securities, as the case may be) then Outstanding (such Series or all Series
voting as one class if more than one Series are so entitled), by written notice
to the Corporation and to the Trustee, may rescind and annul such declaration
and its consequences; but no such rescission and annulment shall extend to or
shall affect any subsequent default, or shall impair any right consequent
thereon.
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In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Corporation, the Trustee and the Holders of the Securities of such Series (or of
all the Securities, as the case may be) shall be restored to their respective
former positions and rights hereunder, and all rights, remedies and powers of
the Corporation and the Trustee and the Holders of the Securities of such Series
(or of all the Securities, as the case may be) shall continue as though no such
proceedings had been taken.
SECTION 6.2. COVENANT OF CORPORATION TO PAY TO TRUSTEE WHOLE AMOUNT DUE
ON SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL. The Corporation
covenants that:
(1) in case default shall be made in the payment of any
installment of interest on any of the Securities of any Series as and
when the same shall become due and payable, and such default shall have
continued for a period of 30 days or
(2) in case default shall be made in the payment of all or any
part of the principal of any of the Securities of any Series when the
same shall have become due and payable, whether at the Stated Maturity
of such Series or by any call for redemption or by declaration of
acceleration or otherwise or
(3) in case default shall be made in the satisfaction of any
sinking fund obligation when and as such obligation becomes due and
payable,
upon demand of the Trustee, the Corporation will pay to the Trustee, for the
benefit of the Holders of the Securities of such Series, the whole amount that
then shall have become due and payable on all such Securities of such Series for
principal (and any premium) and interest and for any overdue sinking fund
payment together with interest upon the overdue principal and installments of
interest (to the extent permitted by law) at the rate or rates of interest borne
by, or prescribed therefor in, the Securities of such Series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expense of collection, including a reasonable compensation to the Trustee, its
agents and counsel, and any expenses or liabilities incurred, and all advances
made, by the Trustee hereunder other than through its negligence or bad faith.
In case the Corporation shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as Trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Corporation or any other obligor upon
such Securities, and collect in the manner provided by law out of
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the property of the Corporation or any other obligor upon such Securities
wherever situated the moneys adjudged or decreed to be payable.
If an Event of Default with respect to Securities of any Series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such Series 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.
SECTION 6.3. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other similar judicial proceeding
relative to the Corporation or any other obligor upon the Securities or the
property of the Corporation or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any Series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Corporation for the payment of overdue principal or interest) shall be
entitled and empowered, to the fullest extent permitted by law, by intervention
in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Securities (or, if the Securities are Original Issue Discount
Securities, such portion of the principal amount as may be specified in
the terms of such Securities) and to file such other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) 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 7.6.
Nothing herein contained 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.
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SECTION 6.4. 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 to the fullest extent
permitted by law 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, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 6.5. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
collected by the Trustee pursuant to Section 6.3 shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Securities in respect of which
moneys have been collected, and stamping thereon the payment, if only partially
paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due to the Trustee under
Section 7.6;
SECOND: In case the principal of the Outstanding Securities in
respect of which moneys have been collected shall not have become due
and be unpaid, to the payment of any interest on such Securities, in
the order of the maturity of the installments of such interest, with
interest upon the overdue installments of interest (so far as permitted
by law and to the extent that such interest has been collected by the
Trustee at the rate or rates of interest borne by such Securities or
prescribed therefor therein) such payments to be made ratably to the
Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Securities in
respect of which such moneys have been collected shall have become due,
by declaration or otherwise, to the payment of the whole amount then
owing and unpaid upon such Securities for principal and interest, if
any, with interest on the overdue principal and any installments of
interest (so far as permitted by law and to the extent that such
interest has been collected by the Trustee) at the rate or rates of
interest borne by, or prescribed therefor in, such Securities; and in
case such moneys shall be insufficient to pay in full the whole amount
so due and unpaid upon such Securities, then to the payment of such
principal and interest, without preference or priority of principal
over interest, or of interest over principal, or of any installment of
interest over any other installment of interest, or of any Security
over any other Security, ratably to the aggregate of such principal and
accrued and unpaid interest; and
FOURTH: To the payment of the remainder, with appropriate interest
to the Corporation or its successors or assigns, or to whosoever may be
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lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
SECTION 6.6. LIMITATION ON SUITS BY HOLDERS OF SECURITIES. No Holder of
any Security of any Series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Indenture or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
such Holder previously shall have given to the Trustee written notice of a
continuing Event of Default, as hereinbefore provided, and unless also the
Holders of not less than 25% in principal amount of the Securities of such
Series then Outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby (including the reasonable fees of counsel for the Trustee), and the
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to this Section 6.6; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security with every other taker and Holder and the Trustee, that no one or more
Holders of Securities shall have any right in any manner whatever by virtue or
by availing of any provision of this Indenture to affect, disturb or prejudice
the rights of the Holders of any other of such Securities, or to obtain or seek
to obtain priority over or preference to any other such Holder, or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all Holders of Securities.For the
protection and enforcement of the provisions of this Section 6.6, each and every
Holder and the Trustee shall be entitled to such relief as can be given either
at law or in equity.
Notwithstanding any other provisions in this Indenture, the right of
any Holder of any Security to receive payment of the principal of and interest
on such Security on or after the respective due dates expressed in such Security
(or, in the case of redemption, on or after the date fixed for redemption), or
to institute suit for the enforcement of any such payment on or after such
respective dates shall not be impaired or affected without the consent of such
Holder.
SECTION 6.7. RIGHTS AND REMEDIES CUMULATIVE. All powers and remedies
given by this Article Six to the Trustee or to the Holders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the Holders, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Indenture, and no delay or
omission of the Trustee or of any Holder of any of the Securities to exercise
any right or power accruing upon any default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 6.6, every power and remedy given by this Article Six or
by law to the Trustee or to the Holders may be
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exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Holders. 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 6.8. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Securities 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.
Subject to the provisions of Section 6.6, every right and remedy given by this
Article Six 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 6.9. CONTROL BY HOLDERS; WAIVER OF PAST DEFAULTS. The Holders
of a majority in principal amount of the Securities of all Series (voting as one
class) at the time Outstanding (determined as provided in Section 8.4) 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, HOWEVER, that, subject to Section 7.1, the
Trustee shall have the right to decline to follow any such direction if the
Trustee in reliance upon an Opinion of Counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Holders not parties to such direction, and provided
further that nothing in this Indenture shall impair the right of the Trustee to
take any action deemed proper by the Trustee and which is not inconsistent with
such direction by the Holders.
The Corporation may set a special record date for purposes of
determining the identity of the Holders of Securities entitled to vote or
consent to any action by vote or consent authorized or permitted by this Section
6.9. Such record date shall be the later of 15 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee pursuant to Section 5.1 of this Indenture prior to such
solicitation.
The Holders of not less than a majority in principal amount of the
Securities of any Series at the time Outstanding (determined as provided in
Section 8.4) may on behalf of the Holders of all the Securities of such Series
waive any past Event of Default with respect to such Series and its consequences
(subject to Section 6.2), except a continuing Event of Default specified in
Section 6.1(a), (b) or (c), or in respect of a covenant or provision of this
Indenture which under Article Ten cannot be modified or amended without the
consent of the Holder of each Security so affected. Upon any such waiver, the
Corporation, the Trustee and the Holders of the Securities of such Series shall
be restored to their former positions and rights hereunder, respectively, and
such Event of Default shall be deemed to have been cured and not continuing for
every purpose of this Indenture; but no such waiver
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shall extend to any subsequent or other Event of Default or impair any right
consequent thereon.
SECTION 6.10. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
Series, give to the Holders of the Securities of such Series in the manner and
to the extent provided in subsection (c) of Section 5.4 with respect to reports
pursuant to subsection (a) of said Section 5.4, notice of such default known to
the Trustee unless such default shall have been cured, remedied or waived before
the giving of such notice (the term "default" for the purposes of this Section
6.10 being hereby defined to be the events specified in Section 6.1 and any
additional events specified in the terms of any Series of Securities pursuant to
Section 2.1 not including any periods of grace provided for therein, and
irrespective of the giving of written notice specified in clause (d) of Section
6.1 and in any such terms); provided, that except in the case of default in the
payment of the principal of or interest on any of the Securities of such Series,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of the Securities
of such Series.
SECTION 6.11. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN
SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this Indenture
agree, and each Holder of any Security by such Holder's acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, 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 or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 6.11 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder of
Securities of any Series, or group of such Holders, holding in the aggregate
more than ten percent in principal amount of the Securities of such Series
Outstanding, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of or any interest or premium on any Security, on or
after the due date expressed in such Security for such interest (or in the case
of any redemption, on or after the Redemption Date).
ARTICLE 7
CONCERNING THE TRUSTEE
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE. The
Trustee, prior to the occurrence of an Event of Default and after the curing,
remedying or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only
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such duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured, remedied or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his or her own
affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, PROVIDED, HOWEVER, that:
(a) prior to the occurrence of an Event of Default and after
the curing, remedying or waving of all Events of Default which may have
occurred:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) 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 Securities pursuant to Section 6.9 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of
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any of its duties hereunder or in the exercise of any of its rights or powers,
if there is reasonable ground for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 7.2. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in
Section 7.1:
(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, consent, order, approval,
bond, debenture, note 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, direction, order or demand of the Corporation
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof shall be herein
specifically prescribed); and any resolution of the Board of may be
evidenced to the Trustee by a Certified Resolution,
(c) 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 accordance
with such written advice or Opinion of Counsel,
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders, pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby,
(e) The Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture,
(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, consent,
order, approval, bond, debenture, note or other paper or document,
unless requested in writing so to do by the Holders of Securities
pursuant to Section 6.9; provided, however, that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee
may require
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reasonable indemnity against such costs, expenses or liabilities as a
condition to such proceeding; and provided further, that nothing in
this subsection (f) shall require the Trustee to give the
Securityholders any notice other than that required by Section 6.10.
The reasonable expense of every such examination shall be paid by the
Corporation or, if paid by the Trustee, shall be reimbursed by the
Corporation upon demand,
(g) 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 and
(h) The Trustee shall be under no responsibility for the
approval by it in good faith of any expert for any of the purposes
expressed in this Indenture.
SECTION 7.3. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR APPLICATION OF
PROCEEDS. The recitals contained herein and in the Securities (other than the
certificate of authentication on the Securities) shall be taken as the
statements of the Corporation, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Corporation of any of the
Securities or of the proceeds thereof.
SECTION 7.4. TRUSTEE MAY OWN SECURITIES. The Trustee, any Paying Agent,
registrar or any agent of the Corporation or of the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not Trustee, Paying Agent, registrar or
such other agent.
SECTION 7.5. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Moneys
held by the Trustee in trust need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Corporation.
SECTION 7.6. TRUSTEE ENTITLED TO COMPENSATION, REIMBURSEMENT AND
INDEMNITY. The Corporation agrees to pay to the Trustee from time to time
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of any express trust), and the
Corporation will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in connection with the acceptance or administration of its trust under this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Corporation also agrees to indemnify the Trustee
for, and to hold it harmless against, any loss, liability or expense
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incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim of liability in the premises. The obligations of the Corporation under
this Section to compensate the Trustee, to pay or reimburse the Trustee for
expenses, disbursements and advances and to indemnify and hold harmless the
Trustee shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness shall
be secured by a lien prior to that of 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 or redemption premium on particular
Securities.
SECTION 7.7. RIGHT OF TRUSTEE TO RELY ON OFFICER'S CERTIFICATE WHERE NO
OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided in Section
7.1, whenever in the administration of the provisions of this Indenture the
Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officer's
Certificate of the Corporation delivered to the Trustee, and such Officer's
Certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of this Indenture upon the faith thereof.
SECTION 7.8. DISQUALIFICATION; CONFLICTING INTEREST.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 7.8, it shall, within 90 days after ascertaining that it
has such conflicting interest, and if the Event of Default to which such
conflicting interest relates has not been cured or duly waived or otherwise
eliminated before the end of such 90-day period, the Trustee shall either
eliminate such conflicting interest or, except as otherwise provided in this
Section 7.8, resign in the manner and with the effect specified in Section 7.10,
such resignation to become effective upon the appointment of a successor trustee
and such successor's acceptance of such appointment, and the Corporation shall
take prompt steps to appoint a successor in accordance with Section 7.10.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section 7.8, the Trustee shall, within ten
days after the expiration of such 90-day period, transmit notice of such failure
to the Securityholders in the manner and to the extent provided in subsection
(c) of Section 5.4 with respect to reports pursuant to subsection (a) of said
Section 5.4.
(c) Subject to the provisions of Section 6.11 of this Indenture, unless
the Trustee's duty to resign is stayed as provided in subsection (f) of this
Section 7.8, any Holder who has been a BONA FIDE Holder of Securities for at
least six months may, on such Holder's behalf and on behalf of all other Holders
similarly situated, petition any court of
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competent jurisdiction for the removal of such Trustee and the appointment of a
successor, if such Trustee fails after written request thereof by such Holder to
comply with the provisions of subsection (a) of this Section 7.8.
(d) For the purposes of this Section 7.8 the Trustee shall be deemed to
have a conflicting interest with respect to the Securities of any Series if an
Event of Default (exclusive of any period of grace or requirement of notice) has
occurred with respect to Securities of such Series and:
(1) the Trustee is trustee under another indenture under which
any other securities, or certificates of interest or participation in
any other securities, of the Corporation or any other obligor on the
Securities are outstanding or is trustee for more than one outstanding
series of securities, as hereinafter defined, under a single indenture
of the Corporation or any other obligor on the Securities, unless such
other indenture is a collateral trust indenture under which the only
collateral consists of Securities issued under this Indenture, PROVIDED
THAT there shall be excluded from the operation of this paragraph, this
Indenture with respect to the Securities of any other Series
Outstanding, and any other indenture or indentures under which other
securities, or certificates of interest or participation in other
securities, of the Corporation or any other obligor on the Securities
are outstanding, if (A) this Indenture is and such other indenture or
indentures (and all series of securities issued thereunder) are wholly
unsecured and rank equally, and such other indenture or indentures (and
such series) are hereafter qualified under the Trust Indenture Act of
1939, unless the Commission shall have found and declared by order
pursuant to subsection (b) of Section 305 or subsection (c) of Section
307 of the Trust Indenture Act of 1939, that differences exist between
the provisions of this Indenture with respect to Securities of such
Series and one or more other Series, or the provisions of this
Indenture and the provisions of such other indenture or indentures (or
such series), which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such
under this Indenture with respect to Securities of such Series and such
other Series, or under this Indenture and such other indenture or
indentures, or (B) the Corporation shall have sustained the burden of
proving, on application to the Commission and after opportunity for
hearing thereon, that the trusteeship under this Indenture with respect
to Securities of such Series and such other Series, or under this
Indenture and such other indenture, is not so likely to involve a
material conflict of interest as to make it necessary in the public
interest or for the protection of investors to disqualify the Trustee
from acting as such under this Indenture with respect to Securities of
such Series and such other Series, or under this Indenture and one of
such indentures,
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(2) the Trustee or any of its directors or executive officers
is an underwriter for the Corporation or any other obligor on the
Securities,
(3) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with an underwriter for the Corporation or any other obligor on
the Securities,
(4) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative
of the Corporation or any other obligor on the Securities, or of an
underwriter (other than the Trustee itself) for the Corporation or any
other obligor on the Securities who is currently engaged in the
business of underwriting, except that (A) one individual may be a
director and/or an executive officer of the Trustee and a director
and/or an executive officer of the Corporation or any other obligor on
the Securities, but may not be at the same time an executive officer of
both the Trustee and the Corporation or any other obligor on the
Securities; (B) if and so long as the number of directors of the
Trustee in office is more than nine, one additional individual may be a
director and/or an executive officer of the Trustee and a director of
the Corporation or any other obligor on the Securities; and (C) the
Trustee may be designated by the Corporation or any other obligor on
the Securities or by an underwriter for the Corporation or any other
obligor on the Securities to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent or
depositary, or in any other similar capacity, or, subject to the
provisions of paragraph (1) of this subsection (d), to act as trustee
whether under an indenture or otherwise,
(5) ten percent or more of the voting securities of the
Trustee is beneficially owned either by the Corporation or any other
obligor on the Securities or by any director, partner or executive
officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such Persons;
or ten percent or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Corporation or any
other obligor on the Securities or by any director, partner or
executive officer thereof or is beneficially owned, collectively, by
any two or more such Persons,
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, as
hereinafter defined, (A) five percent or more of the voting securities,
or ten percent or more of any other class of security, of the
Corporation or any other obligor on the Securities, not including the
Securities issued under this Indenture and securities issued under any
other indenture under which the Trustee is also trustee, or (B) ten
percent or more of any class of security of an underwriter for the
Corporation or any other obligor on the Securities,
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(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, as
hereinafter defined, five percent or more of the voting securities of
any Person who, to the knowledge of the Trustee, owns ten percent or
more of the voting securities of, or controls directly or indirectly or
is under direct or indirect common control with the Corporation or any
other obligor on the Securities,
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, as
hereinafter defined, ten percent or more of any class of security of
any Person who, to the knowledge of the Trustee, owns 50% or more of
the voting securities of the Corporation or any other obligor on the
Securities or
(9) the Trustee owns on the date of the occurrence of such
Event of Default (exclusive of any period of grace or requirement of
notice) or any anniversary thereof while such Event of Default remains
outstanding, in the capacity of executor, administrator, testamentary
or INTER VIVOS trustee, guardian, committee or conservator, or in any
other similar capacity an aggregate of 25% or more of the voting
securities or of any class of security, of any Person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7) or (8) of this subsection
(d). As to any such securities of which the Trustee acquired ownership
through becoming executor, administrator or testamentary trustee of an
estate which included them, the provisions of the preceding sentence
shall not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such estate
do not exceed 25% of such voting securities or 25% of any such class of
security. Promptly after the date of the occurrence of any such Event
of Default and annually in each succeeding year that the Securities or
any Series thereof remain in default, the Trustee shall make a check of
its holdings of such securities in any of the above-mentioned
capacities as of such date. If the Corporation or any other obligor on
the Securities fails to make payment in full of principal of or
interest on any of the Securities when and as the same become due and
payable and such failure continues for 30 days thereafter, the Trustee
shall make a prompt check of its holdings of such securities in any of
the above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection (d), or
(10) except under the circumstances described in paragraphs
(1), (3), (4), (5) or (6) of Section 7.13(b), the Trustee shall be or
become a creditor of the Corporation or any other obligor on the
Securities.
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The specifications of percentages in paragraphs (5) to (9), inclusive,
of this subsection (d) shall not be construed as indicating that the ownership
of such percentages of the securities of a Person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (d).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection
(d) only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a Person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (B) an obligation shall be deemed to be in default
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be deemed to be the
owner or Holder of (i) any security which it holds as collateral security (as
trustee or otherwise) for an obligation which is not in default as defined in
clause (B) above, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (iii) any
security which it holds as agent for collection, or as custodian, escrow agent
or depositary, or in any similar representative capacity.
(e) For the purposes of this Section 7.8:
(1) The term "underwriter" when used with reference to the
Corporation or any other obligor on the Securities shall mean every
Person who, within one year prior to the time as of which the
determination is made, has purchased from the Corporation or any other
obligor on the Securities with a view to, or has offered or sold for
the Corporation or any other obligor on the Securities in connection
with, the distribution of any security of the Corporation or any other
obligor on the Securities outstanding at such time, or has participated
or has had a direct or indirect participation in any such undertaking,
or has participated or has had a participation in the direct or
indirect underwriting of any such undertaking, but such term shall not
include a Person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" shall mean any director of a
corporation or any individual performing similar functions with respect
to any organization whether incorporated or unincorporated.
(3) The term "trust" shall include only a trust where the
interest or interests of the beneficiary or beneficiaries are evidenced
by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or Holder thereof to vote in the
direction or management of the affairs of a Person, or any security
issued under or pursuant to any
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trust, agreement or arrangement whereby a trustee or trustees or agent
or agents for the owner or Holder of such security are presently
entitled to vote in the direction or management of the affairs of a
Person.
(5) The term "executive officer" shall mean the president,
every vice-president, every trust officer, the cashier, the secretary
and the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(6) Except for purposes of paragraphs (6), (7), (8) and (9) of
subsection (d) of this Section 7.8, the term "security" or "securities"
shall mean any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate,
pre-organization certificate or subscription, transferable share,
investment contract, voting-trust certificate, certificate of deposit
for a security, fractional undivided interest in oil, gas or other
mineral rights, or, in general, any interest or instrument commonly
known as a "security" or any certificate of interest or participation
in, temporary or interim certificate for, receipt for, guarantee of, or
warrant or right to subscribe to or purchase, any of the foregoing.
(7) For the purpose of subsection (d)(1) of this Section 7.8,
the term "series of securities" or "series" means a series, class or
group of securities issuable under an indenture pursuant to whose terms
Holders of one such series may vote to direct the indenture trustee, or
otherwise take action pursuant to a vote of such holders, separately
from holders of another such series; PROVIDED, THAT "series of
securities" or "series" shall not include any series of securities
issuable under an indenture if all such series rank equally and are
wholly unsecured.
The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(A) A specified percentage of the voting securities of the
Trustee, the Corporation or any other Person referred to in this
Section 7.8 (each of whom is referred to as a "Person" in this
paragraph) means such amount of the outstanding voting securities of
such Person as entitles the Holder or Holders thereof to cast such
specified percentage of the aggregate votes which the Holders of all
the outstanding voting securities of such Person are entitled to cast
in the direction or management of the affairs of such Person.
(B) A specified percentage of a class of securities of a
Person means such percentage of the aggregate amount of securities of
the class outstanding.
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(C) The term "amount," when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security.
(D) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) Securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) Securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) Securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) Securities held in escrow if placed in escrow by the
issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any Person other than the issuer is entitled to
exercise the voting rights thereof.
(E) A security shall be deemed to be of the same class as
another security if both securities confer upon the Holder or Holders
thereof substantially the same rights and privileges, provided,
however, that, in the case of secured evidences of indebtedness, all of
which are issued under a single indenture, differences in the interest
rates or maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes, and provided
further that, in the case of unsecured evidences of indebtedness,
differences in the interest rate or maturity dates thereof shall not be
deemed sufficient to constitute them securities of different classes,
whether or not they are issued under a single indenture.
(f) Except in the case of a default in the payment of the principal of
or interest on any Securities, or in the payment of any sinking or purchase fund
installment, the Trustee shall not be required to resign as provided by this
Section 7.8 if the Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon, that
(i) the default under this Indenture may be cured or waived during a reasonable
period and under the procedures described in such application, and (ii) a stay
of
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the Trustee's duty to resign will not be inconsistent with the interests of
Holders of such Series of Securities. The filing of such an application shall
automatically stay the performance of the duty to resign until the Commission
orders otherwise. Any resignation of the Trustee shall become effective only
upon the appointment of a successor trustee and such successor's acceptance of
such appointment.
SECTION 7.9. REQUIREMENTS FOR ELIGIBILITY OF TRUSTEE. There shall
always be at least one Trustee hereunder. The Trustee hereunder shall at all
times be a corporation organized and doing business as a commercial bank under
the laws of the United States of America or any state thereof or of the District
of Columbia or a corporation or other Person permitted to act as a trustee by
the Commission and, in each case, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000, and subject to supervision or examination by Federal, State or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. No obligor on the Securities or Person directly or
indirectly controlling, controlled by or under common control with such obligor
shall serve as Trustee. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.9, the Trustee
shall resign immediately in the manner and with the effect specified in this
Article Seven.
SECTION 7.10. RESIGNATION AND REMOVAL OF TRUSTEE; APPOINTMENT OF
SUCCESSOR.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all Series of Securities by
giving written notice of such resignation to the Corporation and by giving to
the Holders of Securities notice thereof in the manner and to the extent
provided in subsection (c) of Section 5.4 with respect to reports pursuant to
subsection (a) of Section 5.4. Upon receiving such notice of resignation and, if
the Corporation shall deem it appropriate, evidence satisfactory to it of such
mailing to the Holders, the Corporation shall promptly appoint a successor
trustee with respect to all Series of Securities or, if appropriate, the
applicable Series by written instrument executed by an authorized officer of the
Corporation, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee, or
any Holder who has been a bona fide Holder of a Security or Securities for at
least six months may, subject to the provisions of Section 6.11, on such
Holder's behalf and on behalf of all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur:
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(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.8 after written request therefor by the
Corporation or by any Securityholder who has been a bona fide Holder of
a Security or Securities of the applicable Series for at least six
months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.9 and shall fail to resign after written
request therefor by the Corporation or by any such Securityholder, 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, or
(4) the Corporation shall determine that the Trustee has
failed to perform its obligations under this Indenture in any material
respect,
then, in any such case, the Corporation may remove the Trustee and appoint a
successor trustee by written instrument executed by an authorized officer of the
Corporation, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 6.11, any Securityholder who has been a bona fide Holder of a Security
or Securities of the affected Series for at least six months may, on such
Person's behalf and on behalf of all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such Series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in principal amount of the Securities
Outstanding (determined as provided in Section 8.4) may at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments
signed by such Holders or their attorneys-in-fact duly authorized, or by the
affidavits of the permanent chairman and secretary of a meeting of the
Securityholders evidencing the vote upon a resolution or resolutions submitted
thereto with respect to such removal and appointment (as provided in Article
Nine), and by delivery thereof to the Trustee so removed, to the successor
trustee and to the Corporation.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.
SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 7.10 shall execute,
acknowledge and deliver to the Corporation and to its predecessor trustee an
instrument accepting such appointment
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hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, duties and
obligations with respect to such Series of its predecessor hereunder, with like
effect as if originally named as trustee herein; but, nevertheless, on the
written request of the Corporation or of the successor trustee, the trustee
ceasing to act shall, upon payment of any amounts then due it pursuant to the
provisions of Section 7.6, execute and deliver an instrument transferring to
such successor trustee all the rights and powers with respect to the trustee so
ceasing to act. Upon written request of any such successor trustee, the
Corporation shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such trustee to secure any amounts
then due it pursuant to the provisions of Section 7.6.
No successor trustee shall accept appointment as provided in this
Section 7.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 7.8 and eligible under the
provisions of Section 7.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the successor trustee shall at the expense of the Corporation
transmit notice of the succession of such trustee hereunder to the Holders of
Securities in the manner and to the extent provided in subsection (c) of Section
5.4 with respect to reports pursuant to subsection (a) of said Section 5.4.
SECTION 7.12. SUCCESSOR TO TRUSTEE BY MERGER, 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 of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be qualified under the provisions of
Section 7.8 and eligible under the provisions of Section 7.9, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have; provided, however, that the
right to adopt the certificate of authentication of any predecessor Trustee or
to authenticate Securities in the name of any predecessor Trustee shall apply
only to its successor or successors by merger, conversion or consolidation.
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SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST CORPORATION.
(a) Subject to the provisions of subsection (b) of this Section 7.13,
if the Trustee shall be or shall become a creditor, directly or indirectly,
secured or unsecured, of the Corporation or any other obligor on the Securities
within three months prior to a default, as defined in subsection (c) of this
Section 7.13, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities for which it is acting as Trustee, and the holders of other indenture
securities (as defined in subsection (c) of this Section 7.13):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three months' period,
and valid as against the Corporation or such other obligor on the
Securities and its other creditors, except any such reduction resulting
from the receipt or disposition of any property described in paragraph
(2) of this subsection, or from the exercise of any right of set-off
which the Trustee could have exercised if a petition in bankruptcy had
been filed by or against the Corporation or such other obligor on the
Securities upon the date of such default; and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three months' period, or an amount equal to the proceeds of any
such property if disposed of, subject, however, to the rights, if any,
of the Corporation or such other obligor on the Securities and their
respective other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Corporation or such
other obligor on the Securities) who is liable thereon, and (ii) the
proceeds of the bona fide sale of any such claim by the Trustee to a
third Person, and (iii) distributions made in cash, securities or other
property in respect of claims filed against the Corporation or such
other obligor on the Securities in bankruptcy or receivership or in
proceedings for reorganization pursuant to Title 11 of the United
States Code or applicable State laws;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such three months' period;
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(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was received
as security therefor simultaneously with the creation thereof, and if
the Trustee shall sustain the burden of proving that at the time such
property was so received, the Trustee had no reasonable cause to
believe that a default, as defined in subsection (c) of this Section
7.13, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for
such claim as provided in such paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have the
same status as such preexisting claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders of Securities for which it is acting as Trustee, and
the holders of other indenture securities in such manner that the Trustee, such
Securityholders and the holders of other indenture securities realize, as a
result of payments from such special account and payments of dividends on claims
filed against the Corporation or such other obligor on the Securities in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, the same percentage
of their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Corporation or such other
obligor on the Securities of the funds and property in such special account and
before crediting to the respective claims of the Trustee, such Securityholders,
and the holders of other indenture securities dividends on claims filed against
the Corporation or such other obligor on the Securities in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, but after crediting thereon receipts
on account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim
in bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, whether such
distribution is made in cash, securities or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to
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apportion among the Trustee, such Securityholders, and the holders of other
indenture securities, in accordance with the provisions of this paragraph, the
funds and property held in such special account and the proceeds thereof, or
(ii) in lieu of such apportionment in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee, such Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claim, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this subsection
(a) as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued, as trustee, occurred after the beginning of such three
months' period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
In every case commenced under the Bankruptcy Act of 1898, or any
amendment thereto enacted prior to November 6, 1978, all references to periods
of three months shall be deemed to be references to periods of four months.
(b) There shall be excluded from the operation of subsection (a) of
this Section 7.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the
Securityholders at the time and in the manner provided in Section
5.4(c) with respect to reports pursuant to subsections (a) and (b)
thereof, respectively;
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(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented, or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of
this Section 7.13;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Corporation or any other obligor on the Securities; and
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section 7.13.
(c) As used in this Section 7.13 the following terms shall be accorded
the following definitions:
(1) the term "default" shall mean any failure to make payment
in full of the principal of or interest on any of the Securities or on
the other indenture securities when and as such principal or interest
becomes due and payable.
(2) the term "other indenture securities" shall mean
securities upon which the Corporation or any other obligor on the
Securities is an "obligor" (as defined in the Trust Indenture Act of
1939) outstanding under any other indenture (A) under which the Trustee
is also trustee, (B) which contains provisions substantially similar to
the provisions of subsection (a) of this Section 7.13, and (C) under
which a default exists at the time of the apportionment of the funds
and property held in said special account.
(3) the term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand.
(4) the term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Corporation or any other obligor on the
Securities for the purpose of financing the purchase, processing,
manufacture, shipment, storage or sale of goods, wares or merchandise
and which is secured by documents evidencing title to, possession of,
or a lien upon, the goods, wares or
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merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Corporation or any
other obligor on the Securities arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
SECTION 8.1. EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in this
Indenture it is provided that the Holders of a specified percentage in principal
amount of the Securities of any or all Series may take any action (including the
making of any demand or request, the giving of any notice, consent or waiver or
the taking of any other action), the fact that at the time of taking any such
action the Holders of such specified percentage have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar tenor
executed by such Securityholders in Person or by agent or proxy appointed in
writing, or (b) by the record of such Holders of Securities voting in favor
thereof at any meeting of such Securityholders duly called and held in
accordance with the provisions of Article Nine, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
Securityholders.
SECTION 8.2. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES. Subject to the provisions of Sections 7.1, 7.2 and 9.5, proof of the
execution of any instrument by a Securityholder or such Holder's agent or proxy
and proof of the holding by any Person of any of the Securities shall be
sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of
any instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Securities of any Series (including
Global Securities) shall be proved by the Register of such Securities
of such Series, or by certificates of the Security registrar or
registrars thereof.
(c) The amount of bearer Securities held by any Person, the
numbers of such Securities and the date of such Person's holding the
same may be proved by the production of such Securities or by a
certificate in form satisfactory to the Trustee, executed by any trust
company, bank, banker or member of a national securities exchange, as
depositary.
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The Trustee shall not be bound to recognize any Person as a
Securityholder unless and until such Person's title to the Securities held by it
is proved in the manner in this Article Eight provided.
The record of any Securityholders' meeting shall be proved in the
manner provided in Section 9.6.
The Trustee may accept such other proof or require such additional
proof of any matter referred to in this Section 8.2 as it shall deem reasonable.
SECTION 8.3. WHO MAY BE DEEMED OWNERS OF SECURITIES. Prior to due
presentment for transfer of any Security, the Corporation, the Trustee and any
agent of the Corporation or the Trustee may deem and treat the Person in whose
name such Security shall be registered upon the Register of Securities of the
Series of which such Security is a part as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and interest, subject to Section 2.3, on such
Security and for all other purposes; and neither the Corporation nor the Trustee
nor any agent of the Corporation or the Trustee shall be affected by any notice
to the contrary. All such payments so made to any such Holder for the time
being, or upon such Holder's order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability of moneys
payable upon any such Security. Ownership of bearer Securities shall be proved
as provided in Section 8.2(c).
If the Securities of any Series are issued in the form of one or more
Global Securities, the Depository therefor may grant proxies to Persons having a
beneficial ownership in such Global Security or Securities for purposes of
voting or otherwise responding to any request for consent, waiver or other
action which the Holder of such Security is entitled to grant or take under this
Indenture and the Trustee shall accept such proxies for the purposes granted;
PROVIDED THAT neither the Trustee nor the Corporation shall have any obligation
with respect to the grant of or solicitation by the Depository of such proxies.
SECTION 8.4. SECURITIES OWNED BY THE CORPORATION OR CONTROLLED OR
CONTROLLING PERSONS DISREGARDED FOR CERTAIN PURPOSES. In determining whether the
Holders of the requisite principal amount of Securities have concurred in any
demand, direction, request, notice, vote, consent, waiver or other action under
this Indenture, Securities which are owned by the Corporation or any other
obligor on the Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Corporation or
any other obligor on the Securities shall be disregarded and deemed not to be
Outstanding, provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such demand, direction, request, notice,
vote, consent, waiver or other action, only Securities which a Responsible
Officer of the Trustee assigned to its principal office knows are so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding for the purposes of this
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Section 8.4, if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Securities and that the pledgee is not a Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Corporation or any such other obligor.
Upon request of the Trustee, the Corporation shall furnish to the
Trustee promptly an Officer's Certificate listing and identifying all
Securities, if any, known by the Corporation to be owned or held by or for the
account of the Corporation or any other obligor on the Securities or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Corporation or any other obligor on the
Securities; and, subject to the provisions of Section 7.1, the Trustee shall be
entitled to accept such Officer's Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination.
SECTION 8.5. INSTRUMENTS EXECUTED BY SECURITYHOLDERS BIND FUTURE
HOLDERS. At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.1, of the taking of any action by the Holders of the
percentage in principal amount of the Securities specified in this Indenture in
connection with such action, any Holder of a Security which is shown by the
evidence to be included in the Securities the Holders of which have consented to
such action may, by filing written notice with the Trustee at its principal
office and upon proof of holding as provided in Section 8.2, revoke such action
so far as concerns such Security. Except as aforesaid any such action taken by
the Holder of any Security and any direction, demand, request, notice, waiver,
consent, vote or other action of the Holder of any Security which by any
provisions of this Indenture is required or permitted to be given shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of such Security, and of any Security issued in lieu thereof, irrespective of
whether any notation in regard thereto is made upon such Security. Any action
taken by the Holders of the percentage in principal amount of the Securities of
any or all Series specified in this Indenture in connection with such action
shall be conclusively binding upon the Corporation, the Trustee and the Holders
of all of the Securities of such Series subject, however, to the provisions of
Section 7.1.
ARTICLE 9
SECURITYHOLDERS' MEETINGS
SECTION 9.1. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of
Holders of Securities of any or all Series may be called at any time and from
time to time pursuant to the provisions of this Article for any of the following
purposes:
(1) to give any notice to the Corporation or to the Trustee,
or to give any directions to the Trustee, or to consent to the waiving
of any default hereunder and its consequences, or to take any other
action authorized to be
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taken by Holders of Securities of any or all Series, as the case may
be, pursuant to any of the provisions of Article Six;
(2) to remove the Trustee and appoint a successor trustee
pursuant to the provisions of Article Seven;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.2; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified principal amount of the
Securities of any or all Series, as the case may be, under any other
provision of this Indenture or under applicable law.
SECTION 9.2. MANNER OF CALLING MEETINGS. The Trustee may at any time
call a meeting of Securityholders to take any action specified in Section 9.1,
to be held at such time and at such place in the City of _________ or San
Francisco, California, as the Trustee shall determine. Notice of every meeting
of Securityholders, setting forth the time and place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be mailed
not less than 20 nor more than 60 days prior to the date fixed for the meeting.
SECTION 9.3. CALL OF MEETING BY THE CORPORATION OR SECURITYHOLDERS. In
case at any time the Corporation pursuant to a resolution of its Board of
Directors, or the Holders of not less than ten percent in principal amount of
the Securities of any or all Series, as the case may be, then Outstanding, shall
have requested the Trustee to call a meeting of Holders of Securities of any or
all Series, as the case may be, to take any action authorized in Section 9.1 by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of such
meeting within 20 days after receipt of such request, then the Corporation or
such Holders of Securities in the amount above specified may determine the time
and place in either the City and County of San Francisco, California or The City
of ____________________ for such meeting and may call such meeting to take any
action authorized in Section 9.1, by mailing (and publishing, if required)
notice thereof as provided in Section 9.2.
SECTION 9.4. WHO MAY ATTEND AND VOTE AT MEETINGS. To be entitled to
vote at any meeting of Securityholders a Person shall (a) be a Holder of one or
more Securities with respect to which the meeting is being held; or (b) be a
Person appointed by an instrument in writing as proxy by such Holder of one or
more Securities. The only Persons who shall be entitled to be present or to
speak at any meeting of Securityholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Corporation and its counsel.
SECTION 9.5. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE
MEETING; VOTING RIGHTS - ADJOURNMENT. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of
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Securityholders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit. Except as otherwise permitted or
required by any such regulations, the holding of Securities and the appointment
of any proxy shall be proved in the manner specified in Section 8.2; provided,
however, that such regulations may provide that written instruments appointing
proxies regular on their face, may be presumed valid and genuine without the
proof herein above or in said Section 8.2 specified.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Corporation or by Securityholders as provided in Section 9.3, in which case the
Corporation or the Securityholders calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by majority vote of the
meeting.
Subject to the provisions of Section 8.4, at any meeting each
Securityholder or proxy shall be entitled to one vote for each $1,000 principal
amount (in the case of Original Issue Discount Securities, such principal amount
shall be equal to such portion of the principal amount as may be specified in
the terms of such Series) of Securities held or represented by such Holder;
provided, however, that no vote shall be cast or counted at any meeting in
respect of any Security challenged as not Outstanding and ruled by the chairman
of the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Securities held by such Person or
instruments in writing as aforesaid duly designating such Person as the Person
to vote on behalf of other Securityholders. Any meeting of Securityholders duly
called pursuant to the provisions of Section 9.2 or 9.3 may be adjourned from
time to time, and the meeting may be held so adjourned without further notice.
At any meeting of Securityholders, the presence of Persons holding or
representing Securities in principal amount sufficient to take action on the
business for the transaction of which such meeting was called shall constitute a
quorum, but, if less than a quorum is present, the Persons holding or
representing a majority in principal amount of the Securities represented at the
meeting may adjourn such meeting with the same effect for all intents and
purposes, as though a quorum had been present.
SECTION 9.6. MANNER OF VOTING AT MEETINGS AND RECORD TO BE KEPT. The
vote upon any resolution submitted to any meeting of Securityholders shall be by
written ballots on which shall be subscribed the signatures of the Holders of
Securities or of their representatives by proxy and the principal amount or
amounts of the Securities held or represented by them. The permanent chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
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meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 9.2. The record
shall show the principal amount or principal amounts of the Securities voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one
copy thereof shall be delivered to the Corporation and the other to the Trustee
to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 9.7. EXERCISE OF RIGHTS OF TRUSTEE AND SECURITYHOLDERS NOT TO
BE HINDERED OR DELAYED. Nothing in this Article Nine contained shall be deemed
or construed to authorize or permit, by reason of any call of a meeting of
Securityholders or any rights expressly or impliedly conferred hereunder to make
such call, any hindrances or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Securityholders under any of
the provisions of this Indenture or of the Securities.
ARTICLE 10
SUPPLEMENTAL INDENTURES
SECTION 10.1. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURES MAY BE ENTERED
INTO WITHOUT CONSENT OF SECURITYHOLDERS. Without the consent of the Holders of
any Securities, the Corporation and the Trustee may from time to time and at any
time enter into an indenture or indentures supplemental hereto (which shall
comply with the provisions of the Trust Indenture Act of 1939 as then in effect)
for one or more of the following purposes:
(a) if deemed appropriate by the Corporation or required by
law, to evidence the succession of another corporation to the
Corporation or successive successions and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Corporation pursuant to Article Four hereof,
(b) to add to the covenants of the Corporation such further
covenants, restrictions or conditions as its Board of Directors and the
Trustee shall consider to be for the protection of the Holders of all
or any Series of Securities (and if such covenants, restrictions or
conditions are to be for the benefit of less than all Series of
Securities, stating that such covenants, restrictions or conditions are
expressly being included solely for the benefit of such Series), and to
make the occurrence, or the occurrence and continuance,
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of a default in any such additional covenants, restrictions or
conditions an Event of Default permitting the enforcement of all or any
of the several remedies provided in this Indenture as herein set forth;
provided, however, that in respect to any such additional covenant,
restriction or condition such Supplemental Indenture may provide for a
particular period of grace after default (which period may be shorter
or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default,
(c) to add or change any of the provisions of this Indenture
to such extent as shall be necessary to facilitate the issuance of
Securities in (i) global form or (ii) bearer form, registerable or not
registerable as to principal or principal and interest, and with or
without coupons,
(d) to change or eliminate any of the provisions of this
Indenture; PROVIDED, HOWEVER, that any such change or elimination shall
become effective only when there is no Security of any Series
Outstanding created prior to the execution of such Supplemental
Indenture which is entitled to the benefit of such provision,
(e) to establish the form or terms of Securities of any Series
as permitted by Sections 2.1 and 2.2,
(f) to appoint, at the request of the Trustee, a successor
Trustee for a particular Series of Securities to act as such pursuant
to the provisions of this Indenture and to add to or change the
provisions of this Indenture to such extent as shall be necessary to
facilitate the performance of the duties of such trustee, and
(g) to cure any ambiguity or to correct or supplement any
provisions contained herein or in any Supplemental Indenture which may
be defective or inconsistent with any other provision contained herein
or in any Supplemental Indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture or any
Supplemental Indenture which shall not adversely affect the interests
of the Holders of the Securities.
SECTION 10.2. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF
SECURITIES. With the consent (evidenced as provided in Section 8.1) of the
Holders of not less than a majority in principal amount of the Securities of all
Series at the time Outstanding (determined as provided in Section 8.4) affected
by such Supplemental Indenture (voting as one class), the Corporation and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall comply with the provisions of the
Trust Indenture Act of 1939 as then in effect) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any Supplemental Indenture or of modifying in any manner
the rights of the
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Holders of the Securities of each such Series; provided, however, that no such
Supplemental Indenture shall, without the consent of the Holders of each
Outstanding Security affected thereby:
(a) Change the fixed maturity or Redemption Date of any
Security or reduce the rate of interest thereon or the method of
determining such rate of interest or extend the time of payment of
interest or reduce the principal amount (including the amount of
principal of an Original Issue Discount Security that would be due upon
declaration of acceleration of the maturity thereof pursuant to Section
6.1 hereof) thereof or reduce any premium payable upon the redemption
thereof, or change the coin or currency in which any Security or the
interest thereon is payable or impair the right to institute suit for
the enforcement of any such payment on or after the maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(b) Reduce the percentage in principal amount of the
Outstanding Securities the consent of the Holders of which is required
for any such Supplemental Indenture, or the consent of the Holders of
which 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
(c) Change the time of payment or reduce the amount of any
minimum sinking account or fund payment, or
(d) Modify any of the provisions of this Section 10.2, 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 Security affected thereby.
A Supplemental Indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular Series of Securities, or which modifies
the rights of Holders of Securities of such Series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other Series.
It shall not be necessary for the consent of the Securityholders under
this Section 10.2 to approve the particular form of any proposed Supplemental
Indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Corporation and the Trustee of any
Supplemental Indenture pursuant to the provisions of this Section 10.2, the
Corporation shall mail a notice to the Holders of Registered Securities of each
Series so affected, setting forth in general terms the substance of such
Supplemental Indenture. Any failure of the Corporation to mail
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such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such Supplemental Indenture.
SECTION 10.3. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any Supplemental Indenture pursuant to the provisions of this Article Ten, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith, and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Corporation and the
Holders of Securities shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such Supplemental Indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
The Trustee shall be entitled to receive, and subject to the provisions
of Section 7.1 shall be entitled to rely upon, an Opinion of Counsel as
conclusive evidence that any such Supplemental Indenture complies with the
provisions of this Article Ten and that the Securities affected by the
Supplemental Indenture, when such Securities are authenticated and delivered by
the Trustee and executed and issued by the Corporation in the manner and subject
to any conditions specified in such Opinion of Counsel, will be valid and
binding obligations of the Corporation, except as any rights thereunder may be
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and by general equity principles.
SECTION 10.4. SECURITIES MAY BEAR NOTATION OF CHANGES BY SUPPLEMENTAL
INDENTURES. Securities authenticated and delivered after the execution of any
Supplemental Indenture pursuant to the provisions of this Article Ten, or after
any action taken at a Securityholders' meeting pursuant to Article Nine, may
bear a notation in form approved by the Trustee as to any matter provided for in
such Supplemental Indenture or as to any action taken at any such meeting. If
the Corporation or the Trustee shall so determine, new Securities so modified as
to conform, in the opinion of the Trustee and the Corporation, to any
modification of this Indenture contained in any such Supplemental Indenture may
be prepared by the Corporation, authenticated by the Trustee and delivered in
exchange for the Securities then Outstanding.
ARTICLE 11
DISCHARGE; DEFEASANCE
SECTION 11.1. DISCHARGE OF INDENTURE. If the Corporation shall pay and
discharge or cause to be paid or discharged the entire indebtedness on all
Outstanding Securities by paying or causing to be paid the principal of
(including redemption premium, if any) and interest on the Outstanding
Securities, as and when the same become due and payable or by delivering to the
Trustee, for cancellation by it, all Outstanding Securities, and if the
Corporation shall also pay or cause to be paid all other sums payable hereunder
by it,
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thereupon, upon written request of the Corporation and upon receipt by the
Trustee of such certificates, if any, as the Trustee shall reasonably require,
to the effect that all conditions precedent to the satisfaction and discharge of
the Corporation's obligations under this Indenture have been complied with, this
Indenture shall be discharged and terminated and the Trustee shall forthwith
execute proper instruments acknowledging satisfaction of and discharging and
terminating this Indenture with respect to the Corporation's obligations
hereunder and any such other interests.
The Corporation may at any time surrender to the Trustee for
cancellation by it any Securities previously authenticated and delivered which
the Corporation may have acquired in any manner whatsoever, and such Securities,
upon such surrender and cancellation, shall be deemed to be paid and retired.
SECTION 11.2. DISCHARGE OF LIABILITY ON SECURITIES. Upon the deposit
with the Trustee, in trust, at or before maturity, of money or securities of the
kind and in the necessary amount (as provided in Section 11.4 of this Indenture)
to pay or redeem Outstanding Securities (whether upon or prior to their maturity
or the Redemption Date of such Securities, provided that, if such Securities are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as in Article Three hereof provided or provision satisfactory to
the Trustee shall have been made for the giving of such notice), the obligation
of the Corporation duly and punctually to pay or cause to be paid the principal
of and any interest and premium in respect of such Securities and all liability
of the Corporation in respect of such payment shall cease, terminate and be
completely discharged and the Holders thereof shall thereafter be entitled only
to payment out of the money or securities deposited with the Trustee as
aforesaid for their payment; provided, however, that this discharge of the
Corporation's obligation so to pay and of the liability of the Corporation in
respect of such payment shall not occur unless the Corporation shall have
delivered to the Trustee an Opinion of Counsel to the effect that Holders of the
Securities of such Series will not recognize income, gain or loss for Federal
income tax purposes as a result of such discharge.
SECTION 11.3. DISCHARGE OF CERTAIN COVENANTS AND OTHER OBLIGATIONS.
Upon the deposit with the Trustee, in trust, prior to maturity of money or
securities of the kind and in the necessary amount (as provided in Section 11.4
of this Indenture) to pay or redeem Outstanding Securities of one or more Series
(whether upon or prior to their maturity or the Redemption Date of such
Securities, provided that, if such Securities are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as in Article
Three hereof provided or provision satisfactory to the Trustee shall have been
made for the giving of such notice), all of the obligations, covenants and
agreements of the Corporation with respect to such Securities under Sections
4.2, 4.3, 4.4 and 4.5 hereof shall cease, terminate and be completely
discharged.
SECTION 11.4. DISCHARGE OF CERTAIN OBLIGATIONS UPON DEPOSIT OF MONEY OR
SECURITIES WITH TRUSTEE. The conditions for deposit of money or securities
contained in Sections 11.2 and 11.3 shall have been satisfied whenever with
respect to any Securities
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denominated in United States Dollars, the Corporation shall have deposited or
caused to be deposited irrevocably in trust with the Trustee dedicated solely to
the benefit of the Holders of such Securities:
(a) Lawful money of the United States of America in an amount
equal to the principal amount of such Securities and all unpaid
interest thereon to maturity, except that, in the case of Securities
which are to be redeemed prior to maturity, the amount so to be
deposited or held shall be the principal amount of such Securities and
interest thereon to the Redemption Date, together with the redemption
premium, if any; or
(b) Direct obligations of the United States of America or
obligations the principal of and interest on which are guaranteed by
the United States of America (which obligations are not subject to
redemption prior to maturity at the option of the issuer), in such
amounts and maturing at such times that the proceeds of said
obligations to be received upon their respective maturities and
interest payment dates will provide funds sufficient to pay the
principal, premium, if any, and interest to maturity, or to the
Redemption Date, as the case may be, with respect to all of the
Securities to be paid or redeemed, as such principal, premium and
interest become due, provided that the Trustee shall have been
irrevocably instructed to apply the proceeds of said obligations to the
payment of said principal, premium, if any, and interest with respect
to said Securities.
The conditions for deposit of money or securities contained in Sections 11.2 and
11.3 shall have been satisfied whenever with respect to any Securities
denominated in one or more currencies or composite currency other than United
States Dollars, the Corporation shall have deposited or caused to be deposited
irrevocably in trust with the Trustee dedicated solely to the benefit of the
Holders of such Securities:
(i) Lawful money in such currency, currencies or composite
currency in which such Securities are payable and in an amount equal to
the principal amount of such Securities and all unpaid interest thereon
to maturity, except that, in the case of Securities which are to be
redeemed prior to maturity, the amount so to be deposited or held shall
be the principal amount of such Securities and interest thereon to the
Redemption Date, together with the redemption premium, if any; or
(ii) Either (1) direct obligations of the government that
issued or caused to be issued the currency in which such Securities are
payable, for which obligations the full faith and credit of the
government is pledged (which obligations are not subject to redemption
prior to maturity at the option of the issuer) or (2) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit
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obligation by such government (which obligations are not subject to
redemption prior to maturity at the option of the issuer), in either
case, in such amounts and maturing at such times that the proceeds of
said obligations to be received upon their respective maturities and
interest payment dates will provide funds sufficient to pay the
principal, premium, if any, and interest to maturity, or to the
Redemption Date, as the case may be, with respect to all of the
Securities to be paid or redeemed, as such principal, premium and
interest become due, provided that the Trustee shall have been
irrevocably instructed to apply the proceeds of said obligations to the
payment of said principal, premium, if any, and interest with respect
to said Securities.
SECTION 11.5. UNCLAIMED MONEYS. Any moneys deposited with or paid to
the Trustee or any Paying Agent for the payment of the principal of and any
premium and interest on any Security and not so applied but remaining unclaimed
under applicable law shall be transferred by the Trustee to the appropriate
Persons in accordance with applicable laws, and the Holder of such Security
shall thereafter look only to such Persons for any payment which such Holder may
be entitled to collect and all liability of the Trustee and such Paying Agent
with respect to such moneys shall thereupon cease.
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.1. INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
CORPORATION EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Security, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Corporation, either directly or through the Corporation, 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 personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors, as such, of
the Corporation 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 of the Securities 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, stockholder, 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 of the Securities 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 issue of such Securities.
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ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.1. SUCCESSORS AND ASSIGNS OF THE CORPORATION BOUND BY
INDENTURE. All the covenants, stipulations, promises and agreements in this
Indenture contained by or in behalf of the Corporation shall bind its successors
and assigns, whether so expressed or not.
SECTION 13.2. NOTICES; EFFECTIVENESS. Any notice or demand which by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the Holders of Securities to or on the Corporation, or by the
Corporation or by the Holders of Securities to the Trustee or upon the
Depository by the Corporation or the Trustee may be electronically communicated
or hand delivered or sent by overnight courier, addressed to the relevant party
as provided in this Section 13.2.
All communications intended for the Corporation shall be sent to:
Providian Financial Corporation
201 Mission Street
San Francisco, CA 94105
Attention: Treasurer
Fax Number: (415)
All communications intended for the Trustee shall be sent to:
-----------------------------
-----------------------------
-----------------------------
Attention: Corporate Trust Department
Fax Number: ( )
or at any other address of which any of the foregoing shall have notified the
others in any manner prescribed in this Section 13.2.
For all purposes of this Indenture, a notice or communication will be
deemed effective:
(a) if delivered by hand or sent by overnight courier, on the
day it is delivered unless (i) that day is not a Business Day in the
city specified (a "Local Business Day") in the address for notice
provided by the recipient or (ii) if delivered after the close of
business on a Local Business Day, then on the next succeeding Local
Business Day,
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(b) if sent by facsimile transmission, on the date
transmitted, provided that oral or written confirmation of receipt is
obtained by the sender unless the date of transmission and confirmation
is not a Local Business Day, in which case, on the next succeeding
Local Business Day.
Any notice, direction, requires, demand, consent or waiver by the Corporation,
any Securityholder to or upon the Trustee shall be deemed to have been
sufficiently given, made or filed, for all purposes, if given, made or filed in
writing at the Principal Office of the Trustee in accordance with the provisions
of this Section 13.2.
Any notice, request, consent or waiver by the Corporation or the Trustee upon
the Depository shall have been sufficiently given, made or filed, for all
purposes, if give or made in accordance with the provisions of this Section 13.2
at the address shown for such Depository in the Register or at such other
address as the Depository shall have provided for purposes of notice.
SECTION 13.3. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any request or
application by the Corporation to the Trustee to take any action under any of
the provisions of this Indenture, the Corporation shall furnish to the Trustee
an Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent have been complied with, except that in the case of any
such application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
Section 5.3(d)) shall include (1) a statement that the Person making such
certificate or opinion has read such covenant or condition; (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 such Person, he or she has made
such examination or investigation as is necessary to enable such Person 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 or not, in the opinion of
such Person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Corporation
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
such certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon the certificate, statement or opinion of or
representations by an officer or officers of the Corporation stating that the
information with respect to such
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factual matters is in the possession of the Corporation, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which such Person's certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Corporation
or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his or her certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate or opinion of any firm of independent
public accountants filed with the Trustee shall contain a statement that such
firm is independent.
SECTION 13.4. DAYS ON WHICH PAYMENT TO BE MADE, NOTICE GIVEN OR OTHER
ACTION TAKEN. If any date on which a payment is to be made, notice given or
other action taken hereunder is a Saturday, Sunday or legal holiday in the state
in which the payment, notice or other action is to be made, given or taken, then
such payment, notice or other action shall be made, given or taken on the next
succeeding Business Day in such state, and in the case of any payment, no
interest shall accrue for the delay.
SECTION 13.5. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939 TO
CONTROL. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 317,
inclusive, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 13.6. GOVERNING LAW. THIS INDENTURE AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE.
SECTION 13.7. PROVISIONS OF THE INDENTURE AND SECURITIES FOR THE SOLE
BENEFIT OF THE PARTIES AND THE SECURITYHOLDERS. Nothing in this Indenture or in
the Securities, expressed or implied, shall give or be construed to give any
Person, other than the parties hereto and the Holders of the Securities, any
legal or equitable right, remedy or claim under or in respect of this Indenture,
or under any covenant, condition and provision herein contained; all its
covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the Holders of the Securities.
SECTION 13.8. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This Indenture
may be executed in any number of counterparts, each of which shall be an
original; but such counterparts shall together constitute but one and the same
instrument.
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____________________ hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.
IN WITNESS WHEREOF, PROVIDIAN FINANCIAL CORPORATION has
caused this Indenture to be signed by its Chairman of the Board or any
Vice-Chairmen of the Board or one of its Vice-Presidents and
____________________ has caused this Indenture to be signed and acknowledged by
one of its _______________ and to be signed and acknowledged by one of its
Assistant Secretaries, all as of the day and year first written above.
PROVIDIAN FINANCIAL CORPORATION
By
-------------------------------------
____________________, as Trustee
By
-------------------------------------
By
-------------------------------------
Assistant Secretary
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EXHIBIT 4.16
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PROVIDIAN FINANCIAL CORPORATION
STANDARD STOCK WARRANT
AGREEMENT PROVISIONS
===============================================================================
<PAGE>
<TABLE>
TABLE OF CONTENTS
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PAGE
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<S> <C>
ARTICLE 1 Issuance, Execution and Delivery of Warrant Certificates...........................1
1.1 Issuance of Warrant Certificates...................................................1
1.2 Execution and Delivery of Warrant Certificates.....................................1
1.3 Registration and Countersignature..................................................2
ARTICLE 2 Warrant Price, Duration and Exercise of Warrant Certificates.......................2
2.1 Warrant Price......................................................................2
2.2 Duration of Warrant Certificates...................................................2
2.3 Exercise of Warrant Certificates...................................................2
ARTICLE 3 Other Provisions Relating to Rights of Holders of Warrant Certificates.............3
3.1 No Rights as Securityholders Conferred By Warrant Certificates.....................3
3.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates..........................3
3.3 Holder of Warrant Certificate May Enforce Rights...................................4
3.4 Call of Warrants by the Company....................................................4
3.5 Optional Reduction of Warrant Price................................................4
3.6 Reservation of Shares..............................................................4
3.7 Obtaining of Governmental Approvals and Stock Exchange Listings....................4
3.8 Adjustment of Exercise Price and Number of Shares Purchasable or Number of
Warrants...........................................................................5
3.9 Fractional Warrants and Fractional Shares..........................................7
3.10 Notices to Warrant Holders.........................................................7
ARTICLE 4 Exchange and Transfer of Warrant Certificates......................................8
4.1 Exchange and Transfer..............................................................8
4.2 Treatment of Holders of Warrant Certificates.......................................9
4.3 Cancellation of Warrant Certificates...............................................9
ARTICLE 5 Concerning the Warrant Agent.......................................................9
5.1 Warrant Agent......................................................................9
5.2 Conditions of Warrant Agent's Obligations..........................................9
5.3 Resignation and Appointment of Successor Warrant Agent........................... 10
ARTICLE 6 Miscellaneous.................................................................... 11
6.1 Supplements and Amendments....................................................... 11
6.2 Notices and demands to the Company and Warrant Agent............................. 12
6.3 Addresses........................................................................ 12
6.4 Delivery of Prospectus........................................................... 12
6.5 Obtaining of Governmental Approvals.............................................. 12
6.6 Persons Having Rights under Warrant Agreement.................................... 12
6.7 Headings......................................................................... 12
6.8 Counterparts..................................................................... 12
6.9 Inspection of Agreement.......................................................... 12
6.10 Governing Law.................................................................... 12
6.11 Successors....................................................................... 12
6.12 Termination...................................................................... 13
</TABLE>
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From time to time, Providian Financial Corporation, a Delaware
corporation (the "Company"), may enter into one or more warrant agreements that
provide for the issuance and sale of warrants ("Warrants") to purchase shares of
the Company's [Common Stock, $0.01 par value][Preferred Stock, $0.01 par value]
(collectively "Shares"). The standard provisions set forth herein may be
included or incorporated by reference in any such warrant agreement (a "Warrant
Agreement"). The Warrant Agreement, including the provisions incorporated
therein by reference, is herein referred to as this "Agreement." The person
named as the "Warrant Agent" in the first paragraph of the Warrant Agreement is
herein referred to as the "Warrant Agent." Unless otherwise defined in this
Agreement or in the Warrant Agreement, as the case may be, terms defined in the
Warrant Agreement are used herein as therein defined and terms defined herein
are used in the Warrant Agreement as herein defined.
ARTICLE 1
ISSUANCE, EXECUTION AND DELIVERY OF WARRANT CERTIFICATES
1.1 ISSUANCE OF WARRANT CERTIFICATES. Each Warrant Certificate shall
evidence one or more Warrants. Each Warrant evidenced thereby shall represent
the right, subject to the provisions contained herein and therein, to purchase
such number of Shares as are set forth in the Warrant Agreement. The number of
Warrants which may be issued and delivered under this Agreement is unlimited.
There shall be established in or pursuant to a resolution of the Board
of Directors of the Company or any duly authorized committee thereof or
established in one or more warrant agreements supplemental hereto, prior to the
issuance of any Warrants: the designation of such Warrants; if the Warrants are
issued together as a unit with any other securities of the Company, the date
after which the Warrants shall be freely tradable separately from such other
securities (the "Distribution Date"); if the Company may at its option or under
circumstances described therein provide for an earlier Distribution Date; the
expiration date, pursuant to Section 2.2; the exercise price and any form of
consideration other than lawful money of the United States of America by which
the exercise price may be paid, pursuant to Section 2.1; the Call Price, Call
Date and Call Terms, pursuant to Section 3.4; and the limitations, if any, upon
the Reduced Warrant Price and the Reduced Warrant Price Period, pursuant to
Section 3.5; the circumstances, if any, under which the Exercise Price and the
number of Shares purchasable upon the exercise of each Warrant and the number of
Warrants outstanding are subject to adjustment and the manner of making any such
adjustment.
1.2 EXECUTION AND DELIVERY OF WARRANT CERTIFICATES. Each Warrant
Certificate, whenever issued, shall be in registered form substantially in such
form or forms as shall be established by the Company from time to time pursuant
to one or more resolutions of the Board of Directors of the Company or in one or
more warrant agreements supplemental hereto, and in each case shall be dated as
of the date of issuance thereof, and may have such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the
Warrant Certificate may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with (i) any law or with any rule or
regulation made pursuant thereto or (ii) any rule or regulation of any stock
exchange on which the Warrant Certificates may be listed, or to conform to
usage. The Warrant Certificates shall be signed on behalf of the Company by its
Chairman of the Board of Directors, a Vice Chairman of the Board of Directors,
its President, a Vice President or its Treasurer and attested by its Secretary
or Assistant Secretary, under its corporate seal. Such signatures may be manual
or facsimile signatures of such authorized officers and may be imprinted or
otherwise reproduced on the Warrant Certificates. The seal of the Company may be
in the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no Warrant
evidenced thereby shall be exercisable, until such Warrant Certificate has been
countersigned by the manual signature of the Warrant Agent. Such signature by
the Warrant Agent upon any Warrant Certificate executed by the Company shall be
conclusive evidence that the Warrant Certificate so countersigned has been duly
delivered hereunder.
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If any officer of the Company who shall have signed any of the Warrant
Certificates either manually or by facsimile signature shall cease to be such
officer before the Warrant Certificates so signed shall have been countersigned
and delivered to the Warrant Agent, such Warrant Certificates nevertheless may
be countersigned and delivered as though the person who signed such Warrant
Certificates had not ceased to be such officer of the Company. Any Warrant
Certificate may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Warrant Certificate, shall be the proper
officers of the Company, although at the date of the execution of this Agreement
any such person was not an officer.
1.3 REGISTRATION AND COUNTERSIGNATURE. The Warrant Agent shall, upon
receipt of Warrant Certificates, duly executed on behalf of the Company,
countersign the Warrant Certificates evidencing Warrants to purchase the number
of Shares set forth in the Warrant Agreement and shall deliver such Warrant
Certificates to the appropriate person or entity upon the order of the Company.
After the original issuance of the Warrant Certificates, the Warrant Agent shall
countersign a Warrant Certificate only if the Warrant Certificate is issued in
exchange or substitution for, or in connection with the registration of transfer
of, one or more previously countersigned Warrant Certificates, as hereinafter
provided. The Warrant Certificates shall not be valid for any purpose unless so
countersigned.
The Warrant Agent's countersignature on all Warrants shall be in
substantially the following form:
[NAME OF WARRANT AGENT],
as Warrant Agent
By ______________________________
Authorized Signatory
ARTICLE 2
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANT CERTIFICATES
2.1 WARRANT PRICE. The exercise price of each Warrant and any other
form of consideration other than lawful money of the United States of America by
which the exercise price may be paid shall be as set forth in the Warrant
Agreement. The purchase price (including moneys and such other consideration) of
the Shares upon exercise of the Warrants is referred to in this Agreement as the
"Warrant Price" and is payable in full at the time of exercise.
2.2 DURATION OF WARRANT CERTIFICATES. Warrant Certificates may be
exercised in whole at any time, and in part from time to time, during the period
set forth in the Warrant Agreement (the "Expiration Date"). Each Warrant
Certificate not exercised on or before the close of business on the Expiration
Date shall become void, and all rights of the holder thereunder and under this
Agreement shall cease.
2.3 EXERCISE OF WARRANT CERTIFICATES.
(a) Prior to the Expiration Date, a Warrant Certificate, if
countersigned by the Warrant Agent, may be exercised in whole or in part by
providing certain information set forth on the reverse side of the Warrant
Certificate and, unless otherwise provided pursuant to Section 2.1, by paying in
full (in cash or by certified or official bank check in New York Clearing House
funds or by bank wire transfer in immediately available funds), in United States
dollars, the Warrant Price for the Shares as to which the Warrant Certificate is
exercised, to the Warrant Agent at its corporate trust office at the address set
forth in the Warrant Agreement. The payment must specify the name of the holder
and the number of Warrants exercised by such holder. Warrants will be deemed to
have been exercised upon receipt by the Warrant Agent of the Warrant Price and
the Warrant Certificate properly completed and duly
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<PAGE>
executed by the registered holder or holders thereof or by the duly appointed
legal representative thereof or by a duly authorized attorney, such signature to
be guaranteed (under the Medallion Program) by a bank or trust company, by a
broker or dealer which is a member of the National Association of Securities
Dealers, Inc. ("NASD") or by a member of a national securities exchange. If the
Warrant Agent receives moneys in payment of the Warrant Price, the Warrant Agent
shall deposit all funds received by it in the account of the Company maintained
with it for such purpose. If the Warrant Agent receives consideration other than
moneys for Warrants, the Warrant Agent shall deliver such consideration directly
to the Company. In either case, the Warrant Agent shall advise the Company by
telex or telecopy at the end of each day as to the Warrant Certificates that
have been exercised and the amount of moneys deposited to its account or the
type and amount of other consideration to be delivered to it.
(b) The Warrant Agent shall, from time to time, as promptly as
practicable, advise the Company of (i) the number of Warrants exercised, (ii)
the instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to delivery of the Shares to which such holder is entitled
upon such exercise, (iii) delivery of Warrant Certificates evidencing the
balance, if any, of the Warrants remaining after such exercise and (iv) such
other information as the Company shall reasonably require.
(c) As soon as practicable after receipt of payment of the Warrant
Price and the Warrant Certificate properly completed and duly executed at the
corporate trust of flee of the Warrant Agent, the Company shall issue or
deliver, upon the order of the holder of such Warrant Certificate, the Shares in
authorized denominations to which such holder is entitled, in fully registered
form in such name or names as may be directed by such holder, and if such
Warrant Certificate was not exercised in full, upon request of the holder a new
Warrant Certificate evidencing the number of Warrants remaining unexercised
shall be issued if sufficient time remains prior to the Expiration Date.
(d) The Company will pay all documentary stamp taxes attributable to
the initial issuance of Warrants and of Shares upon the exercise of Warrants;
provided, however, that the Company shall not be required to pay any tax or
taxes which may be payable in respect of any transfer involved in the issue of
any Warrant Certificates or any certificates for Shares in a name other than the
registered holder of a Warrant Certificate surrendered upon the exercise of a
Warrant, and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
ARTICLE 3
OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES
3.1 NO RIGHTS AS SECURITYHOLDERS CONFERRED BY WARRANT CERTIFICATES. No
Warrant Certificate shall entitle the holder thereof to any of the rights of a
stockholder of the Company, including the right to receive the payment of
dividends or vote on the Shares.
3.2 LOST, STOLEN, MUTILATED OR DESTROYED WARRANT CERTIFICATES. Upon
receipt by the Company and the Warrant Agent of evidence reasonably satisfactory
to them of the ownership and the loss, theft, destruction or mutilation of the
Warrant Certificate, and of indemnity reasonably satisfactory to them, and, in
the case of mutilation, upon surrender thereof to the Warrant Agent for
cancellation, then, in the absence of notice to the Company or the Warrant Agent
that such Warrant Certificate has been acquired by a bona fide purchaser, the
Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, in exchange for or in lieu of the lost,
stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of
the same tenor and for a like number of Warrants. Upon the issuance of any new
Warrant Certificate 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 expense (including the fees and expenses of
the Warrant Agent) in connection therewith. Every substitute Warrant Certificate
executed and delivered pursuant to this Section in lieu of any lost, stolen or
destroyed Warrant Certificate shall constitute an additional contractual
obligation of the Company, whether or not the lost, stolen or destroyed Warrant
Certificate shall be at any time enforceable by anyone, and shall be entitled to
the benefits of this Agreement equally and proportionately with any and all
other Warrant Certificates duly
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<PAGE>
executed and delivered hereunder. The provisions of this Section are exclusive
and shall preclude (to the extent lawful) any and all other rights or remedies
with respect to the replacement of mutilated, lost, stolen or destroyed Warrant
Certificates.
3.3 HOLDER OF WARRANT CERTIFICATE MAY ENFORCE RIGHTS. Notwithstanding
any of the provisions of this Agreement, any holder of any Warrant Certificate,
without the consent of the Warrant Agent, the holder of any Shares or the holder
of any other Warrant Certificate, may, in his or her own behalf and for his or
her own benefit, enforce, and may institute and maintain any audit, action or
proceeding against the Company to enforce or otherwise in respect of, his right
to exercise his or her Warrant Certificate in the manner provided in his or her
Warrant Certificate and in his or her Agreement.
3.4 CALL OF WARRANTS BY THE COMPANY. If so provided in the Warrant
Agreement, the Company shall have the right to call and repurchase any or all
Warrants at the price (the "Call Price") and on or after the date (the "Call
Date") and upon the terms (the "Call Terms") as shall be established from time
to time in or pursuant to resolutions of the Board of Directors of the Company
or in the Warrant Agreement before the issuance of such Warrants. Notice of such
Call Price, Call Date and Call Terms shall be given to registered holders of
Warrants in writing by the Company or the Warrant Agent.
3.5 OPTIONAL REDUCTION OF WARRANT PRICE. Subject to the limits, if any,
established from time to time by the Board of Directors of the Company or in the
Warrant Agreement, the Company shall have the right, at any time or from time to
time, voluntarily to reduce the then current Warrant Price to such amount (the
"Reduced Warrant Price") and for such period or periods of time, which may be
through the close of business on the Expiration Date (the "Reduced Warrant Price
Period"), as may be deemed appropriate by the Board of Directors of the Company.
Notice of any such Reduced Warrant Price and Reduced Warrant Price Period shall
be given to registered holders of Warrants in writing by the Company or the
Warrant Agent. After the termination of the Reduced Warrant Price Period, the
Warrant Price shall be such Warrant Price that would have been in effect had
there been no reduction in the Warrant Price pursuant to the provisions of this
Section 3.5.
3.6 RESERVATION OF SHARES. For the purpose of enabling it to satisfy
any obligation to issue Shares upon exercise of Warrants, the Company will at
all times through the close of business on the Expiration Date, reserve and keep
available, free from preemptive rights and out of its aggregate authorized but
unissued or treasury shares of [Common/Preferred Stock], the number of Shares
deliverable upon the exercise of all outstanding Warrants, and the transfer
agent for the shares is hereby irrevocably authorized and directed at all times
to reserve such number of authorized and unissued or treasury shares of
[Common/Preferred Stock] as shall be required for such purpose. The Company will
keep a copy of this Agreement on file with such transfer agent and with every
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of Warrants. The Warrant Agent is hereby irrevocably authorized to
requisition from time to time from such transfer agent stock certificates
issuable upon exercise of outstanding Warrants, and the Company will supply such
Transfer Agent with duly executed stock certificates for such purpose.
Before taking any action that would cause an adjustment pursuant to
Section 3.7 reducing the Exercise Price below the then par value (if any) of the
Shares issuable upon exercise of the Warrants, the Company will take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Shares at the Exercise Price as so adjusted.
The Company covenants that all Shares issued upon exercise of the
Warrants will, upon issuance in accordance with the terms of this Agreement, be
fully paid and nonassessable and free from all taxes, liens, charges and
security interests created by or imposed upon the Company with respect to the
issuance and holding thereof.
3.7 OBTAINING OF GOVERNMENTAL APPROVALS AND STOCK EXCHANGE LISTINGS. So
long as any Warrants remain outstanding, the Company will take all necessary
steps (a) to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and to make filings under
federal and state securities acts and laws, which may be or become requisite in
connection with the issuance, sale, transfer and delivery of the
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<PAGE>
Warrant Certificates, the exercise of the Warrants and the issuance, sale,
transfer and delivery of the Shares issued upon exercise of Warrants, and (b) to
have the shares of Stock, immediately upon their issuance upon exercise of
Warrants, (i) listed on each national securities exchange on which the
[Common/Preferred Stock] is then listed or (ii) if the [Common/Preferred Stock]
is not then listed on any national securities exchange, listed for quotation on
the NASD Automated Quotations System ("Nasdaq") National Market ("Nasdaq
National Market") or such other over-the-counter quotation system on which the
Stock may then be listed.
3.8 ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES PURCHASABLE OR
NUMBER OF WARRANTS. The Exercise Price, the number of Shares purchasable upon
the exercise of each Warrant and the number of Warrants outstanding are subject
to adjustment from time to time upon the occurrence of the events enumerated in
this Section 3.8.
(a) If the Company shall (i) pay a dividend on its capital stock
(including [Common/Preferred Stock]) in shares of Stock, (ii) subdivide its
outstanding shares of [Common/Preferred Stock], (iii) combine its outstanding
shares of [Common/Preferred Stock] into a smaller number of shares of
[Common/Preferred Stock] or (iv) issue any shares of its capital stock in a
reclassification of the [Common/Preferred Stock] (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing corporation), the number of Shares purchasable upon
exercise of each Warrant immediately prior thereto shall be adjusted so that the
holder of each Warrant shall be entitled to receive the kind and number of
Shares or other securities of the Company which such holder would have owned or
have been entitled to receive after the happening of any of the events described
above, had such Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An adjustment made pursuant
to this paragraph (a) shall become effective immediately after the effective
date of such event retroactive to the record date, if any, for such event.
(b) In the event of any capital reorganization or any reclassification
of the [Common/Preferred Stock] (except as provided in paragraph (a) above or
paragraph (h) below), any holder of Warrants upon exercise thereof shall be
entitled to receive, in lieu of the [Common/Preferred Stock] to which he would
have become entitled upon exercise immediately prior to such reorganization or
reclassification, the shares (of any class or classes) or other securities or
property of the Company that he would have been entitled to receive at the same
aggregate Exercise Price upon such reorganization or reclassification if his or
her Warrants had been exercised immediately prior thereto; and in any such case,
appropriate provision (as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive and shall be evidenced by a
resolution filed with the Warrant Agent) shall be made for the application of
this Section 14 with respect to the rights and interests thereafter of the
holders of Warrants (including the allocation of the adjusted Warrant Price
between or among shares of classes of capital stock), to the end that this
Section 3.8 (including the adjustments of the number of shares of Stock or other
securities purchasable and the Warrant Price thereof) shall thereafter be
reflected, as nearly as reasonably practicable, in all subsequent exercises of
the Warrants for any shares or securities or other property thereafter
deliverable upon the exercise of the Warrants.
(c) Except for adjustments required by paragraph (h) hereof, no
adjustment in the number of Shares purchasable hereunder shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the number of Shares purchasable upon the exercise of each
Warrant; provided, however, that any adjustments which by reason of this
paragraph (c) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations shall be made to the
nearest cent and to the nearest one-hundredth of a Share, as the case may be.
(d) Whenever the number of Shares purchasable upon the exercise of each
Warrant is adjusted as herein provided (whether or not the Company then or
thereafter elects to issue additional Warrants in substitution for an adjustment
in the number of Shares as provided in paragraph (I)), the Exercise Price
payable upon exercise of each Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, of which the
numerator shall be the number of Shares purchasable upon the exercise of each
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of Shares so purchasable immediately/hereafter.
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(e) For the purpose of this Section 3.8, the term "shares of Stock"
shall mean (i) the class of stock designated as the [Common/Preferred Stock] of
the Company at the date of this Agreement, or (ii) any other class of stock
resulting from successive changes or reclassification of such shares consisting
solely of changes in par value, of from par value to no par value, or from no
par value to par value. If at any time, as a result of an adjustment made
pursuant to paragraph (a) or (b) above, the holders of Warrants shall become
entitled to purchase any shares of the Company other than shares of Stock,
thereafter the number of such other shares so purchasable upon exercise of each
Warrant and the Exercise Price of such shares shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Shares contained in paragraphs (a) through
(d), inclusive, above, and the provisions of Sections 2.1, 2.2, 2.3, 3.6,
3.7(a), 3.10, with respect to the Shares, shall apply on like terms to any such
other shares.
(f) The Company may elect, on or after the date of any adjustment
required by paragraphs (a) through (b) of this Section 3.8, to adjust the number
of Warrants in substitution for an adjustment in the number of Shares
purchasable upon the exercise of a Warrant. Each of the Warrants outstanding
after such adjustment of the number of Warrants shall be exercisable for the
same number of Shares as immediately prior to such adjustment. Each Warrant held
of record prior to such adjustment of the number of Warrants shall become that
number of Warrants (calculated to the nearest hundredth) obtained by dividing
the Warrant Price in effect prior to adjustment of the Warrant Price by the
Warrant Price in effect after adjustment of the Warrant Price. The Company shall
notify the holders of Warrants in the same manner as provided in the first
paragraph of Section 3.10, of its election to adjust the number of Warrants,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Exercise Price is adjusted or any day thereafter. Upon each adjustment of
the number of Warrants pursuant to this paragraph (f) the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Warrants on such record date Warrant Certificates evidencing, subject to Section
3.9, the additional Warrants to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Warrant Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Warrant Certificates
evidencing all the Warrants to be issued, executed and registered in the manner
specified in Section 1.13 and Article 4 (and which may bear, at the option of
the Company, the adjusted Exercise Price) and shall be registered in the names
of the holders of record of Warrant Certificates on the record date specified in
the notice.
(g) Except as provided in paragraph (a) of this Section 3.8, no
adjustment in respect of any dividends shall be made during the term of a
Warrant or upon the exercise of a Warrant.
(h) In case of any consolidation of the Company with or merger of the
Company into another corporation or in case of any sale or conveyance to another
corporation of the property of the Company as an entirely or substantially as an
entirety, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrant Agent an agreement that each holder of a
Warrant shall have the right thereafter upon payment of the Warrant Price in
effect immediately prior to such action to purchase upon exercise of each
Warrant the kind and amount of shares and other securities and property which he
or she would have owned or have been entitled to receive after the happening of
such consolidation, merger, sale or conveyance had such Warrant been exercised
immediately prior to such action. The Company shall mail by first class mail,
postage prepaid, to each holder of a Warrant, notice of the execution of any
such agreement. Such agreement shall provide for adjustments, which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 3.8. The provisions of this paragraph (h) shall similarly apply to
successive consolidations, mergers, sales or conveyances. The Warrant Agent
shall be under no duty or responsibility to determine the correctness of any
provisions contained in any provisions contained in any such agreement relating
either to the kind or amount of shares of stock or other securities or property
receivable upon exercise of Warrants or with respect to the method employed and
provided therein for any adjustments and shall be entitled to rely upon the
provisions contained in any such agreement.
(i) Irrespective of any adjustments in the Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
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3.9 FRACTIONAL WARRANTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Warrants on
any distribution of Warrants to holders of Warrant Certificates or to distribute
Warrant Certificates that evidence fractional Warrants. In lieu of such
fractional Warrants there shall be paid to the registered holders of the Warrant
Certificates with regard to which such fractional Warrants would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a full Warrant. For purposes of this Section, the current market value
of a Warrant shall be the closing price of one Warrant (as determined pursuant
to paragraph (c) below) for the trading day immediately prior to the date on
which such fractional Warrant would have been otherwise issuable.
(b) Notwithstanding any adjustment pursuant to section 3.9 in the
number of Shares purchasable upon the exercise of a Warrant, the Company shall
not be required to issue fractions of Shares upon exercise of the Warrants or to
distribute certificates which evidence fractional Shares. In lieu of fractional
Shares, there shall be paid to the registered holders of Warrant Certificates at
the time such Warrant Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of a share of
[Common/Preferred Stock]. For purposes of this Section 3.9, the current market
value of a share of [Common/Preferred Stock] shall be the closing price of a
share of [Common/Preferred Stock] (as determined pursuant to paragraph (c)
below) for the trading day immediately prior to the date of such exercise.
(c) The closing price for each day shall be the last sale price,
regular way, or, if no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, for such day, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Warrants or Stock, as the case may be, is not listed or admitted to
trading on such exchange, as reported on the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Warrants or [Common/Preferred Stock],
respectively, is listed or admitted to trading, or if the Warrants or
[Common/Preferred Stock], as the case may be, is not listed or admitted to
trading on any national securities exchange, as reported on Nasdaq National
Market or, if the Warrants or Stock, as the case may be, is not listed or
admitted to trading on Nasdaq National Market, as reported on Nasdaq.
3.10 NOTICES TO WARRANT HOLDERS. Upon any adjustment of the number of
Shares purchasable upon exercise of each Warrant, the Warrant Price or the
number of Warrants outstanding, the Company within 20 calendar days thereafter
shall (i) cause to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing selected by the Company
(who may be the regular auditors of the Company) setting forth the Warrant Price
and either the number of Shares purchasable upon exercise of each Warrant or the
additional number of Warrants to be issued for each previously outstanding
Warrant, as the case may be, after such adjustment and setting forth in
reasonable detail the method of calculation and the facts upon which such
adjustment was made, which certificate shall be conclusive evidence of the
correctness of the masters set forth therein, and (ii) cause to be given to each
of the registered holders of the Warrant Certificates at such holder's address
appearing on the Warrant Register written notice of such adjustments by first
class mail, postage prepaid. Where appropriate, such notice may be given in
advance and included as a part of the notice required to be mailed under the
other provisions of this Section 3.10.
The Company shall cause written notice of such later Distribution Date,
such later Expiration Date, such Call Price, Call Date and Call Terms and such
Reduced Exercise Price and Reduced Exercise Price Period, as the case may be, to
be given as soon as practicable to the Warrant Agent and to each of the
registered holders of the Warrant Certificates by first class mail, postage
prepaid, at such holder's address appearing on the Warrant Register. In addition
to the written notice referred to in the preceding sentence, the Company shall
make a public announcement in a daily morning newspaper of general circulation
in New York City and in San Francisco of such earlier Distribution Date, such
later Expiration Date, such Call Price, Call Date and Call Terms and such
Reduced Exercise Price and Reduced Exercise Price Period, as the case may be, at
least once a week for two successive weeks prior to the implementation of such
terms.
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If:
(a) the Company shall declare any dividend payable in any securities
upon its shares of [Common/Preferred Stock] or make any distribution (other than
a cash dividend) to the holders of its shares of [Common/Preferred Stock], or
(b) the Company shall offer to the holders of its shares of
[Common/Preferred Stock] any additional shares of [Common/Preferred Stock] or
securities convertible into shares of [Common/Preferred Stock] or any right to
subscribe "hereto, or
(c) there shall be a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation, merger or sale of all or
substantially all of its property, assets and business as an entirety),
(d) the Company shall cause written notice of such event to be filed
with the Warrant Agent and shall cause written notice of such event to be given
to each of the registered holders of the Warrant Certificates at such holder's
address appearing on the Warrant Register, by first class mail, postage prepaid,
and (ii) make a public announcement in a daily newspaper of general circulation
in New York City and in San Francisco of such event, such giving of notice and
publication to be completed at least 10 calendar days (or 20 calendar days in
any case specified in clause (c) above) prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution or subscription rights, or
for the determination of stockholders entitled to vote on such proposed
dissolution, liquidation or winding up. Such notice shall specify such record
date or the date of closing the transfer books, as the case may be. The failure
to give the notice required by this Section 3.10 or any defect therein shall not
affect the legality or validity of any distribution, right, warrant,
dissolution, liquidation or winding up or the vote upon or any other action
taken in connection therewith.
ARTICLE 4
EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES
4.1 EXCHANGE AND TRANSFER. Upon surrender at the corporate trust office
of the Warrant Agent, Warrant Certificates evidencing Warrants may be exchanged
for Warrant Certificates in other denominations evidencing such Warrants and the
transfer of Warrants may be registered in whole or in part; provided that such
other Warrant Certificates shall evidence the same aggregate number of Warrants
as the Warrant Certificates surrendered for exchange or registration of
transfer. The Warrant Agent shall keep, at its corporate trust office, books in
which it shall register Warrant Certificates and exchanges and transfers of
outstanding Warrant Certificates, upon surrender of the Warrant Certificates to
the Warrant Agent at its corporate trust office for exchange or registration of
transfer, properly completed and duly endorsed and duly signed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney, such signature to be guaranteed (under the
Medallion Program) by (a) a bank or trust company, (b) a broker or dealer that
is a member of the NASD or (c) a member of a national securities exchange and
accompanied by appropriate instruments of registration of transfer and written
instructions for transfer, all in form satisfactory to the Company and the
Warrant Agent. No service charge shall be made for any exchange or registration
of transfer of Warrant Certificates, but the Company may require payment of a
sum sufficient to cover any stamp or other tax or other governmental charge that
may be imposed in connection with any such exchange or registration of transfer.
Whenever any Warrant Certificates are surrendered for exchange or registration
of transfer, an authorized officer of the Warrant Agent shall mutually
countersign and deliver to the person or persons entitled thereto a Warrant
Certificate or Warrant Certificate duly authorized and executed by the Company,
as so requested. The Warrant Agent shall not be required to effect any exchange
or registration of transfer that will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange or
registration of transfer of Warrant Certificates shall be the valid obligations
of the Company, evidencing the same obligations and entitled to the same
benefits under this Agreement as the Warrant Certificates surrendered for such
exchange or registration of transfer.
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4.2 TREATMENT OF HOLDERS OF WARRANT CERTIFICATES. Every holder of a
Warrant Certificate, by accepting the same, consents and agrees with the
Company, the Warrant Agent and with every subsequent holder of such Warrant
Certificate that, until the transfer of the Warrant Certificate is registered on
the books of the Warrant Agent, the Company and the Warrant Agent may treat the
registered holder as the absolute owner thereof for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced
thereby, any notice to the contrary notwithstanding.
4.3 CANCELLATION OF WARRANT CERTIFICATES. Any Warrant Certificate
surrendered for exercise, registration of transfer or exchange shall, if
surrendered to the Company, be delivered to the Warrant Agent, and all Warrant
Certificates surrendered or so delivered to the Warrant Agent shall be promptly
canceled by the Warrant Agent and shall not be reissued and, except as expressly
permitted by this Agreement, no Warrant Certificate shall be issued hereunder in
lieu thereof. The Warrant Agent shall deliver to the Company from time to time,
or otherwise dispose of, canceled Warrant Certificates in a manner satisfactory
to the Company.
ARTICLE 5
CONCERNING THE WARRANT AGENT
5.1 WARRANT AGENT. The Company hereby appoints the Warrant Agent as the
Warrant Agent of the Company in respect of the Warrant Certificates upon the
terms and subject to the conditions herein set forth, and the Warrant Agent
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in the Warrant Certificates and by
this Agreement, and such further powers and authority to act on behalf of the
Company as the Company may hereafter grant to or confer upon it. All of the
terms and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.
5.2 CONDITIONS OF WARRANT AGENT'S OBLIGATIONS. The Warrant Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following (to all of which the Company agrees and to all of which
the rights hereunder of the holders from time to time of the Warrant
Certificates shall be subject):
(a) PERFORMANCE BY THE COMPANY. The Company agrees that it will take
any corporate action that may be reasonably necessary in order to fulfill its
obligations under this Agreement and the Warrant Certificates, and that it will
not take any action that would impair its ability to perform its obligations
under this Agreement and the Warrant Certificates.
(b) COMPENSATION AND INDEMNIFICATION. The Company agrees promptly to
pay the Warrant Agent the compensation to be agreed upon with the Company for
all services rendered by the Warrant Agent and to reimburse the Warrant Agent
for reasonable out-of-pocket expenses (including reasonable counsel fees)
incurred by the Warrant Agent in connection with the services rendered hereunder
by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Warrant Agent, arising out of or in
connection with its acting as the Warrant Agent hereunder, as well as the costs
and expenses of defending against any claim of liability in the premises.
(c) AGENT FOR THE COMPANY. In acting under this Warrant Agreement and
in connection with the Warrant Certificates, the Warrant Agent is acting solely
as an agent of the Company, and the Warrant Agent does not assume any obligation
or relationship of agency or trust for or with any of the owners or holders of
the Warrant Certificates.
(d) COUNSEL. The Warrant Agent may consult with counsel satisfactory to
it, and the opinion of such 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 accordance with the opinion of such counsel.
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(e) DOCUMENTS. The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or thing suffered by it in
reliance upon any Warrant Certificate, notice, direction, consent, certificate,
affidavit, statement or other paper or document reasonably believed by it to be
genuine and to have been presented or signed by the proper parties.
(f) CERTAIN TRANSACTIONS. The Warrant Agent and its officers, directors
and employees may buy, sell or deal in any of the Shares or other securities of
the Company and may become the owner of, or acquire any interest in, any Warrant
Certificates, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, they
may engage or be interested in any financial or other transaction with the
Company and may act on, or as depositary, trustee or agent for, any committee or
body of holders of the Shares or other obligations of the Company as freely as
if it were not the Warrant Agent.
(g) NO LIABILITY FOR INTEREST. Except as set forth in the Warrant
Agreement, the Warrant Agent shall not be under any liability for interest on
any moneys or other consideration at any time received by it pursuant to any of
the provisions of this Agreement or of the Warrant Certificates.
(h) NO LIABILITY FOR INVALIDITY. The Warrant Agent shall not incur any
liability with respect to the validity of this Agreement or any of the Warrant
Certificates.
(i) NO RESPONSIBILITY FOR REPRESENTATIONS. The Warrant Agent shall not
be responsible for any of the recitals or representations contained herein or in
the Warrant Certificates (except the Warrant Agent shall be responsible for any
representations of the Warrant Agent herein and for its countersignature on the
Warrant Certificates), all of which are made solely by the Company.
(j) NO IMPLIED OBLIGATIONS. The Warrant Agent shall be obligated to
perform such duties as are herein and in the Warrant Certificates specifically
set forth, but no implied duties or obligations shall be read into this
Agreement or the Warrant Certificates against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder which may
tend to involve it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it. The Warrant
Agent shall not be accountable or under any duty or responsibility for the use
by the Company of any of the Warrant Certificates authenticated by the Warrant
Agent and delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by the
Company in the performance of its covenants or agreements contained in the
Warrant Certificates or in the case of the receipt of any written demand from a
holder of a Warrant Certificate with respect to such default, including any duty
or responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or to make any demand upon the Company.
(k) INSTRUCTIONS. The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Treasurer, the Secretary or any Assistant Secretary of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer or
in good faith reliance upon any statement signed by any one of such officers of
the Company with respect to any fact or matter (unless other evidence in respect
thereof is herein specifically prescribed) which may be deemed to be
conclusively proved and established by such signed statement
5.3 RESIGNATION AND APPOINTMENT OF SUCCESSOR WARRANT AGENT.
(a) The Company agrees, for the benefit of the holders from time to
time of the Warrant Certificates, that at all times there shall be a Warrant
Agent hereunder until all the Warrant Certificates are no longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the date
on which its desired resignation shall become effective; provided that
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<PAGE>
such date shall not be less than 60 days after the date on which such notice is
given unless the Company agrees to accept less notice. The Warrant Agent may be
removed at any time by the filing with it of an instrument in writing signed by
or on behalf of the Company and specifying such removal an the date when it
shall become effective. Such resignation or removal shall take effect upon the
appointment by the Company, as hereinafter provided, of a successor Warrant
Agent (which shall be a bank or trust company organized and doing business under
the laws of the United States of America or of any State, in good standing, and
authorized under such laws to exercise corporate trust powers) and the
acceptance of such appointment by such successor Warrant Agent. Upon its
resignation or removal, the Warrant Agent shall be entitled to the payment by
the Company of the compensation agreed to under Section 5.2(b) hereof for, and
to the reimbursement of all reasonable out-of-pocket expenses incurred in
connection with, the services rendered hereunder by the Warrant Agent.
(c) If at any time the Warrant Agent shall resign, or shall be removed,
or shall become incapable of acting, or shall be adjudged bankrupt or insolvent,
or shall file a petition seeking relief under the Federal Bankruptcy Code, as
now constituted or hereafter amended, or under any other applicable federal or
state bankruptcy law or similar law or make an assignment for the benefit of its
creditors or consent to the appointment of a receiver or custodian of all or any
substantial part of its property, or shall admit in writing its inability to pay
or meet its debts as they mature, or if a receiver or custodian of it or of all
or any substantial part of its property shall be appointed, or if an order of
any court shall be entered for relief against it under the Federal Bankruptcy
Code, as now constituted or hereafter amended, or under any other applicable
federal or state bankruptcy or similar law or if any public officer shall have
taken charge or control of the Warrant Agent or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified in accordance with the terms of this Agreement, shall be
appointed by the Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment of a successor Warrant Agent and acceptance
by the latter of such appointment, the Warrant Agent so superseded shall cease
to be the Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with all
the authority, rights, powers, trusts, immunities, duties and obligations of
such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay over,
and such successor Warrant Agent shall be entitled to receive, all moneys,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be
merged or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation to
which the Warrant Agent shall sell or otherwise transfer all or substantially
all the assets and business of the Warrant Agent, provided that it shall be
qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE 6
MISCELLANEOUS
6.1 SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended or
supplemented from time to time by the parties hereto, without the consent of the
holder of any Warrant Certificate, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective provision contained herein,
or in regard to matters or questions arising under this Agreement as the Company
and the Warrant Agent may deem necessary or desirable, provided such action
shall not adversely affect the interests of the holders of the Warrant
Certificates.
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6.2 NOTICES AND DEMANDS TO THE COMPANY AND WARRANT AGENT. If the
Warrant Agent shall receive any notice or demand addressed to the Company by the
holder of a Warrant Certificate pursuant to the provisions of the Warrant
Certificates, the Warrant Agent shall promptly forward such notice or demand to
the Company.
6.3 ADDRESSES. Any communication to the Warrant Agent with respect to
this Agreement shall be addressed to the address set forth in the Warrant
Agreement, and any such communication to the Company shall be addressed to the
Company at the following address:
Providian Financial Corporation
201 Mission Street, 28th Floor
San Francisco, CA 94105
Attention: _______________
or such other address as shall be specified in writing by the Warrant Agent or
by the Company.
6.4 DELIVERY OF PROSPECTUS. If the Company is required under applicable
federal or state securities laws to deliver a prospectus upon exercise of
Warrants, the Company will furnish to the Warrant Agent sufficient copies of a
prospectus, and the Warrant Agent agrees that upon the exercise of any Warrant
Certificate by the holder thereof, the Warrant Agent will deliver to such
holder, prior to or concurrently with the delivery of the Shares issued upon
such exercise, a copy of the prospectus.
6.5 OBTAINING OF GOVERNMENTAL APPROVALS. The Company will from time to
time take all action that may be necessary to obtain and keep effective any and
all permits, consents and approvals of governmental agencies and authorities and
securities acts filings under federal and state laws, which may be or become
requisite in connection with the issuance, sale, transfer and delivery of the
Warrant Certificates, the exercise of the Warrants, and the issuance, sale,
transfer and delivery of the Shares issued upon exercise of the Warrants or upon
the expiration of the period during which the Warrants are exercisable.
6.6 PERSONS HAVING RIGHTS UNDER WARRANT AGREEMENT. Nothing in this
Agreement is intended, or shall be construed, to confer upon, or give to, any
person or corporation other than the Company, the Warrant Agent and the holders
of the Warrant Certificates any right, remedy or claim under or by reason of
this Agreement or of any covenant, condition, stipulation, promise or agreement
hereof. All covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent and their successors and of the holders of the
Warrant Certificates.
6.7 HEADINGS. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
6.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
6.9 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the principal corporate trust office of the
Warrant Agent for inspection by the holder of any Warrant Certificate. The
Warrant Agent may require such holder to submit his Warrant Certificate for
inspection by it.
6.10 GOVERNING LAW. This Agreement and each Warrant Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
California and for all purposes shall be construed in accordance with the laws
of such State.
6.11 SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Warrant Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
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<PAGE>
6.12 TERMINATION. This Agreement shall terminate at the close of
business on the Expiration Date. Notwithstanding the foregoing, this Agreement
will terminate on any earlier date when the Warrants have been exercised.
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EXHIBIT 4.17
PROVIDIAN FINANCIAL CORPORATION
AND
--------------------,
Warrant Agent
------------------
WARRANT AGREEMENT
------------------
Providing for the Issuance of
_____% [Notes/Debentures] Due _____ Purchase Warrants
Dated as of _________, 19__
<PAGE>
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement") is entered into as of
________, 19__ between Providian Financial Corporation, a corporation
incorporated under the laws of Delaware (the "Company") and __________, a
___________ incorporated under the laws of __________ (the "Agent"),
W I T N E S S E T H :
WHEREAS, the Company proposes to issue ____________ Warrants (as
hereinafter defined), each Warrant entitling the registered owner thereof to
purchase _____% [Notes/Debentures] Due ______ (as hereinafter defined) of the
Company at the price and upon the terms and conditions herein set forth; and
WHEREAS, the Company is duly authorized to issue the Warrants as herein
provided; and
WHEREAS, all things necessary have been done and performed to make the
Warrants when duly authenticated by the Agent and issued as in this Agreement
provided legal and valid and binding upon the Company with the benefits and
subject to the terms of this Agreement:
NOW THEREFORE THIS AGREEMENT WITNESSETH that for good and valuable
consideration mutually given and received, the receipt and sufficiency whereof
is hereby acknowledged, it is hereby agreed and declared as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. Except as otherwise expressly provided or
unless the context otherwise requires, the terms defined in this Section 1.1
shall, for all purposes of this Agreement, have the meanings herein specified,
the following definitions to be equally applicable to both the singular and
plural forms of any of the terms herein defined:
(a) AGENT. The term "Agent" shall mean __________, a __________
incorporated under the laws of ____________ or its lawful successors from time
to time appointed in accordance with this Agreement.
(b) AGREEMENT. The term "Agreement" shall mean this Warrant Agreement
between the Company and the Agent, as such agreement is originally executed or
as it may from time to time be supplemented, modified or amended as provided
herein.
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<PAGE>
(c) BUSINESS DAY. The term "Business Day" shall mean any day which is
not a Saturday or Sunday or which in the City and County of San Francisco or in
The City of New York or __________ is neither a legal holiday nor a day on which
banking institutions are authorized by law or regulation to close.
(d) COMPANY. The term "Company" shall mean Providian Financial
Corporation, a Delaware corporation, until a successor entity shall have become
such pursuant to the applicable provisions of this Agreement and thereafter the
term "Company" shall mean such successor entity.
(e) EVENT OF DEFAULT. The term "Event of Default" shall mean any event
specified as such in Section 6.1 hereof. An Event of Default shall "exist" if an
Event of Default shall have occurred and be continuing.
(f) EXERCISE DATE. The term "Exercise Date" shall mean each date during
the Exercise Period on which [Notes/Debentures] are purchased by a Registered
Owner through the exercise of all or a portion of its Warrants.
(g) EXERCISE FORM. The term "Exercise Form" shall mean the form
designated Exercise Form attached as Annex II to each Warrant.
(h) EXERCISE PERIOD. The term "Exercise Period" shall mean the period
commencing at 9:00 a.m. (_________ time) on __________, 19__ and ending at 4:00
p.m. (________ time) on __________.
(i) EXERCISE PRICE. The term "Exercise Price" shall have the meaning
accorded such term in Section 2.1 of this Agreement.
(j) INDENTURE. The term "Indenture" shall mean that certain Indenture
dated as of __________, 19__ between the Company and __________, as trustee, as
such Indenture was originally executed or as it may from time to time be
supplemented, modified or amended in accordance with the terms thereof.
(k) [NOTES/DEBENTURES]. The term "[Notes/Debentures]" means any or all,
as the case may be, of the Company's _____% [Notes/Debentures] Due ______,
authenticated and delivered as provided in the Indenture.
(l) NOTICE OF INTENT TO EXERCISE. The term "Notice of Intent to
Exercise" shall have the meaning accorded thereto in Section 4.1 of this
Agreement. The form of Notice of Intent to Exercise is attached as Annex I to
each Warrant.
(m) OUTSTANDING. The term "Outstanding" when used with reference to the
Warrants shall mean, as of the date of determination, all Warrants theretofore
authenticated and delivered under this Agreement, except:
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(i) Warrants theretofore canceled by the Agent or delivered to
the Agent for cancellation and
(ii) Warrants in exchange for or in lieu of which other
Warrants shall have been authenticated and delivered under this
Agreement.
(n) PERSON. The term "Person" shall mean an individual, a corporation,
a partnership, a joint venture, an association, a joint stock company, a trust,
an unincorporated organization, or a government or any agency, authority or
political subdivision thereof.
(o) REGISTER. The term "Register" shall mean the books for the
registration and transfer of Warrants which books are kept by the Agent pursuant
to Section 3.1 hereof.
(p) TIME OF EXPIRY. The term "Time of Expiry" means 4:00 p.m.,
__________ time, on ___________, 19__.
(q) WARRANTHOLDERS; REGISTERED OWNERS. The term "Warrantholders" or
"Registered Owners" means the persons from time to time who are Registered
Owners of the Warrants.
(r) WARRANTHOLDERS' REQUEST. The term "Warrantholders' Request" means
an instrument signed in one or more counterparts by the Warrantholders entitled
to purchase in the aggregate not less than a majority of the aggregate principal
amount of [Notes/Debentures] which could be purchased pursuant to all Warrants
then Outstanding requesting the Agent to take some action or proceeding
specified therein.
(s) WARRANTS. The term "Warrants" means the ___% [Notes/Debentures] Due
200__ Purchase Warrants issued hereunder pursuant to which Warrantholders have
the right to purchase [Notes/Debentures] on the terms and conditions herein set
forth.
(t) WRITTEN ORDER OF THE COMPANY. The term "Written Order of the
Company" and "Written Consent of the Company" mean, respectively, a written
order or consent signed in the name of the Company by any one of its officers
and may consist of one or more instruments so executed.
ARTICLE II
ISSUANCE OF WARRANTS
Section 2.1 ISSUANCE AND TERMS OF WARRANTS. The issuance of Warrants
entitling the Registered Owners thereof to purchase up to an aggregate of not
more than U.S. $/Specified Currency] in principal amount of the
[Notes/Debentures] is hereby authorized. The Warrants are hereby designated as
the "_____% [Notes/Debentures] Due ______ Purchase Warrants." The Warrants shall
be delivered by the Company to the Agent to be authenticated by the Agent and
delivered in accordance with the Written Order of the Company. The Warrants
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shall be dated __________, 19_ and shall be issuable in fully registered form
and in denominations that permit the purchase upon exercise of [U.S.$/Specified
Currency] principal amount of [Notes/Debentures] and any integral multiples
thereof.
The Warrants shall be exercisable on any Business Day during the
Exercise Period. Each Warrant in the denomination of [U.S.$/Specified Currency]
shall entitle the Registered Owner thereof to exercise such Warrant in
accordance with and pursuant to the terms thereof for the purchase of a
[Note/Debenture] in the principal amount of [U.S.$/Specified Currency] at par
plus interest accrued thereon from ____________ to but not including, the
Exercise Date (the "Exercise Price").
Section 2.2 FORM OF WARRANTS. The Warrants shall be in substantially
the form set out in this Section 2.2, with such additional provisions,
omissions, variations or substitutions as are not inconsistent with the
provisions of this Agreement. The Warrants may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistent herewith, be determined by the officer executing such Warrants
as evidenced by such officer's execution thereof.
FORM OF WARRANT
Number R-W-______ __________ Warrant(s) Representing Right to
Purchase Up to [U.S.$/Specified
Currency] in Aggregate Principal
Amount of ___% [Notes/Debentures] Due ____
This Warrant expires at 4:00 p.m. (______ time) on [__________] and
thereafter will be void and of no value. Notice of the holder's intent to
exercise this Warrant must be given to__________, as Agent not later than 4:00
p.m. (________ time) [____________].
PROVIDIAN FINANCIAL CORPORATION
NOTE/DEBENTURE] PURCHASE WARRANT
THIS CERTIFIES THAT, for value received, ____________, the Registered
Owner hereof (herein sometimes called the "Warrantholder") is entitled, upon and
subject to the terms and conditions set forth herein and in the Warrant
Agreement (the "Warrant Agreement") dated as of ____________, between Providian
Financial Corporation (the "Company") and ____________ as Agent, (the"Agent'),
to purchase at par plus interest accrued thereon, if any, at any time from 9:00
a.m. (______ time) [__________] to 4:00 p.m. (_________ time) [__________],
inclusive (each such date being referred to as an "Exercise Date," up to
[U.S.$/Specified Currency] in aggregate principal amount of _____%
[Notes/Debentures] Due __________ (the "[Notes/Debentures]") of Providian
Financial Corporation (the "Company"), by providing written notice to the Agent
of the Warrantholder's intention to exercise its right
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to purchase provided for herein specifying the number of Warrants which the
Warrantholder wishes to exercise, such notice to be provided in the notice form
annexed hereto as Annex II not earlier than 9:00 a.m. (_________ time) on
__________] and not later than 4:00 p.m. (_________ time) [__________], and by
surrendering to the Agent at its principal office in__________, on any Exercise
Date, this Warrant, with the Exercise Form annexed hereto as Annex I duly
completed and executed. On the Exercise Date on which this Warrant is exercised,
the [Notes/Debentures] will be delivered as described below against payment
therefor in [U.S. Federal Reserve or other United States/Specified Currency]
funds current and immediately available to the Agent at the account designated
in the Warrant Agreement, in each case in an amount equal to the purchase price
of the [Notes/Debentures] so purchased pursuant to the exercise of this Warrant.
This Warrant is one of a duly authorized issue of warrants issued under
the provisions of the Warrant Agreement. Reference is hereby made for
particulars of the rights of the Warrantholders and of the Company in respect
thereof and the terms and conditions upon which the Warrants are issued and
held, all to the sole effect as if the provisions of the Warrant Agreement were
herein set forth, to all of which the Warrantholder by acceptance hereof
assents. The Company will furnish to the Warrantholder, upon written request and
without charge, a copy of the Warrant Agreement. All capitalized terms not
otherwise defined herein, shall have the meanings ascribed thereto in the
Warrant Agreement.
The [Notes/Debentures] purchased pursuant to the exercise of this
Warrant will be mailed by certified mail return receipt requested to the person
specified in the Exercise Form annexed hereto at its address specified therein
or, if so specified in the Exercise Form, delivered to such person or its agent
at the principal office of the Agent in ____________ on the Exercise Date. If
[Notes/Debentures] are purchased in an aggregate principal amount which is less
than the total principal amount of the [Notes/Debentures] that can be purchased
pursuant to this Warrant, the Warrantholder hereof will be entitled to receive
without charge a new Warrant in respect of the balance of the principal amounts
of [Notes/Debentures] which the Registered Owner hereof was entitled to purchase
under the surrendered Warrant and which were not then purchased.
On presentation at the principal office of the Agent in ____________
subject to the provisions of the Warrant Agreement, one or more Warrants may be
exchanged for one or more Warrants entitling the Warrantholder to purchase an
equal aggregate principal amount of [Notes/Debentures] as may be purchased under
the Warrant or Warrants so exchanged. Nothing contained in this Warrant, the
Warrant Agreement or elsewhere shall be construed as conferring upon the
Warrantholder hereof any right or interest whatsoever as a owner of
[Notes/Debentures] or any other right or interest in respect thereof except as
herein and in the Warrant Agreement expressly provided.
This Warrant is registered on the books of the Company and is
transferable only in accordance with the provisions of the Warrant Agreement by
surrender thereof at the principal office of the Agent duly endorsed or
accompanied by a written instrument of transfer duly
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executed by the Registered Owner of this Warrant or its attorney duly authorized
in writing all in accordance with the terms and provisions of the Warrant
Agreement.
This Warrant and the Warrant Agreement are governed by and construed in
accordance with the laws of [California].
IN WITNESS WHEREOF the Company has caused this Warrant to be duly
executed as of __________, 199__.
PROVIDIAN FINANCIAL CORPORATION
By
--------------------------------
Title
-----------------------------
Certificate of Authentication
This is one of the Warrants described
in the within-mentioned Warrant Agreement
________________________, as Agent
By
---------------------------------------
Authorized Officer
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ANNEX I
NOTICE OF INTENT TO EXERCISE
TO:
The undersigned Warrantholder of Warrants evidenced by Warrant Number
(the "Warrant") hereby notifies you pursuant to Section 4.1 of the Warrant
Agreement dated as of __________ (the "Warrant Agreement") between Providian
Financial Corporation (the "Company') and [__________/the undersigned], of the
undersigned's intention to exercise
__________ of such Warrants on __________ (the "Exercise Date") to purchase
[U.S.$/Specified Currency] in aggregate principal amount of the Company's ___%
[Notes/Debentures] Due __________ (the "[Notes/Debentures]," at par plus
interest accrued, if any, from and after [__________]. The purchase price shall
be a total of [U.S.$/Specified Currency] representing [U.S.$/Specified Currency]
in principal and [U.S.$/Specified Currency] in accrued interest.
The Warrant with the Exercise Form duly completed shall be delivered to
the Agent at its principal office in __________. Payment of the purchase price
of the [Notes/Debentures] shall be made in [U.S. Federal Reserve or other United
States/Specified Currency funds] immediately available at the principal office
of the Agent on the Exercise Date. The undersigned shall direct such
[Notes/Debentures] be registered and delivered in the name(s) and the amount(s)
set forth opposite the undersigned's name on Annex II to the Warrant.
DATED this ____ day of __________, 199__.
[NAME OF WARRANTHOLDER]
By
----------------------------------
Title
-------------------------------
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ANNEX II
EXERCISE FORM
TO:
The undersigned Warrantholder of __________ Warrants evidenced by the
Warrant attached hereto hereby exercises on __________ (the "Exercise Date")
Warrants to purchase [U.S.$/Specified Currency] in aggregate principal amount of
Providian Financial Corporation's _____% [Notes/Debentures] Due _____ (the
"[Notes/Debentures]") at par plus $____________ in accrued interest on the
[Notes/Debentures] from [__________], and agrees to transfer on the Exercise
Date in [U.S.$/Specified Currency] funds immediately available to the Agent (at
[account]) such purchase price of the [Notes/Debentures] all in accordance with
the terms and conditions of the Warrant Agreement dated as of__________ (the
"Warrant Agreement") between Providian Financial Corporation and ____________],
as Agent. The undersigned hereby irrevocably directs that such
[Notes/Debentures] be registered and delivered in accordance with the directions
set forth herein.
The undersigned acknowledges that all taxes or other governmental
charges payable upon the registration and delivery of such [Notes/Debentures]
(other than in connection with each original issue and sale of the
[Notes/Debentures]), including any transfer taxes payable if the
[Notes/Debentures] are to be registered in the name of a person or persons other
than the undersigned Warrantholder, must be paid by the undersigned.
DATED this ____ day of __________, 199__
[NAME OF WARRANTHOLDER]
By
--------------------------------
Title
-----------------------------
/ / Please check box if [Notes/Debentures] are to be delivered at the
offices of __________ on the Exercise Date, failing which the
[Notes/Debentures] will be mailed by certified mail return receipt
requested.
Unless the foregoing box is checked, the [Notes/Debentures] shall be delivered
to the Warrantholder at its address set forth in the Register.
Section 2.3 WARRANTS MUTILATED, LOST, DESTROYED OR STOLEN WARRANTS. If
(i) any mutilated Warrant is surrendered to the Agent, or the Company and the
Agent receive evidence to their satisfaction of the destruction, loss or theft
of any Warrant and (ii) there is delivered to the Company and the Agent such
security or indemnity as may be required by
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them to save each of them harmless, then, in the absence of notice to the
Company or the Agent that such Warrant has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Warrant, a new Warrant of the same principal amount,
bearing a number not contemporaneously Outstanding.
Upon the issuance of any new Warrant under this Section 2.3, 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 connected therewith.
Every new Warrant issued pursuant to this Section 2.3 in lieu of any
destroyed, lost or stolen Warrant shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Warrant shall be at any time enforceable by anyone, and shall be entitled
to all the security and benefits of this Agreement equally and ratably with all
other Outstanding Warrants.
The provisions of this Section 2.3 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 Warrants.
Section 2.4 WARRANTHOLDER NOT A REGISTERED OWNER OF THE
[NOTES/DEBENTURES]. The ownership of a Warrant shall not constitute the
Registered Owner thereof an owner of any of the [Notes/Debentures] nor entitle
the Registered Owner to any right or interest in respect thereof except upon the
exercise and surrender of its Warrants and the payment of the purchase price of
the [Notes/Debentures] in accordance with and pursuant to the terms herein
provided.
Section 2.5 WARRANTS TO RANK PARI PASSU. All Warrants shall rank pan
passu with each other.
Section 2.6 EXECUTION OF WARRANTS. The Warrants shall be signed in the
name and on behalf of the Company by one of its officers. The signature of the
officer executing the Warrants may be manual or facsimile. In case any officer
of the Company who shall have signed any of the Warrants (manually or in
facsimile) shall cease to be such officer before the Warrants so signed shall
have been authenticated and delivered by the Agent, such Warrants nevertheless
may be authenticated and delivered as though the Person who signed such Warrants
had not ceased to be such officer of the Company. Also, any Warrant may be
signed on behalf of the Company by such Persons as on the actual date of
execution of such Warrant shall be the proper officers of the Company, although
at the date of the execution of this Agreement any such Person was not such
officer.
Only such of the Warrants as shall bear thereon a certificate of
authentication in substantially the form set forth in Section 2.2 hereof,
executed by the Agent, shall be entitled to the benefits of this Agreement or be
valid or obligatory for any purpose.
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Section 2.7 PURCHASE OF WARRANTS BY THE COMPANY. The Company may
purchase in the market, by private contracts or otherwise all or any portion of
the Warrants on such terms as the Company may determine.
ARTICLE III
EXCHANGE OF WARRANTS; REGISTRATION OF
TRANSFER OF WARRANTS; NOTICE TO WARRANTHOLDERS
Section 3.1 REGISTER. The Agent, as agent of the Company, shall
maintain, at its principal office in ______________, the Register in which,
subject to such reasonable regulations as it and the Company may prescribe, it
shall provide for the registration of the Warrants and the transfer of Warrants
as in this Agreement provided. The Register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. The Registered Owners of the Warrants shall present directly to the Agent
all requests for (a) registration of transfer of Warrants, (b) exchange of
Warrants for new Warrants in authorized denominations and (c) replacement of
Warrants in the case of mutilation, destruction, loss or theft.
Upon the Company's request, the Agent shall furnish the Company with a
list of names and addresses of the Registered Owners showing the number of such
Warrants held by each Registered Owner.
Section 3.2 EXCHANGE OF WARRANTS. Warrants entitling the Registered
Owner to purchase any specified principal amount of [Notes/Debentures] may, upon
compliance with the reasonable requirements of the Agent, be exchanged for
Warrants entitling the Registered Owner thereof to purchase an equal aggregate
principal amount of [Notes/Debentures].
Warrants may be exchanged only at the principal office of the Agent in
__________, or at any other place that is designated by the Company. Any
Warrants tendered for exchange shall be surrendered to the Agent and canceled.
The Company shall execute all Warrants necessary to carry out exchanges as
aforesaid and such Warrants shall be authenticated by the Agent.
Section 3.3 CHARGES FOR EXCHANGE. For each Warrant exchanged or
transferred, the Agent, except as otherwise herein provided, shall, if required
by the Company, charge a reasonable sum for each new Warrant issued; and payment
of such charges and reimbursement of the Agent or the Company for any taxes or
governmental or other charges required to be paid shall be made by the party
requesting such exchange, as a condition precedent thereto.
Section 3.4 REGISTRATION OF TRANSFER; RESTRICTIONS ON TRANSFERS. No
transfer of a Warrant shall be valid unless made at the principal offices of the
Agent in the __________, or at any other place that is designated by the Company
as an office for registration of
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transfer by the Registered Owner or such Registered Owner's executors,
administrators or other legal representatives or attorney duly appointed by an
instrument in writing in form and execution satisfactory to the Agent and upon
compliance with such reasonable requirements as the Agent and the Company may
prescribe. Any Warrants tendered for registration of transfer shall be
surrendered to the Agent.
Section 3.5 NOTICE TO WARRANTHOLDERS. Unless herein otherwise expressly
provided, any notice to be given hereunder to Warrantholders shall be deemed to
be validly given if such notice is mailed to the last addresses of the
Warrantholders appearing on the Register. Any notice so given shall be deemed to
have been given on the day on which it has been mailed. In determining under any
provision hereof the date when notice of any meeting or other event must be
given, the date of giving notice shall be included and the date of the meeting
or other event shall be excluded.
ARTICLE IV
EXERCISE OF WARRANTS
Section 4.1 METHOD OF EXERCISE OF WARRANTS. The Registered Owner of any
Warrant may exercise the right thereby conferred to purchase [Notes/Debentures]
by surrendering to the Agent on any Business Day during the Exercise Period at
the principal office of the Agent ___________, or at any other place or places
that may be designated by the Company:
(a) at least 3 Business Days prior to the exercise of its Warrants, a
completed and executed Notice of Intent to Exercise in the form thereof set
forth in Annex I to each Warrant (a "Notice of Intent to Exercise");
(b) on the Exercise Date, a duly completed and executed Exercise Form
in the form thereof set forth in Annex II to each Warrant;
(c) on the Exercise Date, its Warrant or Warrants which it is
exercising; and
(d) on the Exercise Date, the Exercise Price in funds immediately
available to the Company.
The items described in the foregoing clauses (a) and (b) shall be
deemed received when an actual copy or a facsimile thereof is received by the
Agent. Each Warrant shall be deemed to be surrendered only upon personal
delivery thereof to or, if sent by mail or other means of transmission, upon
receipt thereof by, the Agent at the office specified in this Section 4.1. Each
Warrant shall be deemed exercised as of the first Business Day on which all of
the foregoing conditions are satisfied with respect to such Warrant. The first
day on which the Warrants may be exercised is __________. The Company
acknowledges that the Registered Owners of the Warrants are not required under
any circumstances to take any other actions in order to exercise their Warrants.
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Section 4.2 EFFECT OF EXERCISE OF WARRANTS. Upon surrender and payment
of the Exercise Price by the Registered Owner of any Warrant in accordance with
Section 4.1, the [Notes/Debentures] so purchased shall be deemed to have been
issued and the person or persons to whom such [Notes/Debentures] are to be
issued shall be deemed to have become the Registered Owner or owners of such
[Notes/Debentures] on the [Exercise Date].
After the due exercise of a Warrant as aforesaid, the Company shall
forthwith cause to be delivered to the person to whom the [Notes/Debentures] so
purchased are to be issued at the address specified in such form or, if so
specified in such purchase form, cause to be
delivered to such person at the office where such Warrant was surrendered, a
[Note/Debenture] or [Notes/Debentures] in the form or forms and in the
denominations requested and for the appropriate principal amount of
[Notes/Debentures] not exceeding the principal amount which the Warrantholder is
entitled to purchase pursuant to the Warrant surrendered.
Section 4.3 PARTIAL EXERCISE OF WARRANTS. Subject to the issuance of
[Notes/Debentures] in authorized denominations only, the Registered Owner of any
Warrant may purchase [Notes/Debentures] in a principal amount less than that
which such Registered Owner is entitled to purchase pursuant to the surrendered
Warrant. In the event of any purchase of a principal amount of
[Notes/Debentures] less than the principal amount which can be purchased
pursuant to a Warrant, the Registered Owner thereof upon exercise thereof prior
to the Time of Expiry shall, in addition, be entitled to receive forthwith a new
Warrant in respect of the balance of the principal amount of [Notes/Debentures]
which such Registered Owner was entitled to purchase pursuant to the surrendered
Warrant and which were not then exercised. The Company shall not be responsible
for any taxes which may be payable in connection with the issuance of such new
Warrant.
Section 4.4 EXPIRATION OF WARRANTS. After the Time of Expiry, all
rights under any Warrant in respect of which the right of purchase herein and
therein provided for shall not theretofore have been exercised pursuant to
Section 4.1 shall cease and terminate and such Warrant shall become void and of
no effect and all rights of the Registered Owner thereof under this Warrant
Agreement shall cease and terminate as of such termination; provided that such
Registered Owner's rights under this Warrant Agreement with respect to actions
occurring prior to such termination shall remain in full force. After the Time
of Expiry, each Registered Owner of any Warrants shall return any unexercised
Warrants to the Agent for cancellation in accordance with Section 4.5 of this
Agreement.
Section 4.5 CANCELLATION OF SURRENDERED WARRANTS. All Warrants
surrendered to the Agent pursuant to Sections 2.3, 3.2, 3.4 or 4.1 shall
forthwith be canceled by the Agent. All Warrants canceled or required to be
canceled under this or any other provision of this Agreement may be destroyed by
or under the direction of the Agent and the Agent shall furnish the Company with
a destruction certificate identifying the Warrants so destroyed and the
principal amount of [Notes/Debentures] which could have been purchased pursuant
to each.
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Section 4.6 ACCOUNTING AND RECORDING. The Agent shall forthwith account
and remit to the Company with respect to Warrants exercised and immediately
forward to the Company (or into an account or accounts of the Company with the
bank or trust company designated by the Company for that purpose) all monies
received by the Agent on the purchase of [Notes/Debentures] through the exercise
of Warrants. All such monies, and any [Notes/Debentures] or other instruments,
from time to time received by the Agent shall be received in trust for, and
shall be segregated and kept apart by the Agent in trust for, the Company.
The Agent shall record the particulars of the Warrants exercised which
shall include the names and addresses of the persons who become Registered
Owners of [Notes/Debentures] on exercise, the Exercise Date, the Exercise Price
and the number of [Notes/Debentures] delivered from the [Notes/Debentures]
reserved for that purpose by the Company. The Agent shall provide such
particulars in writing to the Company.
ARTICLE V
COVENANTS
Section 5.1 ISSUANCE OF [NOTES/DEBENTURES]. The Company covenants that
so long as any Warrants remain Outstanding it will cause the [Notes/Debentures]
from time to time paid for pursuant to the Warrants in the manner herein
provided to be duly issued and delivered in accordance with the Warrants and the
terms hereof.
Section 5.2 CORPORATE EXISTENCE OF THE COMPANY; CONSOLIDATION, MERGER,
SALE OR TRANSFER. The Company covenants that so long as any of the Warrants are
Outstanding, it will maintain its existence, will not dissolve, sell or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another entity or permit one or more other
entities to consolidate with or merge into it; provided that the Company may,
without violating the covenants in this Section 5.2 contained, consolidate with
or merge into another entity or permit one or more other entities to consolidate
with or merge into it, or sell or otherwise transfer to another entity all or
substantially all of its assets as an entirety and thereafter dissolve, if the
surviving, resulting or transferee entity, as the case may be, (i) shall be
formed and existing under the laws of one of the States of the United States of
America, (ii) assumes, if such entity is not the Company, all of the obligations
of the Company hereunder and (iii) is not, after such transaction, otherwise in
default under any provisions hereof.
Section 5.3 MAINTENANCE OF OFFICES OR AGENCIES FOR TRANSFER,
REGISTRATION, EXCHANGE OF WARRANTS. So long as any of the Warrants shall remain
Outstanding, the Company covenants that it will maintain an office or agency in
______________, where the Warrants may be presented for registration, exchange
and transfer as in this Agreement provided, and where notices and demands to or
upon the Company in respect of the Warrants or of this Agreement may be served,
and where the Warrants may be presented for exchange for [Notes/Debentures] as
provided herein.
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Section 5.4 APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF AGENT. The
Company, whenever necessary to avoid or fill a vacancy in the office of Agent,
covenants that it will appoint, in the manner provided in Section 9.4 hereof, an
Agent, so that there shall at all times be an Agent with respect to the
Outstanding Warrants.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
Section 6.1 EVENTS OF DEFAULT. The term "Event of Default" whenever
used herein with respect to any Warrant shall mean any one of the following
events:
(a) Failure by the Company to deliver the [Notes/Debentures] in
exchange for the Warrants in accordance with the provisions of this Agreement;
or
(b) failure on the part of the Company to observe or perform in any
material respect any of the covenants or agreements on its part in the Warrants
or in this Agreement specifically contained for the benefit of the
Warrantholders, for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Agent, or to the Company and
the Agent by the Registered Owners of not less than 25% in principal amount of
the Warrants at the time Outstanding under this Agreement a written notice
specifying such failure and stating that such is a "Notice of Default"
hereunder.
Section 6.2 SUITS BY WARRANTHOLDERS. All or any of the rights conferred
upon the Registered Owner of any Warrant by the terms of such Warrant and/or
this Agreement may be enforced by the Registered Owner of such Warrants by
appropriate legal proceedings but without prejudice to the right which is hereby
conferred upon the Agent to proceed in its own name to enforce each and all of
the provisions herein contained for the benefit of the Registered Owners of the
Warrants from time to time Outstanding.
Section 6.3 REMEDIES NOT WAIVED; ENFORCEMENT EXPENSE. No delay or
failure on the part of the Registered Owners of Warrants or the Agent to
exercise any right shall operate as a waiver of such right or otherwise
prejudice such Registered Owner's or Agent's, as the case may be, rights, powers
and remedies. The Company agrees to pay all costs, expenses and fees, including
all reasonable attorneys' fees, which may be incurred by a Registered Owner in
enforcing or attempting to enforce its rights thereunder and hereunder following
the occurrence and during the continuance of any Event of Default hereunder,
whether the same shall be enforced by suit or otherwise.
Section 6.4 INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
COMPANY AND EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement of this Agreement, or of any Warrant, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company, either directly or through the Company,
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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 Agreement and the Warrants issued hereunder are solely
corporate obligations, and that no personal liability whatever shall attach to,
or is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Agreement or in any of the Warrants 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,
stockholder, officer or director, as such, because of the creation of the
obligations hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Agreement or in any of the Warrants or
implied therefrom are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Agreement and the issuance of
such Warrants.
ARTICLE VII
AMENDMENTS; MEETING OF WARRANTHOLDERS
Section 7.1 AMENDMENTS WITHOUT CONSENT OF REGISTERED OWNERS OF
WARRANTS. This Agreement and the terms and conditions of the Warrants may be
amended by the Company and the Agent, without the consent of any Registered
Owner of Warrants for any of the following purposes:
(a) to add to the covenants of the Company for the benefit of the
Registered Owners of Warrants,
(b) to surrender any right or power conferred upon the Company,
(c) to cure any ambiguity or correcting or supplementing any provision
contained herein or in the Warrants which may be defective or inconsistent with
any other provisions contained herein or in the Warrants,
(d) if deemed appropriate by the Company or required by law, to
evidence the permitted succession of another corporation to the Company and the
assumption by such successor of the covenants and obligations of the Company
herein and in the Warrants or
(e) to make such other provisions in regard to matters or questions
arising under this Agreement or the Warrants which shall not adversely affect
the interests of the Registered Owners of the Warrants in any material respect.
Section 7.2 AMENDMENTS WITH CONSENT OF REGISTERED OWNERS OF WARRANTS.
This Agreement, the terms and conditions of the Warrants and the covenants
contained in either may also be modified or amended by the Company and the Agent
and past defaults there-
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under or future compliance therewith by the Company may be waived either with
the written consent of the Registered Owners of not less than a majority in
aggregate principal amount of the [Notes/Debentures] at the time outstanding, or
by the adoption, at a meeting duly convened and held in accordance with the
provisions of Section 8.04 at which the Registered Owners of at least 25% of the
aggregate principal amount of the [Notes/Debentures] at the time outstanding are
present or represented, of a resolution by the Registered Owners of not less
than 75% in aggregate principal amount of the Outstanding Warrants present or
represented at the meeting; provided that no such modification, amendment or
waiver may, without the consent or affirmative vote of the Registered Owner of
each Warrant affected thereby:
(a) Waive a default in the failure to deliver [Notes/Debentures] in
exchange for Warrants pursuant to Section 4.1 hereof or change the Exercise
Dates or the Expiry Date with respect to any Warrant, or change the coin or
currency in which any Warrant is exercisable for [Notes/Debentures] or impair
the right to institute suit for the enforcement of any rights of any Registered
Owner of a Warrant or
(b) Reduce the percentage in principal amount of the Outstanding
Warrants, the consent of which Registered Owners is required for any
modification or amendment to this Agreement or to the terms and conditions of or
covenants contained in this Agreement or in the Warrants or for any waiver of
compliance therewith or
(c) modify any of the provisions of this Section 7.2 except to provide
that certain other provisions of this Agreement or the terms and conditions of
the Warrants cannot be modified, amended or waived without the consent of the
Registered Owner of each Outstanding Warrant affected thereby.
It shall not be necessary for the Registered Owners of Warrants to approve the
particular form of any proposed amendment, but it shall be sufficient if they
approve the substance thereof.
Section 7.3 BINDING NATURE OF AMENDMENTS; NOTICE. Any modifications,
amendments or waivers to this Agreement or to the terms and conditions of the
Warrants in accordance with the provisions hereof will be conclusive and binding
on all Registered Owners of Warrants, whether or not they have given such
consent, whether or not notation of such modifications, amendments or waivers is
made upon the Warrants, and on all future Registered Owners of Warrants.
Promptly after the execution of any amendment to this Agreement or the
implementation of any modification or amendment of the terms and conditions of
the Warrants, notice of such amendment or modification shall be given by the
Company or by the Agent, on behalf of and at the instruction of the Company, to
the Registered Owners by mail as such owner's address as it appears on the
Register. The failure to give such notice on a timely basis shall not invalidate
such amendment or modification, but such notice shall be given as soon as
practicable upon discovering such failure or upon any impediment to the giving
of such notice being overcome.
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ARTICLE VIII
MEETINGS
Section 8.1 MEETINGS OF REGISTERED OWNERS OF WARRANTS. A meeting of
Registered Owners of Warrants may be called at any time and from time to time to
make, give or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement or the Warrants to be
made, given or taken by Registered Owners of Warrants.
The Agent may at any time call a meeting of Registered Owners of
Warrants for any purpose specified herein to be held at such time and at such
place in __________ or __________ as the Agent shall determine. Notice of every
meeting of Registered Owners of Warrants, setting forth the time and the place
of such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, by mail to each registered Owner at its address as it
appears on the Register, not less than 21 nor more than [45] days prior to the
date fixed for the meeting. In case at any time the Company or the Registered
Owners of at least 25% in aggregate principal amount of the Outstanding Warrants
shall have requested the Agent to call a meeting of the Registered Owners of
Warrants for any purpose, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Agent shall not have
mailed notice of such meeting within 14 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Registered Owners of Warrants in the amount previously
specified, as the case may be, may determine the time and the place in
__________ or __________ for such meeting and may call such meeting for such
purposes by giving notice thereof as provided herein.
To be entitled to vote at any meeting of Registered Owners of Warrants,
a Person shall be a registered Owner of Outstanding Warrants. The Persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Warrants shall constitute a quorum. In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if convened at
the request of the Registered Owners of Warrants, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 5 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 5 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in this Section 8.1 with respect to an original meeting,
except that such notice need be given only once not less than 3 days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of the
principal amount of the Outstanding Warrants which shall constitute a quorum.
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Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum the persons entitled to vote 25% in aggregate principal
amount of the Outstanding Warrants shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting. Any meeting of
Registered Owners of Warrants at which a quorum is present may be adjourned from
time to time by a vote as hereinafter provided in this Section 8.1, and the
meeting may be held as so adjourned without further notice. At a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as aforesaid,
any resolution and all matters shall be effectively passed or decided if passed
or decided by persons entitled to vote the lesser of (a) a majority in aggregate
principal amount of Outstanding Warrants or (b) 75% in aggregate principal
amount of Outstanding Warrants represented and voting at such meeting.
The Agent may make such reasonable regulations as it may deem advisable
for any meeting of Registered Owners of Warrants in regard to proof of the
holding of Warrants and such other matters concerning the conduct of the meeting
as it shall deem appropriate. The Agent shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall have been
called by the Company or Registered Owners of Warrants as provided herein, in
which case the Company or the Registered Owners calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Warrants represented at the meeting. The chairman of the meeting shall have no
right to vote, except as a Holder of Warrants.
Section 8.2 RECORD OF MEETINGS. A record, at least in triplicate, of
the proceedings of each meeting of Registered Owners of Warrants shall be
prepared, and one such copy shall be delivered to the Company and the Agent. The
copy delivered to the Agent shall be preserved by the Agent and, upon reasonable
notice, made available to any Registered Owners of Outstanding Warrants.
ARTICLE IX
CONCERNING THE AGENT
Section 9.1 APPOINTMENT OF AGENT. The Company hereby appoints
[____________, at present having its principal office in ___________ at
___________] as the Agent in respect of the Warrants, upon the terms and subject
to the conditions set forth in this Agreement.
Section 9.2 ACCEPTANCE OF APPOINTMENT BY AGENT; LIMITATIONS OF DUTIES
OF AGENT. The Agent accepts its obligations set forth herein and in the Warrants
upon the terms and conditions hereof and thereof, including the following, to
all of which the Company agrees and to all of which the rights hereunder of the
Registered Owners from time to time of the Warrants shall be subject:
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(a) The Agent shall be entitled to the compensation agreed upon with
the Company for all services rendered by it, and the Company agrees promptly to
pay such compensation and to reimburse the Agent for its reasonable
out-of-pocket expenses (including, without limitation, the reasonable
compensation of its counsel) incurred by it in connection with the services
rendered by it hereunder. The Company also agrees to indemnify the Agent for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with its
acting as such Agent hereunder, including the costs and expenses of defending
against any claim of liability.
(b) In acting under this Agreement and in connection with the Warrants,
the Agent is acting solely as the agent of the Company and does not assume any
obligation or relationship of agency or trust for or with any of the Registered
Owners of the Warrants.
(c) The Agent may consult with one or more counsel (who may also be
counsel to the Company), and, in the absence of bad faith, the written opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, omitted or suffered by it hereunder in the good
faith reliance thereon.
(d) The Agent shall be protected and shall incur no liability for or in
respect of any action taken, omitted or suffered by it in the good faith
reliance upon any Warrant, notice, direction, consent, certificate, affidavit,
statement or other paper or document signed by the Company reasonably believed
by the Agent to be genuine and to have been signed by the proper persons.
(e) The Agent and its officers, directors and employees may become the
owner of, or acquire any interest in, any Warrants, with the same rights that it
or they would have if it were not the Agent hereunder, may engage or be
interested in any financial or other transaction with the Company and may act
on, or as depository, trustee or agent for, any committee or body of Registered
Owners of the Warrants or holders of other obligations of the Company as freely
as if it were not the Agent hereunder.
(f) The recitals contained herein and in the Warrants (except in the
Agent's certificates of authentication) shall be taken as the statements of the
Company, and the Agent assumes no responsibility for their correctness. The
Agent makes no representation as to the validity or sufficiency of this
Agreement or the Warrants, provided that the Agent shall not be relieved of its
duty to authenticate Warrants as authorized by this Agreement. The Agent shall
not be accountable for the use or application by the Company of the proceeds of
the Warrants.
(g) The Agent shall be obligated to perform such duties and only such
duties as are herein and in the Warrants specifically set forth and no implied
duties or obligations shall be read into this Agreement or the Warrants against
the Agent.
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(h) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own willful misconduct or that of its officers or employees.
(i) The Agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company and.
Section 9.3 AGENT REQUIRED. The Company agrees that, until all Warrants
(a) shall have been delivered to the Agent for cancellation or (b) have become
null and void because of the passage of the Expiry Date, there shall at all
times be an Agent hereunder which shall be a corporation doing business in the
United States and which alone or with its affiliates has a combined capital and
surplus of at least $__________.
Section 9.4 RESIGNATION AND REMOVAL OF AGENT; APPOINTMENT OF SUCCESSOR.
The Agent may at any time resign by giving written notice (in accordance with
Section 10.1 hereof) to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided,
however, that such date shall never be less than [90] days after the receipt of
such notice by the Company unless the Company agrees to accept less notice. Upon
receipt of such notice of resignation, the Company shall promptly act to appoint
a successor Agent. The Agent may be removed at any time by the Company by
delivering written notice thereof specifying such removal and the date when it
is intended to become effective. Any resignation or removal of the Agent shall
take effect upon the date of the appointment by the Company as hereinafter
provided of a successor and the acceptance of such appointment by such
successor.
In case at any time the Agent shall resign, or shall be removed, or
shall become incapable of acting or shall be adjudged a bankrupt or insolvent,
or if a receiver of it or of its property shall be appointed, or if any public
officer shall take charge or control of it or of its property or affairs, for
the purpose of rehabilitation, conservation or liquidation, a successor agent,
eligible as aforesaid, shall be appointed by the Company. Upon the appointment
as aforesaid of a successor agent and acceptance by it of such appointment, the
Agent so superseded shall cease to be the Agent hereunder. If no successor Agent
shall have been so appointed by the Company and shall have accepted appointment
as hereinafter provided, then the Registered Owners of a majority in aggregate
principal amount of the Outstanding Warrants, on such Holders' behalf and on
behalf of all others similarly situated may petition any court of competent
jurisdiction for the appointment of a successor Agent.
Any successor Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and to the Company an instrument accepting such
appointment hereunder, and thereupon such successor Agent, without any further
act, deed or conveyance, shall become vested with all the authority, rights,
powers, immunities, duties and obligations of such predecessor with like effect
as if originally named as such Agent hereunder, and such predecessor, upon
payment of its charges and disbursements then unpaid, shall simultaneously
therewith become obligated to transfer, deliver and pay over, and such successor
Agent shall be entitled to receive, all moneys, [Notes/Debentures] or other
property on deposit with or
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held by such predecessor, as such Agent hereunder. The Company or, at the
direction of the Company, the successor Agent, will give prompt written notice
by U.S. Mail to each Registered Owners of the Warrants at such owners address as
it appears on the Register of the appointment of a successor Agent. Failure to
give such notice or any defect therein shall not affect the appointment of a
successor Agent.
Section 9.5 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
OF AGENT. Any corporation into which the 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 the Agent shall be a party, or any
corporation succeeding to all or substantially all the assets and business of
the Agent, shall be the successor to the Agent hereunder, provided such
corporation shall be otherwise eligible under this Article VII, without the
execution or filing of any document or any further act on the part of any of the
parties hereto.
In case any Warrants shall have been authenticated, but not delivered,
by the Agent then in office, any successor by merger, conversion or
consolidation to such authenticating Agent may adopt such authentication and
deliver the Warrants so authenticated with the same effect as if such successor
Agent had itself authenticated such Warrants.
ARTICLE X
MISCELLANEOUS
Section 10.1 NOTICES. All notices or demands hereunder upon the Company
or the Agent may be electronically communicated or hand delivered or sent by
overnight courier, addressed to any party hereto as provided in this Section
10.1.
All communications intended for the Company shall be sent to:
Providian Financial Corporation
201 Mission Street
San Francisco, CA 94105
Attention: [Treasurer]
Fax Number: (415) ____________
All communications intended for the Agent shall be sent to:
Agent-Name
------------------------------
------------------------------
Attention: ______________
Fax Number: _____________
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or at any other address of which either of the foregoing shall have notified the
other in any manner prescribed in this Section 10.1.
For all purposes of this Agreement, a notice or communication will be
deemed effective:
(a) if delivered by hand or sent by overnight courier, on the day it is
delivered unless (i) that day is not a day on which commercial banks are open
for business (a "Local Business Day") in the city specified in the address for
notice provided by the recipient or (ii) if delivered after the close of
business on a Local Business Day, then on the next succeeding Local Business
Day; or
(b) if sent by facsimile transmission, on the date transmitted,
provided that oral or written confirmation of receipt is obtained by the sender
unless the date of transmission and confirmation is not a Local Business Day, in
which case, on the next succeeding Local Business Day.
Any notice, direction, request, demand, consent or waiver by the
Company or any Registered Owner to or upon the Agent shall be deemed to have
been sufficiently given, made or filed, for all purposes, if given, made or
filed in writing with the Agent in accordance with the provisions of this
Section 10.1.
Section 10.2 DAY NOT A BUSINESS DAY. If any date on which a payment is
to be made, notice given or other action taken hereunder is not a Business Day,
then such payments, notice or other action shall be made, given or taken on the
next succeeding business day in such place, and in the case of any payment, no
interest shall accrue for the delay.
Section 10.3 CURRENCY. All amounts herein are expressed in [United
States Dollars/Specified Currency]
Section 10.4 GOVERNING LAW. This Agreement and the Warrants shall be
construed in accordance with the laws of [California].
Section 10.5 LIMITATION OF RIGHTS TO PARTIES AND REGISTERED OWNERS OF
WARRANTS. Nothing in this Agreement or in the Warrants expressed or implied is
intended or shall be construed to give to any Person other than the Company, the
Agent and the Registered Owners of the Warrants any legal or equitable right,
remedy or claim under or in respect of this Agreement or any covenant, condition
or provision herein or in the Warrants. All such covenants, conditions and
provisions are and shall be held to be for the sole and exclusive benefit of the
Company, the Agent and the Registered Owners of the Warrants.
Section 10.6 SEPARABILITY OF INVALID PROVISIONS. In case any one or
more of the provisions contained in this Agreement or in the Warrants shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability
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shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
Section 10.7 NO WAIVER OF RIGHTS. A failure or delay in exercising any
right, power or privilege in respect of this Warrant Agreement will not be
presumed to operate as a waiver, and a single or partial exercise of any right,
power or privilege will not be presumed to precluded any subsequent or further
exercise of that right power or privilege or the exercise of any other right,
power or privilege.
Section 10.8 EXECUTION IN SEVERAL COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which shall for all purposes be
deemed to be an original; but such counterparts shall together constitute but
one and the same instrument.
Section 10.9 ARTICLE AND SECTION HEADINGS. The headings or titles of
the several Articles and Sections hereof and any table of contents appended to
copies hereof shall be solely for convenience of reference and shall not affect
the meaning, construction or effect of this Agreement.
Section 10.10 SUCCESSORS AND ASSIGNS. All the covenants and agreements
in this Agreement contained by or on behalf of the Company or the Agent shall
bind their respective successors and assigns, whether so expressed or not.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PROVIDIAN FINANCIAL CORPORATION
By
------------------------------------
Title
---------------------------------
AGENT-NAME, as agent
By
------------------------------------
Title
---------------------------------
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EXHIBIT 4.18
DEPOSIT AGREEMENT
dated as of __________, 199__
among
PROVIDIAN FINANCIAL CORPORATION
a Delaware corporation,
_____________, a [national banking association],
and the holders
from time to time of the Depositary Shares
described herein.
WHEREAS it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of _________ Preferred Stock,
Series __, $.01 par value, of PROVIDIAN FINANCIAL CORPORATION, with the
Depositary (as hereinafter defined) for the purposes set forth in this Deposit
Agreement and for the issuance hereunder of Receipts (as hereinafter defined)
evidencing Depositary Shares (as hereinafter defined) in respect of the Stock
(as hereinafter defined) so deposited:
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement and the
Receipts:
1.1 "CERTIFICATE" shall mean the certificate of designations filed with
the Secretary of State of Delaware establishing the Stock as a series of
preferred stock of the company.
1.2 "COMPANY" shall mean Providian Financial Corporation, a Delaware
corporation, and its successors.
1.3 "DEPOSIT AGREEMENT" shall mean this Deposit Agreement, as amended
or supplemented from time to time.
1.4 "DEPOSITARY" shall mean ________________, a [national banking
association], and any successor as Depositary hereunder.
1.5 "DEPOSITARY SHARES" shall mean Depositary Shares, each representing
a one-[half] interest in a share of the Stock and evidenced by a Receipt.
1.6 "DEPOSITARY'S AGENT" shall mean an agent appointed by the
Depositary pursuant to Section 7.05.
1.7 "DEPOSITARY'S OFFICE" shall mean the office of the Depositary at
_____________, _____________, _____________, at which at any particular time its
depositary receipt business shall be administered.
1.8 "RECEIPT" shall mean one of the depositary receipts issued
hereunder, whether in definitive or temporary form.
1.9 "RECORD HOLDER" as applied with respect to a Depositary Share shall
mean the person in whose name a Receipt evidencing such Depositary Share is
registered on the books of the Depositary maintained for such purpose.
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1.10 "REGISTRAR" shall mean any bank or trust company which shall be
appointed to register ownership and transfers of Receipts as herein provided.
1.11 "STOCK" shall mean shares of the Company's ______________
Preferred Stock, Series __, $.01 par value.
ARTICLE 2
FORM OF RECEIPTS, DEPOSIT OF STOCK
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
2.1 FORM AND TRANSFER OF RECEIPTS. Definitive Receipts shall be
engraved or printed or lithographed and shall be substantially in the form set
forth in Exhibit A annexed to this Deposition Agreement, with appropriate
insertions, modifications and omissions, as hereinafter provided. Pending the
preparation of definitive Receipts, the Depositary, upon the written order of
the Company delivered in compliance with Section 2.2, shall execute and deliver
temporary Receipts which are printed, lithographed, typewritten, mimeographed or
otherwise substantially of the tenor of the definitive Receipts in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations as the persons executing such Receipts may determine, as
evidenced by their execution of such Receipts. If temporary Receipts are issued,
the Company and the Depositary will cause definitive Receipts to be prepared
without unreasonable delay. After the preparation of definitive Receipts, the
temporary Receipts shall be exchangeable for definitive Receipts upon surrender
of the temporary Receipts at an office described in the third paragraph of
Section 2.2, without charge to the holder. Upon surrender for cancellation of
any one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts. Such
exchange shall be made at the Company's expense and without any charge therefor.
Until so exchanged, the temporary Receipts shall in all respects be entitled to
the same benefits under this Deposit Agreement, and with respect to the Stock,
as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of
a duly authorized officer of the Depositary; provided, that such signature may
be a facsimile if a Registrar for the Receipts (other than the Depositary) shall
have been appointed and such Receipts are countersigned by manual signature of a
duly authorized officer of the Registrar. No Receipt shall be entitled to any
benefits under this Deposit Agreement or be valid or obligatory for any purpose
unless it shall have been executed manually by a duly authorized officer of the
Depositary or, if a Registrar for the Receipts (other than the Depositary) shall
have been appointed, by facsimile signature of a duly authorized officer of the
Depositary and countersigned manually by a duly authorized officer of such
Registrar. The Depositary shall record on its books each Receipt so signed and
delivered as hereinafter provided.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Company or the Depositary or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange upon which the Stock, the
Depositary Shares or the Receipts may be listed or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is properly
endorsed, or accompanied by a properly executed instrument of transfer, shall be
transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Depositary Share shall
be registered on the books of the Depositary as provided in Section 2.4, the
Depositary may, notwithstanding any notice to the contrary, treat the Record
Holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
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2.2 DEPOSIT OF STOCK; EXECUTION AND DELIVERY RECEIPTS IN RESPECT
THEREOF. Subject to the terms and conditions of this Deposit Agreement, the
Company may from time to time deposit shares of Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a duly executed instrument of transfer or endorsement, in form
satisfactory to the Depositary, together with all such certifications as may be
required by the Depositary in accordance with the provisions of this Deposit
Agreement, and together with a written order of the Company directing the
Depositary to execute and deliver to, or upon the written order of, the person
or persons stated in such order a Receipt or Receipts for the number of
Depositary Shares relating to such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together with
the other documents required as above specified, and upon recordation of the
Stock so deposited on the books of the Company in the name of the Depositary or
its nominee, the Depositary, subject to the terms and conditions of this Deposit
Agreement, shall execute and deliver, to or upon the order of the person or
persons named in the written order delivered to the Depositary referred to in
the first paragraph of this Section, a Receipt or Receipts for the number of
Depositary Shares relating to the Stock so deposited and registered in such name
or names as may be requested by such person or persons. The Depositary shall
execute and deliver such Receipt or Receipts at the Depositary's Office or such
other offices, if any, as the Depositary may designate. Delivery at other
offices shall be at the risk and expense of the person requesting such delivery.
Other than in the case of splits, combinations or other
reclassifications affecting the Stock, or in the case of dividends or other
distributions of Stock, if any, there shall be deposited hereunder not more than
shares of Stock.
2.3 REDEMPTION OF STOCK. Whenever the Company shall elect to redeem
shares of Stock in accordance with the provisions of the Certificate, it shall
(unless otherwise agreed in writing with the Depositary) mail notice to the
Depositary of such proposed redemption, by first class mail, postage prepaid not
less than 40 or more than 70 days prior to the date fixed for redemption of
Stock in accordance with Section [3(b)] of the Certificate. On the date of such
redemption, provided that the Company shall then have paid in full to the
Depositary the redemption price of the Stock to be redeemed, plus any accrued
and unpaid dividends thereon, the Depositary shall redeem the Depositary Shares
relating to such Stock. The Depositary shall mail notice of such redemption and
the proposed simultaneous redemption of the number of Depositary Shares relating
to the Stock to be redeemed, by first-class mail, postage prepaid, not less than
30 and not more than 60 days prior to the date fixed for redemption of such
Stock and Depositary Shares (the "Redemption Date"), to the Record Holders of
the Depositary Shares to be so redeemed, at the addresses of such holders as
they appear on the records of the Depositary; but neither failure to mail any
such notice to one or more such holders nor any defect in any notice to one or
more such holders shall affect the sufficiency of the proceedings for redemption
as to other holders. Each such notice shall state: (i) the Redemption Date; (ii)
the number of Depositary Shares to be redeemed and, if less than all the
Depositary Shares held by any such holder are to be redeemed, the number of such
Depositary Shares held by such holder to be so redeemed; (iii) the redemption
price; (iv) the place or places where Receipts evidencing Depositary Shares are
to be surrendered for payment of the redemption price; and (v) that dividends in
respect of the Stock underlying the Depositary Shares to be redeemed will cease
to accrue and accumulate at the close of business on such Redemption Date. In
case less than all the outstanding Depositary Shares are to be redeemed, the
Depositary Shares to be so redeemed shall be selected by lot, pro rata or such
other method as may be determined by the Depositary to be equitable.
Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to redeem the
shares of Stock to be redeemed by it as set forth in the Company's notice
provided for in the preceding paragraph) all dividends in respect of the
Depositary Shares so called for redemption shall cease to accrue and accumulate,
the Depositary Shares being redeemed from such proceeds shall be deemed no
longer to be outstanding, all rights of the holders of Receipts evidencing such
Depositary Shares (except the right to receive the redemption price) shall, to
the extent of such Depositary Shares, cease and terminate and, upon surrender in
accordance with such notice of the Receipts evidencing any such Depositary
Shares (properly endorsed
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or assigned for transfer, if the Depositary shall so require), such Depositary
Shares shall be redeemed by the Depositary at a redemption price per Depositary
Share equal to the proportionate part of the redemption price per share paid in
respect of the shares of Stock plus all money and other property, if any, paid
with respect to such Depositary Shares, including all amounts paid by the
Company in respect of dividends which on the Redemption Date have accumulated on
the shares of Stock to be so redeemed and have not theretofore been paid.
If less than all the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the redemption payment, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
2.4 REGISTRATION OF TRANSFER OF RECEIPTS. Subject to the terms and
conditions of this Deposit Agreement, the Depositary shall register on its books
from time to time transfers of Depositary Shares upon any surrender of the
Receipt or Receipts evidencing such Depositary Shares by the holder in person or
by duly authorized attorney, properly endorsed or accompanied by a properly
executed instrument of transfer. Thereupon the Depositary shall execute a new
Receipt or Receipts evidencing the same aggregate number of Depositary Shares as
those evidenced by the Receipt or Receipts surrendered and deliver such new
Receipt or Receipts to or upon the order of the person entitled thereto.
2.5 SPLIT-UPS AND COMBINATIONS OF RECEIPTS; SURRENDER OF DEPOSITARY
SHARES AND WITHDRAWAL OF STOCK. Upon surrender of a Receipt or Receipts at the
Depositary's Office or at such other offices as it may designate for the purpose
of effecting a split-up or combination of such Receipt or Receipts, and subject
to the terms and conditions of this Deposit Agreement, the Depositary shall
execute and deliver a new Receipt or Receipts in the denominations requested,
evidencing the aggregate number of Depositary Shares evidenced by the Receipt or
Receipts surrendered.
Any holder of Depositary Shares may withdraw the number of whole shares
of Stock underlying such Depositary Shares of whole shares of Stock underlying
such Depositary Shares and all money and other property, if any, underlying such
Depositary Shares by surrendering Receipts evidencing such Depositary Shares at
the Depositary's Office or at such other offices as the Depositary may designate
for such withdrawals. Thereafter, without unreasonable delay, the Depositary
shall deliver to such holder, or to the person or persons designated by such
holder as hereinafter provided, the number of whole shares of Stock and all
money and other property, if any, underlying the Depositary Shares so
surrendered for withdrawal, but holders of such whole shares of Stock will not
thereafter be entitled to deposit such Stock hereunder or to receive Receipts
evidencing Depositary Shares therefor.If a Receipt delivered by a holder to the
Depositary in connection with such withdrawal shall evidence a number of
Depositary Shares relating to other than a number of whole shares of Stock, the
Depositary shall at the same time, in addition to such number of whole shares of
Stock and such money and other property, if any, to be so withdrawn, deliver to
such holder, or (subject to Section 3.2) upon his order, a new Receipt
evidencing such excess number of Depositary Shares. Delivery of the Stock and
money and other property being withdrawn may be made by delivery of such
certificates, documents of title and other instruments as the Depositary may
deem appropriate.
If the Stock and the money and other property being withdrawn are to be
delivered to a person or persons other than the Record Holder of the Depositary
Shares evidenced by the Receipts being surrendered for withdrawal of Stock, such
holder shall execute and deliver to the Depositary a written order so directing
the Depositary, and the Depositary may require that the Receipt or Receipts
surrendered by such holder for withdrawal of such shares of Stock be properly
endorsed in blank or accompanied by a properly executed instrument of transfer.
Delivery of the Stock and money and other property, if any, underlying
the Depositary Shares surrendered for withdrawal shall be made by the Depositary
at the Depositary's Office, except that, at the request, risk and expense of the
holder surrendering such Depositary Shares and for the account of such holder,
such delivery may be made at such other place as may be designated by such
holder.
2.6 LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER, SURRENDER AND
EXCHANGE OF RECEIPTS. As a condition precedent to the execution and delivery,
registration of transfer, split-up, combination, surrender or exchange of any
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Receipt, the Depositary, any of the Depositary's Agents or the Company may
require payment to it of a sum sufficient for the payment (or, in the event that
the Depositary or the Company shall have made such payment, the reimbursement to
it) of any charges or expenses payable by the holder of a Receipt pursuant to
Section 5.7, may require the production of evidence satisfactory to it as to the
identity and genuineness of any signature and may also require compliance with
such regulations, if any, as the Depositary or the Company may establish
consistent with the provisions of this Deposit Agreement.
The delivery of Receipts against Stock may be suspended, the
registration of transfer of Depositary Shares may be refused and the
registration of transfer, surrender or exchange of outstanding Depositary Shares
may be suspended (i) during any period when the register of stockholders of the
Company is closed or (ii) if any such action is deemed necessary or advisable by
the Depositary, any of the Depositary's Agents or the Company at any time or
from time to time because of any requirement of law or of any government or
governmental body or commission or under any provision of this Deposit
Agreement.
2.7 LOST RECEIPTS, ETC. In case any Receipt shall be mutilated,
destroyed, lost or stolen, the Depositary in its discretion may execute and
deliver a Receipt of like form and tenor in exchange and substitution for such
mutilated Receipt, or in lieu of and in substitution for such destroyed, lost or
stolen Receipt, upon (i) the filing by the holder thereof with the Depositary of
evidence satisfactory to the Depositary of such destruction or loss or theft of
such Receipt, or the authenticity thereof and of his or her ownership thereof
and (ii) the furnishing of the Depositary with reasonable indemnification
satisfactory to it.
2.8 CANCELLATION AND DESTRUCTION OF SURRENDERED RECEIPTS. All Receipts
surrendered to the Depositary or any Depositary's agent shall be canceled by the
Depositary. Except as prohibited by applicable law or regulation, the Depositary
is authorized to destroy all Receipts so canceled.
ARTICLE 3
CERTAIN OBLIGATIONS OF THE HOLDERS
OF RECEIPTS AND THE COMPANY
3.1 FILING PROOFS, CERTIFICATES AND OTHER INFORMATION. Any holder of a
Depositary Share may be required from time to time to file such proof of
residence, or other matters or other information, to execute such certificates
and to make such representations and warranties as the Depositary or the Company
may reasonably deem necessary or proper. The Depositary or the Company may
withhold the delivery, or delay the registration of transfer, redemption or
exchange, of any Depositary Share or the withdrawal of any Stock underlying
Depositary Shares or the distribution of any dividend or other distribution or
the sale of any rights or of the proceeds thereof until such proof or other
information is filed or such certificates are executed or such representations
and warranties are made.
3.2 PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. Holders of
Depositary Shares shall be obligated to make payments to the Depositary of
certain charges and expenses, as provided in Section 5.7. Registration of
transfer of any Depositary Share or any withdrawal of Stock and delivery of all
money or other property, if any, underlying such Depositary Share may be refused
until any such payment due is made, and any dividends or other distributions may
be withheld or all or any part of the Stock or other property relating to such
Depositary Shares and not theretofore sold may be sold for the account of the
holder thereof (after attempting by reasonable means to notify such holder prior
to such sale), and such dividends or other distributions or the proceeds of any
such sale may be applied to any payment of such charges or expenses, the holder
of such Depositary Share remaining liable for any deficiency.
3.3 WARRANTY AS TO STOCK. The Company hereby represents and warrants
that the Stock, when issued, will be validly issued, fully paid and
nonassessable. Such representation and warranty shall survive the deposit of the
Stock and the issuance of the Receipts.
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ARTICLE 4
THE DEPOSITED SECURITIES; NOTICES
4.1 CASH DISTRIBUTIONS. Whenever the Depositary shall receive any cash
dividend or other cash distribution on the Stock, the Depositary shall, subject
to Sections 3.1 and 3.2, distribute to the Record Holders of Depositary Shares
on the record date fixed pursuant to Section 4.4 such amounts of such dividend
or distribution as are, as nearly as practicable, in proportion to the
respective numbers of Depositary Shares held by such holders; provided, however,
that in case the Company or the Depositary shall be required to withhold and
shall withhold from any cash dividend or other cash distribution in respect of
the Stock an amount on account of taxes, the amount made available for
distribution or distributed in respect of Depositary Shares shall be reduced
accordingly. The Depositary shall distribute or make available for distribution,
as the case may be, only such amount, however, as can be distributed without
attributing to any holder of Depositary Shares a fraction of one cent, and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and be treated as part of the next
sum received by the Depositary for distribution to Record Holders of Depositary
Shares then outstanding.
4.2 DISTRIBUTIONS OTHER THAN CASH. Whenever the Depositary shall
receive any distribution other than cash on the Stock, the Depositary shall,
subject to Sections 3.1 and 3.2, distribute to the Record Holders of Depositary
Shares on the record date fixed pursuant to Section 4.4 such amounts of the
securities or property received by it as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares held by such holders,
in any manner that the Depositary may deem equitable and practicable for
accomplishing such distribution. If in the opinion of the Depositary such
distribution cannot be made proportionately among such Record Holders, or if for
any other reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes or governmental charge) the Depositary
deems, after consultation with the Company, such distribution not to be
feasible, the Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Sections 3.1 and 3.2, be distributed or made available for
distribution, as the case may be, by the Depositary to the Record Holders of
Depositary Shares entitled thereto as provided by Section 4.1 in the case of a
distribution received in cash. The Company shall not make any distribution of
such securities unless the Company shall have provided an opinion of counsel to
the effect that such securities have been registered under the Securities Act of
1933 or do not need to be registered.
4.3 SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the Company
shall at any time offer or cause to be offered to the persons in whose names
Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the Record Holders of Depositary Shares in such manner as the Depositary may
determine, either by the issue to such Record Holders of warrants representing
such rights, preferences or privileges or by such other method as may be
approved by the Depositary in its discretion with the approval of the Company;
provided, however, that (i) if at the time of issue or offer of any such rights,
preferences or privileges the Depositary determines that it is not lawful or
(after consultation with the Company) not feasible to make such rights,
preferences or privileges available to holders of Depositary Shares by the issue
of warrants or otherwise, or (ii) if and to the extent so instructed by holders
of Depositary Shares who do not desire to exercise such rights, preferences or
privileges, then the Depositary, in its discretion (with the approval of the
Company, in any case where the Depositary has determined that it is not feasible
to make such rights, preferences or privileges available), may, if applicable
laws or the terms of such rights, preferences or privileges permit such
transfer, sell such rights, preferences or privileges at public or private sale,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Sections 3.1 and 3.2, be distributed
by the Depositary to the Record Holders of Depositary Shares entitled thereto as
provided by Section 4.1 in the case of a distribution received in cash. The
Company shall not make any distribution of such rights, preferences or
privileges unless the Company shall have provided an opinion of counsel to the
effect that such rights, preferences or privileges have been registered under
the Securities Act of 1933 or do not need to be registered.
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If registration under the Securities Act of 1933 of the securities to
which any rights, preferences or privileges relate is required in order for
holders of Depositary Shares to be offered or sold the securities to which such
rights, preferences or privileges relate, the Company agrees with the Depositary
that it will file promptly a registration statement pursuant to such Act with
respect to such rights, preferences or privileges and securities to use its best
efforts to take all steps available to it to cause such registration statement
to become effective sufficiently in advance of the expiration of such rights,
preferences or privileges to enable such holders to exercise such rights,
preferences or privileges. In no event shall the Depositary make available to
the holder of Depositary Shares any right, preference or privilege to subscribe
for or to purchase any securities unless and until such a registration statement
shall have become effective, or unless the offering and sale of such securities
to such holders are exempt from registration under the provision of such Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to the
holders of Depositary Shares, the Company agrees with the Depositary that the
Company will use its best efforts to take such action or obtain such
authorization, consent or permit sufficiently in advance of the expiration of
such rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges.
4.4 NOTICE OF DIVIDENDS, ETC.; FIXING OF RECORD DATE FOR HOLDERS OF
DEPOSITARY SHARES. Whenever any cash dividend or other cash distribution shall
become payable or any distribution other than cash shall be made, or if rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or whenever the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote, or of which holders of Stock are entitled
to notice, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Company with respect to
the Stock) for the determination of the holders of Depositary Shares who shall
be entitled to receive a distribution in respect of such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof, or to
give instructions for the exercise of voting rights at any such meeting, or who
shall be entitled to receive notice of such meeting.
4.5 VOTING RIGHTS. Upon receipt of notice of any meeting at which the
holders of the Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the Record Holders of Depositary Shares a notice
which shall contain (i) such information as is contained in such notice of
meeting and (ii) a statement informing holders of Depositary Shares that they
may instruct the Depositary as to the exercise of the voting rights pertaining
to the amount of Stock underlying their respective Depositary Shares and a brief
statement as to the manner in which such instructions may be given. Upon the
written request of the holders of Depositary Shares on the record date
established in accordance with Section 4.4, the Depositary shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of whole shares of
Stock underlying the Depositary Shares as to which any particular voting or
consent instructions are received. The Company hereby agrees to take all action
which may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be voted. In the absence of
specific instructions from the holder of a Depositary Share, the Depositary will
abstain from voting (but, at its discretion, not from appearing at any meeting
with respect to such Stock unless directed to the contrary by the holders of all
the Depositary Shares) to the extent of the Stock underlying the Depositary
Shares.
4.6 CHANCES AFFECTING DEPOSITED SECURITIES AND RECLASSIFICATIONS.
Recapitalizations. etc. Upon any change in par or liquidation value, split-up,
combination or any other reclassification of the Stock, or upon any
recapitalization, reorganization, merger, amalgamation or consolidation
affecting the Company or to which it is a party, the Depositary may in its
discretion, with the approval of, and shall upon the instructions of, the
Company, and (in either case) in such manner as the Depositary may deem
equitable, (i) make such adjustments in (A) the fraction of an interest in one
share of Stock underlying one Depositary Share and (B) the ratio of the
redemption price per Depositary Share to the redemption price of a share of the
Stock, in each case as may be necessary fully to reflect the effects of such
change in par or liquidation value, split-up, combination or other
reclassification of the Stock, or of such recapitalization, reorganization,
merger, amalgamation or consolidation and (ii) treat any securities which shall
be received by the Depositary in exchange for or upon conversion of or in
respect of the Stock as new deposited securities so received in exchange for or
upon conversion of or in respect of such Stock. In any such case
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the Depositary may in its discretion, with the approval of the Company, execute
and deliver additional Receipts, or may call for the surrender of all
outstanding Receipts to be exchanged for new Receipts specifically describing
such new deposited securities.
4.7 DELIVERY REPORTS. The Depositary will forward to Record Holders of
Receipts, at their respective addresses appearing in the Depositary's books, all
notices, reports and communications received from the Company which are
delivered to the Depositary and which the Company is required to furnish to the
holders of Stock or Receipts.
4.8 LIST OF HOLDERS. Promptly upon request from time to time by the
Company, the Depositary shall furnish to it a list, as of a recent date, of the
names, addresses and holdings of Depositary Shares of all persons in whose names
Depositary Shares are registered on the books of the Depositary or Registrar, as
the case may be.
ARTICLE 5
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
5.1 MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER BOOKS BY THE
DEPOSITARY; REGISTRAR. Upon execution of this Deposit Agreement, the Depositary
shall maintain at the Depositary's Offices, or at any Registrar's Office, at
which the Depositary shall have complete access to all books and records
maintained on the Company's behalf, facilities for the execution and delivery,
surrender and exchange of Receipts and the registration and registration of
transfer of Depositary Shares, and at the offices of the Depositary's Agents, if
any, facilities for the delivery, surrender and exchange of Receipts and the
registration of transfer of Depositary Shares, all in accordance with the
provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Depositary Shares, which books at
all reasonable times shall be open for inspection by the Record Holders of
Depositary Shares; provided, that any such holder requesting to exercise such
right shall certify to the Depositary that such inspection shall be for a proper
purpose reasonably related to such person's interest as an owner of Depositary
Shares.
The Depositary may close such books, at any time or from time to time,
when deemed expedient by it in connection with the performance of its duties
hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the Stock
underlying such Depositary Shares shall be listed on the New York Stock
Exchange, the Depositary may, with the approval of the Company, appoint a
Registrar for registration of such Receipts or Depositary Shares in accordance
with any requirements of such Exchange. Such Registrar (which may be the
Depositary if so permitted by the requirements of such Exchange) may be removed
and a substitute registrar appointed by the Depositary upon the request or with
the approval of the Company. If the Receipts, such Depositary Shares or such
Stock are listed on one or more other stock exchanges, the Depositary will, at
the request of the Company, arrange such facilities for the delivery,
registration, registration of transfer, surrender and exchange of such Receipts,
such Depositary Shares or such Stock as may be required by law or applicable
stock exchange regulation.
5.2 PREVENTION OF OR DELAY IN PERFORMANCE BY THE DEPOSITARY, THE
DEPOSITARV'S AGENTS, ANY REGISTRAR OR THE COMPANY. Neither the Depositary nor
any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder of any Depositary Share if by reason of any provision of
any present or future law, or regulation thereunder, of the United States of
America or of any other governmental authority or, in the case of the
Depositary, any Depositary's Agent or any Registrar, by reason of any provision,
present or future, of the Company's Certificate of Incorporation (including the
Certificate) or by reason of any event of force majeure or war or other
circumstance beyond the control of the relevant party, the Depositary, any
Depositary's Agent, any Registrar or the Company shall be prevented or forbidden
from doing or performing any act or thing which the terms of this Deposit
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Agreement provide shall be done or performed; nor shall the Depositary, any
Depositary's Agent, any Registrar or the Company incur any liability to any
holder of a Depositary Share (i) by reason of any nonperformance or delay,
caused as aforesaid, in the performance of any act or thing which the terms of
this Deposit Agreement provide shall or may be done or performed, or (ii) by
reason of any exercise of, or failure to exercise, any discretion provided for
in this Deposit Agreement except, in case of any such exercise or failure to
exercise discretion not caused as aforesaid, if caused by the gross negligence
or willful misconduct of the party charged with such exercise or failure to
exercise.
5.3 OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, ANY
REGISTRAR AND THE COMPANY. Neither the Depositary nor any Depositary's Agent nor
any Registrar nor the Company assumes any obligation or shall be subject to any
liability under this Deposit Agreement to holders of Depositary Shares other
than for its negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Stock, the Depositary Shares
or the Receipts which in its opinion may involve it in expense or liability
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or information
from any person presenting Stock for deposit, any holder of a Depositary Share
or any other person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any Registrar and the
Company may each rely and shall each be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Stock or for the manner or effect
of any such vote, as long as any such action or nonaction is in good faith. The
Depositary undertakes, and any Registrar shall be required to undertake, to
perform such duties and only such duties as are specifically set forth in this
Deposit Agreement, and no implied covenants or obligations shall be read into
this Deposit Agreement against the Depositary or any Registrar. The Depositary
will indemnify the Company against any liability which may arise out of acts
performed or omitted by the Depositary or its agents due to its or their
negligence or bad faith. The Depositary, the Depositary's Agents, any Registrar
and the Company may own and deal in any class of securities of the Company and
its affiliates and in Depositary Shares. The Depositary may also act as transfer
agent or registrar of any of the securities of the Company and its affiliates.
5.4 RESIGNATION AND REMOVAL OF THE DEPOSITARY; APPOINTMENT OF SUCCESSOR
DEPOSITARY. The Depositary may at any time resign as Depositary hereunder by
notice of its election so to do delivered to the Company, such resignation to
take effect upon the appointment of a successor Depositary and its acceptance of
such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.
In case the Depositary acting hereunder shall at any time resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor Depositary,
which shall be a bank or trust company having its principal office in the United
States of America and having a combined capital and surplus of at least
$50,000,000. If no successor Depositary shall have been so appointed within 60
days after delivery of such notice, the resigning or removed Depositary may
petition any court of competent jurisdiction for the appointment of a successor
Depositary. Every successor Depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor Depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties
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and obligations of its predecessor and for all purposes shall be the Depositary
under this Deposit Agreement, and such predecessor, upon payment of all sums due
it and on the written request of the Company, shall execute and deliver an
instrument transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all right, title
and interest in the Stock and any moneys or property held hereunder to such
successor and shall deliver to such successor a list of the Record Holders of
all outstanding Depositary Shares. Any successor Depositary shall promptly mail
notice of its appointment to the Record Holders of Depositary Shares.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
Depositary may authenticate the Receipts in the name of the predecessor
Depositary or in the name of the successor Depositary.
5.5 CORPORATE NOTICES AND REPORTS. The Company agrees that it will
transmit to the Depositary all notices, reports and communications (including,
without limitation, financial statements) required by law, the rules of any
national securities exchange upon which the Stock, the Depositary Shares or the
Receipts are listed or by the Company's Certificate of Incorporation (including
the Certificate) to be furnished by the Company to holders of the Stock.
5.6 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify the
Depositary, any Depositary's Agent and any Registrar against, and hold each of
them harmless from, any loss, liability or expense (including the costs and
expenses of defending itself) which may arise out of (i) acts performed or
omitted in connection with this Deposit Agreement and the Depositary Shares (a)
by the Depositary, any Registrar or any of their respective agents (including
any Depositary's Agent), except for any liability arising out of negligence,
willful misconduct or bad faith on the respective parts of any such person or
persons, or (b) by the Company or any of its agents, or (ii) the offer, sale or
registration of the Depositary Shares or the Stock pursuant to the provisions
hereof. The obligations of the Company set forth in this Section 5.6 shall
survive any succession of any Depositary, Registrar or Depositary's Agent.
5.7 CHARGES AND EXPENSES. The Company shall pay all transfer and other
taxes and governmental charges arising solely from the existence of the
depositary arrangements. The Company shall pay all charges of the Depositary in
connection with the initial deposit of the Stock and the initial issuance of the
Receipts, any redemption of the Stock at the option of the Company and any
withdrawals of Stock by holders of Depositary Shares. All other transfer and
other taxes and governmental charges shall be at the expense of holders of
Depositary Shares. If, at the request of a holder of a Depositary Share, the
Depositary incurs charges or expenses for which it is not otherwise liable
hereunder, such holder will be liable for such charges and expenses. All other
reasonable charges and expenses of the Depositary, any Depositary's Agent
hereunder and any Registrar (including, in each case, reasonable fees and
expenses of counsel) incident to the performance of their respective obligations
hereunder will be paid upon consultation and agreement between the Depositary
and the Company as to the amount and nature of such charges and expenses. The
Depositary shall present its statement for charges and expenses to the Company
once every three months or at such other intervals as the Company and the
Depositary may agree.
ARTICLE 6
AMENDMENT AND TERMINATION
6.1 AMENDMENT. The form of the Receipts and any provisions of this
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary in any respect which they may deem
necessary or desirable; provided, however, that no such amendment which shall
materially and adversely alter the rights of the existing holders of Depositary
Shares shall be effective unless such amendment shall have been approved by the
holders of at least a majority of the Depositary Shares then outstanding. Each
holder of an outstanding Depositary Share at the time any such amendment becomes
effective shall be deemed, by continuing to hold such Depositary Share, to
consent and agree to such amendment and to be bound by this Deposit Agreement as
amended thereby.
-10-
<PAGE>
6.2 TERMINATION. This Deposit Agreement may be terminated by the
Company or the Depositary only after (i) all outstanding Depositary Shares shall
have been redeemed and any accumulated and unpaid dividends on the Stock
represented by the Depositary Shares, together with all other moneys and
property, if any, to which holders of the related Receipts are entitled under
the terms of such Receipts or this Deposit Agreement, have been paid or
distributed as provided in this Deposit Agreement or provision therefor has been
duly made pursuant to Section 2.3 or (ii) there shall have been made a final
distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Receipts pursuant to Section 4.1 or 4.2, as
applicable.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary, any Depositary's Agents and any Registrar under
Sections 5.6 and 5.7.
ARTICLE 7
MISCELLANEOUS
7.1 COUNTERPARTS. This Deposit Agreement may be executed in any number
of counterparts, and by each of the parties hereto on separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed an
original, but all such counterparts taken together shall constitute one and the
same instrument.
7.2 EXCLUSIVE BENEFIT OF PARTIES. This Deposit Agreement is for the
exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
7.3 INVALIDITY OF PROVISIONS. In case any one or more of the provisions
contained in this Deposit Agreement or in the Receipts should be or become
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
7.4 NOTICES. Any and all notices to be given to the Company hereunder
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail or telegram or telex confirmed by
letter, addressed to the Company at 201 Mission Street, 28th Floor, San
Francisco, California 94105 to the attention of ________________, or at any
other address of which the Company shall have notified the Depositary in
writing.
Any and all notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail or by telegram or telex confirmed by
letter, addressed to the Depositary at the Depositary's office, at
______________, ______________, _______________, or at any other address of
which the Depositary shall have notified the Company in writing.
Any and all notices to be given to any Record Holder of a Depositary
Share hereunder or under the Receipts shall be in writing and shall be deemed to
have been duly given if personally delivered or sent by mail or by telegram or
telex confirmed by letter, addressed to such Record Holder at the address of
such Record Holder as it appears on the books of the Depositary, or if such
holder shall have filed with the Depositary a written request that notices
intended for such holder be mailed to some other address, at the address
designated in such request.
Delivery of a notice sent by mail or by telegram or telex shall be
deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telegram or telex message) is
deposited, postage prepaid, in a post office letter box. The Depositary or the
Company may, however, act upon any telegram or telex message received by it from
the other or from any holder of a Depositary Share, notwithstanding that such
telegram or telex message shall not subsequently be confirmed by letter or as
aforesaid.
-11-
<PAGE>
7.5 DEPOSITARY'S AGENTS. The Depositary may from time to time, with the
prior approval of the Company, appoint Depositary's Agents to act in any respect
for the Depositary for the purposes of this Deposit Agreement and may at any
time appoint additional Depositary's Agents and vary or terminate the
appointment of such Depositary's Agents. The Depositary will notify the Company
of any such action.
7.6 HOLDERS OF RECEIPTS ARE PARTIES. The holders of Depositary Shares
from time to time shall be parties to this Deposit Agreement and shall be bound
by all of the terms and conditions hereof and of the Receipts evidencing such
Depositary Shares by acceptance of delivery thereof.
7.7 GOVERNING LAW. THIS DEPOSIT AGREEMENT AND RECEIPTS AND ALL RIGHTS
HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF [NEW YORK].
7.8 INSPECTION OF DEPOSIT AGREEMENT. Copies of this Deposit Agreement
shall be filed with the Depositary and the Depositary's Agents and shall be open
to inspection during business hours at the Depositary's of flee and the
respective of flees of the Depositary's Agents, if any, by any holder of a
Depository Share.
7.9 HEADINGS. The headings of articles and sections in this Deposit
Agreement and in the form of Receipt set forth in Exhibit A hereto have been
inserted for convenience only and are not to be regarded as part of this Deposit
Agreement or the Receipts or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Deposit Agreement as of the day and year first above set forth, and all
holders or Depositary Shares shall become parties hereto by and upon a
acceptance by them of delivery of Receipts evidencing such Depositary Shares and
issued in accordance with the terms hereof.
PROVIDIAN FINANCIAL CORPORATION
By
--------------------------------------
Title
-----------------------------------
[NAME OF DEPOSITORY]
By
--------------------------------------
Title
-----------------------------------
-12-
<PAGE>
EXHIBIT A
FORM OF DEPOSITARY RECEIPT
FOR DEPOSITARY SHARES
[GENERAL FORM OF FACE OF RECEIPT]
NUMBER DEPOSITARY SHARES
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES,
REPRESENTING PREFERRED STOCK
PROVIDIAN FINANCIAL CORPORATION
Incorporated under the laws of the State of Delaware
This Depositary Receipt is transferable
in the City of _____________
___________________, as Depositary, (the "Depositary"), hereby
certifies that ____________ is the registered owner of _________________
Depositary Shares ("Depositary Shares"), each Depositary Share representing
_______________) of one share of ______________ Preferred Stock, Series __, par
value $.01 per share (the "Stock"), of Providian Financial Corporation, a
Delaware corporation (the "Company"), on deposit with the Depositary, subject to
the terms and entitled to the benefits of the Deposit Agreement dated as of
__________, 199__ (the "Deposit Agreement", between the Company, the Depositary
and all holders from time to time of Depositary Receipts. By accepting this
Depositary Receipt the holder hereof becomes a party to and agrees to be bound
by all the term and conditions of the Deposit Agreement. This Depositary Receipt
shall not be valid or obligatory for any purpose or entitled to any benefits
under the Deposit Agreement unless it shall have been executed by the Depositary
by the manual signature of a duly authorized officer or, if executed in
facsimile by the Depositary, countersigned by a Registrar in respect of the
Depositary Receipts by the manual signature of a duly authorized officer
thereof.
Dated ________________ DEPOSITARY
By
------------------------------------
Title
---------------------------------
REGISTRAR
By
------------------------------------
Title
---------------------------------
A-1
<PAGE>
[GENERAL FORM OF REVERSE OF RECEIPT]
Providian Financial Corporation will furnish without charge to each
receiptholder who so requests a copy of the Deposit Agreement and a statement or
summary of the powers, designations, preferences and relative, participating,
option or other special rights of each class of stock or series thereof which
Providian Financial Corporation is authorized to issue and the qualifications,
limitations or restrictions of such preferences and/or rights. Any such request
is to be addressed to the Secretary of Providian Financial Corporation
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right survivorship and not as tenants in
common UNIF GIFT MIN ACT - ____________ Custodian ______________
(Cust) (State)
Additional abbreviations may also be used though not in the above list.
For value received, ____________________________________ hereby
sell(s), assign(s) and transfer(s) onto __________________________ (Please
insert social security or other identifying number of Assignee)
- --------------------------------------------------------------------------------
Please print or typewrite Name and address including postal Zip Code of Assignee
____________________ Depositary Shares represented by the within receipt and all
rights thereunder, and do hereby irrevocably constitute and appoint
_________________ Attorney to transfer said Depositary Shares on the books of
the within-named Depositary with full power of substitution in the premises.
Dated ___________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of this instrument in every particular, without alteration
or enlargement or any change whatever.
A-2
EXHIBIT 4.19
===============================================================================
SUBORDINATED INDENTURE
Between
PROVIDIAN FINANCIAL CORPORATION
and
THE BANK OF NEW YORK, AS TRUSTEE
Dated as of __________ __, 1998
================================================================================
<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1 DEFINITIONS...............................................................................1
Section 1.1. Certain Terms Defined................................................................1
ARTICLE 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION,
TRANSFER AND EXCHANGE OF SECURITIES.......................................................7
Section 2.1. Amount, Series, Execution, Authentication and Delivery of
Subordinated Securities..............................................................7
Section 2.2. Form of Subordinated Securities and Trustee's Certificate of
Authentication..................................................................... 12
Section 2.3. Denominations; Payment of Interest on Fully Registered Subordinated
Securities......................................................................... 13
Section 2.4. Execution of Subordinated Securities............................................... 15
Section 2.5. Registration, Transfer and Exchange of Subordinated Securities..................... 16
Section 2.6. Temporary Subordinated Securities.................................................. 17
Section 2.7. Mutilated, Destroyed, Lost or Stolen Subordinated Securities....................... 17
Section 2.8. Cancellation and Destruction of Surrendered Subordinated Securities................ 18
Section 2.9. Subordinated Securities in Global Form; Depositories............................... 18
ARTICLE 3 REDEMPTION OF SECURITIES................................................................ 20
Section 3.1. Redemption of Subordinated Securities.............................................. 20
Section 3.2. Notice of Redemption............................................................... 20
Section 3.3. Selection of Subordinated Securities for Redemption................................ 21
Section 3.4. Partial Redemption of Registered Subordinated Security............................. 21
Section 3.5. Effect of Redemption............................................................... 21
ARTICLE 4 PARTICULAR COVENANTS OF THE CORPORATION................................................. 22
Section 4.1. Payment of Principal of and Interest on Subordinated Securities.................... 22
Section 4.2. Corporate Existence of the Corporation; Consolidation, Merger, Sale
or Transfer........................................................................ 22
Section 4.3. Limitations of Dividends........................................................... 23
Section 4.4. Maintenance of Offices or Agencies for Transfer, Registration,
Exchange and Payment of Subordinated Securities.................................... 23
Section 4.5. Appointment to Fill a Vacancy in the Office of Trustee............................. 24
Section 4.6. Duties of Paying Agent............................................................. 24
Section 4.7. Notice of Default.................................................................. 25
ARTICLE 5 SECURITYHOLDERS' LISTS AND REPORTS BY THE
CORPORATION AND THE TRUSTEE............................................................. 25
Section 5.1. Corporation to Furnish Trustee Information As to the Names and
Addresses of Subordinated Securityholders.......................................... 25
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<PAGE>
Section 5.2. Preservation of Information; Communication to Subordinated
Securityholders.................................................................... 26
Section 5.3. Reports by Corporation............................................................. 27
Section 5.4. Reports by Trustee................................................................. 28
ARTICLE 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON
EVENT OF DEFAULT........................................................................ 30
Section 6.1. Events of Default; Acceleration, Waiver of Default and Restoration of
Position and Rights................................................................ 30
Section 6.2. Covenant of Corporation to Pay to Trustee Whole Amount Due on
Subordinated Securities on Default in Payment of Interest or Principal............. 32
Section 6.3. Trustee May File Proofs of Claim................................................... 33
Section 6.4. Trustee May Enforce Claims Without Possession of Subordinated
Securities......................................................................... 34
Section 6.5. Application of Moneys Collected By Trustee......................................... 34
Section 6.6. Limitation on Suits By Holders of Subordinated Securities.......................... 35
Section 6.7. Rights and Remedies Cumulative..................................................... 36
Section 6.8. Delay or Omission Not Waiver....................................................... 36
Section 6.9. Control By Holders; Waiver of Past Defaults........................................ 36
Section 6.10. Trustee to Give Notice of Defaults Known to It, But May Withhold in
Certain Circumstances.............................................................. 37
Section 6.11. Requirement of an Undertaking to Pay Costs in Certain Suits Under
this Subordinated Indenture or Against the Trustee................................. 37
ARTICLE 7 CONCERNING THE TRUSTEE.................................................................. 38
Section 7.1. Certain Duties and Responsibilities of Trustee..................................... 38
Section 7.2. Certain Rights of Trustee.......................................................... 39
Section 7.3. Trustee Not Responsible for Recitals or Application of Proceeds.................... 40
Section 7.4. Trustee May Own Subordinated Securities............................................ 40
Section 7.5. Moneys Received by Trustee to be Held in Trust..................................... 41
Section 7.6. Trustee Entitled to Compensation, Reimbursement and Indemnity...................... 41
Section 7.7. Right of Trustee to Rely on Officer's Certificate Where No Other
Evidence Specifically Prescribed................................................... 41
Section 7.8. Disqualification; Conflicting Interest............................................. 41
Section 7.9. Requirements for Eligibility of Trustee............................................ 48
Section 7.10. Resignation and Removal of Trustee; Appointment of Successor....................... 49
Section 7.11. Acceptance of Appointment by Successor Trustee..................................... 50
Section 7.12. Successor to Trustee by Merger, Consolidation or Succession to
Business........................................................................... 51
Section 7.13. Preferential Collection of Claims Against Corporation.............................. 51
ARTICLE 8 CONCERNING THE SECURITYHOLDERS.......................................................... 56
Section 8.1. Evidence of Action by Subordinated Securityholders................................. 56
Section 8.2. Proof of Execution of Instruments and of Holding of Subordinated
Securities......................................................................... 56
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<PAGE>
Section 8.3. Who May be Deemed Owners of Subordinated Securities................................ 57
Section 8.4. Subordinated Securities Owned by the Corporation or Controlled or
Controlling Persons Disregarded for Certain Purposes............................... 57
Section 8.5. Instruments Executed by Subordinated Securityholders Bind Future
Holders............................................................................ 58
ARTICLE 9 SECURITYHOLDERS' MEETINGS............................................................... 58
Section 9.1. Purposes for Which Meetings May be Called.......................................... 58
Section 9.2. Manner of Calling Meetings......................................................... 59
Section 9.3. Call of Meeting by the Corporation or Subordinated Securityholders................. 59
Section 9.4. Who May Attend and Vote at Meetings................................................ 59
Section 9.5. Regulations May be Made by Trustee; Conduct of the Meeting;
Voting Rights - Adjournment........................................................ 59
Section 9.6. Manner of Voting at Meetings and Record to be Kept................................. 60
Section 9.7. Exercise of Rights of Trustee and Subordinated Securityholders Not to
be Hindered or Delayed............................................................. 61
ARTICLE 10 SUPPLEMENTAL SUBORDINATED INDENTURES.................................................... 61
Section 10.1. Purposes for Which Supplemental Subordinated Indentures May be
Entered Into Without Consent of Subordinated Securityholders....................... 61
Section 10.2. Modification of Subordinated Indenture with Consent of Holders of
Subordinated Securities............................................................ 62
Section 10.3. Effect of Supplemental Subordinated Indentures..................................... 64
Section 10.4. Subordinated Securities May Bear Notation of Changes by
Supplemental Subordinated Indentures............................................... 64
ARTICLE 11 DISCHARGE; DEFEASANCE................................................................... 65
Section 11.1. Discharge of Subordinated Indenture................................................ 65
Section 11.2. Discharge of Liability on Subordinated Securities.................................. 65
Section 11.3. Discharge of Certain Covenants and Other Obligations............................... 65
Section 11.4. Discharge of Certain Obligations Upon Deposit of Money or
Subordinated Securities with Trustee............................................... 66
Section 11.5. Unclaimed Moneys................................................................... 67
ARTICLE 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS........................................................................... 67
Section 12.1. Incorporators, Stockholders, Officers and Directors of Corporation
Exempt From Individual Liability................................................... 67
ARTICLE 13 MISCELLANEOUS PROVISIONS................................................................ 68
Section 13.1. Successors and Assigns of the Corporation Bound by Subordinated
Indenture.......................................................................... 68
Section 13.2. Notices; Effectiveness............................................................. 68
Section 13.3. Compliance Certificates and Opinions............................................... 69
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<PAGE>
Section 13.4. Days on Which Payment to be Made, Notice Given or Other Action
Taken.............................................................................. 70
Section 13.5. Provisions Required by Trust Indenture Act of 1939 to Control...................... 71
Section 13.6. Governing Law...................................................................... 71
Section 13.7. Provisions of this Subordinated Indenture and Subordinated Securities
for the Sole Benefit of the Parties and the Subordinated
Securityholders.................................................................... 71
Section 13.8. Subordinated Indenture May be Executed in Counterparts............................. 71
</TABLE>
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<PAGE>
TABLE SHOWING REFLECTION IN THIS SUBORDINATED INDENTURE OF
CERTAIN PROVISIONS OF THE TRUST INDENTURE ACT OF 19391
<TABLE>
<CAPTION>
Section Section
of Act of Subordinated Indenture
- ------- -------------------------
<S> <C>
310(a)(1) .................................... 7.9
310(a)(2) .................................... 7.9
310(a)(3) .................................... Inapplicable
310(a)(4) .................................... Inapplicable
310(a)(5) .................................... 7.9
310(b) .................................... 7.8, 7.10
310(c) .................................... Inapplicable
311(a) .................................... 7.13(a), 7.13(c)
311(b) .................................... 7.13(b), 7.13(c)
311(c) .................................... Inapplicable
312(a) .................................... 5.1, 5.2(a)
312(b) .................................... 5.2(b)
312(c) .................................... 5.2(c)
313(a) .................................... 5.4(a)
313(b)(1) .................................... Inapplicable
313(b)(2) .................................... 5.4(b)
313(c) .................................... 5.4(c)
313(d) .................................... 5.4(d)
314(a)(1) .................................... 5.3(a)
314(a)(2) .................................... 5.3(b)
314(a)(3) .................................... 5.3(c)
314(a)(4) .................................... 5.3(d)
314(b) .................................... Inapplicable
314(c) .................................... 13.3
314(d) .................................... Inapplicable
314(e) .................................... 13.3
314(f) .................................... Omitted
315(a) .................................... 7.1
315(b) .................................... 6.10
315(c) .................................... 7.1
315(d) .................................... 7.1
315(e) .................................... 6.11
316(a)(1) .................................... 6.9
316(a)(2) .................................... Omitted
316(b) .................................... 6.6
316(c) .................................... 6.9
- --------
1 This Table is not part of the Subordinated Indenture.
-v-
<PAGE>
317(a) .................................... 6.2, 6.3
317(b) .................................... 4.8
318(a) .................................... 13.5
</TABLE>
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<PAGE>
SUBORDINATED INDENTURE
THIS SUBORDINATED INDENTURE, dated as of __________ __, 1998, between
PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation (the "Corporation"), and
THE BANK OF NEW YORK, a New York banking corporation (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Corporation has duly authorized the issuance, sale,
execution and delivery, from time to time, of its unsecured evidences of
indebtedness (hereinafter referred to as the "Subordinated Securities"), without
limit as to principal amount, issuable in one or more Series, the amount and
terms of each such Series to be determined as hereinafter provided; and, to
provide the terms and conditions upon which the Subordinated Securities are to
be issued, authenticated and delivered, the Corporation has duly authorized the
execution of this Subordinated Indenture; and
WHEREAS, all acts and things necessary to make the Subordinated
Securities, when executed by the Corporation and authenticated and delivered by
the Trustee as in this Subordinated Indenture provided, the valid, binding and
legal obligations of the Corporation, and to constitute this Subordinated
Indenture a valid indenture and agreement according to its terms, have been done
and performed, and the execution of this Subordinated Indenture and the issuance
hereunder of the Subordinated Securities have in all respects been duly
authorized;
NOW, THEREFORE, THIS SUBORDINATED INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Subordinated Securities are to be issued, authenticated and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Subordinated Securities by the Holders thereof, the Corporation covenants and
agrees with the Trustee, for the equal and proportionate benefit of the
respective Holders from time to time of the Subordinated Securities or of any
Series thereof, as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. CERTAIN TERMS DEFINED. For all purposes of this
Subordinated Indenture, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article One have the meanings
assigned to them in this Article One, and include the plural as well as
the singular;
-1-
<PAGE>
(b) all other terms used herein which are defined in the Trust
Indenture Act of 1939, either directly or by reference therein, have
the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein shall
have the meanings assigned to them and all computations herein provided
for shall be made, in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles"
shall mean such principles as they exist at the date of applicability
thereof; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Subordinated Indenture as a whole
and not to any particular Article, Section or other subdivision.
BOARD OF DIRECTORS
The term "Board of Directors" shall mean the Board of Directors of the
Corporation, or any duly authorized committee of such Board of Directors.
BUSINESS DAY
The term "Business Day" shall mean any day which is not a Saturday or
Sunday or which in the City and County of San Francisco or in The City of New
York is neither a legal holiday nor a day on which banking institutions are
authorized by law or regulation to close.
CERTIFIED RESOLUTION
The term "Certified Resolution" shall mean a resolution of the Board of
Directors of the Corporation certified by the Secretary or by an Assistant
Secretary of the Corporation to have been duly adopted by the Board of Directors
of the Corporation and to be in full force and effect on the date of such
certification.
COMMISSION
The term "Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted, created under the Securities
Exchange Act of 1934, as amended, or if at any time after the execution of this
Subordinated Indenture such Commission is not existing and performing the duties
theretofore assigned to it under the Trust Indenture Act of 1939, then the body
performing such duties at such time.
CORPORATION
The term "Corporation" shall mean Providian Financial Corporation, a
Delaware corporation, until a successor entity shall have become such pursuant
to the applicable provisions hereof, and thereafter "Corporation" shall mean
such successor entity.
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<PAGE>
DEPOSITORY
The term "Depository" shall mean, with respect to the Subordinated
Securities of any Series issuable or issued in whole or in part in the form of
one or more Global Subordinated Securities, the Person designated as Depository
by the Corporation pursuant to Section 2.1 of this Subordinated Indenture until
a successor Depository shall have become such pursuant to the applicable
provisions of this Subordinated Indenture, and thereafter the term "Depository"
shall mean or include each Person who is then a Depository hereunder, and if at
any time there is more than one such Person, "Depository" as used with respect
to the Subordinated Securities of any such Series shall mean the Depository with
respect to the Subordinated Securities of that Series.
EVENT OF DEFAULT
The term "Event of Default" with respect to Subordinated Securities of
any Series shall mean any event specified as such in Section 6.1 and any other
event as may be established with respect to the securities of such Series as
permitted by Section 2.1. An Event of Default shall "exist" if an Event of
Default shall have occurred and be continuing.
GLOBAL SUBORDINATED SECURITY
The term "Global Subordinated Security" shall mean a Subordinated
Security evidencing all or a portion of a Series of Subordinated Securities,
issued under this Subordinated Indenture and delivered to the Depository for
such Series in accordance with Section 2.9 of this Subordinated Indenture, and
bearing the legend prescribed in such Section 2.9.
INTEREST PAYMENT DATE
The term "Interest Payment Date" when used with respect to any
Subordinated Security means the Stated Maturity of an installment of interest on
such Subordinated Security.
OFFICER'S CERTIFICATE
The term "Officer's Certificate" shall mean a certificate signed by the
Chairman of the Board, any Vice-Chairman of the Board or the President, any
Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Corporation. Each such certificate shall include the
statements provided for in Section 13.3, if and to the extent required by the
provisions of such Section.
-3-
<PAGE>
OPINION OF COUNSEL
The term "Opinion of Counsel" shall mean a written opinion of counsel,
who may be counsel to the Corporation. Each such opinion shall include the
statements provided for in Section 13.3, if and to the extent required by the
provisions of such Section.
ORIGINAL ISSUE DISCOUNT SUBORDINATED SECURITY
The term "Original Issue Discount Subordinated Security" shall mean (a)
any Subordinated Security which provides for an amount less than the principal
amount thereof to be due and payable upon declaration of acceleration of the
maturity thereof pursuant to Section 6.1 or (b) any other Subordinated Security
which for United States Federal income tax purposes would be considered an
original issue discount security.
OUTSTANDING
The term "Outstanding" when used with reference to Subordinated
Securities shall, subject to the provisions of Section 8.4, mean, as of the date
of determination, all Subordinated Securities theretofore authenticated and
delivered under this Subordinated Indenture, except:
(a) Subordinated Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(b) Subordinated Securities for whose payment or redemption
moneys in the necessary amount have been theretofore deposited with the
Trustee or with any Paying Agent in trust for the Holders of such
Subordinated Securities, provided that if such Subordinated Securities
are to be redeemed, notice of such redemption has been duly given as
provided in Article Three hereof, or provision therefor satisfactory to
the Trustee has been made;
(c) Subordinated Securities in exchange for or in lieu of
which other Subordinated Securities shall have been authenticated and
delivered under this Subordinated Indenture; and
(d) Subordinated Securities alleged to have been destroyed,
lost or stolen which have been paid as provided in Section 2.7 hereof.
In determining whether the Holders of the requisite principal amount of
Outstanding Subordinated Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Subordinated Security that shall be deemed
to be Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination as if a
declaration of acceleration of the maturity thereof pursuant to Section 6.1 had
been made.
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PAYING AGENT
The term "Paying Agent" means any Person authorized by the Corporation
to pay the principal of and any interest and premium on any Subordinated
Securities on behalf of the Corporation.
PERIODIC OFFERING
The term "Periodic Offering" means an offering from time to time of
Subordinated Securities of a Series, the specific terms of which (including,
without limitation, the rate or rates of interest, if any, thereon or any
methods of calculating such, the maturity date or dates thereof and any
redemption provisions with respect thereto) are to be determined by the
Corporation or its agents upon the issuance of such Series of Subordinated
Securities.
PERSON
The term "Person" shall mean an individual, a corporation, a
partnership, a joint venture, an association, a joint stock company, a trust, an
unincorporated organization, or a government or any agency, authority or
political subdivision thereof.
PRINCIPAL OFFICE OF THE TRUSTEE
The term "Principal Office of the Trustee" shall mean the principal
office of the Trustee in New York at which at any particular time
its corporate trust business shall be administered, except that with respect to
presentation of Subordinated Securities for payment such term shall mean the
office or agency of the Trustee at which at any particular time its corporate
agency business shall be conducted. The present address of the principal office
at which the corporate trust business of the Trustee is administered is
101 Barclay Street, Floor 21W, New York, NY 10286.
RECORD DATE
The term "Record Date" for the interest payable on any Interest Payment
Date on any Series of Subordinated Securities shall mean the date specified as
such in the Subordinated Securities of such Series.
REDEMPTION DATE
The term "Redemption Date" when used with respect to any Subordinated
Security to be redeemed means the date fixed for such redemption pursuant to
this Subordinated Indenture.
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REDEMPTION PRICE
The term "Redemption Price" when used with respect to any Subordinated
Security to be redeemed means the price at which it is to be redeemed pursuant
to this Subordinated Indenture. It includes any applicable premium but does not
include installments of interest whose Stated Maturity is on or before the
Redemption Date.
REGISTER
The term "Register" shall mean the books for the registration and
transfer of Subordinated Securities which books are kept by the Trustee pursuant
to Section 2.5.
RESPONSIBLE OFFICER
The term "Responsible Officer" when used with respect to the Trustee
shall mean the chairman and vice-chairman of the board of directors, the
chairman and vice-chairman of the executive committee of said board, the
president, any vice-president or second vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any corporate trust officer, the controller, any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer of
the Trustee to whom such matter is referred because of such Person's knowledge
of and familiarity with the particular subject.
SERIES
The term "Series" shall mean an issue of Subordinated Securities under
this Subordinated Indenture.
STATED MATURITY
The term "Stated Maturity" when used with respect to any Subordinated
Security or any installment of interest thereon means the date specified in such
Subordinated Security as the fixed date on which the principal of such
Subordinated Security or such installment of interest is due and payable.
SUBORDINATED INDENTURE
The term "Subordinated Indenture" shall mean this instrument as
originally executed, or as it may from time to time be supplemented, modified or
amended, as provided herein, and shall include the form and terms of particular
Series of Subordinated Securities established in accordance with the provisions
of Sections 2.1 and 2.2.
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SUBORDINATED SECURITY OR SUBORDINATED SECURITIES
The terms "Subordinated Security" or "Subordinated Securities" shall
mean any security or securities of the Corporation without regard to Series,
authenticated and delivered under this Subordinated Indenture.
SUBORDINATED SECURITYHOLDER; HOLDER
The terms "Subordinated Securityholder" or "Holder", whenever employed
herein with respect to a Subordinated Security, shall mean the Person in whose
name such Subordinated Security shall be registered on the Register.
SUPPLEMENTAL SUBORDINATED INDENTURE
The term "Supplemental Subordinated Indenture" shall mean an indenture
supplemental hereto as such Supplemental Subordinated Indenture may be
originally executed, or as it may from time to time be supplemented, modified or
amended, as provided herein and therein.
TRUSTEE
The term "Trustee" shall mean The Bank of New York until a successor
Trustee shall have become such pursuant to the applicable provisions of this
Subordinated Indenture, and thereafter "Trustee" shall mean such successor
Trustee.
TRUST INDENTURE ACT OF 1939
The term "Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939, as amended as of the date of this Subordinated Indenture.
UNITED STATES DOLLARS
The term "United States Dollars" shall mean the lawful currency of the
United States of America.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION,
TRANSFER AND EXCHANGE OF SECURITIES
SECTION 2.1. AMOUNT, SERIES, EXECUTION, AUTHENTICATION AND DELIVERY OF
SUBORDINATED SECURITIES. The aggregate principal amount of Subordinated
Securities which may be authenticated and delivered under this Subordinated
Indenture is not limited. The Subordinated Securities may be issued in one or
more Series.
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(A) The following terms and provisions of each Series of Subordinated
Securities shall be established by a resolution of the Board of Directors and
set forth in either a Certified Resolution or a Supplemental Subordinated
Indenture:
(1) the designation of the Series of Subordinated Securities
(which shall distinguish the Subordinated Securities of such
Series from all other Series of Subordinated Securities),
(2) any limit upon the aggregate principal amount of the
particular Series of Subordinated Securities which may be
executed, authenticated and delivered under this Subordinated
Indenture; PROVIDED, HOWEVER, that nothing contained in this
Section 2.1 or elsewhere in this Subordinated Indenture or in
the Subordinated Securities or in such Certified Resolution or
in a Supplemental Subordinated Indenture is intended to or
shall limit execution by the Corporation or authentication and
delivery by the Trustee of Subordinated Securities under the
circumstances contemplated by Sections 2.5, 2.6, 2.7, 3.4 and
10.4,
(3) the currency or currencies or composite currency in which
principal of and interest and any premium on such Series of
Subordinated Securities shall be payable (if other than in
United States Dollars),
(4) the Stated Maturity for payment of principal of such Series of
Subordinated Securities and any sinking fund or analogous
provisions,
(5) the rate or rates at which such Series of Subordinated
Securities shall bear interest or the method of calculating
such rate or rates of interest and the Interest Payment Dates
for such Series of Subordinated Securities,
(6) the place or places where such Series of Subordinated
Securities may be presented for payment and for the other
purposes provided in Section 4.6,
(7) any Redemption Price or Prices, the Redemption Date or Dates
and other applicable redemption or repurchase provisions for
such Series of Subordinated Securities,
(8) whether such Series of Subordinated Securities shall be
issuable as one or more Global Subordinated Securities and the
form of such Series of Subordinated Securities,
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(9) if the Subordinated Securities of such Series shall be issued
in whole or in part as one or more Global Subordinated
Securities, the Depository for such Global Subordinated
Security or Securities and any additional terms and conditions
relating to such Global Subordinated Securities not set forth
in this Subordinated Indenture,
(10) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which such Series of
Subordinated Securities shall be issuable,
(11) the date from which interest on such Subordinated Securities
shall accrue,
(12) the basis upon which interest on such Series of Subordinated
Securities shall be computed (if other than on the basis of a
360- day year of twelve 30-day months),
(13) if other than the principal amount thereof, the portion of the
principal amount of such Series of Subordinated Securities
which shall be payable upon declaration of acceleration of the
maturity thereof pursuant to Section 6.1,
(14) the Person or Persons who shall be registrar for such Series
of Subordinated Securities, and the place or places where the
Register of such Series of Subordinated Securities shall be
kept,
(15) any additional events of default with respect to the
Subordinated Securities of a particular Series not set forth
herein,
(16) any additional covenants of the Corporation with respect to
the Subordinated Securities of a particular Series not set
forth herein,
(17) the terms of subordination applicable to such Series of
Subordinated Securities,
(18) the terms and conditions, if any, upon which any Subordinated
Securities of such Series may or shall be converted into other
instruments or other forms of property, and
(19) any other terms of such Series of Subordinated Securities
(which terms shall not be inconsistent with the provisions of
this Subordinated Indenture).
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All Subordinated Securities of any one Series shall be substantially
identical except that any Series may have serial maturities and different
interest rates for different maturities and except as to denomination and the
differences herein specified between Global Subordinated Securities and
Subordinated Securities issued in definitive form and except as may otherwise be
provided in or pursuant to the Certified Resolution or Supplemental Subordinated
Indenture relating to such Series of Subordinated Securities. All Subordinated
Securities of any one Series need not be issued at the same time, and, unless
otherwise provided in the Certified Resolution or Supplemental Subordinated
Indenture relating to such Series, a Series may be reopened for issuances of
additional Subordinated Securities of such Series.
(B) At any time and from time to time after the execution and delivery
of this Subordinated Indenture, the Corporation may deliver any Series of
Subordinated Securities executed by the Corporation to the Trustee for
authentication by it, and the Trustee shall thereupon authenticate and deliver
said Subordinated Securities (or if only a single Global Subordinated Security,
such Global Subordinated Security) to or upon the written order of the
Corporation, signed by an officer of the Corporation, without any further
corporate action. In authenticating such Subordinated Securities and accepting
the additional responsibilities under this Subordinated Indenture in relation to
such Subordinated Securities and except as hereinafter provided with respect to
a Series of Subordinated Securities subject to a Periodic Offering, the Trustee
shall be entitled to receive, and (subject to Section 7.1) shall be fully
protected in relying upon:
(1) each Certified Resolution relating to such Series of
Subordinated Securities,
(2) an executed Supplemental Subordinated Indenture, if any,
relating to such Series of Subordinated Securities,
(3) an Opinion of Counsel to the effect that:
(a) the terms and form of such Subordinated Securities
have been established as permitted by Sections 2.1 and
2.2 in conformity with the provisions of this
Subordinated Indenture,
(b) such Subordinated Securities, when executed and issued
by the Corporation and authenticated and delivered by
the Trustee in accordance with the provisions of this
Subordinated Indenture and subject to any conditions
specified in such Opinion of Counsel, will constitute
valid and binding obligations of the Corporation,
except as any rights thereunder may be limited by the
effect of bankruptcy, insolvency, reorganization,
receivership, conservatorship, arrangement, moratorium
or other laws
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affecting or relating to the rights of creditors
generally; the rules governing the availability of
specific performance, injunctive relief or other
equitable remedies and general principles of equity,
regardless of whether considered in a proceeding in
equity or at law; the effect of applicable court
decisions invoking statutes or principles of equity,
which have held that certain covenants and provisions
of agreements are unenforceable where the breach of
such covenants or provisions imposes restrictions or
burdens upon a borrower, and it cannot be demonstrated
that the enforcement of such restrictions or burdens
is necessary for the protection of the creditor, or
which have held that the creditor's enforcement of
such covenants or provisions under the circumstances
would have violated the creditor's covenants of good
faith and fair dealing implied under California law;
and the effect of California statutes and rules of law
which cannot be waived prospectively by a borrower,
and
(c) the Corporation has complied with all applicable
Federal laws and requirements in respect of the
execution and delivery of such Subordinated
Securities.
With respect to a Series of Subordinated Securities subject to a Periodic
Offering, the Trustee shall be entitled to receive, and, subject to Section 7.1,
shall be fully protected in relying upon the documents described in the
foregoing subsections (1), (2) and (3) of this Section 2.1(B); PROVIDED THAT (i)
the Certified Resolution may be delivered to the Trustee prior to the delivery
to the Trustee of such Subordinated Securities for authentication and delivery,
(ii) the Trustee shall authenticate and deliver Subordinated Securities of such
Series for original issue from time to time, in an aggregate principal amount
not exceeding the aggregate principal amount, if any, established for such
Series, pursuant to such Certified Resolution or pursuant to such procedures as
may be specified from time to time by a Certified Resolution, (iii) the maturity
date or dates, original issue date or dates, interest rate or rates or the
method or methods of calculating such and any other terms of the Subordinated
Securities of such Series shall be determined by the Certified Resolution or
pursuant to such procedures, (iv) if provided for in such procedures, such
Certified Resolution may authorize authentication and delivery pursuant to oral
or electronic instructions from the Corporation or its duly authorized agent or
agents, which oral instructions shall be promptly confirmed in writing and (v)
the Trustee shall be entitled to receive an Opinion of Counsel only once at or
prior to the time of the first authentication of Subordinated Securities of such
Series and the opinions described in the foregoing subsections (3)(a) and (3)(b)
of this Section 2.1(B) may be to the effect that:
(x) the form of the Subordinated Securities of such Series has
been duly authorized by the Corporation and has been established in
conformity with the provisions of this Subordinated Indenture and that,
when the terms of such
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Subordinated Securities shall have been established pursuant to a
Certified Resolution or pursuant to such procedures as may be specified
from time to time by a Certified Resolution, such terms will have been
duly authorized by the Corporation and will have been established in
conformity with the provisions of this Subordinated Indenture, and
(y) Subordinated Securities of such Series, when executed and
issued by the Corporation and completed, authenticated and delivered by
the Trustee in accordance with the provisions of this Subordinated
Indenture and subject to any conditions specified in such Opinion of
Counsel and when paid for, all as contemplated by and in accordance
with the Certified Resolution or specified procedures, as the case may
be, will constitute valid and binding obligations of the Corporation,
except as any rights thereunder may be limited by the effect of
bankruptcy, insolvency, reorganization, receivership, conservatorship,
arrangement, moratorium or other laws affecting or relating to the
rights of creditors generally; the rules governing the availability of
specific performance, injunctive relief or other equitable remedies and
general principles of equity, regardless of whether considered in a
proceeding in equity or at law; the effect of applicable court
decisions invoking statutes or principles of equity, which have held
that certain covenants and provisions of agreements are unenforceable
where the breach of such covenants or provisions imposes restrictions
or burdens upon a borrower, and it cannot be demonstrated that the
enforcement of such restrictions or burdens is necessary for the
protection of the creditor, or which have held that the creditor's
enforcement of such covenants or provisions under the circumstances
would have violated the creditor's covenants of good faith and fair
dealing implied under California law; and the effect of California
statutes and rules of law which cannot be waived prospectively by a
borrower.
With respect to Subordinated Securities of a Series offered in a Periodic
Offering, the Trustee may rely, as to the authorization by the Corporation of
any such Subordinated Securities, the form and terms thereof and the valid and
binding effect thereof, upon the Opinion of Counsel and other documents
delivered pursuant to this Section 2.1 in connection with the first
authentication of Subordinated Securities of such Series unless and until such
Opinion of Counsel or other documents shall have been superseded or revoked. In
connection with the authentication and delivery of Subordinated Securities of a
Series subject to a Periodic Offering, the Trustee shall be entitled to assume
that the instructions of the Corporation to authenticate and deliver such
Subordinated Securities do not violate any rules, regulations or orders of any
governmental agency having jurisdiction over the Corporation.
Each fully registered Subordinated Security shall be dated the date of
its authentication.
SECTION 2.2. FORM OF SUBORDINATED SECURITIES AND TRUSTEE'S CERTIFICATE
OF AUTHENTICATION. The Subordinated Securities of each Series shall be
substantially of the tenor
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and purport as shall be authorized by the related Certified Resolution or
Supplemental Subordinated Indenture, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Subordinated Indenture, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements
thereon as the Board of Directors may deem appropriate and as are not
inconsistent with the provisions of this Subordinated Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Subordinated Securities of such Series may be listed, or to conform to usage.
The definitive Subordinated Securities and each Global Subordinated
Security may be printed, lithographed or fully or partly engraved or produced in
any other manner, all as determined by the officers executing such Subordinated
Securities, as evidenced by their execution thereof.
The Trustee's certificate of authentication shall be in substantially
the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Subordinated Securities, of the Series
designated herein, referred to in the within-mentioned Subordinated
Indenture.
The Bank of New York, as Trustee
By
--------------------------------------
Authorized Signatory
SECTION 2.3. DENOMINATIONS; PAYMENT OF INTEREST ON FULLY REGISTERED
SUBORDINATED SECURITIES. The Subordinated Securities of each Series may be
issued as fully registered Subordinated Securities in denominations as shall be
specified as contemplated by Section 2.1. In the absence of such provisions with
respect to the Subordinated Securities of any Series, the Subordinated
Securities of such Series (other than any Global Subordinated Securities) shall
be issued in denominations of $1,000 and any integral multiple thereof.
If the Subordinated Securities of any Series shall bear interest, each
Subordinated Security of such Series shall bear interest from the applicable
date at the rate per annum specified in the Certified Resolution or Supplemental
Subordinated Indenture with respect to such Series of Subordinated Securities.
Unless otherwise specified in the Certified Resolution or Supplemental
Subordinated Indenture with respect to the Subordinated Securities of any
Series, interest on the Subordinated Securities of such Series shall be computed
on the basis of a 360-day year of twelve 30-day months. Such interest shall be
payable on the Interest Payment Dates specified in the Certified Resolution or
Supplemental Subordinated Indenture with respect to such Series of Subordinated
Securities. The Person in whose name any
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Subordinated Security is registered at the close of business on the applicable
Record Date for the Series of which such Subordinated Security is a part shall
be entitled to receive the interest payable thereon on such Interest Payment
Date notwithstanding the cancellation of such Subordinated Security upon any
transfer or exchange thereof subsequent to such Record Date and prior to such
Interest Payment Date unless such Subordinated Security shall have been called
for redemption on a Redemption Date which is subsequent to such Record Date and
prior to such Interest Payment Date or unless the Corporation shall default in
the payment of interest due on such Interest Payment Date on any Subordinated
Security of such Series.
Any interest on any Subordinated Security of any Series 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 registered Holder on the relevant Record Date solely by virtue of
such Holder having been such Holder; and such Defaulted Interest may be paid by
the Corporation, at its election in each case, as provided in subsection A or B
below:
A. The Corporation may elect to make payment of any Defaulted
Interest on the Subordinated Securities of any Series to the Persons in
whose names such Subordinated 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 Corporation
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Subordinated Security and the date of the
proposed payment (which date shall be such as will enable the Trustee
to comply with the next sentence hereof), and at the same time the
Corporation 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 subsection provided. Thereupon
the Trustee shall fix a special record date (the "Special Record Date")
for the payment of such Defaulted Interest which shall be not more than
15 nor 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 Corporation
of such Special Record Date and, in the name and at the expense of the
Corporation, 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 of a Subordinated Security
of such Series at such Holder's address as it appears in the
Subordinated 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 mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in
whose names the Subordinated Securities of such Series are registered
on such Special Record Date and shall no longer be payable pursuant to
the following subsection B.
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B. The Corporation may make payment of any Defaulted Interest
on the Subordinated Securities of any Series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which such Subordinated Securities may be listed and upon such notice
as may be required by such exchange, if, after notice given by the
Corporation to the Trustee of the proposed payment pursuant to this
subsection, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.3, each
Subordinated Security delivered under this Subordinated Indenture upon transfer
of or in exchange for or in lieu of any other Subordinated Security shall carry
all the rights to interest accrued and unpaid, and to accrue, which were carried
by such other Subordinated Security and each such Subordinated Security shall
bear interest from such date, such that neither gain nor loss in interest shall
result from such transfer, exchange or substitution.
SECTION 2.4. EXECUTION OF SUBORDINATED SECURITIES. The Subordinated
Securities shall be executed manually or in facsimile, by an officer and the
Secretary or an Assistant Secretary of the Corporation under its corporate seal,
which may be affixed thereto or printed, engraved or otherwise reproduced
thereon, by facsimile or otherwise. Only such Subordinated Securities as shall
bear thereon a certificate of authentication substantially in the form recited
herein, executed by the Trustee manually by an authorized officer, shall be
entitled to the benefits of this Subordinated Indenture or be valid or
obligatory for any purpose. Such certificate of authentication of the Trustee
upon any Subordinated Security executed by the Corporation shall be conclusive
evidence that the Subordinated Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Subordinated Indenture. Typographical or other errors or
defects in the seal or facsimile signature on any Subordinated Security or in
the text thereof shall not affect the validity or enforceability of such
Subordinated Security if it has been duly authenticated and delivered by the
Trustee.
In case any officer of the Corporation who shall have signed any of the
Subordinated Securities (manually or in facsimile) shall cease to be such
officer before the Subordinated Securities so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Corporation,
such Subordinated Securities nevertheless may be authenticated and delivered or
disposed of as though the Person who signed such Subordinated Securities had not
ceased to be such officer of the Corporation. Also, any Subordinated Security
may be signed on behalf of the Corporation by such Persons as on the actual date
of execution of such Subordinated Security shall be the proper officers of the
Corporation, although at the date of the execution of this Subordinated
Indenture or on the nominal date of such Subordinated Security any such Person
was not such officer.
SECTION 2.5. REGISTRATION, TRANSFER AND EXCHANGE OF SUBORDINATED
SECURITIES. Except as specifically otherwise provided herein with respect to
Global Subordinated Securities, Subordinated Securities of any Series may be
exchanged for a like aggregate principal amount of Subordinated Securities of
the same Series of other authorized
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denominations. Subordinated Securities to be exchanged shall be surrendered at
the offices or agencies to be maintained in accordance with the provisions of
Section 4.4 and the Corporation shall execute the Subordinated Security or
Securities, and the Trustee shall authenticate and deliver in exchange therefor
the Subordinated Security or Securities which the Subordinated Securityholder
making the exchange shall be entitled to receive.
The Corporation shall keep or cause to be kept, at one or more of the
offices or agencies to be maintained by the Corporation in accordance with the
provisions of Section 4.4 with respect to the Subordinated Securities of each
Series, the Register in which, subject to such reasonable regulations as it may
prescribe, the Corporation shall provide for the registration of the
Subordinated Securities of such Series and the transfer of Subordinated
Securities of such Series as in this Article provided. The Register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times the Register shall be open for
inspection by the Trustee and any registrar of the Subordinated Securities of
such Series other than the Trustee. Upon due presentment for transfer of any
Subordinated Security of any Series at the offices or agencies of the
Corporation to be maintained in accordance with Section 4.4 with respect to the
Subordinated Securities of such Series, the Corporation shall execute a new
Subordinated Security and the Trustee shall authenticate and deliver in the name
of the transferee or transferees a new Subordinated Security or Securities of
the same Series for a like aggregate principal amount of authorized
denominations.
Notwithstanding any other provisions of this Section 2.5, unless and
until it is exchanged in whole or in part for Subordinated Securities in
definitive form, a Global Subordinated Security representing all or a portion of
the Subordinated Securities of a Series may not be transferred except as a whole
by the Depository for such Series to a nominee of such Depository or by a
nominee of such Depository to such Depository or another nominee of such
Depository or by such Depository or any such nominee to a successor Depository
for such Series or a nominee of such successor Depository.
All Subordinated Securities of any Series presented or surrendered for
exchange, transfer, redemption, conversion or payment shall, if so required by
the Corporation or any registrar of the Subordinated Securities of such Series,
be accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Corporation and such registrar, duly executed by the
registered Holder or by such Person's attorney duly authorized in writing.
No service charge shall be made for any exchange or registration of
transfer of Subordinated Securities, but the Corporation may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
The Corporation shall not be required to exchange or transfer (a) any
Subordinated Securities of any Series during a period beginning at the opening
of business 15 days before the day of the first publication or the mailing (if
there is no publication) of a notice of redemption of Subordinated Securities of
such Series and ending at the close of business on
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the day of such publication or mailing, (b) any Subordinated Securities called
or selected for redemption in whole or in part, except, in the case of
Subordinated Securities called for redemption in part, the portion thereof not
so called for redemption in whole or in part or during a period beginning at the
opening of business on any Record Date for such Series and ending at the close
of business on the relevant Interest Payment Date therefor.
SECTION 2.6. TEMPORARY SUBORDINATED SECURITIES. Pending the preparation
of definitive Subordinated Securities of any Series, the Corporation may execute
and the Trustee shall authenticate and deliver temporary Subordinated Securities
of such Series which are printed, lithographed, typewritten or otherwise
produced, in any denomination substantially of the tenor of the definitive
Subordinated Securities in lieu of which they are issued, in registered form and
with such appropriate omissions, insertions, substitutions and other variations
as the officers executing such Subordinated Securities may determine, as
evidenced by their execution of such Subordinated Securities. Every such
temporary Subordinated Security shall be authenticated by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Subordinated Securities. If temporary Subordinated Securities
are issued, the Corporation will cause definitive Subordinated Securities to be
prepared without unreasonable delay. After the preparation of definitive
Subordinated Securities, the temporary Subordinated Securities of such Series
shall be exchangeable for definitive Subordinated Securities upon surrender of
the temporary Subordinated Securities without charge to the Holder at the
offices or agencies to be maintained by the Corporation as provided in Section
4.4 with respect to the Subordinated Securities of such Series. Upon surrender
for cancellation of any one or more temporary Subordinated Securities the
Corporation shall execute and the Trustee shall authenticate and deliver in
exchange for such temporary Subordinated Securities an equal aggregate principal
amount of definitive Subordinated Securities of such Series. Until so exchanged,
the temporary Subordinated Securities of any Series shall in all respects be
entitled to the benefits of this Subordinated Indenture and interest thereon,
when and as payable, shall be paid to the registered owners thereof.
SECTION 2.7. MUTILATED, DESTROYED, LOST OR STOLEN SUBORDINATED
SECURITIES. If (i) any mutilated Subordinated Security is surrendered to the
Trustee, or the Corporation and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Subordinated Security, and
(ii) there is delivered to the Corporation and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Corporation or the Trustee that such Subordinated
Security has been acquired by a bona fide purchaser, the Corporation shall
execute and upon its request the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Subordinated Security, a new Subordinated Security of the same Series and of
like tenor and principal amount, bearing a number not contemporaneously
Outstanding.
In case any such mutilated, destroyed, lost or stolen Subordinated
Security has become or is about to become due and payable, the Corporation in
its discretion may, instead of issuing a new Subordinated Security, pay such
Subordinated Security.
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Upon the issuance of any new Subordinated Security under this Section
2.7, the Corporation 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 connected therewith.
Every new Subordinated Security issued pursuant to this Section 2.7 in
exchange for or in lieu of any mutilated, destroyed, lost or stolen Subordinated
Security shall constitute an original additional contractual obligation of the
Corporation, whether or not the mutilated, destroyed, lost or stolen
Subordinated Security shall be at any time enforceable by anyone, and shall be
entitled to all the security and benefits of this Subordinated Indenture equally
and ratably with all other Outstanding Subordinated Securities of such Series.
The provisions of this Section 2.7 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 Subordinated Securities.
SECTION 2.8. CANCELLATION OF SURRENDERED SUBORDINATED SECURITIES. All
Subordinated Securities surrendered for payment, redemption, transfer,
conversion or exchange shall, if surrendered to the Corporation, the Trustee or
any agent of the Corporation or of the Trustee, be delivered to the Trustee, and
the same, together with Subordinated Securities surrendered to the Trustee for
cancellation, shall be canceled by it and thereafter disposed of by it as
directed by the Corporation, and no Subordinated Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Subordinated Indenture. The Trustee shall return canceled Subordinated
Securities to the Corporation upon receipt of an Officer's Certificate of the
Corporation, pursuant to which the Corporation shall direct that canceled
Subordinated Securities be returned to it. If the Corporation shall purchase or
otherwise acquire any of the Subordinated Securities, however, such purchase or
acquisition shall not operate as a payment, redemption or satisfaction of the
indebtedness represented by such Subordinated Securities unless and until the
Corporation, at its option, shall deliver or surrender the same to the Trustee
for cancellation.
SECTION 2.9. SUBORDINATED SECURITIES IN GLOBAL FORM; DEPOSITORIES.
(a) Each Global Subordinated Security shall: (i) represent and be
denominated in an aggregate amount equal to the aggregate principal amount of
the Subordinated Securities of the Series to be represented by such Global
Subordinated Security, (ii) be registered in the name of either the Depository
for such Global Subordinated Security or the nominee of such Depository, (iii)
be delivered by the Trustee to such Depository or pursuant to such Depository's
written instruction and (iv) bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for Subordinated
Securities in definitive form, this Global Subordinated Security may not be
transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any nominee to a successor Depository or a
nominee of any successor Depository." The notation of the record owner's
interest in such Global Subordinated Security upon the original issuance thereof
shall
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be deemed to be delivery in connection with the original issuance
of each beneficial owner's interest in such Global Subordinated Security.
Without limiting the foregoing, the Corporation and the Trustee shall have no
responsibility, obligation or liability with respect to: (x) the maintenance,
review or accuracy of the records of the Depository or of any of its
participating organizations with respect to any ownership interest in or
payments with respect to such Global Subordinated Security, (y) any
communication with or delivery of any notice (including notices of redemption)
with respect to the Series of Subordinated Securities represented by the Global
Subordinated Security to any Person having any ownership interest in such Global
Subordinated Security or to any of the Depository's participating organizations
or (z) any payment made on account of any beneficial ownership interest in such
Global Subordinated Security.
(b) If any Subordinated Security of a Series is issuable in the form of
one or more Global Subordinated Securities, each such Global Subordinated
Security may provide that it shall represent the aggregate amount of Outstanding
Subordinated Securities of such Series from time to time endorsed thereon and
may also provide that the aggregate amount of Outstanding Subordinated
Securities of such Series represented thereby may from time to time be reduced
to reflect exchanges. Any endorsement of a Global Subordinated Security to
reflect the amount of Outstanding Subordinated Securities of a Series
represented thereby shall be made by the Trustee and in such manner as shall be
specified on such Global Subordinated Security. Any instructions by the
Corporation with respect to a Global Subordinated Security, after its initial
issuance, shall be in writing but need not comply with Section 13.3 of this
Subordinated Indenture.
(c) Each Depository designated pursuant to the provisions of Section
2.1 of this Subordinated Indenture for a Global Subordinated Security must, at
the time of its designation and at all times while it serves as a depositary, be
a clearing agency registered under the Securities Exchange Act of 1934, as
amended, and any other applicable statute or regulation. If at any time the
Depository for the Subordinated Securities of a Series notifies the Corporation
that it is unwilling or unable to continue as Depository for the Subordinated
Securities of such Series or if at any time the Depository for the Subordinated
Securities of such Series shall no longer be eligible under this Section 2.9,
the Corporation shall appoint a successor Depository with respect to the
Subordinated Securities of such Series. If a successor Depository for the
Subordinated Securities of such Series is not appointed by the Corporation
within 90 days after the Corporation receives such notice or learns of such
ineligibility, the Corporation shall execute, and the Corporation shall direct
the Trustee to authenticate and deliver, definitive Subordinated Securities of
such Series in authorized denominations in exchange for the Global Subordinated
Security or Securities. Upon receipt of such direction, the Trustee shall
thereupon authenticate and deliver the definitive Subordinated Securities of
such Series in the same aggregate principal amount as the Global Subordinated
Security or Securities representing such Series in exchange for such Global
Subordinated Security or Securities, in accordance with the provisions of
subsection (e) of this Section 2.9, without any further corporate action by the
Corporation.
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(d) The Corporation may at any time and in its sole discretion
determine that the Subordinated Securities of any Series issued in the form of
one or more Global Subordinated Securities shall no longer be represented by
such Global Subordinated Security or Securities. In such event, the Corporation
will execute and upon receipt of a written order from the Corporation, the
Trustee shall thereupon authenticate and deliver Subordinated Securities of such
Series in definitive form and in authorized denominations in an aggregate
principal amount equal to the principal amount of the Global Subordinated
Security or Securities representing such Series in exchange for such Global
Subordinated Security or Securities, in accordance with the provisions of
subsection (e) of this Section 2.9 without any further corporate action by the
Corporation.
(e) Upon any exchange hereunder of the Global Subordinated Security or
Securities for Subordinated Securities in definitive form, such Global
Subordinated Security or Securities shall be canceled by the Trustee.
Subordinated Securities issued hereunder in exchange for the Global Subordinated
Security or Securities shall be registered in such names and in such authorized
denominations as the Depository for such Global Subordinated Security, pursuant
to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such definitive Subordinated
Securities in exchange for the Global Subordinated Security or Securities to the
persons in whose name such definitive Subordinated Securities have been
registered in accordance with the directions of the Depository.
ARTICLE 3
REDEMPTION OF SECURITIES
SECTION 3.1. REDEMPTION OF SUBORDINATED SECURITIES. Subordinated
Securities of any Series may be made subject to redemption prior to their Stated
Maturity, as a whole or in part, at such time or times, upon payment of the
principal amount thereof plus such premium or premiums, if any, as shall be set
forth in the resolution of the Board of Directors or the Supplemental
Subordinated Indenture relating to such Series.
SECTION 3.2. NOTICE OF REDEMPTION. In all cases other than redemption
at the option of the Holders of Subordinated Securities, notice of redemption
shall be mailed, not less than 30 nor more than 60 days prior to the Redemption
Date, to each Person in whose name any Subordinated Security called for
redemption is registered on the Register as of the date of such notice, but
neither a failure to give notice by mail nor any defect in any notice so mailed
shall affect the validity of the proceedings for such redemption. Each notice of
redemption shall state the Redemption Date, the Redemption Price, the place of
redemption, the principal amount and, if less than all, the distinctive numbers
of the Subordinated Securities to be redeemed and shall also state that the
interest on the Subordinated Securities in such notice designated for redemption
shall cease to accrue from and after such Redemption Date.
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Notice of redemption of Subordinated Securities may be given by the
Corporation or, at the option of the Corporation, by the Trustee on behalf of
the Corporation. Upon receipt of any direction to give notice, the Trustee shall
as soon as practicable give such notice. The Corporation shall give the Trustee
notice of a redemption no less than 45 days prior to a Redemption Date. The
Trustee may rely upon such direction that all conditions precedent to the giving
of such direction have been complied with or done.
SECTION 3.3. SELECTION OF SUBORDINATED SECURITIES FOR REDEMPTION.
Whenever provision is made for the redemption of any Series of Subordinated
Securities or portion thereof and less than all of the Subordinated Securities
of such Series or portion thereof are called for redemption, the Trustee shall
select the Subordinated Securities to be redeemed, from the Outstanding
Subordinated Securities of such Series or portion thereof not previously called
for redemption, in any manner which the Trustee deems fair and appropriate. For
the purpose of any such selection, the Trustee shall assign a separate number
for each $1,000 principal amount of each Subordinated Security of a denomination
of more than $1,000 except that if the Subordinated Securities of any Series are
denominated in a currency other than United States Dollars, the Trustee shall
assign a separate number for each principal amount equal to the minimum
denomination of each Subordinated Security of such Series of a denomination
greater than such minimum denomination.
SECTION 3.4. PARTIAL REDEMPTION OF REGISTERED SUBORDINATED SECURITY.
Upon surrender of any registered Subordinated Security (including any Global
Subordinated Security) to be redeemed in part only, the Corporation shall
execute and the Trustee shall authenticate and deliver to the registered owner
thereof, without service charge, a new Subordinated Security (or in the case of
a Global Subordinated Security, a new Global Subordinated Security) of the same
Series and maturity and of authorized denomination or denominations as requested
by such registered owners, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Subordinated
Security so surrendered.
SECTION 3.5. EFFECT OF REDEMPTION. If notice of redemption shall have
been duly given as provided in Section 3.2, the Subordinated Securities or
portions of Subordinated Securities specified in such notice shall become due
and payable on the Redemption Date and at the place or places stated in such
notice at the Redemption Price specified in such notice, and on and after such
Redemption Date (unless the Corporation shall default in the payment of such
Subordinated Securities at the applicable Redemption Price) such Subordinated
Securities or portions of Subordinated Securities shall cease to bear interest,
and such Subordinated Securities shall cease from and after the Redemption Date
to be entitled to any benefit or security under this Subordinated Indenture, and
the Holders thereof shall have no right in respect of such Subordinated
Securities except the right to receive the Redemption Price thereof and any
unpaid interest accrued to the Redemption Date. Upon presentation and surrender
of such Subordinated Securities at said place of payment in said notice
specified, the said Subordinated Securities or portions thereof shall be paid
and redeemed by the Corporation at the applicable Redemption Price, together
with any interest accrued to the Redemption Date; PROVIDED, HOWEVER, that any
regular payment of interest becoming due on
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any Subordinated Securities on the Redemption Date shall be payable to the
registered ownersof such Subordinated Securities as of the Relevant Record Date
as provided in Article Two hereof. Upon presentation of any Subordinated
Security which is redeemed in part only, the Corporation shall execute a new
Subordinated Security and the Trustee shall authenticate and deliver at the
expense of the Corporation a new Subordinated Security of the same Series of
authorized denomination in principal amount equal to the unredeemed portion of
the Subordinated Security so presented.
If the Company shall fail to timely deposit the applicable Redemption
Price with the Trustee and if any Subordinated Security called for redemption
shall not be so paid upon surrender thereof for redemption, the principal
thereof shall, to the extent permitted by law, bear interest from the date fixed
for redemption at the rate borne by the Subordinated Security, or, in the case
of a Subordinated Security which does not bear interest, at the rate of interest
set forth therefor in the Subordinated Security, in either case until paid.
ARTICLE 4
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 4.1. PAYMENT OF PRINCIPAL OF AND INTEREST ON SUBORDINATED
SECURITIES. The Corporation covenants that it will duly and punctually pay or
cause to be paid the principal of and any interest and premium on each of the
Subordinated Securities in accordance with the terms of the Subordinated
Securities and this Subordinated Indenture. Except with respect to any Global
Subordinated Securities, if the Subordinated Securities of any Series bear
interest, each installment of interest on the Subordinated Securities of such
Series may, at the option of the Corporation, be paid by mailing a check or
checks for such interest payable to the Person entitled thereto pursuant to
Section 2.3 to the address of such Person as it appears on the Register of the
Subordinated Securities of such Series on the applicable Record Date for such
interest payment.
SECTION 4.2. CORPORATE EXISTENCE OF THE CORPORATION; CONSOLIDATION,
MERGER, SALE OR TRANSFER. The Corporation covenants that so long as any of the
Subordinated Securities are Outstanding, it will maintain its existence, will
not dissolve, sell or otherwise dispose of all or substantially all of its
assets and will not consolidate with or merge into another entity or permit one
or more other entities to consolidate with or merge into it; provided that the
Corporation may, without violating the covenants in this Section 4.2 contained,
consolidate with or merge into another entity or permit one or more other
entities to consolidate with or merge into it, or sell or otherwise transfer to
another entity all or substantially all of its assets as an entirety and
thereafter dissolve, if the surviving, resulting or transferee entity, as the
case may be, (i) shall be organized and existing under the laws of one of the
States of the United States of America, (ii) assumes, if such entity is not the
Corporation, all of the obligations of the Corporation hereunder and (iii) is
not, after such transaction, otherwise in default under any provisions hereof.
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SECTION 4.3. LIMITATIONS OF DIVIDENDS. The provisions of this Section
4.3 shall apply so long as Subordinated Securities of any Series are
Outstanding, except to the extent that the provisions contained in this Section
4.3 are expressly made inapplicable to the Subordinated Securities of a
particular Series, as specified in the terms of such Series in accordance with
Section 2.1 hereof at the time of issuance of such series.
(a) If a particular Series of Subordinated Securities are issued to one
or more trusts established under the Delaware Business Trust Act in
connection with the issuance of securities by such trust and (1) there
shall have occurred any Event of Default or (2) the Corporation shall
be in default with respect to its payment of any obligation with
respect to any guaranty issued by the Corporation with respect to
securities issued by such trust, then (i) the Corporation shall not
declare or pay any dividend on, make any distributions with respect to,
or redeem, purchase or make a liquidation payment with respect to, any
of its capital stock and (ii) the Corporation shall not make any
payment of interest, principal or any premium on or repay, repurchase
or redeem any debt securities issued by the Corporation which rank PARI
PASSU with or junior to such Series of Subordinated Securities.
(b) If a particular Series of Subordinated Securities are issued to one
or more trusts established under the Delaware Business Trust Act in
connection with the issuance of securities by such trust and the
Corporation shall have exercised its right to defer payments of
interest on such Series of Subordinated Securities by extending the
Interest Payment Date in accordance with the provisions of the
Supplemental Subordinated Indenture or Certified Resolution
establishing the terms of such Series of Subordinated Securities or any
extension thereof shall be continuing, then (1) the Corporation shall
not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to,
any of its capital stock and (2) the Corporation shall not make any
payment of interest, principal or any premium on or repay or repurchase
or redeem any debt securities issued by the Company which rank PARI
PASSU with such Series of Subordinated Securities.
(c) The restrictions set forth in Section 4.3(a)(i) and (b)(1) do not
apply to any stock dividend paid by the Corporation where the dividend
stock is of the same class as that of the stock held by the holder
receiving the dividend.
SECTION 4.4. MAINTENANCE OF OFFICES OR AGENCIES FOR TRANSFER,
REGISTRATION, EXCHANGE AND PAYMENT OF SUBORDINATED SECURITIES. So long as any of
the Subordinated Securities shall remain Outstanding, the Corporation covenants
that it will maintain an office or agency in either The City of New York, State
of New York, or the City and County of San Francisco, State of California, where
the Subordinated Securities may be presented for registration, exchange and
transfer as in this Subordinated Indenture provided, and where notices and
demands to or upon the Corporation in respect of the Subordinated Securities or
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of this Subordinated Indenture may be served, and where the Subordinated
Securities may be presented for payment. In case the Corporation shall designate
and maintain some office or agency other than a previously designated office or
agency, it shall give the Trustee notice thereof. In case the Corporation shall
fail to maintain any such office or agency or shall fail to give such notice of
the location or of any change in the location thereof to the Trustee,
presentations and demands may be made and notices may be served at the principal
office of the Trustee.
In addition to such office or agency, the Corporation may from time to
time constitute and appoint one or more other offices or agencies for such
purposes with respect to Subordinated Securities of any Series, and one or more
paying agents for the payment of Subordinated Securities of any Series, in such
cities or in one or more other cities, and may from time to time rescind such
appointments, as the Corporation may deem desirable or expedient, and as to
which the Corporation has notified the Trustee.
SECTION 4.5. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE.
The Corporation, whenever necessary to avoid or fill a vacancy in the office of
Trustee, covenants that it will appoint, in the manner provided in Section 7.10,
a Trustee, so that there shall at all times be a Trustee with respect to the
Outstanding Subordinated Securities.
SECTION 4.6. DUTIES OF PAYING AGENT.
(a) If the Corporation shall appoint a Paying Agent other than the
Trustee with respect to Subordinated Securities of any Series, it will cause
such Paying Agent to execute and deliver to the Trustee an instrument in which
such agent shall agree with the Trustee, subject to the provisions of this
Section 4.6 and Section 11.5,
(1) that it will hold all sums held by it as such agent for
the payment of the principal of or interest, if any, on the
Subordinated Securities of such Series (whether such sums have been
paid to it by the Corporation or by any other obligor on the
Subordinated Securities of such Series) in trust for the benefit of the
Holders of the Subordinated Securities entitled to such principal or
interest and will notify the Trustee of the receipt of sums to be so
held,
(2) that it will give the Trustee notice of any failure by the
Corporation (or by any other obligor on the Subordinated Securities of
such Series) to make any payment of the principal of or interest on the
Subordinated Securities of such Series when the same shall be due and
payable, and
(3) that it will at any time during the continuance of any
Event of Default, upon the written request of the Trustee, deliver to
the Trustee all sums so held in trust by it.
(b) Whenever the Corporation shall have one or more Paying Agents with
respect to the Subordinated Securities of any Series, it will, prior to each due
date of the principal of
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or any interest on the Subordinated Securities of such Series, deposit with a
Paying Agent of such Series a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Holders of
Subordinated Securities entitled to such principal or interest, and (unless such
Paying Agent is the Trustee) the Corporation will promptly notify the Trustee of
its action or failure so to act.
(c) If the Corporation shall act as its own Paying Agent with respect
to the Subordinated Securities of any Series, it will, on or before each Stated
Maturity of the principal of or any interest on the Subordinated Securities of
such Series, set aside, segregate and hold in trust for the benefit of the
Holders of the Subordinated Securities of such Series, a sum sufficient to pay
such principal and any interest so becoming due and will notify the Trustee of
such action, or any failure by it or any other obligor on the Subordinated
Securities of such Series to take such action and will at any time during the
continuance of any Event of Default, upon the written request of the Trustee,
deliver to the Trustee all sums so held in trust by it.
(d) Anything in this Section 4.6 to the contrary notwithstanding, the
Corporation may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Subordinated Indenture with respect to one or more or all
Series of Subordinated Securities hereunder, or for any other reason, pay or
cause to be paid to the Trustee all sums held in trust for such Series by it, or
any Paying Agent hereunder, as required by this Section 4.6, and such sums are
to be held by the Trustee upon the trust herein contained.
SECTION 4.7. NOTICE OF DEFAULT. The Corporation covenants that, as soon
as is practicable, the Corporation will furnish the Trustee notice of any event
which is an Event of Default or which with the giving of notice or the passage
of time or both would constitute an Event of Default which has occurred and is
continuing on the date of such notice, which notice shall set forth the nature
of such event and the action which the Corporation proposes to take with respect
thereto.
ARTICLE 5
SECURITYHOLDERS' LISTS AND REPORTS
BY THE CORPORATION AND THE TRUSTEE
SECTION 5.1. CORPORATION TO FURNISH TRUSTEE INFORMATION AS TO THE NAMES
AND ADDRESSES OF SUBORDINATED SECURITYHOLDERS. The Corporation will furnish or
cause to be furnished to the Trustee, not less than 45 days nor more than 60
days after each (month and day) specified as an Interest Payment Date for the
Subordinated Securities of the first Series issued under this Subordinated
Indenture (whether or not any Subordinated Securities of that Series are then
Outstanding), but in no event less frequently than semiannually, and at such
other times as the Trustee may request in writing, within 30 days after receipt
by the Corporation of any such request, a list in such form as the Trustee may
reasonably require containing all the information in the possession or control
of the Corporation, or any of its
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Paying Agents other than the Trustee, as to the names and addresses of the
Holders of Subordinated Securities, obtained since the date as of which the next
previous list, if any, wasfurnished, EXCLUDING from any such list the names and
addresses received by the Trustee in its capacity as registrar (if so acting).
Any such list may be dated as of a date not more than 15 days prior to the time
such information is furnished and need not include information received after
such date.
SECTION 5.2. PRESERVATION OF INFORMATION; COMMUNICATION TO SUBORDINATED
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Subordinated Securities
of each Series (1) contained in the most recent list furnished to it as provided
in Section 5.1, (2) received by the Trustee in the capacity of Paying Agent or
registrar (if so acting) and (3) filed with the Trustee within the two preceding
years as provided for in Section 5.4(c). The Trustee may destroy any list
furnished to it as provided in Section 5.1 upon receipt of a new list so
furnished.
(b) If three or more Holders of Subordinated Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Subordinated
Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Subordinated Securities of any Series or with
Holders of all Subordinated Securities with respect to their rights under this
Subordinated Indenture or under such Subordinated Securities, and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Trustee shall, within five Business Days after the
receipt of such application, at its election, either:
(1) afford such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 5.2 or
(2) inform such applicants as to the approximate number of
Holders of Subordinated Securities of such Series or all Subordinated
Securities, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 5.2, and as to the
approximate cost of mailing to such Subordinated Securityholders the
form of proxy or other communications, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each of the Holders of Subordinated Securities of such Series, or all
Subordinated Securities, as the case may be, whose name and address appear in
the information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 5.2, a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness
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after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender, theTrustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interests of the Holders of Subordinated
Securities of such Series or all Subordinated Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Subordinated Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Each and every Holder of the Subordinated Securities, by receiving
and holding the same, agrees with the Corporation and the Trustee that neither
the Corporation nor the Trustee nor any Paying Agent nor any registrar shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Subordinated Securities in accordance with
the provisions of subsection (b) of this Section 5.2, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
said subsection (b).
SECTION 5.3. REPORTS BY CORPORATION.
(a) The Corporation covenants and agrees to file with the Trustee
within 15 days after the Corporation is required to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Corporation may be required to file with the Commission pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934; or, if the Corporation
is not required to file information, documents or reports pursuant to either of
such sections, then to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Securities Exchange Act of 1934 in
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations.
(b) The Corporation covenants and agrees to file with the Trustee and
the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and
reports with respect to compliance by the Corporation with the conditions and
covenants provided for in this Subordinated Indenture as may be required from
time to time by such rules and regulations.
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(c) The Corporation covenants and agrees to transmit to the Holders of
Subordinated Securities within 30 days after the filing thereof with the
Trustee, in the manner and to the extent provided in subsection (c) of Section
5.4 with respect to reports pursuant to subsection (a) of said Section 5.4, such
summaries of any information, documents and reports required to be filed by the
Corporation pursuant to subsections (a) and (b) of this Section 5.3 as may be
required by rules and regulations prescribed from time to time by the
Commission.
(d) The Corporation and any other obligor on the Subordinated
Securities each covenant and agree to furnish to the Trustee, not less than
annually, a brief certificate from the principal executive officer, principal
financial officer or principal accounting officer as to his or her knowledge of
the Corporation's compliance with all conditions and covenants of this
Subordinated Indenture (which compliance shall be determined without regard to
any period of grace or requirement of notice as provided in this Subordinated
Indenture). Such certificates need not comply with Section 13.3 of this
Subordinated Indenture.
SECTION 5.4. REPORTS BY TRUSTEE.
(a) On or before the first September 15th following the date of
execution of this Subordinated Indenture, and on or before September 15 in every
year thereafter, if and so long as any Subordinated Securities are Outstanding
hereunder, the Trustee shall transmit to the Subordinated Securityholders as
hereinafter in this Section 5.4 provided, a brief report dated as of the August
15 immediately preceding such September 15 with respect to any of the following
events which may have occurred within the 12 months preceding such August 15
(but if no such event has occurred within such period no report need be
transmitted):
(1) any change to its eligibility under Section 7.9, and its
qualifications under Section 7.8;
(2) the creation of or any material change to a relationship
specified in paragraph (1) through (10) of Section 7.8(d);
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Subordinated Securities of
any Series, on any property or funds held or collected by it as
Trustee, except that the Trustee shall not be required (but may elect)
to state such advances if such advances so remaining unpaid aggregate
not more than one-half of one percent of the principal amount of the
Subordinated Securities of such Series Outstanding on the date of such
report;
(4) the amount, interest rate and maturity date of all other
indebtedness owing by the Corporation (or by any other obligor on the
Subordinated Securities) to the Trustee in its individual capacity, on
the date of such report, with a brief description of any property held
as collateral security
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therefor, except indebtedness based upon a creditor relationship
arising in any manner described in paragraph (2), (3), (4) or (6) of
subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically
in the possession of the Trustee (as such) on the date of such report;
(6) any additional issue of Subordinated Securities which the
Trustee has not previously reported; and
(7) any action taken by the Trustee in the performance of its
duties under this Subordinated Indenture which it has not previously
reported and which in its opinion materially affects the Subordinated
Securities, except action in respect of a default, notice of which has
been or is to be withheld by it in accordance with the provisions of
Section 6.10.
(b) The Trustee shall transmit to the Subordinated Securityholders, as
hereinafter provided, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section 5.4 (or if no such report has yet been so transmitted, since the date of
execution of this Subordinated Indenture), for the reimbursement of which it
claims or may claim a lien or charge prior to that of the Subordinated
Securities of any Series on property or funds held or collected by it as
Trustee, and which it has not previously reported pursuant to this subsection,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate ten percent or
less of the principal amount of Subordinated Securities of such Series
Outstanding at such time, such report to be transmitted within 90 days after
such time.
(c) Reports pursuant to this Section 5.4 shall be transmitted by mail
(i) to all Holders of Subordinated Securities of any Series, as the names and
addresses of such Holders shall appear upon the Register of the Subordinated
Securities of such Series, (ii) to such Holders of Subordinated Securities as
have, within the two years preceding such transmission, filed their names and
addresses with the Trustee for that purpose and (iii) except in the case of
reports pursuant to subsection (b) of this Section 5.4 to each Holder whose name
and address are preserved at the time by the Trustee as provided in Section
5.2(a) hereof.
(d) A copy of each such report shall, at the time of such transmission
to Subordinated Securityholders, be filed by the Trustee with each stock
exchange upon which the Subordinated Securities of any Series are listed and
also with the Commission. The Corporation will notify the Trustee when and as
the Subordinated Securities of any Series become listed on any stock exchange.
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ARTICLE 6
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT; ACCELERATION, WAIVER OF DEFAULT AND
RESTORATION OF POSITION AND RIGHTS. The term "Event of Default" whenever used
herein with respect to any particular Series of Subordinated Securities shall
mean any one of the following events:
(a) default in the payment of any installment of interest on
any Subordinated Security of such Series as and when the same shall
become due and payable, and continuance of such default for a period of
30 days, or
(b) default in the payment of all or any part of the principal
of or any premium on any Subordinated Security of such Series as and
when the same shall become due and payable whether at maturity, by
proceedings for redemption, by declaration or otherwise, or
(c) default in the satisfaction of any sinking fund payment
obligation relating to such Series of Subordinated Securities, when and
as such obligation shall become due and payable, or
(d) failure on the part of the Corporation to observe or
perform in any material respect any other of the covenants or
agreements on its part in the Subordinated Securities or in this
Subordinated Indenture (including any Supplemental Subordinated
Indenture or pursuant to any Certified Resolution, as contemplated by
Section 2.1) specifically contained for the benefit of the Holders of
the Subordinated Securities of such Series, for a period of 90 days
after there has been given, by registered or certified mail, to the
Corporation by the Trustee, or to the Corporation and the Trustee by
the Holders of not less than 25% in principal amount of the
Subordinated Securities of such Series and all other Series so
benefitted (all Series voting as one class) at the time Outstanding
under this Subordinated Indenture a written notice specifying such
failure and stating that such is a "Notice of Default" hereunder, or
(e) the entry by a court having jurisdiction in the premises
of a decree or order for relief in respect of the Corporation in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Corporation or for any substantial part of its
property, or ordering the winding up or liquidation of its affairs, if
such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days, or
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(f) the commencement by the Corporation of a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or the Corporation's consent to the entry of an
order for relief in any involuntary case under any such law, or its
consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Corporation or for any substantial part of its
property, or the making by the Corporation of any general assignment
for the benefit of creditors, or its failure generally to pay its debts
as they become due or the taking by the Corporation of any corporate
action in furtherance of any of the foregoing.
If an Event of Default shall have occurred and be continuing with
respect to any one or more Series of Outstanding Subordinated Securities, then
and in each and every such case, unless the principal amount of all the
Subordinated Securities of each Series as to which there is an Event of Default
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in principal amount of the Subordinated Securities of such
Series then Outstanding hereunder (each such Series voting as a separate class)
by notice in writing to the Corporation (and to the Trustee if given by
Subordinated Securityholders) may declare the principal amount (or, if the
Subordinated Securities of any such Series are Original Issue Discount
Subordinated Securities, such portion of the principal amount as may be
specified in the terms of such Series) of all the Subordinated Securities of
such Series, together with any accrued interest, to be due and payable
immediately, and upon any such declaration the same shall be immediately due and
payable, anything in this Subordinated Indenture or in the Subordinated
Securities of such Series contained to the contrary notwithstanding. The
foregoing provisions, however, are subject to the condition that if, at any time
after the principal amount of the Subordinated Securities of any one or more
Series (or of all the Subordinated Securities, as the case may be) shall have
been so declared due and payable, and before any judgment or decree for the
payment of moneys due shall have been obtained or entered as hereinafter
provided, the Corporation shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Subordinated
Securities of such Series (or upon all the Subordinated Securities, as the case
may be) and the principal of any and all Subordinated Securities of such Series
(or of any and all the Subordinated Securities, as the case may be) which shall
have become due otherwise than by declaration (with interest on overdue
installments of interest to the extent permitted by law and on such principal at
the rate or rates of interest borne by, or prescribed therefor in the
Subordinated Securities of such Series to the date of such payment or deposit)
and the amounts payable to the Trustee under Section 7.6 and any and all
defaults under this Subordinated Indenture with respect to Subordinated
Securities of such Series (or all Subordinated Securities, as the case may be),
other than the non-payment of principal of and any accrued interest on
Subordinated Securities of such Series (or any Subordinated Securities, as the
case may be) which shall have become due by declaration shall have been cured,
remedied or waived as provided in Section 6.9 -- then and in every such case the
Holders of a majority in principal amount of the Subordinated Securities of such
Series (or of all the Subordinated Securities, as the case may be) then
Outstanding (such Series or all Series voting as one class if more than one
Series are so entitled), by written notice to the
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Corporation and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under
this Subordinated Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Corporation, the Trustee and the Holders of the Subordinated Securities of
such Series (or of all the Subordinated Securities, as the case may be) shall be
restored to their respective former positions and rights hereunder, and all
rights, remedies and powers of the Corporation and the Trustee and the Holders
of the Subordinated Securities of such Series (or of all the Subordinated
Securities, as the case may be) shall continue as though no such proceedings had
been taken.
SECTION 6.2. COVENANT OF CORPORATION TO PAY TO TRUSTEE WHOLE AMOUNT DUE
ON SUBORDINATED SECURITIES ON DEFAULT IN PAYMENT OF INTEREST OR PRINCIPAL. The
Corporation covenants that:
(1) in case default shall be made in the payment of any
installment of interest on any of the Subordinated Securities of any
Series as and when the same shall become due and payable, and such
default shall have continued for a period of 30 days or
(2) in case default shall be made in the payment of all or any
part of the principal of any of the Subordinated Securities of any
Series when the same shall have become due and payable, whether at the
Stated Maturity of such Series or by any call for redemption or by
declaration of acceleration or otherwise or
(3) in case default shall be made in the satisfaction of any
sinking fund obligation when and as such obligation becomes due and
payable,
upon demand of the Trustee, the Corporation will pay to the Trustee, for the
benefit of the Holders of the Subordinated Securities of such Series, the whole
amount that then shall have become due and payable on all such Subordinated
Securities of such Series for principal (and any premium) and interest and for
any overdue sinking fund payment together with interest upon the overdue
principal and installments of interest (to the extent permitted by law) at the
rate or rates of interest borne by, or prescribed therefor in, the Subordinated
Securities of such Series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expense of collection, including a
reasonable compensation to the Trustee, its agents and counsel, and any expenses
or liabilities incurred, and all advances made, by the Trustee hereunder other
than through its negligence or bad faith.
In case the Corporation shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as Trustee of an express trust,
shall be entitled and
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empowered to institute any actions or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Corporation or any other obligor upon such Subordinated
Securities, and collect in the manner provided by law out of the property of the
Corporation or any other obligor upon such Subordinated Securities wherever
situated the moneys adjudged or decreed to be payable.
If an Event of Default with respect to Subordinated Securities of any
Series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Subordinated
Securities of such Series 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
Subordinated Indenture or in aid of the exercise of any power granted herein, or
to enforce any other proper remedy.
SECTION 6.3. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other similar judicial proceeding
relative to the Corporation or any other obligor upon the Subordinated
Securities or the property of the Corporation or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Subordinated Securities of any Series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Corporation for the payment of overdue
principal or interest) shall be entitled and empowered, to the fullest extent
permitted by law, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Subordinated Securities (or, if the Subordinated
Securities are Original Issue Discount Subordinated Securities, such
portion of the principal amount as may be specified in the terms of
such Subordinated Securities) and to file such other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) 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 7.6.
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Nothing herein contained 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
Subordinated 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.
SECTION 6.4. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SUBORDINATED SECURITIES. All rights of action and claims under this Subordinated
Indenture or the Subordinated Securities may be prosecuted and enforced by the
Trustee to the fullest extent permitted by law without the possession of any of
the Subordinated 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, be for the
ratable benefit of the Holders of the Subordinated Securities in respect of
which such judgment has been recovered.
SECTION 6.5. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys
collected by the Trustee pursuant to Section 6.3 shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such moneys, upon presentation of the several Subordinated Securities in respect
of which moneys have been collected, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due to the Trustee under
Section 7.6;
SECOND: In case the principal of the Outstanding Subordinated
Securities in respect of which moneys have been collected shall not
have become due and be unpaid, to the payment of any interest on such
Subordinated Securities, in the order of the maturity of the
installments of such interest, with interest upon the overdue
installments of interest (so far as permitted by law and to the extent
that such interest has been collected by the Trustee at the rate or
rates of interest borne by such Subordinated Securities or prescribed
therefor therein) such payments to be made ratably to the Persons
entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Outstanding Subordinated
Securities in respect of which such moneys have been collected shall
have become due, by declaration or otherwise, to the payment of the
whole amount then owing and unpaid upon such Subordinated Securities
for principal and interest, if any, with interest on the overdue
principal and any installments of interest (so far as permitted by law
and to the extent that such interest has been collected by the Trustee)
at the rate or rates of interest borne by, or prescribed therefor in,
such Subordinated Securities; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon
such
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Subordinated Securities, then to the payment of such principal and
interest, without preference or priority of principal over interest, or
of interest over principal, or of any installment of interest over any
other installment of interest, or of any Subordinated Security over any
other Subordinated Security, ratably to the aggregate of such principal
and accrued and unpaid interest; and
FOURTH: To the payment of the remainder, with appropriate
interest to the Corporation or its successors or assigns, or to
whosoever may be lawfully entitled to receive the same, or as a court
of competent jurisdiction may direct.
SECTION 6.6. LIMITATION ON SUITS BY HOLDERS OF SUBORDINATED SECURITIES.
No Holder of any Subordinated Security of any Series shall have any right by
virtue or by availing of any provision of this Subordinated Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Subordinated Indenture or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless such Holder previously
shall have given to the Trustee written notice of a continuing Event of Default,
as hereinbefore provided, and unless also the Holders of not less than 25% in
principal amount of the Subordinated Securities of such Series then Outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby (including the reasonable fees
of counsel for the Trustee), and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to this
Section 6.6; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Subordinated Security with every other taker and
Holder and the Trustee, that no one or more Holders of Subordinated Securities
shall have any right in any manner whatever by virtue or by availing of any
provision of this Subordinated Indenture to affect, disturb or prejudice the
rights of the Holders of any other of such Subordinated Securities, or to obtain
or seek to obtain priority over or preference to any other such Holder, or to
enforce any right under this Subordinated Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Subordinated Securities. For the protection and enforcement of the provisions of
this Section 6.6, each and every Holder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Notwithstanding any other provisions in this Subordinated Indenture,
the right of any Holder of any Subordinated Security to receive payment of the
principal of and interest on such Subordinated Security on or after the
respective due dates expressed in such Subordinated Security (or, in the case of
redemption, on or after the date fixed for redemption), or to institute suit for
the enforcement of any such payment on or after such respective dates shall not
be impaired or affected without the consent of such Holder.
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SECTION 6.7. RIGHTS AND REMEDIES CUMULATIVE. All powers and remedies
given by this Article Six to the Trustee or to the Holders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other powers and remedies available to the Trustee or the Holders, by
judicial proceedings or otherwise, to enforce the performance or observance of
the covenants and agreements contained in this Subordinated Indenture, and no
delay or omission of the Trustee or of any Holder of any of the Subordinated
Securities to exercise any right or power accruing upon any default occurring
and continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 6.6, every power and remedy given by this
Article Six or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as shall be deemed expedient, by the Trustee or by
the Holders. 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 6.8. DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Subordinated Securities 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.
Subject to the provisions of Section 6.6, every right and remedy given by this
Article Six 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 6.9. CONTROL BY HOLDERS; WAIVER OF PAST DEFAULTS. The Holders
of a majority in principal amount of the Subordinated Securities of all Series
(voting as one class) at the time Outstanding (determined as provided in Section
8.4) 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, HOWEVER, that, subject to Section 7.1,
the Trustee shall have the right to decline to follow any such direction if the
Trustee in reliance upon an Opinion of Counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Holders not parties to such direction, and provided
further that nothing in this Subordinated Indenture shall impair the right of
the Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by the Holders.
The Corporation may set a special record date for purposes of
determining the identity of the Holders of Subordinated Securities entitled to
vote or consent to any action by vote or consent authorized or permitted by this
Section 6.9. Such record date shall be the later of 15 days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Trustee pursuant to Section 5.1 of this Subordinated Indenture
prior to such solicitation.
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The Holders of not less than a majority in principal amount of the
Subordinated Securities of any Series at the time Outstanding (determined as
provided in Section 8.4) may on behalf of the Holders of all the Subordinated
Securities of such Series waive any past Event of Default with respect to such
Series and its consequences (subject to Section 6.2), except a continuing Event
of Default specified in Section 6.1(a), (b) or (c), or in respect of a covenant
or provision of this Subordinated Indenture which under Article Ten cannot be
modified or amended without the consent of the Holder of each Subordinated
Security so affected. Upon any such waiver, the Corporation, the Trustee and the
Holders of the Subordinated Securities of such Series shall be restored to their
former positions and rights hereunder, respectively, and such Event of Default
shall be deemed to have been cured and not continuing for every purpose of this
Subordinated Indenture; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereon.
SECTION 6.10. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days after the
occurrence of any default hereunder with respect to the Subordinated Securities
of any Series, give to the Holders of the Subordinated Securities of such Series
in the manner and to the extent provided in subsection (c) of Section 5.4 with
respect to reports pursuant to subsection (a) of said Section 5.4, notice of
such default known to the Trustee unless such default shall have been cured,
remedied or waived before the giving of such notice (the term "default" for the
purposes of this Section 6.10 being hereby defined to be the events specified in
Section 6.1 and any additional events specified in the terms of any Series of
Subordinated Securities pursuant to Section 2.1 not including any periods of
grace provided for therein, and irrespective of the giving of written notice
specified in clause (d) of Section 6.1 and in any such terms); provided, that
except in the case of default in the payment of the principal of or interest on
any of the Subordinated Securities of such Series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders of the Subordinated Securities of such
Series.
SECTION 6.11. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN
SUITS UNDER THIS SUBORDINATED INDENTURE OR AGAINST THE TRUSTEE. All parties to
this Subordinated Indenture agree, and each Holder of any Subordinated Security
by such Holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Subordinated Indenture, or in any suit against the
Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 6.11 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder of Subordinated
Securities of any Series, or group of such Holders, holding in the aggregate
more than ten percent in principal amount of the Subordinated Securities of such
Series Outstanding, or to any suit instituted by any Holder for the enforcement
of the
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payment of the principal of or any interest or premium on any Subordinated
Security, on or after the due date expressed in such Subordinated Security for
such interest (or in the case of any redemption, on or after the Redemption
Date).
ARTICLE 7
CONCERNING THE TRUSTEE
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES OF TRUSTEE. The
Trustee, prior to the occurrence of an Event of Default and after the curing,
remedying or waiving of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Subordinated Indenture. In case an Event of Default has occurred
(which has not been cured, remedied or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Subordinated Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his or her own
affairs.
No provision of this Subordinated Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, PROVIDED, HOWEVER,
that:
(a) prior to the occurrence of an Event of Default and after
the curing, remedying or waving of all Events of Default which may have
occurred:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Subordinated Indenture and the Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Subordinated Indenture, and
no implied covenants or obligations shall be read into this
Subordinated Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Subordinated Indenture; but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Subordinated Indenture;
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(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) 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 Subordinated Securities pursuant to Section
6.9 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 Subordinated Indenture.
None of the provisions contained in this Subordinated Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
SECTION 7.2. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in
Section 7.1:
(a) The Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, note 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, direction, order or demand of the Corporation
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate (unless other evidence in respect thereof shall be herein
specifically prescribed); and any resolution of the Board of may be
evidenced to the Trustee by a Certified Resolution,
(c) The Trustee may consult with counsel of its selection and
the 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 accordance
with such written advice or Opinion of Counsel,
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Subordinated Indenture at
the request, order or direction of any of the Subordinated
Securityholders, pursuant to the provisions of this Subordinated
Indenture, unless such Subordinated Securityholders shall have offered
to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby,
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(e) The Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Subordinated Indenture,
(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, consent,
order, approval, bond, debenture, note or other paper or document,
unless requested in writing so to do by the Holders of Subordinated
Securities pursuant to Section 6.9; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Subordinated Indenture, the Trustee may require reasonable indemnity
against such costs, expenses or liabilities as a condition to such
proceeding; and provided further, that nothing in this subsection (f)
shall require the Trustee to give the Subordinated Securityholders any
notice other than that required by Section 6.10. The reasonable expense
of every such examination shall be paid by the Corporation or, if paid
by the Trustee, shall be reimbursed by the Corporation upon demand,
(g) 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 and
(h) The Trustee shall be under no responsibility for the
approval by it in good faith of any expert for any of the purposes
expressed in this Subordinated Indenture.
SECTION 7.3. TRUSTEE NOT RESPONSIBLE FOR RECITALS OR APPLICATION OF
PROCEEDS. The recitals contained herein and in the Subordinated Securities
(other than the certificate of authentication on the Subordinated Securities)
shall be taken as the statements of the Corporation, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Subordinated Indenture
or of the Subordinated Securities. The Trustee shall not be accountable for the
use or application by the Corporation of any of the Subordinated Securities or
of the proceeds thereof.
SECTION 7.4. TRUSTEE MAY OWN SUBORDINATED SECURITIES. The Trustee, any
Paying Agent, registrar or any agent of the Corporation or of the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Subordinated Securities with the same rights it would have if it were not
Trustee, Paying Agent, registrar or such other agent.
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SECTION 7.5. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Moneys
held by the Trustee in trust need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed with the
Corporation.
SECTION 7.6. TRUSTEE ENTITLED TO COMPENSATION, REIMBURSEMENT AND
INDEMNITY. The Corporation agrees to pay to the Trustee from time to time such
compensation as the parties shall agree from time to time (which shall not be
limited by any provision of law in regard to the compensation of a trustee of
any express trust), and the Corporation will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in connection with the acceptance or administration of its
trust under this Subordinated Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all Persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Corporation also agrees to indemnify
the Trustee for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this trust,
including the reasonable costs and expenses of defending itself against any
claim of liability in the premises. The obligations of the Corporation under
this Section to compensate the Trustee, to pay or reimburse the Trustee for
expenses, disbursements and advances and to indemnify and hold harmless the
Trustee shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Subordinated Indenture. Such additional
indebtedness shall be secured by a lien prior to that of the Subordinated
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 or
redemption premium on particular Subordinated Securities.
SECTION 7.7. RIGHT OF TRUSTEE TO RELY ON OFFICER'S CERTIFICATE WHERE NO
OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided in Section
7.1, whenever in the administration of the provisions of this Subordinated
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officer's Certificate of the Corporation delivered to the Trustee, and such
Officer's Certificate, in the absence of negligence or bad faith on the part of
the Trustee, shall be full warrant to the Trustee for any action taken, suffered
or omitted by it under the provisions of this Subordinated Indenture upon the
faith thereof.
SECTION 7.8. DISQUALIFICATION; CONFLICTING INTEREST.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 7.8, it shall, within 90 days after ascertaining that it
has such conflicting interest, and if the Event of Default to which such
conflicting interest relates has not been cured or duly waived or otherwise
eliminated before the end of such 90-day period, the Trustee shall either
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eliminate such conflicting interest or, except as otherwise provided in this
Section 7.8, resign in the manner and with the effect specified in Section 7.10,
such resignation to become effective upon the appointment of a successor trustee
and such successor's acceptance of such appointment, and the Corporation shall
take prompt steps to appoint a successor in accordance with Section 7.10.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section 7.8, the Trustee shall, within ten
days after the expiration of such 90-day period, transmit notice of such failure
to the Subordinated Securityholders in the manner and to the extent provided in
subsection (c) of Section 5.4 with respect to reports pursuant to subsection (a)
of said Section 5.4.
(c) Subject to the provisions of Section 6.11 of this Subordinated
Indenture, unless the Trustee's duty to resign is stayed as provided in
subsection (f) of this Section 7.8, any Holder who has been a BONA FIDE Holder
of Subordinated Securities for at least six months may, on such Holder's behalf
and on behalf of all other Holders similarly situated, petition any court of
competent jurisdiction for the removal of such Trustee and the appointment of a
successor, if such Trustee fails after written request thereof by such Holder to
comply with the provisions of subsection (a) of this Section 7.8.
(d) For the purposes of this Section 7.8 the Trustee shall be deemed to
have a conflicting interest with respect to the Subordinated Securities of any
Series if an Event of Default (exclusive of any period of grace or requirement
of notice) has occurred with respect to Subordinated Securities of such Series
and:
(1) the Trustee is trustee under another indenture under which
any other securities, or certificates of interest or participation in
any other securities, of the Corporation or any other obligor on the
Subordinated Securities are outstanding or is trustee for more than one
outstanding series of securities, as hereinafter defined, under a
single indenture of the Corporation or any other obligor on the
Subordinated Securities, unless such other indenture is a collateral
trust indenture under which the only collateral consists of
Subordinated Securities issued under this Subordinated Indenture,
PROVIDED THAT there shall be excluded from the operation of this
paragraph, this Subordinated Indenture with respect to the Subordinated
Securities of any other Series Outstanding, and any other indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Corporation or any other
obligor on the Subordinated Securities are outstanding, if (A) this
Subordinated Indenture is and such other indenture or indentures (and
all series of securities issued thereunder) are wholly unsecured and
rank equally, and such other indenture or indentures (and such series)
are hereafter qualified under the Trust Indenture Act of 1939, unless
the Commission shall have found and declared by order pursuant to
subsection (b) of Section 305 or subsection (c) of Section 307 of the
Trust Indenture Act of 1939, that differences exist between the
provisions of this Subordinated
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Indenture with respect to Subordinated Securities of such Series and
one or more other Series, or the provisions of this Subordinated
Indenture and the provisions of such other indenture or indentures (or
such series), which are so likely to involve a material conflict of
interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such
under this Subordinated Indenture with respect to Subordinated
Securities of such Series and such other Series, or under this
Subordinated Indenture and such other indenture or indentures, or (B)
the Corporation shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that the trusteeship under this Subordinated Indenture with
respect to Subordinated Securities of such Series and such other
Series, or under this Subordinated Indenture and such other indenture,
is not so likely to involve a material conflict of interest as to make
it necessary in the public interest or for the protection of investors
to disqualify the Trustee from acting as such under this Subordinated
Indenture with respect to Subordinated Securities of such Series and
such other Series, or under this Subordinated Indenture and one of such
indentures,
(2) the Trustee or any of its directors or executive officers
is an underwriter for the Corporation or any other obligor on the
Subordinated Securities,
(3) the Trustee directly or indirectly controls or is directly
or indirectly controlled by or is under direct or indirect common
control with an underwriter for the Corporation or any other obligor on
the Subordinated Securities,
(4) the Trustee or any of its directors or executive officers
is a director, officer, partner, employee, appointee or representative
of the Corporation or any other obligor on the Subordinated Securities,
or of an underwriter (other than the Trustee itself) for the
Corporation or any other obligor on the Subordinated Securities who is
currently engaged in the business of underwriting, except that (A) one
individual may be a director and/or an executive officer of the Trustee
and a director and/or an executive officer of the Corporation or any
other obligor on the Subordinated Securities, but may not be at the
same time an executive officer of both the Trustee and the Corporation
or any other obligor on the Subordinated Securities; (B) if and so long
as the number of directors of the Trustee in office is more than nine,
one additional individual may be a director and/or an executive officer
of the Trustee and a director of the Corporation or any other obligor
on the Subordinated Securities; and (C) the Trustee may be designated
by the Corporation or any other obligor on the Subordinated Securities
or by an underwriter for the Corporation or any other obligor on the
Subordinated Securities to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent or
depositary, or in any other similar capacity,
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or, subject to the provisions of paragraph (1) of this
subsection (d), to act as trustee whether under an indenture or
otherwise,
(5) ten percent or more of the voting securities of the
Trustee is beneficially owned either by the Corporation or any other
obligor on the Subordinated Securities or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such Persons;
or ten percent or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Corporation or any
other obligor on the Subordinated Securities or by any director,
partner or executive officer thereof or is beneficially owned,
collectively, by any two or more such Persons,
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, as
hereinafter defined, (A) five percent or more of the voting securities,
or ten percent or more of any other class of security, of the
Corporation or any other obligor on the Subordinated Securities, not
including the Subordinated Securities issued under this Subordinated
Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (B) ten percent or more of any class of
security of an underwriter for the Corporation or any other obligor on
the Subordinated Securities,
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, as
hereinafter defined, five percent or more of the voting securities of
any Person who, to the knowledge of the Trustee, owns ten percent or
more of the voting securities of, or controls directly or indirectly or
is under direct or indirect common control with the Corporation or any
other obligor on the Subordinated Securities,
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, as
hereinafter defined, ten percent or more of any class of security of
any Person who, to the knowledge of the Trustee, owns 50% or more of
the voting securities of the Corporation or any other obligor on the
Subordinated Securities or
(9) the Trustee owns on the date of the occurrence of such
Event of Default (exclusive of any period of grace or requirement of
notice) or any anniversary thereof while such Event of Default remains
outstanding, in the capacity of executor, administrator, testamentary
or INTER VIVOS trustee, guardian, committee or conservator, or in any
other similar capacity an aggregate of 25% or more of the voting
securities or of any class of security, of any Person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraph (6), (7) or (8) of this subsection
(d). As to any such securities of which the Trustee acquired
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ownership through becoming executor, administrator or testamentary
trustee of an estate which included them, the provisions of the
preceding sentence shall not apply, for a period of two years from the
date of such acquisition, to the extent that such securities included
in such estate do not exceed 25% of such voting securities or 25% of
any such class of security. Promptly after the date of the occurrence
of any such Event of Default and annually in each succeeding year that
the Subordinated Securities or any Series thereof remain in default,
the Trustee shall make a check of its holdings of such securities in
any of the above-mentioned capacities as of such date. If the
Corporation or any other obligor on the Subordinated Securities fails
to make payment in full of principal of or interest on any of the
Subordinated Securities when and as the same become due and payable and
such failure continues for 30 days thereafter, the Trustee shall make a
prompt check of its holdings of such securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (6), (7) and (8) of this subsection (d), or
(10) except under the circumstances described in paragraphs
(1), (3), (4), (5) or (6) of Section 7.13(b), the Trustee shall be or
become a creditor of the Corporation or any other obligor on the
Subordinated Securities.
The specifications of percentages in paragraphs (5) to (9), inclusive,
of this subsection (d) shall not be construed as indicating that the ownership
of such percentages of the securities of a Person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (d).
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection
(d) only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a Person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (B) an obligation shall be deemed to be in default
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be deemed to be the
owner or Holder of (i) any security which it holds as collateral security (as
trustee or otherwise) for an obligation which is not in default as defined in
clause (B) above, or (ii) any security which it holds as collateral security
under this Subordinated Indenture, irrespective of any default hereunder, or
(iii) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
(e) For the purposes of this Section 7.8:
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(1) The term "underwriter" when used with reference to the
Corporation or any other obligor on the Subordinated Securities shall
mean every Person who, within one year prior to the time as of which
the determination is made, has purchased from the Corporation or any
other obligor on the Subordinated Securities with a view to, or has
offered or sold for the Corporation or any other obligor on the
Subordinated Securities in connection with, the distribution of any
security of the Corporation or any other obligor on the Subordinated
Securities outstanding at such time, or has participated or has had a
direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
Person whose interest was limited to a commission from an underwriter
or dealer not in excess of the usual and customary distributors' or
sellers' commission.
(2) The term "director" shall mean any director of a
corporation or any individual performing similar functions with respect
to any organization whether incorporated or unincorporated.
(3) The term "trust" shall include only a trust where the
interest or interests of the beneficiary or beneficiaries are evidenced
by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or Holder thereof to vote in the
direction or management of the affairs of a Person, or any security
issued under or pursuant to any trust, agreement or arrangement whereby
a trustee or trustees or agent or agents for the owner or Holder of
such security are presently entitled to vote in the direction or
management of the affairs of a Person.
(5) The term "executive officer" shall mean the president,
every vice-president, every trust officer, the cashier, the secretary
and the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(6) Except for purposes of paragraphs (6), (7), (8) and (9) of
subsection (d) of this Section 7.8, the term "security" or "securities"
shall mean any note, stock, treasury stock, bond, debenture, evidence
of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateraltrust certificate, pre-organization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas or other mineral rights, or,
in general, any interest or instrument commonly known as a "security"
or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, or warrant or right
to subscribe to or purchase, any of the foregoing.
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(7) For the purpose of subsection (d)(1) of this Section 7.8,
the term "series of securities" or "series" means a series, class or
group of securities issuable under an indenture pursuant to whose terms
Holders of one such series may vote to direct the indenture trustee, or
otherwise take action pursuant to a vote of such holders, separately
from holders of another such series; PROVIDED, THAT "series of
securities" or "series" shall not include any series of securities
issuable under an indenture if all such series rank equally and are
wholly unsecured.
The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(A) A specified percentage of the voting securities of the
Trustee, the Corporation or any other Person referred to in this
Section 7.8 (each of whom is referred to as a "Person" in this
paragraph) means such amount of the outstanding voting securities of
such Person as entitles the Holder or Holders thereof to cast such
specified percentage of the aggregate votes which the Holders of all
the outstanding voting securities of such Person are entitled to cast
in the direction or management of the affairs of such Person.
(B) A specified percentage of a class of securities of a
Person means such percentage of the aggregate amount of securities of
the class outstanding.
(C) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security.
(D) The term "outstanding" means issued and not held by or for
the account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) Subordinated Securities of an issuer held in a
sinking fund relating to securities of the issuer of the same
class;
(ii) Subordinated Securities of an issuer held in a
sinking fund relating to another class of securities of the
issuer, if the obligation evidenced by such other class of
securities is not in default as to principal or interest or
otherwise;
(iii) Subordinated Securities pledged by the issuer
thereof as security for an obligation of the issuer not in
default as to principal or interest or otherwise; and
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(iv) Subordinated Securities held in escrow if placed
in escrow by the issuer thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any Person other than the issuer is entitled to
exercise the voting rights thereof.
(E) A security shall be deemed to be of the same class as
another security if both securities confer upon the Holder or Holders
thereof substantially the same rights and privileges, provided,
however, that, in the case of secured evidences of indebtedness, all of
which are issued under a single indenture, differences in the interest
rates or maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes, and provided
further that, in the case of unsecured evidences of indebtedness,
differences in the interest rate or maturity dates thereof shall not be
deemed sufficient to constitute them securities of different classes,
whether or not they are issued under a single indenture.
(f) Except in the case of a default in the payment of the principal of
or interest on any Subordinated Securities, or in the payment of any sinking or
purchase fund installment, the Trustee shall not be required to resign as
provided by this Section 7.8 if the Trustee shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that (i) the default under this Subordinated Indenture may be cured or
waived during a reasonable period and under the procedures described in such
application, and (ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of such Series of Subordinated
Securities. The filing of such an application shall automatically stay the
performance of the duty to resign until the Commission orders otherwise. Any
resignation of the Trustee shall become effective only upon the appointment of a
successor trustee and such successor's acceptance of such appointment.
SECTION 7.9. REQUIREMENTS FOR ELIGIBILITY OF TRUSTEE. There shall
always be at least one Trustee hereunder. The Trustee hereunder shall at all
times be a corporation organized and doing business as a commercial bank under
the laws of the United States of America or any state thereof or of the District
of Columbia or a corporation or other Person permitted to act as a trustee by
the Commission and, in each case, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000, and subject to supervision or examination by Federal, State or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. No obligor on the Subordinated Securities or Person
directly or indirectly controlling, controlled by or under common control with
such obligor shall serve as Trustee. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this
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Section 7.9, the Trustee shall resign immediately in the manner and with the
effect specified in this Article Seven.
SECTION 7.10. RESIGNATION AND REMOVAL OF TRUSTEE; APPOINTMENT OF
SUCCESSOR.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all Series of Subordinated
Securities by giving written notice of such resignation to the Corporation and
by giving to the Holders of Subordinated Securities notice thereof in the manner
and to the extent provided in subsection (c) of Section 5.4 with respect to
reports pursuant to subsection (a) of Section 5.4. Upon receiving such notice of
resignation and, if the Corporation shall deem it appropriate, evidence
satisfactory to it of such mailing to the Holders, the Corporation shall
promptly appoint a successor trustee with respect to all Series of Subordinated
Securities or, if appropriate, the applicable Series by written instrument
executed by an authorized officer of the Corporation, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any Holder who has
been a bona fide Holder of a Subordinated Security or Subordinated Securities
for at least six months may, subject to the provisions of Section 6.11, on such
Holder's behalf and on behalf of all others similarly situated, petition any
such court for the appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.8 after written request therefor by the
Corporation or by any Subordinated Securityholder who has been a bona
fide Holder of a Subordinated Security or Subordinated Securities of
the applicable Series for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 7.9 and shall fail to resign after written
request therefor by the Corporation or by any such Subordinated
Securityholder, 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, or
(4) the Corporation shall determine that the Trustee has
failed to perform its obligations under this Subordinated Indenture in
any material respect,
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then, in any such case, the Corporation may remove the Trustee and appoint a
successor trustee by written instrument executed by an authorized officer of the
Corporation, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 6.11, any Subordinated Securityholder who has been a bona fide Holder of
a Subordinated Security or Subordinated Securities of the affected Series for at
least six months may, on such Person's behalf and on behalf of all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee with respect to such
Series. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in principal amount of the Subordinated
Securities Outstanding (determined as provided in Section 8.4) may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments signed by such Holders or their attorneys-in-fact duly authorized,
or by the affidavits of the permanent chairman and secretary of a meeting of the
Subordinated Securityholders evidencing the vote upon a resolution or
resolutions submitted thereto with respect to such removal and appointment (as
provided in Article Nine), and by delivery thereof to the Trustee so removed, to
the successor trustee and to the Corporation.
(d) Any resignation or removal of the Trustee and any appointment of a
successor trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.11.
SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any
successor trustee appointed as provided in Section 7.10 shall execute,
acknowledge and deliver to the Corporation and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations with respect to such Series of
its predecessor hereunder, with like effect as if originally named as trustee
herein; but, nevertheless, on the written request of the Corporation or of the
successor trustee, the trustee ceasing to act shall, upon payment of any amounts
then due it pursuant to the provisions of Section 7.6, execute and deliver an
instrument transferring to such successor trustee all the rights and powers with
respect to the trustee so ceasing to act. Upon written request of any such
successor trustee, the Corporation shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
7.6.
No successor trustee shall accept appointment as provided in this
Section 7.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 7.8 and eligible under the
provisions of Section 7.9.
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Upon acceptance of appointment by a successor trustee as provided in
this Section 7.11, the successor trustee shall at the expense of the Corporation
transmit notice of the succession of such trustee hereunder to the Holders of
Subordinated Securities in the manner and to the extent provided in subsection
(c) of Section 5.4 with respect to reports pursuant to subsection (a) of said
Section 5.4.
SECTION 7.12. SUCCESSOR TO TRUSTEE BY MERGER, 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 of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be qualified under the provisions of
Section 7.8 and eligible under the provisions of Section 7.9, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Subordinated Indenture any of the Subordinated Securities
shall have been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any predecessor Trustee,
and deliver such Subordinated Securities so authenticated; and in case at that
time any of the Subordinated Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Subordinated Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Subordinated Securities or in this Subordinated Indenture
provided that the certificate of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Subordinated Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST CORPORATION.
(a) Subject to the provisions of subsection (b) of this Section 7.13,
if the Trustee shall be or shall become a creditor, directly or indirectly,
secured or unsecured, of the Corporation or any other obligor on the
Subordinated Securities within three months prior to a default, as defined in
subsection (c) of this Section 7.13, or subsequent to such a default, then,
unless and until such default shall be cured, the Trustee shall set apart and
hold in a special account for the benefit of the Trustee individually, the
Holders of the Subordinated Securities for which it is acting as Trustee, and
the holders of other indenture securities (as defined in subsection (c) of this
Section 7.13):
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such three months' period,
and valid as against the Corporation or such other obligor on the
Subordinated Securities and its
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other creditors, except any such reduction resulting from the receipt
or disposition of any property described in paragraph (2) of this
subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been filed
by or against the Corporation or such other obligor on the Subordinated
Securities upon the date of such default; and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the beginning
of such three months' period, or an amount equal to the proceeds of any
such property if disposed of, subject, however, to the rights, if any,
of the Corporation or such other obligor on the Subordinated Securities
and their respective other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Corporation or such
other obligor on the Subordinated Securities) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Corporation or such other obligor on the Subordinated Securities in
bankruptcy or receivership or in proceedings for reorganization
pursuant to Title 11 of the United States Code or applicable State
laws;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior
to the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such three months' period and such property was received
as security therefor simultaneously with the creation thereof, and if
the Trustee shall sustain the burden of proving that at the time such
property was so received, the Trustee had no reasonable cause to
believe that a default, as defined in subsection (c) of this Section
7.13, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for
such claim as provided in such paragraph (B) or (C), as the case may
be, to the extent of the fair value of such property.
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For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any preexisting claim of the Trustee as such creditor, such claim shall have the
same status as such preexisting claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders of Subordinated Securities for which it is acting as
Trustee, and the holders of other indenture securities in such manner that the
Trustee, such Subordinated Securityholders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Corporation or such other
obligor on the Subordinated Securities in bankruptcy or receivership or in
proceedings for reorganization pursuant to Title 11 of the United States Code or
applicable State law, the same percentage of their respective claims, figured
before crediting to the claim of the Trustee anything on account of the receipt
by it from the Corporation or such other obligor on the Subordinated Securities
of the funds and property in such special account and before crediting to the
respective claims of the Trustee, such Subordinated Securityholders, and the
holders of other indenture securities dividends on claims filed against the
Corporation or such other obligor on the Subordinated Securities in bankruptcy
or receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code or applicable State law, but after crediting thereon receipts
on account of the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and property so held
in such special account. As used in this paragraph, with respect to any claim,
the term "dividends" shall include any distribution with respect to such claim
in bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code or applicable State law, whether such
distribution is made in cash, securities or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion among the
Trustee, such Subordinated Securityholders, and the holders of other indenture
securities, in accordance with the provisions of this paragraph, the funds and
property held in such special account and the proceeds thereof, or (ii) in lieu
of such apportionment in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions to
be made to the Trustee, such Subordinated Securityholders and the holders of
other indenture securities with respect to their respective claims, in which
event it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claim, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three months' period shall be subject to the provisions of this subsection
(a) as though such
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resignation or removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such three months' period, it shall be subject
to the provisions of this subsection (a) if and only if the following conditions
exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had
continued, as trustee, occurred after the beginning of such three
months' period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
In every case commenced under the Bankruptcy Act of 1898, or any
amendment thereto enacted prior to November 6, 1978, all references to periods
of three months shall be deemed to be references to periods of four months.
(b) There shall be excluded from the operation of subsection (a) of
this Section 7.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court
of competent jurisdiction, or by this Subordinated Indenture, for the
purpose of preserving any property which shall at any time be subject
to the lien of this Subordinated Indenture or of discharging tax liens
or other prior liens or encumbrances thereon, if notice of such advance
and of the circumstances surrounding the making thereof is given to the
Subordinated Securityholders at the time and in the manner provided in
Section 5.4(c) with respect to reports pursuant to subsections (a) and
(b) thereof, respectively;
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered
or premises rented, or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of
this Section 7.13;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Corporation or any other obligor on the Subordinated
Securities; and
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(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subsection (c) of this Section 7.13.
(c) As used in this Section 7.13 the following terms shall be accorded
the following definitions:
(1) the term "default" shall mean any failure to make payment
in full of the principal of or interest on any of the Subordinated
Securities or on the other indenture securities when and as such
principal or interest becomes due and payable.
(2) the term "other indenture securities" shall mean
securities upon which the Corporation or any other obligor on the
Subordinated Securities is an "obligor" (as defined in the Trust
Indenture Act of 1939) outstanding under any other indenture (A) under
which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of subsection (a) of this
Section 7.13, and (C) under which a default exists at the time of the
apportionment of the funds and property held in said special account.
(3) the term "cash transaction" shall mean any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand.
(4) the term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Corporation or any other obligor on the
Subordinated Securities for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Corporation or any other obligor on the
Subordinated Securities arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
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ARTICLE 8
CONCERNING THE SECURITYHOLDERS
SECTION 8.1. EVIDENCE OF ACTION BY SUBORDINATED SECURITYHOLDERS.
Whenever in this Subordinated Indenture it is provided that the Holders of a
specified percentage in principal amount of the Subordinated Securities of any
or all Series may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action the Holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by such Subordinated
Securityholders in Person or by agent or proxy appointed in writing, or (b) by
the record of such Holders of Subordinated Securities voting in favor thereof at
any meeting of such Subordinated Securityholders duly called and held in
accordance with the provisions of Article Nine, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
Subordinated Securityholders.
SECTION 8.2. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SUBORDINATED SECURITIES. Subject to the provisions of Sections 7.1, 7.2 and 9.5,
proof of the execution of any instrument by a Subordinated Securityholder or
such Holder's agent or proxy and proof of the holding by any Person of any of
the Subordinated Securities shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of
any instrument may be proved in any reasonable manner acceptable to the
Trustee.
(b) The ownership of Subordinated Securities of any Series
(including Global Subordinated Securities) shall be proved by the
Register of such Subordinated Securities of such Series, or by
certificates of the Subordinated Security registrar or registrars
thereof.
(c) The amount of bearer Subordinated Securities held by any
Person, the numbers of such Subordinated Securities and the date of
such Person's holding the same may be proved by the production of such
Subordinated Securities or by a certificate in form satisfactory to the
Trustee, executed by any trust company, bank, banker or member of a
national securities exchange, as depositary.
The Trustee shall not be bound to recognize any Person as a
Subordinated Securityholder unless and until such Person's title to the
Subordinated Securities held by it is proved in the manner in this Article Eight
provided.
The record of any Subordinated Securityholders' meeting shall be proved
in the manner provided in Section 9.6.
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The Trustee may accept such other proof or require such additional
proof of any matter referred to in this Section 8.2 as it shall deem reasonable.
SECTION 8.3. WHO MAY BE DEEMED OWNERS OF SUBORDINATED SECURITIES. Prior
to due presentment for transfer of any Subordinated Security, the Corporation,
the Trustee and any agent of the Corporation or the Trustee may deem and treat
the Person in whose name such Subordinated Security shall be registered upon the
Register of Subordinated Securities of the Series of which such Subordinated
Security is a part as the absolute owner of such Subordinated Security (whether
or not such Subordinated Security shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and interest, subject to Section
2.3, on such Subordinated Security and for all other purposes; and neither the
Corporation nor the Trustee nor any agent of the Corporation or the Trustee
shall be affected by any notice to the contrary. All such payments so made to
any such Holder for the time being, or upon such Holder's order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability of moneys payable upon any such Subordinated Security.
Ownership of bearer Subordinated Securities shall be proved as provided in
Section 8.2(c).
If the Subordinated Securities of any Series are issued in the form of
one or more Global Subordinated Securities, the Depository therefor may grant
proxies to Persons having a beneficial ownership in such Global Subordinated
Security or Securities for purposes of voting or otherwise responding to any
request for consent, waiver or other action which the Holder of such
Subordinated Security is entitled to grant or take under this Subordinated
Indenture and the Trustee shall accept such proxies for the purposes granted;
PROVIDED THAT neither the Trustee nor the Corporation shall have any obligation
with respect to the grant of or solicitation by the Depository of such proxies.
SECTION 8.4. SUBORDINATED SECURITIES OWNED BY THE CORPORATION OR
CONTROLLED OR CONTROLLING PERSONS DISREGARDED FOR CERTAIN PURPOSES. In
determining whether the Holders of the requisite principal amount of
Subordinated Securities have concurred in any demand, direction, request,
notice, vote, consent, waiver or other action under this Subordinated Indenture,
Subordinated Securities which are owned by the Corporation or any other obligor
on the Subordinated Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Corporation or any other obligor on the Subordinated Securities shall be
disregarded and deemed not to be Outstanding, provided that for the purposes of
determining whether the Trustee shall be protected in relying on any such
demand, direction, request, notice, vote, consent, waiver or other action, only
Subordinated Securities which a Responsible Officer of the Trustee assigned to
its principal office knows are so owned shall be so disregarded. Subordinated
Securities so owned which have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section 8.4, if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Subordinated
Securities and that the pledgee is not a Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Corporation or any such other obligor.
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Upon request of the Trustee, the Corporation shall furnish to the
Trustee promptly an Officer's Certificate listing and identifying all
Subordinated Securities, if any, known by the Corporation to be owned or held by
or for the account of the Corporation or any other obligor on the Subordinated
Securities or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Corporation or any other
obligor on the Subordinated Securities; and, subject to the provisions of
Section 7.1, the Trustee shall be entitled to accept such Officer's Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Subordinated Securities not listed therein are Outstanding for the purpose of
any such determination.
SECTION 8.5. INSTRUMENTS EXECUTED BY SUBORDINATED SECURITYHOLDERS BIND
FUTURE HOLDERS. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 8.1, of the taking of any action by the Holders
of the percentage in principal amount of the Subordinated Securities specified
in this Subordinated Indenture in connection with such action, any Holder of a
Subordinated Security which is shown by the evidence to be included in the
Subordinated Securities the Holders of which have consented to such action may,
by filing written notice with the Trustee at its principal office and upon proof
of holding as provided in Section 8.2, revoke such action so far as concerns
such Subordinated Security. Except as aforesaid any such action taken by the
Holder of any Subordinated Security and any direction, demand, request, notice,
waiver, consent, vote or other action of the Holder of any Subordinated Security
which by any provisions of this Subordinated Indenture is required or permitted
to be given shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Subordinated Security, and of any Subordinated
Security issued in lieu thereof, irrespective of whether any notation in regard
thereto is made upon such Subordinated Security. Any action taken by the Holders
of the percentage in principal amount of the Subordinated Securities of any or
all Series specified in this Subordinated Indenture in connection with such
action shall be conclusively binding upon the Corporation, the Trustee and the
Holders of all of the Subordinated Securities of such Series subject, however,
to the provisions of Section 7.1.
ARTICLE 9
SECURITYHOLDERS' MEETINGS
SECTION 9.1. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of
Holders of Subordinated Securities of any or all Series may be called at any
time and from time to time pursuant to the provisions of this Article for any of
the following purposes:
(1) to give any notice to the Corporation or to the Trustee,
or to give any directions to the Trustee, or to consent to the waiving
of any default hereunder and its consequences, or to take any other
action authorized to be taken by Holders of Subordinated Securities of
any or all Series, as the case may be, pursuant to any of the
provisions of Article Six;
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(2) to remove the Trustee and appoint a successor trustee
pursuant to the provisions of Article Seven;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.2; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified principal amount of the
Subordinated Securities of any or all Series, as the case may be, under
any other provision of this Subordinated Indenture or under applicable
law.
SECTION 9.2. MANNER OF CALLING MEETINGS. The Trustee may at any time
call a meeting of Subordinated Securityholders to take any action specified in
Section 9.1, to be held at such time and at such place in the City of __________
or San Francisco, California, as the Trustee shall determine. Notice of every
meeting of Subordinated Securityholders, setting forth the time and place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed not less than 20 nor more than 60 days prior to the
date fixed for the meeting.
SECTION 9.3. CALL OF MEETING BY THE CORPORATION OR SUBORDINATED
SECURITYHOLDERS. In case at any time the Corporation pursuant to a resolution of
its Board of Directors, or the Holders of not less than ten percent in principal
amount of the Subordinated Securities of any or all Series, as the case may be,
then Outstanding, shall have requested the Trustee to call a meeting of Holders
of Subordinated Securities of any or all Series, as the case may be, to take any
action authorized in Section 9.1 by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed notice of such meeting within 20 days after receipt of such request,
then the Corporation or such Holders of Subordinated Securities in the amount
above specified may determine the time and place in either the City and County
of San Francisco, California or The City of __________, for such meeting and may
call such meeting to take any action authorized in Section 9.1, by mailing (and
publishing, if required) notice thereof as provided in Section 9.2.
SECTION 9.4. WHO MAY ATTEND AND VOTE AT MEETINGS. To be entitled to
vote at any meeting of Subordinated Securityholders a Person shall (a) be a
Holder of one or more Subordinated Securities with respect to which the meeting
is being held; or (b) be a Person appointed by an instrument in writing as proxy
by such Holder of one or more Subordinated Securities. The only Persons who
shall be entitled to be present or to speak at any meeting of Subordinated
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Corporation and its counsel.
SECTION 9.5. REGULATIONS MAY BE MADE BY TRUSTEE; CONDUCT OF THE
MEETING; VOTING RIGHTS - ADJOURNMENT. Notwithstanding any other provisions of
this Subordinated Indenture, the Trustee may make such reasonable regulations as
it may deem advisable for any meeting of Subordinated Securityholders, in regard
to proof of the holding of
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Subordinated Securities and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit. Except as
otherwise permitted or required by any such regulations, the holding of
Subordinated Securities and the appointment of any proxy shall be proved in the
manner specified in Section 8.2; provided, however, that such regulations may
provide that written instruments appointing proxies regular on their face, may
be presumed valid and genuine without the proof herein above or in said Section
8.2 specified.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Corporation or by Subordinated Securityholders as provided in Section 9.3, in
which case the Corporation or the Subordinated Securityholders calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by majority vote of the meeting.
Subject to the provisions of Section 8.4, at any meeting each
Subordinated Securityholder or proxy shall be entitled to one vote for each
$1,000 principal amount (in the case of Original Issue Discount Subordinated
Securities, such principal amount shall be equal to such portion of the
principal amount as may be specified in the terms of such Series) of
Subordinated Securities held or represented by such Holder; provided, however,
that no vote shall be cast or counted at any meeting in respect of any
Subordinated Security challenged as not Outstanding and ruled by the chairman of
the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Subordinated Securities held by such
Person or instruments in writing as aforesaid duly designating such Person as
the Person to vote on behalf of other Subordinated Securityholders. Any meeting
of Subordinated Securityholders duly called pursuant to the provisions of
Section 9.2 or 9.3 may be adjourned from time to time, and the meeting may be
held so adjourned without further notice.
At any meeting of Subordinated Securityholders, the presence of Persons
holding or representing Subordinated Securities in principal amount sufficient
to take action on the business for the transaction of which such meeting was
called shall constitute a quorum, but, if less than a quorum is present, the
Persons holding or representing a majority in principal amount of the
Subordinated Securities represented at the meeting may adjourn such meeting with
the same effect for all intents and purposes, as though a quorum had been
present.
SECTION 9.6. MANNER OF VOTING AT MEETINGS AND RECORD TO BE KEPT. The
vote upon any resolution submitted to any meeting of Subordinated
Securityholders shall be by written ballots on which shall be subscribed the
signatures of the Holders of Subordinated Securities or of their representatives
by proxy and the principal amount or amounts of the Subordinated Securities held
or represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of
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the proceedings of each meeting of Subordinated Securityholders shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more Persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was mailed as provided in Section 9.2. The record shall show the
principal amount or amounts of the Subordinated Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one copy
thereof shall be delivered to the Corporation and the other to the Trustee to be
preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 9.7. EXERCISE OF RIGHTS OF TRUSTEE AND SUBORDINATED
SECURITYHOLDERS NOT TO BE HINDERED OR DELAYED. Nothing in this Article Nine
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Subordinated Securityholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrances or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Subordinated Securityholders under any of the provisions of this
Subordinated Indenture or of the Subordinated Securities.
ARTICLE 10
SUPPLEMENTAL SUBORDINATED INDENTURES
SECTION 10.1. PURPOSES FOR WHICH SUPPLEMENTAL SUBORDINATED INDENTURES
MAY BE ENTERED INTO WITHOUT CONSENT OF SUBORDINATED SECURITYHOLDERS. Without the
consent of the Holders of any Subordinated Securities, the Corporation and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall comply with the provisions of the
Trust Indenture Act of 1939 as then in effect) for one or more of the following
purposes:
(a) if deemed appropriate by the Corporation or required by
law, to evidence the succession of another corporation to the
Corporation or successive successions and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Corporation pursuant to Article Four hereof,
(b) to add to the covenants of the Corporation such further
covenants, restrictions or conditions as its Board of Directors and the
Trustee shall consider to be for the protection of the Holders of all
or any Series of Subordinated Securities (and if such covenants,
restrictions or conditions are to be for the benefit of less than all
Series of Subordinated Securities, stating that such covenants,
restrictions or conditions are expressly being included solely for the
benefit of such Series), and to make the occurrence, or the occurrence
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and continuance, of a default in any such additional covenants,
restrictions or conditions an Event of Default permitting the
enforcement of all or any of the several remedies provided in this
Subordinated Indenture as herein set forth; provided, however, that in
respect to any such additional covenant, restriction or condition such
Supplemental Subordinated Indenture may provide for a particular period
of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default,
(c) to add or change any of the provisions of this
Subordinated Indenture to such extent as shall be necessary to
facilitate the issuance of Subordinated Securities in (i) global form
or (ii) bearer form, registerable or not registerable as to principal
or principal and interest, and with or without coupons,
(d) to change or eliminate any of the provisions of this
Subordinated Indenture; PROVIDED, HOWEVER, that any such change or
elimination shall become effective only when there is no Subordinated
Security of any Series Outstanding created prior to the execution of
such Supplemental Subordinated Indenture which is entitled to the
benefit of such provision,
(e) to establish the form or terms of Subordinated Securities
of any Series as permitted by Sections 2.1 and 2.2,
(f) to appoint, at the request of the Trustee, a successor
Trustee for a particular Series of Subordinated Securities to act as
such pursuant to the provisions of this Subordinated Indenture and to
add to or change the provisions of this Subordinated Indenture to such
extent as shall be necessary to facilitate the performance of the
duties of such trustee, and
(g) to cure any ambiguity or to correct or supplement any
provisions contained herein or in any Supplemental Subordinated
Indenture which may be defective or inconsistent with any other
provision contained herein or in any Supplemental Subordinated
Indenture, or to make such other provisions in regard to matters or
questions arising under this Subordinated Indenture or any Supplemental
Subordinated Indenture which shall not adversely affect the interests
of the Holders of the Subordinated Securities.
SECTION 10.2. MODIFICATION OF SUBORDINATED INDENTURE WITH CONSENT OF
HOLDERS OF SUBORDINATED SECURITIES. With the consent (evidenced as provided in
Section 8.1) of the Holders of not less than a majority in principal amount of
the Subordinated Securities of all Series at the time Outstanding (determined as
provided in Section 8.4) affected by such Supplemental Subordinated Indenture
(voting as one class), the Corporation and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental
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hereto (which shall comply with the provisions of the Trust Indenture Act of
1939 as then in effect) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Subordinated
Indenture or of any Supplemental Subordinated Indenture or of modifying in any
manner the rights of the Holders of the Subordinated Securities of each such
Series; provided, however, that no such Supplemental Subordinated Indenture
shall, without the consent of the Holders of each Outstanding Subordinated
Security affected thereby:
(a) Change the fixed maturity or Redemption Date of any
Subordinated Security or reduce the rate of interest thereon or the
method of determining such rate of interest or extend the time of
payment of interest or reduce the principal amount (including the
amount of principal of an Original Issue Discount Subordinated Security
that would be due upon declaration of acceleration of the maturity
thereof pursuant to Section 6.1 hereof) thereof or reduce any premium
payable upon the redemption thereof, or change the coin or currency in
which any Subordinated Security or the interest thereon is payable or
impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(b) Reduce the percentage in principal amount of the
Outstanding Subordinated Securities the consent of the Holders of which
is required for any such Supplemental Subordinated Indenture, or the
consent of the Holders of which is required for any waiver (of
compliance with certain provisions of this Subordinated Indenture or
certain defaults hereunder and their consequences) provided for in this
Subordinated Indenture, or
(c) Change the time of payment or reduce the amount of any
minimum sinking account or fund payment, or
(d) Modify any of the provisions of this Section 10.2, except
to increase any such percentage or to provide that certain other
provisions of this Subordinated Indenture cannot be modified or waived
without the consent of the Holder of each Subordinated Security
affected thereby.
A Supplemental Subordinated Indenture which changes or eliminates any
covenant or other provision of this Subordinated Indenture which has expressly
been included solely for the benefit of one or more particular Series of
Subordinated Securities, or which modifies the rights of Holders of Subordinated
Securities of such Series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Subordinated Indenture of
the Holders of Subordinated Securities of any other Series.
It shall not be necessary for the consent of the Subordinated
Securityholders under this Section 10.2 to approve the particular form of any
proposed Supplemental Subordinated Indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
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Promptly after the execution by the Corporation and the Trustee of any
Supplemental Subordinated Indenture pursuant to the provisions of this Section
10.2, the Corporation shall mail a notice to the Holders of Registered
Subordinated Securities of each Series so affected, setting forth in general
terms the substance of such Supplemental Subordinated Indenture. Any failure of
the Corporation to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such Supplemental Subordinated
Indenture.
SECTION 10.3. EFFECT OF SUPPLEMENTAL SUBORDINATED INDENTURES. Upon the
execution of any Supplemental Subordinated Indenture pursuant to the provisions
of this Article Ten, this Subordinated Indenture shall be and be deemed to be
modified and amended in accordance therewith, and the respective rights,
limitations of rights, obligations, duties and immunities under this
Subordinated Indenture of the Trustee, the Corporation and the Holders of
Subordinated Securities shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such Supplemental Subordinated Indenture shall
be and be deemed to be part of the terms and conditions of this Subordinated
Indenture for any and all purposes.
The Trustee shall be entitled to receive, and subject to the provisions
of Section 7.1 shall be entitled to rely upon, an Opinion of Counsel as
conclusive evidence that any such Supplemental Subordinated Indenture complies
with the provisions of this Article Ten and that the Subordinated Securities
affected by the Supplemental Subordinated Indenture, when such Subordinated
Securities are authenticated and delivered by the Trustee and executed and
issued by the Corporation in the manner and subject to any conditions specified
in such Opinion of Counsel, will be valid and binding obligations of the
Corporation, except as any rights thereunder may be limited by bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors' rights
generally and by general equity principles.
SECTION 10.4. SUBORDINATED SECURITIES MAY BEAR NOTATION OF CHANGES BY
SUPPLEMENTAL SUBORDINATED INDENTURES. Subordinated Securities authenticated and
delivered after the execution of any Supplemental Subordinated Indenture
pursuant to the provisions of this Article Ten, or after any action taken at a
Subordinated Securityholders' meeting pursuant to Article Nine, may bear a
notation in form approved by the Trustee as to any matter provided for in such
Supplemental Subordinated Indenture or as to any action taken at any such
meeting. If the Corporation or the Trustee shall so determine, new Subordinated
Securities so modified as to conform, in the opinion of the Trustee and the
Corporation, to any modification of this Subordinated Indenture contained in any
such Supplemental Subordinated Indenture may be prepared by the Corporation,
authenticated by the Trustee and delivered in exchange for the Subordinated
Securities then Outstanding.
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ARTICLE 11
DISCHARGE; DEFEASANCE
SECTION 11.1. DISCHARGE OF SUBORDINATED INDENTURE. If the Corporation
shall pay and discharge or cause to be paid or discharged the entire
indebtedness on all Outstanding Subordinated Securities by paying or causing to
be paid the principal of (including redemption premium, if any) and interest on
the Outstanding Subordinated Securities, as and when the same become due and
payable or by delivering to the Trustee, for cancellation by it, all Outstanding
Subordinated Securities, and if the Corporation shall also pay or cause to be
paid all other sums payable hereunder by it, thereupon, upon written request of
the Corporation and upon receipt by the Trustee of such certificates, if any, as
the Trustee shall reasonably require, to the effect that all conditions
precedent to the satisfaction and discharge of the Corporation's obligations
under this Subordinated Indenture have been complied with, this Subordinated
Indenture shall be discharged and terminated and the Trustee shall forthwith
execute proper instruments acknowledging satisfaction of and discharging and
terminating this Subordinated Indenture with respect to the Corporation's
obligations hereunder and any such other interests.
The Corporation may at any time surrender to the Trustee for
cancellation by it any Subordinated Securities previously authenticated and
delivered which the Corporation may have acquired in any manner whatsoever, and
such Subordinated Securities, upon such surrender and cancellation, shall be
deemed to be paid and retired.
SECTION 11.2. DISCHARGE OF LIABILITY ON SUBORDINATED SECURITIES. Upon
the deposit with the Trustee, in trust, at or before maturity, of money or
securities of the kind and in the necessary amount (as provided in Section 11.4
of this Subordinated Indenture) to pay or redeem Outstanding Subordinated
Securities (whether upon or prior to their maturity or the Redemption Date of
such Subordinated Securities, provided that, if such Subordinated Securities are
to be redeemed prior to the maturity thereof, notice of such redemption shall
have been given as in Article Three hereof provided or provision satisfactory to
the Trustee shall have been made for the giving of such notice), the obligation
of the Corporation duly and punctually to pay or cause to be paid the principal
of and any interest and premium in respect of such Subordinated Securities and
all liability of the Corporation in respect of such payment shall cease,
terminate and be completely discharged and the Holders thereof shall thereafter
be entitled only to payment out of the money or securities deposited with the
Trustee as aforesaid for their payment; provided, however, that this discharge
of the Corporation's obligation so to pay and of the liability of the
Corporation in respect of such payment shall not occur unless the Corporation
shall have delivered to the Trustee an Opinion of Counsel to the effect that
Holders of the Subordinated Securities of such Series will not recognize income,
gain or loss for Federal income tax purposes as a result of such discharge.
SECTION 11.3. DISCHARGE OF CERTAIN COVENANTS AND OTHER OBLIGATIONS.
Upon the deposit with the Trustee, in trust, prior to maturity of money or
securities of the kind and in the necessary amount (as provided in Section 11.4
of this Subordinated Indenture) to pay or
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redeem Outstanding Subordinated Securities of one or more Series (whether upon
or prior to their maturity or the Redemption Date of such Subordinated
Securities, provided that, if such Subordinated Securities are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been given
as in Article Three hereof provided or provision satisfactory to the Trustee
shall have been made for the giving of such notice), all of the obligations,
covenants and agreements of the Corporation with respect to such Subordinated
Securities under Sections 4.2, 4.3, 4.4 and 4.5 hereof shall cease, terminate
and be completely discharged.
SECTION 11.4. DISCHARGE OF CERTAIN OBLIGATIONS UPON DEPOSIT OF MONEY OR
SUBORDINATED SECURITIES WITH TRUSTEE. The conditions for deposit of money or
securities contained in Sections 11.2 and 11.3 shall have been satisfied
whenever with respect to any Subordinated Securities denominated in United
States Dollars, the Corporation shall have deposited or caused to be deposited
irrevocably in trust with the Trustee dedicated solely to the benefit of the
Holders of such Subordinated Securities:
(a) Lawful money of the United States of America in an amount
equal to the principal amount of such Subordinated Securities and all
unpaid interest thereon to maturity, except that, in the case of
Subordinated Securities which are to be redeemed prior to maturity, the
amount so to be deposited or held shall be the principal amount of such
Subordinated Securities and interest thereon to the Redemption Date,
together with the redemption premium, if any; or
(b) Direct obligations of the United States of America or
obligations the principal of and interest on which are guaranteed by
the United States of America (which obligations are not subject to
redemption prior to maturity at the option of the issuer), in such
amounts and maturing at such times that the proceeds of said
obligations to be received upon their respective maturities and
interest payment dates will provide funds sufficient to pay the
principal, premium, if any, and interest to maturity, or to the
Redemption Date, as the case may be, with respect to all of the
Subordinated Securities to be paid or redeemed, as such principal,
premium and interest become due, provided that the Trustee shall have
been irrevocably instructed to apply the proceeds of said obligations
to the payment of said principal, premium, if any, and interest with
respect to said Subordinated Securities.
The conditions for deposit of money or securities contained in Sections 11.2 and
11.3 shall have been satisfied whenever with respect to any Subordinated
Securities denominated in one or more currencies or composite currency other
than United States Dollars, the Corporation shall have deposited or caused to be
deposited irrevocably in trust with the Trustee dedicated solely to the benefit
of the Holders of such Subordinated Securities:
(i) Lawful money in such currency, currencies or composite
currency in which such Subordinated Securities are payable and in an
amount
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equal to the principal amount of such Subordinated Securities and all
unpaid interest thereon to maturity, except that, in the case of
Subordinated Securities which are to be redeemed prior to maturity, the
amount so to be deposited or held shall be the principal amount of such
Subordinated Securities and interest thereon to the Redemption Date,
together with the redemption premium, if any; or
(ii) Either (1) direct obligations of the government that
issued or caused to be issued the currency in which such Subordinated
Securities are payable, for which obligations the full faith and credit
of the government is pledged (which obligations are not subject to
redemption prior to maturity at the option of the issuer) or (2)
obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of such government the timely payment of
which is unconditionally guaranteed as a full faith and credit
obligation by such government (which obligations are not subject to
redemption prior to maturity at the option of the issuer), in either
case, in such amounts and maturing at such times that the proceeds of
said obligations to be received upon their respective maturities and
interest payment dates will provide funds sufficient to pay the
principal, premium, if any, and interest to maturity, or to the
Redemption Date, as the case may be, with respect to all of the
Subordinated Securities to be paid or redeemed, as such principal,
premium and interest become due, provided that the Trustee shall have
been irrevocably instructed to apply the proceeds of said obligations
to the payment of said principal, premium, if any, and interest with
respect to said Subordinated Securities.
SECTION 11.5. UNCLAIMED MONEYS. Any moneys deposited with or paid to
the Trustee or any Paying Agent for the payment of the principal of and any
premium and interest on any Subordinated Security and not so applied but
remaining unclaimed under applicable law shall be transferred by the Trustee to
the appropriate Persons in accordance with applicable laws, and the Holder of
such Subordinated Security shall thereafter look only to such Persons for any
payment which such Holder may be entitled to collect and all liability of the
Trustee and such Paying Agent with respect to such moneys shall thereupon cease.
ARTICLE 12
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.1. INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF
CORPORATION EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any
obligation, covenant or agreement of this Subordinated Indenture, or of any
Subordinated Security, or for any claim based thereon or otherwise in respect
thereof, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Corporation, either
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directly or through the Corporation, 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 Subordinated Indenture and
the obligations issued hereunder are solely corporate obligations, and that no
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors, as such, of the Corporation
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this
Subordinated Indenture or in any of the Subordinated Securities 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,
stockholder, 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 Subordinated Indenture or in any of
the Subordinated Securities or implied therefrom are hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Subordinated Indenture and the issue of such Subordinated Securities.
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.1. SUCCESSORS AND ASSIGNS OF THE CORPORATION BOUND BY
SUBORDINATED INDENTURE. All the covenants, stipulations, promises and agreements
in this Subordinated Indenture contained by or in behalf of the Corporation
shall bind its successors and assigns, whether so expressed or not.
SECTION 13.2. NOTICES; EFFECTIVENESS. Any notice or demand which by any
provision of this Subordinated Indenture is required or permitted to be given or
served by the Trustee or by the Holders of Subordinated Securities to or on the
Corporation, or by the Corporation or by the Holders of Subordinated Securities
to the Trustee or upon the Depository by the Corporation or the Trustee may be
electronically communicated or hand delivered or sent by overnight courier,
addressed to the relevant party as provided in this Section 13.2.
All communications intended for the Corporation shall be sent to:
Providian Financial Corporation
201 Mission Street
San Francisco, CA 94105
Attention: Treasurer
Fax Number: (415)
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<PAGE>
All communications intended for the Trustee shall be sent to:
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Attention: Corporate Trust Department
Fax Number: (212) 815-5915
or at any other address of which any of the foregoing shall have notified the
others in any manner prescribed in this Section 13.2.
For all purposes of this Subordinated Indenture, a notice or
communication will be deemed effective:
(a) if delivered by hand or sent by overnight courier, on the
day it is delivered unless (i) that day is not a Business Day in the
city specified (a "Local Business Day") in the address for notice
provided by the recipient or (ii) if delivered after the close of
business on a Local Business Day, then on the next succeeding Local
Business Day,
(b) if sent by facsimile transmission, on the date
transmitted, provided that oral or written confirmation of receipt is
obtained by the sender unless the date of transmission and confirmation
is not a Local Business Day, in which case, on the next succeeding
Local Business Day.
Any notice, direction, request, demand, consent or waiver by the Corporation,
any Subordinated Securityholder to or upon the Trustee shall be deemed to have
been sufficiently given, made or filed, for all purposes, if given, made or
filed in writing at the Principal Office of the Trustee in accordance with the
provisions of this Section 13.2.
Any notice, request, consent or waiver by the Corporation or the Trustee upon
the Depository shall have been sufficiently given, made or filed, for all
purposes, if given or made in accordance with the provisions of this Section
13.2 at the address shown for such Depository in the Register or at such other
address as the Depository shall have provided for purposes of notice.
SECTION 13.3. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any request or
application by the Corporation to the Trustee to take any action under any of
the provisions of this Subordinated Indenture, the Corporation shall furnish to
the Trustee an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Subordinated Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied with, except that
in the case of any such application or demand as to which the furnishing of
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such document is specifically required by any provision of this
Subordinated Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Subordinated Indenture
and delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Subordinated Indenture (other than a certificate
provided pursuant to Section 5.3(d)) shall include (1) a statement that the
Person making such certificate or opinion has read such covenant or condition;
(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 such
Person, he or she has made such examination or investigation as is necessary to
enable such Person 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
or not, in the opinion of such Person, such condition or covenant has been
complied with.
Any certificate, statement or opinion of an officer of the Corporation
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
such certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon the certificate, statement or opinion of or
representations by an officer or officers of the Corporation stating that the
information with respect to such factual matters is in the possession of the
Corporation, unless such counsel knows that the certificate, statement or
opinion or representations with respect to the matters upon which such Person's
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Corporation
or of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his or her certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate or opinion of any firm of independent
public accountants filed with the Trustee shall contain a statement that such
firm is independent.
SECTION 13.4. DAYS ON WHICH PAYMENT TO BE MADE, NOTICE GIVEN OR OTHER
ACTION TAKEN. If any date on which a payment is to be made, notice given or
other action taken hereunder is a Saturday, Sunday or legal holiday in the state
in which the payment, notice or other action is to be made, given or taken, then
such payment, notice or other action shall be made, given or taken on the next
succeeding Business Day in such state, and in the case of any payment, no
interest shall accrue for the delay.
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SECTION 13.5. PROVISIONS REQUIRED BY TRUST INDENTURE ACT OF 1939 TO
CONTROL. If and to the extent that any provision of this Subordinated Indenture
limits, qualifies or conflicts with another provision included in this
Subordinated Indenture which is required to be included in this Subordinated
Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act
of 1939, such required provision shall control.
SECTION 13.6. GOVERNING LAW. THIS SUBORDINATED INDENTURE AND EACH
SECURITY SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE.
SECTION 13.7. PROVISIONS OF THIS SUBORDINATED INDENTURE AND
SUBORDINATED SECURITIES FOR THE SOLE BENEFIT OF THE PARTIES AND THE SUBORDINATED
SECURITYHOLDERS. Nothing in this Subordinated Indenture or in the Subordinated
Securities, expressed or implied, shall give or be construed to give any Person,
other than the parties hereto and the Holders of the Subordinated Securities,
any legal or equitable right, remedy or claim under or in respect of this
Subordinated Indenture, or under any covenant, condition and provision herein
contained; all its covenants, conditions and provisions being for the sole
benefit of the parties hereto and of the Holders of the Subordinated Securities.
SECTION 13.8. SUBORDINATED INDENTURE MAY BE EXECUTED IN COUNTERPARTS.
This Subordinated Indenture may be executed in any number of counterparts, each
of which shall be an original; but such counterparts shall together constitute
but one and the same instrument.
____________________ hereby accepts the trusts in this Subordinated
Indenture declared and provided, upon the terms and conditions herein above set
forth.
IN WITNESS WHEREOF, PROVIDIAN FINANCIAL CORPORATION has caused this
Subordinated Indenture to be signed by its Chairman of the Board or any
Vice-Chairmen of the Board or one of its Vice-Presidents and
____________________ has caused this Subordinated Indenture to be signed and
acknowledged by one of its _______________ and
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to be signed and acknowledged by one of its Assistant Secretaries, all as of the
day and year first written above.
PROVIDIAN FINANCIAL CORPORATION
By
-------------------------------------
THE BANK OF NEW YORK, as Trustee
By
-------------------------------------
By
-------------------------------------
Assistant Secretary
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EXHIBIT 4.20
===============================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Dated as of __________, 199__
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
------------------- -----------
<S> <C>
310(a)..............................................4.1(a)
310(b)..............................................4.1(c)
310(c)..............................................Inapplicable
311(a)..............................................2.2(b)
311(b)..............................................2.2(b)
311(c)..............................................Inapplicable
312(a)..............................................2.2(a)
312(b)..............................................2.2(b)
313 ..............................................2.3
314(a)..............................................2.4
314(b)..............................................Inapplicable
314(c)..............................................2.5
314(d)..............................................Inapplicable
314(e)..............................................2.4
314(f)..............................................Inapplicable
315(a)..............................................3.1(d)
315(b)..............................................2.7
315(c)..............................................3.1(c)
315(d)..............................................3.1(d)
315(e)..............................................2.12
316(a)..............................................5.4(a), 2.6
316(b)..............................................2.9
316(c)..............................................3.1
317(a)..............................................2.10, 2.11
317(b)..............................................3.1(e)
318(a)..............................................2.1
318(b)..............................................Inapplicable
318(c)..............................................2.1
- ------------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms
or provisions.
</TABLE>
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
----------------------------------------
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT ("Guarantee Agreement"),
dated as of __________, 199_, is executed and delivered by PROVIDIAN FINANCIAL
CORPORATION, a Delaware corporation (the "Guarantor"), and THE BANK OF NEW YORK,
a New York banking corporation, as trustee (the "Preferred Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Preferred Securities (as defined herein) of Providian Financing __________, a
Delaware statutory business trust (the "Trust Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 199_, among the administrators of the
Trust Issuer named therein, the Guarantor, as Sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Trust Issuer, the
Trust Issuer is issuing on the date hereof $____ aggregate stated Liquidation
Amount of Preferred Securities designated the ______% Trust Originated Preferred
Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee Agreement, to pay to the Holders the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee Agreement") with substantially
identical terms to this Guarantee Agreement for the benefit of the holders of
the Common Securities (as defined herein) except that if a Guarantee Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of the Holders to receive
Guarantee Payments under this Guarantee Agreement.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders.
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS AND INTERPRETATION. In this Guarantee Agreement, unless
the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1 or, if not defined in this Guarantee Agreement, then in the
Declaration;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
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(f) a reference to the singular includes the plural and vice versa.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Trust Issuer.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Guarantee Event of Default" means a default by the Guarantor on any of
its payment obligations under this Guarantee Agreement.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Trust Issuer: (i) any accrued and unpaid Distributions that
are required to be paid on such Preferred Securities if and to the extent that,
in each case, the Issuer of the Subordinated Notes has made a payment to the
Property Trustee of interest and/or principal on the Subordinated Notes, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price"), if and to the extent that, in each case,
the Issuer of the Subordinated Notes has made a payment to the Property Trustee
of interest and/or principal on the Subordinated Notes, with respect to any
Preferred Securities called for redemption by the Trust Issuer, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Trust
Issuer (other than in connection with the distribution of Subordinated Notes to
the Holders in exchange for Preferred Securities as provided in the
Declaration), the lesser of (a) the aggregate of the Liquidation Amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, and (b) the amount of assets of the Trust Issuer remaining available
for distribution to Holders in liquidation of the Trust Issuer (in either case,
the "Liquidation Distribution"). If an event of default under the Indenture has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders to receive Guarantee Payments.
"Holder" shall mean any registered owner of any Preferred Security, as
shown on the Register; provided, however, that in determining whether the
Holders of the requisite percentage of Preferred Securities have voted or given
any request, notice, consent or waiver hereunder, Preferred Securities which are
owned by the Guarantor, the Trust Issuer or any other obligor on the Preferred
Securities or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Sponsor, the Trust Issuer or
any other obligor on the Preferred Securities shall be disregarded.
"Indemnified Person" means the Preferred Guarantee Trustee or any
officers, directors, shareholders, members, partners, employees, representatives
or agents of the Preferred Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of __________,
199_, as supplemented by the First Supplemental Indenture dated as of
__________, 199_, each being between the Subordinated Note Issuer and The Bank
of New York, as trustee, as such Indenture may be further amended, supplemented
or modified in accordance with the provisions thereof.
"Liquidation Amount" has the meaning set forth in the Declaration.
"Liquidation Distribution" has the meaning set forth in the definition
of Guarantee Payment.
"Majority in Liquidation Amount of Preferred Securities" means, except
as provided by the Trust Indenture Act, a vote by Holder(s) of outstanding
Preferred Securities, voting separately as a class, where the aggregate
Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities voted by such Holders represents more than 50% of the above stated
Liquidation Amount of all Preferred Securities.
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"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee Agreement shall include:
(a) a statement that the officer signing the Certificate has read the
covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation on which the statements or opinions contained in such Certificate
are based;
(c) a statement that, in the opinion of such officer, he or she has
made such examination or investigation as is necessary to enable such officer to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Person" means an individual, a corporation, a partnership, a joint
venture, an association, a joint stock company, a trust, an unincorporated
organization, or a government or any agency, authority or political subdivision
thereof.
"Preferred Guarantee Trustee" means The Bank of New York until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Preferred Guarantee Trustee as may have been so
appointed from time to time.
"Redemption Price" has the meaning set forth in the definition of
Guarantee Payments.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any vice president, any assistant vice-president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or assistant trust officer or any other officer of the Corporate Trust
Department of the Preferred Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1 and which has been appointed as such under Section
4.2.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
as of the date of this Guarantee Agreement.
"25% in Liquidation Amount of the Preferred Securities" means, except
as provided by the Trust Indenture Act, Holder(s) of Preferred Securities a vote
by Holder(s) of Preferred Securities, voting separately as a class, and the
aggregate Liquidation Amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities voted by such Holders represents more than 25% of the above stated
Liquidation Amount of all Preferred Securities.
ARTICLE 2
TRUST INDENTURE ACT
2.1 TRUST INDENTURE ACT; APPLICATION.
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(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; provided,
however, that any provisions of the Trust Indenture Act which may in accordance
therewith be excluded are hereby excluded from the provisions hereof; and
(b) if and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Section 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control;
2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor will furnish or cause to be furnished to the
Preferred Guarantee Trustee, not less than 45 days nor more than 60 days after
each (Month and day) that is a Distribution payment date under the Declaration,
but in no event less frequently than semiannually, and at such other times as
the Preferred Guarantee Trustee may request in writing, within 30 days after
receipt by the Guarantor of any such request, a list in such form as the
Preferred Guarantee Trustee may reasonably require containing all the
information in the possession or control of the Guarantor, as to the names and
addresses of the Holders, obtained since the date as of which the next previous
list, if any, was furnished. Any such list may be dated as of a date not more
than 15 days prior to the time such information is furnished and need not
include information received after such date.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Section 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE. Within 60 days after
May 15 of each year commencing May 15, 1999, the Preferred Guarantee Trustee
shall provide to the Holders such reports, if any, as are required by Section
313(a) of the Trust Indenture Act, in each case in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE. The Guarantor
shall provide to the Preferred Guarantee Trustee such documents, reports and
information (if any), and the compliance certificate, required by Section 314(a)
and Section 314(e) of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314(a) of the Trust Indenture Act.
2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The Guarantor
shall provide to the Preferred Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officer's
Certificate.
2.6 GUARANTEE EVENTS OF DEFAULT: WAIVER. The Holders of a Majority in
Liquidation Amount of the Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Guarantee Event of
Default and its consequences. Upon such waiver, any such Guarantee Event of
Default shall cease to exist, and any Guarantee Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Guarantee Event of Default or impair any right consequent thereon.
2.7 GUARANTEE EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of a Guarantee Event of Default, transmit by mail, first class
postage prepaid, to the Holders, notices of all Guarantee Events of Default
known to the Preferred Guarantee Trustee, unless such defaults have been cured
before the giving of such notice; provided, that the Preferred Guarantee Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the
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Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Guarantee Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or a Responsible Officer charged
with the administration of the Declaration shall have obtained written notice,
of such Guarantee Event of Default.
2.8 CONFLICTING INTERESTS. The Declaration shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
2.9 LIMITATION ON SUITS BY HOLDERS. No Holder shall have any right by
virtue or by availing of any provision of this Guarantee Agreement to institute
any suit, action or proceeding in equity or at law upon or under or with respect
to this Guarantee Agreement or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless such Holder previously shall have given
to the Guarantee Trustee written notice of a continuing Guarantee Event of
Default, as hereinbefore provided, and unless also the Holders of not less than
25% in Liquidation Amount of the Preferred Securities shall have made written
request upon the Guarantee Trustee to institute such action, suit or proceeding
in its own name as Guarantee Trustee hereunder and shall have offered to the
Guarantee Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby (including the
reasonable fees of counsel for the Guarantee Trustee), and the Guarantee
Trustee, for 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to this Section 2.9; it being understood and
intended, and being expressly covenanted by the taker and every Holder with
every other taker and Holder and the Guarantee Trustee, that no one or more
Holders shall have any right in any manner whatever by virtue or by availing of
any provision of this Guarantee Agreement to affect, disturb or prejudice the
rights of any other Holders, or to obtain or seek to obtain priority over or
preference to any other Holder, or to enforce any right under this Guarantee
Agreement, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders. For the protection and enforcement of the
provisions of this Section 2.9, each and every Holder and the Guarantee Trustee
shall be entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provisions in this Guarantee Agreement, the
right of any Holder to receive payment of the Guaranteed Payments when due, or
to institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
2.10 COVENANT OF GUARANTOR TO PAY TO GUARANTEE TRUSTEE WHOLE AMOUNT DUE
ON DEFAULT IN GUARANTEE PAYMENTS. The Guarantor covenants that in case default
shall be made in the payment of any Guarantee Payment as and when the same shall
become due and payable and which payment has not been extended in accordance
with the provisions of this Guarantee, and such default shall have continued for
a period of 90 days or upon demand of the Preferred Guarantee Trustee, the
Guarantor will pay to the Preferred Guarantee Trustee, for the benefit of the
Holders, the whole amount that then shall have become due and payable, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expense of collection, including a reasonable compensation to the Preferred
Guarantee Trustee, its agents and counsel, and any expenses or liabilities
incurred, and all advances made, by the Preferred Guarantee Trustee hereunder
other than through its negligence or bad faith.
In case the Guarantor shall fail forthwith to pay such amounts upon
such demand, the Guarantee Trustee, in its own name and as trustee of an express
trust, shall be entitled and empowered to institute any actions or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final decree, and may
enforce any such judgment or final decree against the Guarantor or any other
obligor upon such Preferred Guarantees, and collect in the manner provided by
law out of the property of the Guarantor or any other such obligor wherever
situated the moneys adjudged or decreed to be payable.
If a Guarantee Event of Default with respect to the Preferred
Guarantees occurs and is continuing, the Guarantee Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders by such
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appropriate judicial proceedings as the Preferred Guarantee Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Guarantee Agreement or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
2.11 PREFERRED GUARANTEE TRUSTEE MAY FILE PROOFS OF CLAIM. Upon the
occurrence of a Guarantee Event of Default, the Preferred Guarantee Trustee is
hereby authorized to (a) recover judgment, in its own name and as trustee of an
express trust, against the Guarantor for the whole amount of any Guarantee
Payments remaining unpaid and (b) file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have its claims and those
of the Holders allowed in any judicial proceedings relative to the Guarantor,
its creditors or its property.
2.12 REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN SUITS UNDER
THE GUARANTEE AGREEMENT. All parties to this Guarantee Agreement agree, and each
Holder by such Holder's acceptance thereof, shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Guarantee Agreement, or in any suit against the
Preferred Guarantee Trustee for any action taken or omitted by it as trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 2.12 shall not apply to
any suit instituted by the Preferred Guarantee Trustee, to any suit instituted
by any Holder, or group of such Holders, holding in the aggregate more than 10%
of the Liquidation Amount of the Preferred Securities, or to any suit instituted
by any Holder for the enforcement of the payment of the Guarantee Payments, on
or after the due date expressed in the Preferred Security.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Preferred Guarantee
Trustee for the benefit of the Holders, and the Preferred Guarantee Trustee
shall not transfer this Guarantee Agreement except a Holder exercising his or
her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If a Guarantee Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Guarantee Event of Default and after the curing of all Guarantee Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Guarantee Agreement, and no implied covenants
shall be read into this Guarantee Agreement against the Preferred Guarantee
Trustee. In case a Guarantee Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6), the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Guarantee Agreement,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of any Guarantee Event of Default
and after the curing or waiving of all Guarantee Events of Default that
may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Guarantee Agreement, and the Preferred
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement, and no implied
covenants or obligations shall be read into this Guarantee
Agreement against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Preferred Guaranty Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Preferred Guarantee 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 not less than a
Majority in Liquidation Amount of the Preferred Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or exercising any trust
or power conferred upon the Preferred Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured
to it under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
(e) The Preferred Guarantee Trustee may authorize one or more Paying
Agents to pay Guarantee Payments and any such Paying Agent shall comply with
Section 317(b) of the Trust Indenture Act. Any Paying Agent may be removed by
the Preferred Guarantee Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Preferred Guarantee
Trustee.
3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may rely and shall be
fully 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, sent or presented by the
proper party or parties.
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(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by a Direction
or an Officer's Certificate.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Preferred Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or omitting
any action hereunder, the Preferred Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad
faith on its part, request and rely upon an Officer's Certificate which
shall be promptly delivered by the Guarantor upon receipt of such
request.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with
respect to legal matters 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 accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Guarantee Agreement at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
adequate security and indemnity as would satisfy a reasonable person in
the position of the Preferred Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Preferred
Guarantee Trustee; provided, that nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Preferred Guarantee Trustee,
upon the occurrence of a Guarantee Event of Default, of its obligation
to exercise the rights and powers vested in it by this Guarantee
Agreement.
(vii) The Preferred Guarantee 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, Subordinated Note,
note, other evidence of indebtedness or other paper or document, but
the Preferred Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit.
(viii) The Preferred Guarantee 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 Preferred
Guarantee 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.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders, and the signature of the
Preferred Guarantee Trustee or its agents alone shall be sufficient and
effective to perform any such action. No third party shall be required
to inquire as to the authority of the Preferred Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of
this Guarantee Agreement, both of which shall be conclusively evidenced
by the Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee Agreement
the Preferred Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions
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from the Holders of a Majority in Liquidation Amount, (ii) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in acting
in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Preferred Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Preferred
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Preferred Guarantee Trustee shall be construed to be a duty.
(c) This Guarantee Agreement and all moneys received by the Preferred
Guarantee Trustee hereunder in respect of the Guarantee Payments will not be
subject to any right, charge, security interest, lien or claim of any kind in
favor of, or for the benefit of the Preferred Guarantee Trustee or its agents or
creditors.
3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE. The recitals
contained in this Guarantee Agreement shall be taken as the statements of the
Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE 4
PREFERRED GUARANTEE TRUSTEE
4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least $100,000,000, and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1 (a)(ii),
the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act, subject to the penultimate paragraph thereof.
4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during a
Guarantee Event of Default.
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(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed.
The Preferred Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument in writing executed by the Preferred
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor and the
resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of removal or resignation,
the resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
ARTICLE 5
GUARANTEE
5.1 GUARANTEE. The Guarantor unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Trust Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Trust Issuer may have or assert (other than a
defense of prior payment). The Guarantor's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by the
Guarantor to the Holders or by causing the Trust Issuer to pay such amounts to
the Holders.
5.2 UNCONDITIONAL NATURE OF OBLIGATIONS. The obligations of the
Guarantor under this Guarantee Agreement shall be absolute and unconditional and
shall remain in full force and effect until the entire Liquidation Amount of all
outstanding Preferred Securities shall have been paid, and such obligation shall
not be affected, modified or impaired upon the happening from time to time of
any event, including without limitation any of the following, whether or not
with notice to, or the consent of, the Guarantor:
(a) the waiver, surrender, compromise, settlement, release or
termination of any or all of the obligations, covenants or agreements of the
Trust Issuer under the Preferred Securities;
(b) the failure to give notice to the Guarantor of the occurrence of a
default under the Preferred Securities;
(c) the waiver, compromise or release of the payment, performance or
observance by the Trust Issuer of any or all of the obligations, covenants or
agreements contained, in the Preferred Securities;
(d) the extension of the time for payment of the Liquidation Amount of
any Preferred Securities or of the time for performance of any other
obligations, covenants or agreements under or arising out of the Preferred
Securities;
(e) the modification or amendment (whether material or otherwise) of
any obligation, covenant or agreement set forth in the Preferred Securities;
(f) any failure, omission, delay or lack of diligence on the part of
any Holder to enforce, assert or exercise any right, privilege, power or remedy
conferred on it in or in connection with the Preferred Securities;
(g) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all the assets, marshaling of assets
and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of
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creditors, reorganization, arrangement, composition with creditors or
readjustment of, or other similar proceedings affecting the Trust Issuer or any
of its assets, or any allegation or contest of the validity of the Preferred
Securities in any such proceeding;
(h) any defense based upon any legal disability of the Trust Issuer or,
to the extent permitted by law, any release, discharge, reduction or limitation
of or with respect of any sums owing by the Trust Issuer or any other liability
of the Trust Issuer to any Holder;
(i) to the extent permitted by law, the release or discharge by
operation of law of the Guarantor from the performance or observance of any
obligation, covenant or agreement contained in this Guarantee Agreement,
(j) the default or failure of the Guarantor fully to perform any of its
obligations set forth in this Guarantee Agreement; or
(k) the invalidity of, or defect or deficiency in, the Preferred
Securities or any defense which the Trust Issuer may have against any Holder.
If any payment by the Trust Issuer to any Holder is rescinded or must
be returned by such Holder, the obligations of the Guarantor hereunder shall be
reinstated with respect of such payment.
No set-off, counterclaim, reduction, or diminution of any obligation,
or any defense of any kind or nature which the Guarantor has or may have against
any Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Guarantee Agreement.
The Guarantor assumes responsibility for being and remaining informed
of the financial condition of the Trust Issuer and of all other circumstances
bearing upon the risk of nonpayment of amounts owing under the Preferred
Securities which diligent inquiry would reveal and agrees that no Holder shall
have any duty to advise he Guarantor of information known to it regarding such
condition or any such circumstances.
5.3 PROCEEDINGS AGAINST THE GUARANTOR. In the event of Guarantee Event
of Default, the Preferred Guarantee Trust, on behalf of the Holders, shall have
the right to proceed first and directly against the Guarantor under this
Guarantee Agreement without proceeding against the Trust Issuer or exhausting
any other remedies which it may have and without resorting to any other security
held by it.
5.4 RIGHTS OF HOLDERS. The Guarantor and the Preferred Guarantee
Trustee expressly acknowledge and agree as follows: (i) this Guarantee Agreement
will be deposited with the Preferred Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Preferred Guarantee Trustee shall have the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii)
Holders representing not less than a Majority in Liquidation Amount of the
Preferred Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available in respect of this
Guarantee Agreement including the giving of directions to the Preferred
Guarantee Trustee, or exercising any trust or other power conferred upon the
Preferred Guarantee Trustee under this Guarantee Agreement and (iv) if the
Preferred Guarantee Trustee fails to enforce this Guarantee Agreement, any
Holder of Preferred Securities may, after a period of 90 days has elapsed from
such Holder's written request to the Preferred Guarantee Trustee to enforce this
Guarantee Agreement, institute a legal proceeding directly against the Guarantor
to enforce its rights under this Guarantee Agreement, without first instituting
a legal proceeding against the Trust Issuer, the Preferred Guarantee Trustee, or
any other Person.
5.5 GUARANTEE OF PAYMENT. This Guarantee Agreement creates a guarantee
of payment and not of collection.
5.6 SUBROGATION. The Guarantor shall be subrogated to all rights (if
any) of the Holders against the Trust Issuer in respect of any amounts paid to
such Holders by the Guarantor pursuant to the provisions hereof; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to
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enforce, or to receive any payments arising out of or based upon, such right of
subrogation until the Distributions due on all Preferred Securities shall have
been paid in full.
5.7 INDEPENDENT OBLIGATIONS. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Trust Issuer,
and that the Guarantor shall be liable hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (k), inclusive, of Section
5.2 hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS;
SUBORDINATION; CORPORATE EXISTENCE
6.1 LIMITATION OF TRANSACTIONS. So long as any Preferred Securities
remain outstanding, if there shall have occurred a Guarantee Event of Default or
an Event of Default, then (a) the Guarantor shall not declare or pay any
dividend on, or make any distribution with respect to, or redeem, purchase,
acquire or make any distribution with respect to, any of its capital stock and
(b) the Guarantor shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities issued by the
Guarantor which rank pari passu with or junior to the Subordinated Notes;
provided, that, the foregoing restrictions in this Section 6.1 shall not apply
to any (a) stock dividends paid by the Guarantor, or any of its subsidiaries,
where the dividend stock is the same stock as that on which the dividend is
being paid, (b) dividends or distributions in shares of, or options, warrants or
rights to subscriber for or purchase shares of, common stock of the Guarantor,
(c) any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (d)
payments under the Guarantee Agreement, (e) as a result of a reclassification of
the Guarantor's capital stock solely into shares of one or more classes or
series of the Guarantor's capital stock or the exchange or the conversion of one
class or series of the Guarantor's capital stock, (f) purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, and (g) purchases of the Guarantor's common stock in connection with
the satisfaction by the Guarantor of its obligations (including purchases
related to the issuance of such common stock or rights) under any of the
Guarantor's benefit plans for its and its subsidiaries' directors, officers or
employees or any of the Guarantor's dividend reinvestment plans.
6.2 RANKING. This Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor except those made pari passu
or subordinate by their terms, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by the Guarantor and with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
6.3 CORPORATE EXISTENCE. The Guarantor covenants that so long as any of
the Preferred Guarantees are outstanding, it will maintain its existence, will
not dissolve, sell or otherwise dispose of all or substantially all of its
assets and will not consolidate with or merge into another entity or permit one
or more other entities to consolidate with or merge into it; provided that the
Guarantor may, without violating the covenants in this Section 6.2 contained,
consolidate with or merge into another entity or permit one or more other
entities to consolidate with or merge into it, or sell or otherwise transfer to
another entity all or substantially all of its assets as an entirety and
thereafter dissolve, if the surviving, resulting or transferee entity, as the
case may be, (i) shall be organized and existing under the laws of one of the
States of the United States of America, (ii) assumes, if such entity is not the
Guarantor, all of the obligations of the Guarantor hereunder and (iii) is not,
after such transaction, otherwise in default under any provisions hereof.
ARTICLE 7
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TERMINATION
7.1 TERMINATION. This Guarantee Agreement shall terminate upon (i) full
payment of all Distributions due with respect to the Preferred Securities or the
Redemption Price of all Securities, (ii) upon the distribution of the
Subordinated Notes to the Holders or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Trust Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid under the Preferred Securities or under
this Guarantee Agreement.
ARTICLE 8
COMPENSATION AND EXPENSES OF PREFERRED GUARANTEE TRUSTEE
The Guarantor agrees to pay to the Preferred Guarantee Trustee from
time to time such compensation as the parties shall agree from time to time
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of any express trust), and the Guarantor will pay or
reimburse the Preferred Guarantee Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Preferred Guarantee
Trustee incurred or made by the Preferred Guarantee Trustee in accordance with
the acceptance and administration of its duties under this Guarantee Agreement
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Guarantor also agrees to indemnify the Preferred Guarantee Trustee for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Preferred Guarantee Trustee and
arising out of or in connection with the acceptance or administration of this
Guarantee Agreement, including the reasonable costs and expenses of defending
itself against any claim of liability in the premises. The obligations of the
Guarantor under this Section to compensate the Preferred Guarantee Trustee, to
pay or reimburse the Preferred Guarantee Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Preferred Guarantee Trustee
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. Such additional indebtedness shall
be secured by a lien prior to that of the Preferred Securities upon all property
and funds held or collected by the Preferred Guarantee Trustee as such, except
funds held in trust for the payment of principal of or interest or redemption
premium on particular Preferred Securities.
ARTICLE 9
INDEMNIFICATION
9.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Guarantee
Agreement and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Guarantee Agreement or by law, except that an Indemnified Person shall be liable
for any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to the Holders might properly be paid.
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9.2 INDEMNIFICATION.
(a) To the fullest extent permitted by applicable law, the Guarantor
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee Agreement and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Guarantee Agreement, except that no Indemnified
Person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such Indemnified Person by reason of negligence or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by an Indemnified Person in defending any claim,
demand, action, suit or proceeding shall, from time to time, be advanced by the
Guarantor prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantor of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
ARTICLE 10
MISCELLANEOUS
10.1 SUCCESSORS AND ASSIGNS. All guarantees and agreements contained in
this Guarantee Agreement shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders then outstanding.
10.2 AMENDMENTS. Except with respect to any changes that do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may be amended only with the prior
approval of the Holders of at least a Majority in Liquidation Amount of the
Preferred Securities. The provisions of Section 12.2 of the Declaration with
respect to meetings of Holders of the Securities apply to the giving of such
approval.
10.3 NOTICES. All notices provided for in this Guarantee Agreement
shall be in writing, duly signed by the party giving such notice, and shall be
sent by facsimile transmission or hand delivered or sent by overnight courier,
addressed to the relevant party as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders):
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders):
Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Fax No.: 415-278-6046
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Trust Issuer.
For all purposes of this Guarantee Agreement, a notice or communication
will be deemed effective:
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(i) if delivered by hand or sent by overnight courier, on the
day it is delivered unless (i) that day is not a Business Day in the
city specified (a "Local Business Day") in the address for
notice provided by the recipient or (ii) if delivered after the close
of business on a Local Business Day, then on the next succeeding Local
Business Day or
(d) if sent by facsimile transmission, on the date transmitted, unless
the date of transmission is not a Local Business Day, in which case, on the next
succeeding Local Business Day, provided that oral or written confirmation of
receipt is obtained by the sender.
10.4 BENEFIT. This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Preferred Securities.
10.5 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
PROVIDIAN FINANCIAL CORPORATION
By
----------------------------------
Title
------------------------------
THE BANK OF NEW YORK
as Preferred Guarantee Trustee
By
----------------------------------
Title
-------------------------------
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EXHIBIT 4.21
FORM OF
PURCHASE CONTRACT AGREEMENT
PROVIDIAN FINANCIAL CORPORATION
AND
[PURCHASE CONTRACT AGENT]
DATED AS OF ____________
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE
----
<S> <C>
1. Definitions and Other Provisions of General Application..............................................1
1.1 Definitions.................................................................................1
1.2 Compliance Certificates and Opinions........................................................5
1.3 Form of Documents Delivered to Agent........................................................5
1.4 Acts of Holders; Record Dates...............................................................6
1.5 Notices, etc., to Agent and the Company.....................................................7
1.6 Notice to Holders; Waiver...................................................................7
1.7 Effect of Headings and Table of Contents....................................................7
1.8 Successors and Assigns......................................................................7
1.9 Separability Clause.........................................................................7
1.10 Benefits of Agreement.......................................................................7
1.11 Governing Law...............................................................................8
1.12 Legal Holidays..............................................................................8
1.13 Counterparts................................................................................8
1.14 Inspection of Agreement.....................................................................8
2. Security Certificate Forms...........................................................................8
2.1 Forms of Security Certificates Generally....................................................8
2.2 Form of Agent's Certificate of Authentication...............................................8
3. The Securities.......................................................................................9
3.1 Title and Terms; Denominations..............................................................9
3.2 Rights and Obligations Evidenced by the Security Certificates...............................9
3.3 Execution, Authentication, Delivery and Dating..............................................9
3.4 Temporary Security Certificates........................................................... 10
3.5 Registration; Registration of Transfer and Exchange....................................... 10
3.6 Mutilated, Destroyed, Lost and Stolen Security Certificates............................... 11
3.7 Persons Deemed Owners..................................................................... 12
3.8 Cancellation.............................................................................. 12
3.9 Securities Not Separable.................................................................. 12
4. The Pledged Securities............................................................................. 13
4.1 Payment of Distributions; Rights to Distributions Preserved............................... 13
4.2 Transfer of Pledged Securities Upon Occurrence of Termination Event....................... 13
5. The Purchase Contracts............................................................................. 14
5.1 Purchase of Shares of Common Stock........................................................ 14
5.2 Contract Fees............................................................................. 14
5.3 Deferral of Payment Dates For Contract Fee................................................ 15
5.4 Payment of Purchase Price................................................................. 15
5.5 Issuance of Shares of Common Stock........................................................ 15
5.6 Adjustment of Settlement Rate............................................................. 16
5.7 Notice of Adjustments and Certain Other Events............................................ 20
5.8 Termination Event; Notice................................................................. 20
5.9 Early Settlement.......................................................................... 20
5.10 No Fractional Shares...................................................................... 21
5.11 Charges and Taxes......................................................................... 21
6. Remedies........................................................................................... 22
6.1 Unconditional Right of Holders to Receive Contract Fee.................................... 22
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6.2 Restoration of Rights and Remedies........................................................ 22
6.3 Rights and Remedies Cumulative............................................................ 22
6.4 Delay or Omission Not Waiver.............................................................. 22
6.5 Undertaking for Costs..................................................................... 22
6.6 Waiver of Stay or Extension Laws.......................................................... 22
7. The Agent.......................................................................................... 23
7.1 Certain Duties and Responsibilities....................................................... 23
7.2 Notice of Default......................................................................... 23
7.3 Certain Rights of Agent................................................................... 23
7.4 Not Responsible for Recitals or Issuance of Securities.................................... 24
7.5 May Hold Securities....................................................................... 24
7.6 Money Held in Trust....................................................................... 24
7.7 Compensation and Reimbursement............................................................ 24
7.8 Corporate Agent Required; Eligibility..................................................... 24
7.9 Resignation and Removal; Appointment of Successor......................................... 25
7.10 Corporate Agent Required; Eligibility..................................................... 25
7.11 Resignation and Removal; Appointment of Successor......................................... 26
7.12 Acceptance of Appointment by Successor.................................................... 26
7.13 Merger, Conversion, Consolidation or Succession to Business............................... 27
7.14 Preservation of Information; Communications to Holders.................................... 27
7.15 No Obligations of Agent................................................................... 27
7.16 Tax Compliance............................................................................ 27
8. Supplemental Agreements............................................................................ 28
8.1 Supplemental Agreements Without Consent of Holders........................................ 28
8.2 Supplemental Agreements with Consent of Holders........................................... 28
8.3 Execution of Supplemental Agreements...................................................... 29
8.4 Effect of Supplemental Agreements......................................................... 29
8.5 Reference to Supplemental Agreements...................................................... 29
9. Consolidation, Merger, Sale or Conveyance.......................................................... 29
9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except Under Certain
Conditions................................................................................ 29
9.2 Rights and Duties of Successor Corporation................................................ 29
9.3 Opinion of Counsel to Agent............................................................... 30
10. Covenants.......................................................................................... 30
10.1 Performance Under Purchase Contracts...................................................... 30
10.2 Maintenance of Office or Agency........................................................... 30
10.3 Company to Reserve Common Stock........................................................... 30
10.4 Covenants as to Common Stock.............................................................. 30
10.5 Statements of Officers of the Company as to Default....................................... 30
TESTIMONIUM
SIGNATURES
EXHIBIT A Form of Security Certificate
</TABLE>
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PURCHASE CONTRACT AGREEMENT
THIS PURCHASE CONTRACT AGREEMENT, dated as of ____________, 199__, is
made between PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation (the
"Company"), and [PURCHASE CONTRACT AGENT], acting as purchase contract agent for
the Holders of Securities from time to time (the "Agent").
RECITALS:
A. The Company has duly authorized the execution and delivery of this
Agreement and the Security Certificates evidencing the Securities.
B. All things necessary to make the Company's obligations under the
Securities, when the Security Certificates are executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent, as
in this Agreement provided, the valid obligations of the Company, and to
constitute these presents a valid agreement of the Company, in accordance with
its terms, have been done.
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually agreed as
follows:
1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
1.1 DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular; and
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement 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.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter
"Agent" shall mean the Person who is then the Agent hereunder.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 501.
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
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"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been 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 Agent.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which the NYSE or banking institutions or trust companies in the City of New
York are authorized or obligated by law or executive order to be closed.
"Closing Price" has the meaning specified in Section 501.
"Collateral Agent" means ________________, as Collateral Agent under the
Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such, and thereafter
"Company" shall mean such successor.
"Contract Fee" means the fee payable by the Company in respect of each
Purchase Contract, equal to __________ percent (___%) per annum of the Stated
Amount, accruing from __________, 199_, computed on the basis of the actual
number of days elapsed in a year of three hundred sixty-five (365) or three
hundred sixty-six (366) days, as the case may be, plus any additional fees
accrued pursuant to Section 503.
"Corporate Trust Office" means the principal office of the Agent in the
Borough of Manhattan, The City of New York, at which at any particular time its
corporate trust business shall be administered, which office at the date hereof
is located at ________, New York, New York .
"Current Market Price" has the meaning specified in Section 506(a)(8).
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities as contemplated by
Section 305.
"Early Settlement" has the meaning specified in Section 509(a).
"Early Settlement Amount" has the meaning specified in Section 509(a).
"Early Settlement Date" has the meaning specified in Section 509(a).
"Early Settlement Rate" has the meaning specified in Section 509(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Excess Pledged Securities" has the meaning specified in Section 402.
"Expiration Date" has the meaning specified in Section 104.
"Expiration Time" has the meaning specified in Section 506(a)(6).
"Final Settlement Date" means _______ , 199_.
"Final Settlement Fund" has the meaning specified in Section 505.
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"Global Security Certificate" means a Security Certificate that
evidences all or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
"Holder," when used with respect to a Security Certificate (or a
Security), means a Person in whose name the Security evidenced by such Security
Certificate (or the Security Certificate evidencing such Security) is registered
in the Security Register.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 501.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.
"Outstanding Securities" means, as of the date of determination, all
Securities evidenced by then Outstanding Security Certificates, except:
(i) If a Termination Event has occurred, Securities for which
the underlying Pledged Securities have been theretofore deposited with
the Agent in trust for the Holders of such Securities; and
(ii) On and after the applicable Early Settlement Date,
Securities as to which the Holder has elected to effect Early
Termination of the related Purchase Contracts; provided, however, that
in determining whether the Holders of the requisite number of Securities
have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Agent shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Agent
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 Agent the pledgee's right
so to act with respect to such Securities and that the pledgee is not
the Company or any Affiliate of the Company.
"Outstanding Security Certificates" means, as of the date of
determination, all Security Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) Security Certificates theretofore cancelled by the Agent
or delivered to the Agent for cancellation; and
(ii) Security Certificates in exchange for or in lieu of which
other Security Certificates have been authenticated, executed on behalf
of the Holder and delivered pursuant to this Agreement, other than any
such Security Certificate in respect of which there shall have been
presented to the Agent proof satisfactory to it that such Security
Certificate is held by a bona fide purchaser in whose hands the
Securities evidenced by such Security Certificate are valid obligations
of the Company.
"Payment Date" means ________each _______ and commencing , 19____
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" means the pledge under the Pledge Agreement of the Pledged
Securities constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, among the Company, the Collateral Agent and the Agent, on its own behalf
and as attorney-in-fact for the Holders from time to time of the Securities.
"Pledged Securities" means_________
"Predecessor Security Certificate" of any particular Security
Certificate means every previous Security Certificate evidencing all or a
portion of the rights and obligations of the Holder under the Securities
evidenced thereby; and, for the purposes of this definition, any Security
Certificate authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security Certificate shall be
deemed to evidence the same rights and obligations of the Holder as the
mutilated, destroyed, lost or stolen Security Certificate.
"Purchase Contract," when used with respect to any Security, means the
contract obligating the Company to sell and the Holder of such Security to
purchase Common Stock on the terms and subject to the conditions set forth in
Article Five hereof.
"Purchased Shares" has the meaning specified in Section 506(a)(6).
"Record Date" for the distributions and Contract Fees payable on any
Payment Date means the _____ or _______ (whether or not a Business Day), as the
case may be, next preceding such Payment Date.
"Reorganization Event" has the meaning specified in Section 506(b).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means the collective rights and obligations of a Holder of a
Security Certificate in respect of Pledged Securities with a principal amount or
liquidation preference equal to the Stated Amount, subject to the Pledge
thereof, and a Purchase Contract.
"Security Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Securities specified on such
certificate.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Settlement Rate" has the meaning specified in Section 501.
"Stated Amount" means $_________.
"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Final Settlement Date, a decree or order by a
court having jurisdiction in the premises shall have been entered adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under the United States Bankruptcy Code or
any other similar applicable Federal or State law, and, unless such decree or
order shall have been entered within sixty (60) days prior to the Final
Settlement Date, such decree or order shall have continued undischarged and
unstayed for a period of sixty (60) days; or (ii) a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver or
liquidator or trustee or
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assignee in bankruptcy or insolvency of the Company or of its property, or for
the winding up or liquidation of its affairs, shall have been entered, and,
unless such decree or order shall have been entered within sixty (60) days prior
to the Final Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of sixty (60) days, or (iii) at any time
on or prior to the Final Settlement Date the Company shall institute proceedings
to be adjudicated a bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization under the United States Bankruptcy Code or any other similar
applicable Federal or State law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
501.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 501.
"Underwriting Agreement" means the Underwriting Agreement dated _____
199_ between the Company and _________, as representatives of the several
Underwriters named therein.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly
provided by this Agreement, upon any application or request by the Company to
the Agent to take any action under any provision of this Agreement, the Company
shall furnish to the Agent an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Agreement relating to the proposed
action have been complied with and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) 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;
(c) 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
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
1.3 FORM OF DOCUMENTS DELIVERED TO AGENT. 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.
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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 of fleer 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 Agreement, they may, but need not, be consolidated and
form one instrument.
1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement 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 Agent 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
Agreement and (subject to Section 701) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) 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 Certificate evidencing
such 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 Agent or the Company in reliance thereon, whether or not notation
of such action is made upon such Security Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Securities on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite number of Outstanding Securities on such record
date. Nothing in this paragraph shall be construed to prevent the Company from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite number of Outstanding Securities on
the date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Company, at its
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own expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Agent in writing
and to each Holder of Securities in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 106, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this pare
graph. Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.
1.5 NOTICES, ETC., TO AGENT AND THE COMPANY. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with,
(a) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or mailed, first
class postage prepaid, to the Agent at_______ , Attention: Stock Transfer
Department, or at any other address previously furnished in writing by the Agent
to the Holders and the Company, or
(b) the Company by the Agent or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or mailed, first
class postage prepaid, to the Company at 201 Mission Street, 18th Floor, Street,
San Francisco, California 94105, Attention: _______________, or at any other
address previously furnished in writing to the Agent by the Company.
1.6 NOTICE TO HOLDERS; WAIVER. Where this Agreement 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, and not
earlier than the earliest date, 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 this
Agreement 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 Agent, 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 Agent shall
constitute a sufficient notification for every purpose hereunder.
1.7 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.
1.8 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
1.9 SEPARABILITY CLAUSE. In case any provision in this Agreement or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions hereof and thereof shall
not in any way be affected or impaired thereby.
1.10 BENEFITS OF AGREEMENT. Nothing in this Agreement or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Holders, any benefits or any legal
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or equitable right, remedy or claim under this Agreement. The Holders from time
to time shall be beneficiaries of this Agreement and shall be bound by all of
the terms and conditions hereof and of the Securities evidenced by their
Security Certificates by their acceptance of delivery thereof.
1.11 GOVERNING LAW. This Agreement and the Securities shall be governed
by and construed in accordance with the laws of the State of New York.
1.12 LEGAL HOLIDAYS. In any case where any Payment Date, any Early
Settlement Date or the Final Settlement Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or of the Securities)
payment in respect of distributions on Pledged Securities or Contract Fees shall
not be made, Purchase Contracts shall not be performed and Early Settlement
shall not be effected on such date, but such payments shall be made, or the
Purchase Contracts shall be per formed or Early Settlement effected, as
applicable, on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, Early Settlement Date or Final Settlement Date,
as the case may be; provided, that no interest shall accrue or be payable by the
Company or any Holder for the period from and after any such Payment Date, Early
Settlement Date or Final Settlement Date, as the case may be.
1.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.
1.14 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the Corporate Trust Office for inspection
by any Holder.
2. SECURITY CERTIFICATE FORMS.
2.1 FORMS OF SECURITY CERTIFICATES GENERALLY. The Security Certificates
(including the form of Purchase Contracts forming part of the Securities
evidenced thereby) shall be in substantially the form set forth in Exhibit A
hereto, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Securities are listed or Depositary therefor, or as may, consistently herewith,
be determined by the officers of the Company executing such Security
Certificates, as evidenced by their execution of the Security Certificates.
The definitive Security Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the Security
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Security Certificate authenticated, executed on behalf of
the Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS SECURITY CERTIFICATE IS A GLOBAL SECURITY CERTIFICATE WITHIN THE
MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS SECURITY
CERTIFICATE 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 PURCHASE CONTRACT AGREEMENT.
2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION. The form of the
Agent's certificate of authentication of the Securities shall be in
substantially the form set forth on the form of the Security Certificates.
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3. THE SECURITIES.
3.1 TITLE AND TERMS; DENOMINATIONS. The aggregate number of Securities
evidenced by Security Certificates authenticated, executed on behalf of the
Holders and delivered hereunder is limited to _________(subject to increase up
to a maximum of _______________ to the extent the overallotment option of the
underwriters under the Underwriting Agreement is exercised), except for Security
Certificates authenticated, executed and delivered upon registration of transfer
of, in exchange for, or in lieu of, other Security Certificates pursuant to
Section 304, 305, 306, 509 or 805.
The Security Certificates shall be issuable only in registered form and
only in denominations of a single Security and any integral multiple thereof.
3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE SECURITY CERTIFICATES. Each
Security Certificate shall evidence the number of Securities specified therein,
with each such Security representing the ownership by the Holder thereof of
Pledged Securities with a principal amount or liquidation preference equal to
the Stated Amount, subject to the Pledge of such Pledged Securities by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder under one Purchase Contract. Prior to the purchase, if any, of shares of
Common Stock under the Purchase Contracts, the Securities shall not entitle the
Holders to any of the rights of a holder of shares of Common Stock, including,
without limitation, the right to vote or receive any dividends or other payments
or to consent or to receive notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as stockholders of the Company, except to
the extent otherwise expressly provided in this Agreement.
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Upon the execution
and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Security Certificates executed by the
Company to the Agent for authentication, execution on behalf of the Holders and
delivery, together with its Issuer Order for authentication of such Security
Certificates, and the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holder and deliver such Security
Certificates.
The Security Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, 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 Security Certificates may be manual or facsimile.
Security Certificates 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 of flees prior to the authentication and delivery of such Security
Certificates or did not hold such of rices at the date of such Security
Certificates.
No Purchase Contract underlying a Security evidenced by a Security
Certificate shall be valid until such Security Certificate has been executed on
behalf of the Holder by the manual signature of an authorized signatory of the
Agent, as such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Agent shall be conclusive evidence that the Holder of such
Security Certificate has entered into the Purchase Contracts underlying the
Securities evidenced by such Security Certificate.
Each Security Certificate shall be dated the date of its authentication.
No Security Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Security Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by manual
signature, and such certificate upon any Security Certificate shall be
conclusive evidence, and the only evidence, that such Security Certificate has
been duly authenticated and delivered hereunder.
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3.4 TEMPORARY SECURITY CERTIFICATES. Pending the preparation of
definitive Security Certificates, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Security Certificates, temporary Security
Certificates which are in substantially the form set forth in Exhibit A hereto,
with such letters, numbers or other marks of identification or designation and
such legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Securities are
listed, or as may, consist entry herewith, be determined by the officers of the
Company executing such Security Certificates, as evidenced by their execution of
the Security Certificates.
If temporary Security Certificates are issued, the Company will cause
definitive Security Certificates to be prepared without unreasonable delay.
After the preparation of definitive Security Certificates, the temporary
Security Certificates shall be exchangeable for definitive Security Certificates
upon surrender of the temporary Security Certificates at the Corporate Trust
Office, at the expense of the Company and without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Security Certificates,
the Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange therefor,
one or more definitive Security Certificates of authorized denominations and
evidencing a like number of Securities as the temporary Security Certificate or
Security Certificates so surrendered. Until so exchanged, the temporary Security
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the Securities evidenced thereby as definitive
Security Certificates.
3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Agent shall
keep at the Corporate Trust Office a register (the register maintained in such
office being herein referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Agent shall provide for the
registration of Security Certificates and of transfers of Security Certificates
(the Agent, in such capacity, the "Security Registrar").
Upon surrender for registration of transfer of any Security Certificate
at the Corporate Trust Office, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the designated
transferee or transferees, and deliver, in the name of the designated transferee
or transferees, one or more new Security Certificates of any authorized
denominations and evidencing a like number of Securities.
At the option of the Holder, Security Certificates may be exchanged for
other Security Certificates, of any authorized denominations and evidencing a
like number of Securities, upon surrender of the Security Certificates to be
exchanged at the Corporate Trust Office. Whenever any Security Certificates are
so surrendered for exchange, the Company shall execute and deliver to the Agent,
and the Agent shall authenticate, execute on behalf of the Holder, and deliver
the Security Certificates which the Holder making the exchange is entitled to
receive.
All Security Certificates issued upon any registration of transfer or
exchange of a Security Certificate shall evidence the ownership of the same
number of Securities and be entitled to the same benefits and subject to the
same obligations, under this Agreement as the Securities evidenced by the
Security Certificate surrendered upon such registration of transfer or exchange.
Every Security Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Agent 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 a Security Certificate, but the Company and the Agent may require
payment from the Holder 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 Security Certificates, other than any exchanges pursuant
to Sections 306 and 805 not involving any transfer. Notwithstanding the
foregoing, the Company shall not be obligated to execute and deliver to the
Agent, and the Agent shall not be obligated to authenticate, execute on behalf
of the Holder and deliver any Security Certificate presented or surrendered for
registration of transfer or for exchange on or after the Final Settlement Date
or the Termination Date. In lieu of delivery of a new Security Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Agent shall (i) if
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the Final Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Security Certificate, or (ii) if a Termination Event shall
have occurred prior to the Final Settlement Date, transfer the principal amount
or liquidation amount, as the case may be, of the Pledged Securities evidenced
thereby, in each case subject to the applicable conditions and in accordance
with the applicable provisions of Article Five hereof.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Security Certificates:
(a) Each Global Security Certificate authenticated and executed on
behalf of the Holders under this Agreement shall be registered in the name of
the Depositary designated for such Global Security Certificate or a nominee
thereof and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Security Certificate shall constitute a single
Security Certificate for all purposes of this Agreement.
(b) Notwithstanding any other provision in this Agreement, no Global
Security Certificate may be exchanged in whole or in part for Security
Certificates registered, and no transfer of a Global Security Certificate in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Security Certificate or a nominee thereof unless (A)
such Depositary (i) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Security Certificate or (ii) has ceased
to be a clearing agency registered under the Exchange Act or (b) there shall
have occurred and be continuing a default by the Company in respect to its
obligations under one or more Purchase Contracts.
(c) Subject to Clause (b) above, any exchange of a Global Security
Certificate for other Security Certificates may be made in whole or in part, and
all Security Certificates issued in exchange for a Global Security Certificate
or any portion thereof shall be registered in such names as the Depositary for
such Global Security Certificate shall direct.
(d) Every Security Certificate authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
Certificate or any portion thereof, whether pursuant to this Section, Section
304, 306, 509 or 805 or otherwise, shall be authenticated, executed on behalf of
the Holders and delivered in the form of, and shall be, a Global Security
Certificate, unless such Security Certificate is registered in the name of a
Person other than the Depositary for such Global Security Certificate or a
nominee thereof.
3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITY CERTIFICATES. If any
mutilated Security Certificate is surrendered to the Agent, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, a new Security
Certificate, evidencing the same number of Securities and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence to
their satisfaction of the destruction, loss or theft of any Security
Certificate, and (ii) such security or indemnity as may be required by them to
save each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Agent that such Security Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen Security
Certificate, a new Security Certificate, evidencing the same number of
Securities and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Security Certificate on or after the Final Settlement Date or the Termination
Date. In lieu of delivery of a new Security Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Agent
shall (i) if the Final Settlement Date has occurred, deliver the shares of
Common Stock issuable in respect of the Purchase Contracts forming a part of the
Securities evidenced by such Security Certificate, or (ii) if a Termination
Event shall have occurred prior to the Final Settlement Date, transfer the
principal amount of the Pledged Securities evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
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Upon the issuance of any new Security Certificate under this Section,
the Company and the Agent may require the payment by the Holder 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
Agent) connected therewith.
Every new Security Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security Certificate shall constitute an
original additional contractual obligation of the Company and of the Holder,
whether or not the destroyed, lost or stolen Security Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the benefits and be
subject to all the obligations of this Agreement equally and proportionately
with any and all other Security Certificates delivered hereunder.
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
settlement of mutilated, destroyed, lost or stolen Security Certificates.
3.7 PERSONS DEEMED OWNERS. Prior to due presentment of a Security
Certificate for registration of transfer, the Company and the Agent, and any
agent of the Company or the Agent, may treat the Person in whose name such
Security Certificate is registered as the owner of the Securities evidenced
thereby, for the purpose of receiving payments of distributions on the Pledged
Securities, receiving payments of Contract Fees, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not the payment of
distributions on the Pledged Securities or any Contract Fee payable in respect
of the Purchase Contracts constituting a part of the Securities evidenced
thereby shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Security
Certificate, nothing herein shall prevent the Company, the Agent or any agent of
the Company or the Agent, from giving effect to any written certification, proxy
or other authorization furnished by any Depositary (or its nominee), as a
Holder, with respect to such Global Security Certificate or impair, as between
such Depositary and owners of beneficial interests in such Global Security
Certificate, the operation of customary practices governing the exercise of
rights of such Depositary (or its nominee) as Holder of such Global Security
Certificate.
3.8 CANCELLATION. All Security Certificates surrendered for delivery of
shares of Common Stock on or after the Final Settlement Date, transfer of
Pledged Securities after the occurrence of a Termination Event or pursuant to an
Early Settlement or registration of transfer or exchange shall, if surrendered
to any Person other than the Agent, be delivered to the Agent and, if not
already cancelled, shall be promptly cancelled by it. The Company may at any
time deliver to the Agent for cancellation any Security Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Security Certificates so delivered
shall, upon Issuer Order, be promptly cancelled by the Agent. No Security
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Security Certificates cancelled as
provided in this Section, except as expressly permitted by this Agreement. All
cancelled Security Certificates held by the Agent shall be disposed of as
directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Security Certificate, such acquisition shall not operate as a cancellation of
such Security Certificate unless and until such Security Certificate is
delivered to the Agent cancelled or for cancellation.
3.9 SECURITIES NOT SEPARABLE. Notwithstanding anything contained herein
or in the Security Certificates to the contrary, for so long as the Purchase
Contract underlying a Security remains in effect such Security shall not be
separable into its constituent parts, and the rights and obligations of the
Holder of such Security in respect of the Pledged Securities and Purchase
Contracts constituting such Security may be acquired, and may be transferred and
exchanged, only as a Security. Other than a Security Certificate evidencing a
Security, no Holder of a Security, or any transferee thereof, shall be entitled
to receive a certificate evidencing the ownership of Pledged Securities or the
rights and obligations of the Holder and the Company under a Purchase Contract
for so long as the Purchase Contract underlying the Security remains in effect.
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4. THE PLEDGED SECURITIES.
4.1 PAYMENT OF DISTRIBUTIONS; RIGHTS TO DISTRIBUTIONS PRESERVED.
Distributions on any Pledged Security which is paid on any Payment Date shall,
subject to receipt thereof by the Agent from the Collateral Agent as provided by
the terms of the Pledge Agreement, be paid to the Person in whose name the
Security Certificate (or one or more Predecessor Security Certificates) of which
such Pledged Security is a part is registered at the close of business on the
Record Date next preceding such Payment Date.
Each Security Certificate evidencing Pledged Securities delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu of
any other Security Certificate shall carry the rights to distributions accrued
and unpaid, and to accrue, which were carried by the Pledged Securities
underlying such other Security Certificate.
In the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date after
any Record Date and on or prior to the next succeeding Payment Date,
distributions on the Pledged Securities underlying such Security otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, and such distributions shall, subject to
receipt thereof by the Agent, be paid to the Person in whose name the Security
Certificate (or one or more Predecessor Security Certificates) is registered at
the close of business on the Record Date. Except as otherwise expressly provided
in the immediately preceding sentence, in the case of any Security with respect
to which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, distributions on the related Pledged Securities that
would otherwise be payable after the Early Settlement Date shall not be payable
hereunder to the Holder of such Security.
4.2 TRANSFER OF PLEDGED SECURITIES UPON OCCURRENCE OF TERMINATION EVENT.
Upon the occurrence of a Termination Event and the transfer to the Agent of the
Pledged Securities underlying such Securities pursuant to the terms of the
Pledge Agreement, the Agent shall request transfer instructions with respect to
such Pledged Securities from each Holder of Securities by written request mailed
to such Holder at his address as it appears in the Security Register, in respect
of the Pledged Securities underlying the Security Certificate held by such
Holder. Upon surrender to the Agent of a Security Certificate with such transfer
instructions in proper form for transfer of the Pledged Securities by Federal
Reserve BankWire, book-entry transfer through the facilities of the Depositary
Trust Company, or other appropriate procedure, the Agent shall transfer the
Pledged Securities evidenced by such Security Certificate to such Holder in
accordance with such instructions. If a Security Certificate is not duly
surrendered to the Agent with appropriate transfer instructions, the Agent shall
hold the Pledged Securities evidenced by such Security Certificate as custodian
for the Holder of such Security Certificate.
Pledged Securities shall be transferred only in denominations of
$___________ and integral multiples thereof. As promptly as practicable
following the occurrence of a Termination Event, the Agent shall determine the
excess of (i) the aggregate principal amount or liquidation preference, as the
case may be, of Pledged Securities underlying the Outstanding Securities over
(ii) the aggregate principal amount or liquidation preference, as the case may
be, of Pledged Securities in denominations of $____________ and integral
multiples thereof transferable to Holders of record on the date of such
Termination Event (such excess being herein referred to as the "Excess Pledged
Securities"). As soon as practicable after transfer to the Agent of the Pledged
Securities underlying the Outstanding Securities as provided in the Pledge
Agreement, the Agent shall sell the Excess Pledged Securities to or through one
or more registered broker dealers at then prevailing prices. The Agent shall
deduct from the proceeds of such sales all commissions and other out-of-pocket
transaction costs incurred in connection with such sales of Excess Pledged
Securities and, until the net proceeds of such sale or sales have been
distributed to Holders of the Securities, the Agent shall hold such proceeds in
trust for the Holders of Securities. Each Holder shall be entitled to receive a
portion, if any, of such net proceeds in lieu of Pledged Securities with a
principal amount of less than $_________ determined by multiplying the aggregate
amount of such net proceeds by a fraction, the numerator of which is the
fraction of $________________ in principal amount of Pledged Securities to which
such Holder would otherwise be entitled (after taking into account all
Securities then held by such Holder) and the denominator of which is the
aggregate principal amount of Excess Pledged Securities.
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5. THE PURCHASE CONTRACTS.
5.1 PURCHASE OF SHARES OF COMMON STOCK. Each Purchase Contract shall
obligate the Holder of the related Security to purchase, and the Company to
sell, on the Final Settlement Date at a price equal to the Stated Amount, a
number of shares of Common Stock equal to the Settlement Rate, unless, on or
prior to the Final Settlement Date, there shall have occurred a Termination
Event or an Early Settlement with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is greater than $__________ (the "Threshold
Appreciation Price"), _____________ of a share of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than or equal to the
Threshold Appreciation Price but is greater than the Stated Amount, a fractional
share of Common Stock per Purchase Contract equal to the Stated Amount divided
by the Applicable Market Value (rounded upward or downward to the nearest
1/10,000th of a share) and (c) if the Applicable Market Value is less than or
equal to the Stated Amount, one share of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in Section 506. As provided in
Section 510, no fractional shares of Common Stock will be issued upon settlement
of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the last Trading Day immediately preceding the Final Settlement Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
Each Holder of a Security Certificate evidencing Securities, by his
acceptance thereof, irrevocably authorizes the Agent to enter into and perform
the related Purchase Contracts on his behalf as his attorney-in-fact, agrees to
be bound by the terms and provisions thereof, covenants and agrees to perform
his obligations under such Purchase Contracts, consents to the provisions
hereof, irrevocably authorizes the Agent as his attorney-in-fact to enter into
and perform the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Securities
underlying such Security Certificate pursuant to the Pledge Agreement. Each
Holder of a Security, by his acceptance thereof, further irrevocably covenants
and agrees, that, to the extent and in the manner provided in Section 504 and
the Pledge Agreement, but subject to the terms thereof, payments in respect of
principal or redemption price of the Pledged Securities on the Final Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Upon registration of transfer of a Security Certificate evidencing
Purchase Contracts, the transferee shall be bound (without the necessity of any
other action on the part of such transferee), under the terms of this Agreement,
the Purchase Contracts evidenced thereby and the Pledge Agreement and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by the Security Certificates so transferred. The Company covenants and
agrees, and each Holder of a Security Certificate, by his acceptance thereof,
likewise covenants and agrees, to be bound by the provisions of this paragraph.
5.2 CONTRACT FEES. Subject to Section 503, the Company shall pay, on
each Payment Date, the Contract Fees payable in respect of each Purchase
Contract to the Person in whose name the Security Certificate (or one or more
Predecessor Security Certificates) evidencing such Purchase Contract is
registered at the close of business on the Record Date next preceding such
Payment Date. The Contract Fee will be payable at the office of the Agent
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in the City of New York maintained for that purpose or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Security Register.
Each Security Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of any other Security
Certificate shall carry the rights to Contract Fees accrued and unpaid, and to
accrue, which were carried by the Purchase Contracts evidenced by such other
Security Certificate.
In the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date after
any Record Date and on or prior to the next succeeding Payment Date, Contract
Fees otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Early Settlement, and such Contract Fees shall be paid
to the Person in whose name the Security Certificate evidencing such Security
(or one or more Predecessor Security Certificates) is registered at the close of
business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Contract Fees that would otherwise be payable after the
Early Settlement Date with respect to the Purchase Contract underlying such
Security shall not be payable.
5.3 DEFERRAL OF PAYMENT DATES FOR CONTRACT FEE. The Company shall have
the right, at any time prior to the Final Settlement Date, to defer the payment
of any or all of the Contract Fees otherwise payable on any Payment Date, but
only if the Company shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be deferred) at least
ten (10) Business Days prior to the earlier of (i) the next succeeding Payment
Date or (ii) the date the Company is required to give notice of the Record Date
or Payment Date with respect to payment of such Contract Fee to the New York
Stock Exchange or other applicable self-regulatory organization or to Holders of
the Securities, but in any event not less than two (2) Business Days prior to
such Record Date. Any Contract Fees so deferred shall bear additional Contract
Fees thereon at the rate of per annum set forth in Appendix _____ hereto
(computed on the basis set forth in Appendix _____), compounding on each
succeeding Payment Date, until paid in full. Deferred Contract Fees (and
additional Contract Fees accrued thereon) shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to this
Section. No Contract Fees may be deferred to a date that is after the Final
Settlement Date or, with respect to any particular Purchase Contract, Early
Settlement thereof.
5.4 PAYMENT OF PURCHASE PRICE. The purchase price for the shares of
Common Stock purchased pursuant to a Purchase Contract shall be paid by
application of payments received by the Company on the Final Settlement Date
from the Collateral Agent pursuant to the Pledge Agreement in respect of the
principal or redemption price, as the case may be, of the Pledged Securities
Pledged to secure the obligations of the relevant Holder under such Purchase
Contract. Such application shall satisfy in full the obligations under such
Purchase Contract of the Holder of the Security of which such Purchase Contract
is a part. The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have received payment in full of the aggregate
purchase price for the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
5.5 ISSUANCE OF SHARES OF COMMON STOCK. Unless a Termination Event shall
have occurred on or prior to the Final Settlement Date, on the Final Settlement
Date, upon its receipt of payment in full of the purchase price for the shares
of Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article, and subject to Section 506(b), the Company shall deposit with the
Agent, for the benefit of the Holders of the Outstanding Securities, one or more
certificates representing the shares of Common Stock registered in the name of
the Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Final Settlement Fund")
to which the Holders are entitled hereunder. Subject to the foregoing, upon
surrender of a Security Certificate to the Agent on or after the Final
Settlement Date, together with settlement instructions thereon duly completed
and executed, the Holder of such Security Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article Five (after taking into account all Securities then
held by such Holder) together with cash in lieu of fractional shares as provided
in Section 510 and any dividends or distributions with respect to such shares
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constituting part of the Final Settlement Fund, but without any interest
thereon, and the Security Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions on the Security
Certificate.
If any shares of Common Stock issued in respect of a Purchase Contract
are to be registered to a Person other than the Person in whose name the
Security Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Security Certificate
evidencing such Purchase Contractor has established to the satisfaction of the
Company that such tax either has been paid or is not payable.
5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common
Stock, the Settlement Rate in effect at the opening of business on the
day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business
on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants
to all holders of its Common Stock (not being available on an equivalent
basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them, for a period
expiring within forty-five (45) days after the record date for the
determination of stockholders entitled to receive such rights, options
or warrants, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants (other than
pursuant to a dividend reinvestment plan), the Settlement Rate in effect
at the opening of business on the day following the date fixed for such
determination shall be increased by dividing such Settlement Rate by a
fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (2),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not issue any
such rights, options or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on
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the day following the day upon which such subdivision becomes effective
shall be proportionately increased, and, conversely, in case outstanding
shares of Common Stock shall each be combined into a smaller number of
shares of Common Stock, the Settlement Rate in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any rights
or warrants referred to in paragraph (2) of this Section, any dividend
or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section), the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior
to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of
which the numerator shall be the Current Market Price per share of the
Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution
filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of Common Stock and
the denominator shall all be such Current Market Price per share of the
Common Stock, such adjustment to become effective immediately prior to
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. In
any case in which this paragraph (4) is applicable, paragraph (2) of
this Section shall not be applicable.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed in a Reorganization Event to which Section 506(b)
applies or as part of a distribution referred to in paragraph (4) of
this Section) in an aggregate amount that, combined together with (I)
the aggregate amount of any other distributions to all holders of its
Common Stock made exclusively in cash within the twelve (12) months
preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of
this Section has been made and (II) the aggregate of any cash plus the
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution)
of consideration payable in respect of any tender or exchange offer by
the Company or any of its subsidiaries for all or any portion of the
Common Stock concluded within the twelve (12) months preceding the date
of payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has been
made, exceeds ten percent (10%) of the product of the Current Market
Price per share of the Common Stock on the date for the determination of
holders of shares of Common Stock entitled to receive such distribution
times the number of shares of Common Stock outstanding on such date,
then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so
that the same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on the date
fixed for determination of the stockholders en titled to receive such
distribution by a fraction (i) the numerator of which shall be equal to
the Current Market Price per share of the Common Stock on the date fixed
for such determination less an amount equal to the quotient of (x) the
excess of such combined amount over such ten percent (10%) and (y) the
number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
(6) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based
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on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with (I) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange
offer, of consideration payable in respect of any other tender or
exchange offer, by the Company or any subsidiary of the Company for all
or any portion of the Common Stock expiring within the twelve (12)
months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to paragraph (5) of this Section
or this paragraph (6) has been made and (II) the aggregate amount of any
distributions to all holders of the Company's Common Stock made
exclusively in cash within twelve (12) months preceding the expiration
of such tender or exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section or this paragraph (6) has been
made, exceeds ten percent (10%) of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender or exchange
offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time,
then, and in each such case, immediately prior to the opening of
business on the day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to close of
business on the date of the Expiration Time by a fraction (i) the
numerator of which shall be equal to (A) the product of (I) the Current
Market Price per share of the Common Stock on the date of the Expiration
Time and (II) the number of shares of Com mon Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the
amount of cash plus the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares, and (ii) the denominator of which
shall be equal to the product of (A) the Current Market Price per share
of the Common Stock as of the Expiration Time and (B) the number of
shares of Common Stock out standing (including any tendered shares) as
of the Expiration Time less the number of all shares validly tendered
and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 506(b)
applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number
of shares of Common Stock outstanding immediately thereafter (and the
effective date of such re classification shall be deemed to be "the day
upon which such subdivision be comes effective" or "the day upon which
such combination becomes effective", as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the
meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any
day means the average of the daily Closing Prices for the five (5)
consecutive Trading Days selected by the Company commencing not more
than twenty (20) Trading Days before, and ending not later than, the
earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For
purposes of this paragraph, the term "'ex' date", when used with respect
to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on such exchange or in such market
without the right to receive such issuance or distribution.
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(9) All adjustments to the Settlement Rate shall be calculated
to the nearest 1/10,000th of a share of Common Stock (or if there is not
a nearest 1/10,000th of a share to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless
such adjustment would require an increase or decrease of at least one
percent therein; provided, however, that any adjustments which by reason
of this subparagraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. If an
adjustment is made to the Settlement Rate pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 506(a), an
adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of
Settlement Rate in Section 501 will apply on the Final Settlement Date.
Such adjustment shall be made by multiplying the Applicable Market Value
by a fraction of which the numerator shall be the Settlement Rate in
clause (c) of the Settlement Rate definition in Section 501 immediately
after such adjustment pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 506(a) and the denominator shall be the
Settlement Rate in clause (c) of the Settlement Rate definition in
Section 501 immediately before such adjustment.
(10) The Company may make such increases in the Settlement Rate,
in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of
shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for
stock or from any event treated as such for income tax purposes or for
any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company, with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company (any such event, a "Reorganization Event"), the Settlement Rate will be
adjusted to provide that each Holder of Securities will receive on the Final
Settlement Date with respect to each Purchase Contract forming a part thereof,
the kind and amount of securities, cash and other property receivable upon such
Reorganization Event by a Holder of the number of shares of Common Stock
issuable on account of each Purchase Contract if the Final Settlement Date had
occurred immediately prior to such Reorganization Event, assuming such Holder of
Common Stock is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("constituent Person"), or an Affiliate of
a constituent Person, and failed to exercise his rights of election, if any, as
to the kind or amount of securities, cash and other property receivable upon
such Reorganization Event (provided that if the kind or amount of securities,
cash and other property receivable upon such Reorganization Event is not the
same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("nonelecting share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each nonelecting share shall be deemed to be the kind and amount so
receivable per share by a plurality of the nonelecting shares). In the event of
such a Reorganization Event, the Person formed by such consolidation, merger or
exchange or the Person which acquires the assets of the Company or, in the event
of a liquidation or dissolution of the Company, the Company or a liquidating
trust created in connection therewith, shall execute and deliver to the Agent an
agreement supplemental hereto providing that the Holders of each Outstanding
Security shall have the rights provided by this Section 506. Such supplemental
agree merit shall provide for adjustments which, for events subsequent to the
effective date of such supplemental agreement, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
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5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance
with Section 506 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate, the method of calculation
thereof in reasonable detail, and the facts requiring such adjustment
and upon which such adjustment is based; and
(ii) within ten (10) Business Days following the occurrence of
an event that permits or requires an adjustment to the Settlement Rate
pursuant to Section 506 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware), provide a
written notice to the Holders of the Securities of the occurrence of
such event and a statement in reasonable detail setting forth the method
by which the adjustment to the Settlement Rate was determined and
setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility
to any holder of Securities to determine whether any facts exist which may
require any adjustment of the Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed in making the same. The Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
5.8 TERMINATION EVENT; NOTICE. The Purchase Contracts and the
obligations and rights of the Company and the Holders thereunder, including,
without limitation, the rights of the Holders to receive and the obligation of
the Company to pay any Contract Fee, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Agent or the Company, if, on or prior to the Final Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Security Register.
Upon and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Pledged Securities forming a part
of such Securities in accordance with the provisions of Section 402 and the
Pledge Agreement.
5.9 EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this Section
509 at the option of the Holder thereof, any Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $_______ or an integral
multiple thereof may be settled early ("Early Settlement") as provided herein.
In order to exercise the right to effect Early Settlement with respect to any
Purchase Contracts, the Holder of the Security Certificate evidencing such
Purchase Contracts shall deliver such Security Certificate to the Agent at the
Corporate Trust Of flee duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly completed
and accompanied by payment in the form of a certified or cashier's check payable
to the order of the Company in immediately available funds in an amount (the
"Early Settlement Amount") equal to (i) the product of (A) the Stated Amount
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement minus (ii) the aggregate amount of Contract
Fees, if any, otherwise payable on or prior to the immediately preceding Payment
Date deferred at the option of the Company pursuant to Section 503 and remaining
unpaid as of such immediately preceding Payment Date plus (iii) if such delivery
is made with respect to any Purchase Contracts during the period from the close
of business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the sum of (x) the Contract
Fees payable on such Payment Date with respect to such Purchase Contracts plus
(y) the distributions on the related Pledged Securities payable on such Payment
Date. Except as provided in the immediately preceding sentence and
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subject to the last paragraph of Section 502, no payment or adjustment shall be
made upon Early Settlement of any Purchase Contract on account of any Contract
Fees accrued on such Purchase Contract or on account of any dividends on the
Common Stock issued upon such Early Settlement. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying any Securities
at or prior to 5:00 p.m., New York City time, on a Business Day, such day shall
be the "Early Settlement Date" with respect to such Securities and if such
requirements are first satisfied after 5:00 p.m., New York City time, on a
Business Day or on a day that is not a Business Day, the "Early Settlement Date"
with respect to such Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled to
receive, a number of shares of Common Stock on account of each Purchase Contract
as to which Early Settlement is effected equal to _______ the Early Settlement
Rate. The Early Settlement Rate shall initially be equal to and shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 509, the Company
shall issue and shall deliver to the Agent at the Corporate Trust Of flee a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 510.
(c) The Company shall cause the shares of Common Stock issuable, and
Pledged Securities deliverable, upon Early Settlement of Purchase Contracts to
be issued and delivered, in the case of such shares of Common Stock, and
released from the Pledge by the Collateral Agent and transferred, in the case of
such Pledged Securities, to the Agent, for delivery to the Holder thereof or its
designee, no later than the third Business Day after the applicable Early
Settlement Date.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt thereof from the Company or the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Security Certificate evidencing the related Securities, (i) transfer the Pledged
Securities forming a part of such Securities and (ii) deliver a certificate or
certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 510.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Security Certificate, upon such Early Settlement the Company shall execute and
the Agent shall authenticate, countersign and deliver to the Holder thereof, at
the expense of the Company, a Security Certificate evidencing the Securities as
to which Early Settlement was not effected.
5.10 NO FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued or delivered upon settlement
on the Final Settlement Date or upon Early Settlement of any Purchase Contracts.
If Security Certificates evidencing more than one Purchase Contract shall be
surrendered for settlement at one time by the same Holder, the number of full
shares of Common Stock which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts evidenced by
the Security Certificates so surrendered. Instead of any fractional share of
Common Stock which would otherwise be deliverable upon settlement of any
Purchase Contracts on the Final Settlement Date or upon Early Settlement, the
Company, through the Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional shares at
the Closing Price per share on the Trading Day immediately preceding the Final
Settlement Date or the related Early Settlement Date, respectively. The Company
shall provide the Agent from time to time with sufficient funds to permit the
Agent to make all cash payments required by this Section 510 in a timely manner.
5.11 CHARGES AND TAXES. The Company will pay all stock transfer and
similar taxes attributable to the initial issuance and delivery of the shares of
Common Stock pursuant to the Purchase Contracts; provided, however, that the
Company shall not be required to pay any such tax or taxes which may be payable
in respect of any exchange of or substitution for a Security Certificate
evidencing a Purchase Contract or any issuance of a share of Common Stock in a
name other than that of the registered Holder of a Security Certificate
surrendered in respect of the Purchase Contracts evidenced thereby, other than
in the name of the Agent, as custodian for such Holder, and
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the Company shall not be required to issue or deliver such share certificates or
Security Certificates unless or until the Person or Persons requesting the
transfer or issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.
6. REMEDIES.
6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT FEE.
Notwithstanding any other provision in this Agreement, the Holder of any
Security shall have the right, which is absolute and unconditional (subject to
the right of the Company to defer payment thereof pursuant to Section 503), to
receive payment of each installment of the Contract Fee with respect to the
Purchase Contract constituting a part of such Security on the respective Payment
Date for such Security and to purchase Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
such payment and right to purchase Common Stock, and such rights shall not be
impaired without the consent of such Holder.
6.2 RESTORATION OF RIGHTS AND REMEDIES. If any Holder of Securities has
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company and such Holder shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of such Holder shall continue as though no
such proceeding had been instituted.
6.3 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with
respect to the replacement of mutilated, destroyed, lost or stolen Security
Certificates in the last paragraph of Section 306, no right or remedy herein
conferred upon or reserved to the Holders of Securities 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.
6.4 DELAY OR OMISSION NOT WAIVER. No delay or omission of any Holder to
exercise any right or remedy shall impair any such right or remedy or constitute
a waiver of any such right. Every right and remedy given by this Article or by
law to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by such Holders.
6.5 UNDERTAKING FOR COSTS. All parties to this Agreement agree, and each
Holder of any Security by his acceptance of the Security Certificate evidencing
such Security shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Agreement, or in any suit against the Agent for any action taken, suffered
or omitted by it as Agent, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Agent, to any suit instituted by any
Holder of Securities, or group of Holders, holding in the aggregate more than
ten percent (10%) of the Out standing Securities, or to any suit instituted by
any Holder for the enforcement of the payment of the distributions on any
Pledged Security or the Contract Fee on any Purchase Contract on or after the
respective Payment Date therefor constituting a part of the Securities held by
such Holder, or for enforcement of the right to purchase shares of Common Stock
under the Purchase Contracts constituting a part of the Securities held by such
Holder.
6.6 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 Agreement; 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
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execution of any power herein granted to the Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
7. THE AGENT.
7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this
Agreement against the Agent; and in the absence of bad faith or negligence on
its part, the Agent may, with respect to the Securities, conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Agent and conforming to
the requirements of this Agreement, but in the case of any certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Agent, the Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(ii) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts; and
(iii) no provision of this Agreement shall require the Agent
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.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
7.2 NOTICE OF DEFAULT. Within ninety (90) days after the occurrence of
any default by the Company hereunder, of which a Responsible Officer of the
Agent has actual knowledge, the Agent shall transmit by mail to all Holders of
Securities, as their names and addresses appear in the Security Register, notice
of such default hereunder, unless such default shall have been cured or waived.
7.3 CERTAIN RIGHTS OF AGENT. Subject to the provisions of Section 701:
(a) the Agent 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 an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence
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be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company;
(d) the Agent 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 Agent 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 Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the issuance of the Securities and the
execution, delivery and performance of the Purchase Contracts as it may see fit,
and, if the Agent shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and promises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of its powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys and the
Agent shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals
contained herein and in the Security Certificates shall be taken as the
statements of the Company and the Agent assumes no responsibility for their
correctness. The Agent makes no representations as to the validity or
sufficiency of this Agreement or of the Securities. The Agent shall not be
accountable for the use or application by the Company of the proceeds in re
specs of the Purchase Contracts.
7.5 MAY HOLD SECURITIES. Any Security Registrar or any other agent of
the Company, or the Agent, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with the Company with
the same rights it would have if it were not Security Registrar or such other
agent, or the Agent.
7.6 MONEY HELD IN TRUST. Money held by the Agent in trust hereunder need
not be segregated from the other funds except to the extent required by law. The
Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed with the Company.
7.7 COMPENSATION AND REIMBURSEMENT. The Company agrees:
(i) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(ii) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of this Agreement (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
(iii) to indemnify the Agent and any predecessor Agent for,
and to hold each of them harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of its
duties hereunder, 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.
7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY. There shall at all times be
an Agent hereunder which shall 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 exercise corporate trust
powers, having a combined capital and surplus of at least $100,000,000, subject
to supervision or examination by Federal or State authority and having its
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Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation 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 corporation 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 Agent 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.
7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 710.
(b) The Agent may resign at any time by giving written notice thereof to
the Company sixty (60) days prior to the effective date of such resignation. If
the instrument of acceptance by a successor Agent required by Section 710 shall
not have been delivered to the Agent within thirty (30) days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time:
(i) the Agent fails to comply with Section 310(b) of the TIA, as
if the Agent were an indenture trustee under an indenture qualified
under the TIA, 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
(6) months, or
(ii) the Agent shall cease to be eligible under Section 708 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(iii) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent 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 Agent, or (ii) any
Holder who has been a bona fide Holder of a Security for at least six
(6) months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
7.10 CORPORATE AGENT REQUIRED; ELIGIBILITY. There shall at all times be
an Agent hereunder which shall 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 exercise corporate trust
powers, having a combined capital and surplus of at least $100,000,000, subject
to supervision or examination by Federal or State authority and having its
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation 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 corporation 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 Agent 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.
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7.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 710.
(b) The Agent may resign at any time by giving written notice thereof to
the Company sixty (60) days prior to the effective date of such resignation. If
the instrument of acceptance by a successor Agent required by Section 710 shall
not have been delivered to the Agent within thirty (30) days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time:
(i) the Agent fails to comply with Section 310(b) of the TIA, as
if the Agent were an indenture trustee under an indenture qualified
under the TIA, 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
(6) months, or
(ii) the Agent shall cease to be eligible under Section 708 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(iii) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent 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 Agent, or (ii) any
Holder who has been a bona fide Holder of a Security for at least six
(6) months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Agent for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Agent and shall comply
with the applicable requirements of Section 710. If no successor Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 710, any Holder who has been a bona fide Holder of a
Security for at least six (6) months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to give,
notice of each resignation and each removal of the Agent and each appointment of
a successor Agent by mailing written notice of such event by first class mail,
postage prepaid, to all Holders of Securities as their names and addresses
appear in the Security Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Of rice.
7.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
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(b) Upon request of any such successor Agent, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
7.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
corporation into which the 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 the Agent shall be a party, or any corporation succeeding
to all or substantially all the corporate trust business of the Agent, shall be
the successor of the Agent 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 Security Certificates shall have been authenticated and executed on
behalf of the Holders, but not delivered, by the Agent then in of rice, any
successor by merger, conversion or consolidation to such Agent may adopt such
authentication and execution and deliver the Security Certificates so
authenticated and executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
7.14 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Agent, and furnish to the Agent reasonable proof that each
such applicant has owned a Security for a period of at least six (6) months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall, within five (5) Business Days after the receipt of such
application, afford such applicants access to the information preserved at the
time by the Agent in accordance with Section 712(a).
(c) Every Holder of Securities, by receiving and holding the Security
Certificates evidencing the same, agrees with the Company and the Agent that
none of the Company, the Agent nor any agent of any of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with Section 712(b), regardless of
the source from which such information was derived.
7.15 NO OBLIGATIONS OF AGENT. Except to the extent otherwise provided in
this Agreement, the Agent assumes no obligations and shall not be subject to any
liability under this Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Security Certificate, by his acceptance thereof, shall be
deemed to have agreed, that the Agent's execution of the Security Certificates
on behalf of the Holders shall be solely as agent and attorney-in-fact for the
Holders, and that the Agent shall have no obligation to perform such Purchase
Contracts on behalf of the Holders, except to the extent expressly provided in
Article Five hereof.
7.16 TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
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(b) The Agent shall comply with any direction received from the Company
with respect to the application of such requirements to particular payments or
Holders or in other particular circumstances, and may for purposes of this
Agreement rely on any such direction in accordance with the provisions of
Section 701(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available on
request to the Company or to its authorized representative.
8. SUPPLEMENTAL AGREEMENTS.
8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders, the Company and the Agent, at any time and from time to
time, may enter into one or more agreements supplemental hereto, in form
satisfactory to the Company and the Agent, for any of the following purposes:
(i) 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 Security Certificates; or
(ii) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(iii) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(iv) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 506(b); or
(v) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders.
8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS. With the consent of
the Holders of not less than a majority of the Outstanding Securities delivered
to the Company and the Agent, the Company when authorized by a Board Resolution,
and the Agent may enter into an agreement or agreements supplemental hereto for
the purpose of modifying in the manner the terms of the Securities, or the
provisions of this Agreement or the rights of the Holders in respect of the
Securities, provided, however, that no such supplemental agreement shall,
without the consent of the Holder of Each Outstanding Security affected thereby,
(i) change any Payment Date;
(ii) change the amount or type of Pledged Securities
underlying a Security, impair the right of the Holder of any Security
to receive distribution payments on the underlying Pledged Securities
or otherwise adversely affect the Holder's rights in or to such Pledged
Securities;
(iii) reduce any Contract Fee or change any place where, or
the coin or currency in which, any Contract Fee is payable;
(iv) impair the right to institute suit for the enforcement of
any Purchase Contract;
(v) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Final Settlement Date or otherwise adversely
affect the Holder's rights under any Purchase Contract; or
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(vi) reduce the percentage of the Outstanding Securities the
consent of whose Holders is required for any such supplemental
agreement.
It shall not be necessary for any Act of Holders under this Section to
ap prove the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or accepting the
additional agencies created by, any supple mental agreement permitted by this
Article or the modifications thereby of the agencies created by this Agreement,
the Agent shall be entitled to receive and (subject to Section 701) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement. The Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of any
supplemental agreement under this Article, this Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form a part of this
Agreement for all purposes; and every Holder of Security Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered hereunder shall be bound thereby.
8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Agent, bear a notation in form ap proved by the Agent as to
any matter provided for in such supplemental agree meet. If the Company shall so
determine, new Security Certificates so modified as to conform, in the opinion
of the Agent and the Company, to any such supplemental agreement may be prepared
and executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Agent in exchange for Outstanding Security Certificates.
9. CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT
UNDER CERTAIN CONDITIONS. The Company covenants that it will not merge or
consolidate with any other Person or sell or convey all or substantially all of
its assets to any Person, except that the Company may merge or consolidate with,
or sell or convey all or substantially all of its assets to, any other Person,
provided that (i) the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof and
such corporation shall assume the obligations of the Company under the Purchase
Contracts, this Agreement and the Pledge Agreement by one or more supplemental
agreements in form satisfactory to the Agent and the Collateral Agent, executed
and delivered to the Agent and the Collateral Agent by such corporation, and
(ii) the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any covenant or condition hereunder, under any
of the Securities or under the Pledge Agreement.
9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any such
consolidation, merger, sale or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Providian Financial
Corporation, any or all of the Security Certificates evidencing Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Agent; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Agent shall authenticate and execute on behalf
of the Holders and deliver any Security Certificates which previously shall have
been signed and delivered by the officers of the Company to the Agent for
authentication and execution, and any Security Certificate evidencing Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Agent for that purpose. All the Security Certificates so issued
shall in all respects have the same legal rank and benefit under this Agreement
as the Security Certificates theretofore or thereafter issued in accordance with
the terms of this Agreement as though all of such Security Certificates had been
issued at the date of the execution hereof.
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In case of any such consolidation, merger, sale or conveyance such
change in phraseology and form (but not in substance) may be made in the
Security Certificates evidencing Securities thereafter to be issued as may be
appropriate.
9.3 OPINION OF COUNSEL TO AGENT. The Agent, subject to Sections 701 and
703, may receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale or conveyance, and any such assumption, complies
with the provisions of this Article.
10. COVENANTS.
10.1 PERFORMANCE UNDER PURCHASE CONTRACTS. The Company covenants and
agrees for the benefit of the Holders from time to time of the Securities that
it will duly and punctually perform its oblige lions under the Purchase
Contracts in accordance with the terms of the Purchase Contracts and this
Agreement.
10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the
Borough of Manhattan, The City of New York an office or agency where Security
Certificates may be presented or surrendered for acquisition of shares of Common
Stock upon settlement or Early Settlement and for transfer of Pledged Securities
upon occurrence of a Termination Event, where Security Certificates 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 Agreement
may be served. The Company will give prompt written notice to the Agent 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 Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Security Certificates may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York for such purposes. The Company
will give prompt written notice to the Agent of any such designation or
rescission and of any change in the location of any such other of rice or
agency. The Company hereby designates as the place of payment for the Securities
the Corporate Trust Of rice and appoints the Agent at its Corporate Trust Office
as paying agent in such city.
10.3 COMPANY TO RESERVE COMMON STOCK. The Company shall at all times
prior to the Final Settlement Date reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock the full
number of shares of Common Stock issuable against tender of payment in respect
of all Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Security Certificates.
10.4 COVENANTS AS TO COMMON STOCK. The Company covenants that all shares
of Common Stock which may be issued against tender of payment in respect of any
Purchase Contract constituting a part of the Outstanding Securities will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable.
10.5 STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT. The Company
will deliver to the Agent, within one hundred twenty (120) days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default
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in the performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PROVIDIAN FINANCIAL CORPORATION
By
--------------------------------
Title
-----------------------------
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EXHIBIT A
PROVIDIAN FINANCIAL CORPORATION
______% _____________ SECURITIES
(STATED AMOUNT $ PER SECURITY)
No. Securities
This Security Certificate certifies that is the registered Holder of the
number of Securities set forth above. Each Security represents ownership by the
Holder of __________ percent (___% )United States Pledged Securities due
_______________ ("Pledged Securities") with a principal amount equal to the
Stated Amount, subject to the Pledge of such Pledged Securities by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of the Holder
under one Purchase Contract with Providian Financial Corporation, a Delaware
corporation (the "Company").
Pursuant to the Pledge Agreement, the Pledged Securities constituting
part of each Security evidenced hereby have been pledged to the Collateral Agent
to secure the obligations of the Holder under the Purchase Contract constituting
part of such Security.
The Pledge Agreement provides that all payments of principal of, or
distributions on, any Pledged Securities constituting part of the Securities
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds no later than _______________, New York City time, on
the Business Day such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on a day that is
not a Business Day or after _______________, New York City time, on a Business
Day, then such payment shall be made no later than ______________, New York City
time, on the next succeeding Business Day) (i) in the case of (A) distributions
payments and (B) any principal payments with respect to any Pledged Securities
that have been released from the Pledge pursuant to the Pledge Agreement, to the
Agent to the account designated by it for such purpose and (ii) in the case of
principal payments on any Pledged Securities (as defined in the Pledge
Agreement), to the Company, in full satisfaction of the respective obligations
of the Holders of the Securities of which such Pledged Treasury Securities are a
part under the Purchase Contracts forming a part of such Securities.
Distributions on any Pledged Security forming part of a Security evidenced
hereby which is paid on any __________ or ____________, commencing,
____________199_ (a "Payment Date"), shall, subject to receipt thereof by the
Agent from the Collateral Agent, be paid to the Person in whose name this
Security Certificate (or a Predecessor Security Certificate) is registered at
the close of business on the Record Date next preceding such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Security Certificate to purchase, and the Company to sell, on ____________, (the
"Final Settlement Date"), at a price equal to $____ (the "Stated Amount"), a
number of shares of Common Stock, par value $.01 per share ("Common Stock"), of
the Company, equal to the Settlement Rate, unless on or prior to the Final
Settlement Date there shall have occurred a Termination Event or Early
Settlement with respect to the Security of which such Purchase Contract is a
part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Final Settlement Date by application of payment
received in respect of the principal of the Pledged Securities pledged to secure
the obligations under such Purchase Contract of the Holder of the Security of
which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Security evidenced hereby a fee (the
"Contract Fee") equal to __________ percent (___%) per annum of the Stated
Amount, from ___________, computed on the basis of the actual number of days
elapsed in a year of three hundred sixty-five (365) or three hundred sixty-six
(366) days, as the case may be, subject to deferral at the option of the Company
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. Such
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Contract Fee shall be payable to the Person in whose name this Security
Certificate (or a Predecessor Security Certificate) is registered at the close
of business on the Record Date next preceding such Payment Date.
Distributions on the Pledged Securities and the Contract Fee will be
payable at the office of the Agent in The City of New York or, at the option of
the Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Security Register.
Reference is hereby made to the further provisions 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
Agent by manual signature, this Security Certificate shall not be entitled to
any benefit under the Pledge Agreement or the Purchase Contract Agreement or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PROVIDIAN FINANCIAL CORPORATION
By:
Attest:
HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts evidenced hereby)
By: as Attorney-in-Fact of such Holder
By:
Dated:
This is one of the Security Certificates referred to in the within
mentioned Purchase Contract Agreement
- -----------------------------,
as Agent
By:
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<PAGE>
Form of Reverse of Security Certificate
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of __________, 1998 (the "Purchase Contract
Agreement"), between the Company and _______________, as Agent (herein called
the "Agent"), to which Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company, and the Holders and of the terms upon which the Security
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Security Certificate to purchase, and the Company to sell, on the Final
Settlement Date at a price equal to the Stated Amount, a number of shares of
Common Stock of the Company equal to the Settlement Rate, unless, on or prior to
the Final Settlement Date, there shall have occurred a Termination Event or an
Early Settlement with respect to the Security of which such Purchase Contract is
a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is greater than $______ (the "Threshold Appreciation Price"), of
a share of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than or equal to the Threshold Appreciation Price but is greater
than the Stated Amount, a fractional share of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Amount is less than or equal to the Stated Amount, one share
of Common Stock per Purchase Contract, in each case subject to adjustment as
provided in the Purchase Contract. No fractional shares of Common Stock will be
issued upon settlement of Purchase Contracts, as provided in the Purchase
Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty (20) consecutive Trading Days
ending on the last Trading Day immediately preceding the Final Settlement Date.
The "Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the mar Let value of the
Common Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company. A "Trading
Day" means a day on which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
The purchase price for the shares of Common Stock purchased pursuant to
each Purchase Contract shall be paid by application of payments received by the
Company on the Final Settlement Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the principal of the Pledged Securities Pledged
to secure the obligations of the relevant Holder under such Purchase Contract.
The Company shall not be obligated to issue any shares of Common Stock in re
specs of a Purchase Contract or deliver any certificates therefor to the Holder
unless it shall have received payment in full of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Fee payable in respect of each Purchase Contract to
the Person in whose name the Security Certificate evidencing such Purchase
Contract is registered at the close of business on the Record Date next pre
ceding such Payment Date. Contract Fees will be payable at the office of the
Agent in The City of New York or, at the option of the Company, by cheek mailed
to the address of the Person entitled thereto at such address as it ap pears on
the Security Register.
The Company shall have the right, at any time prior to the Final
Settlement Date, to defer the payment of any or all of the Contract Fees
otherwise pay able on any Payment Date, but only if the Company shall give the
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Holders and the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) as provided in the Purchase Contract
Agreement. Any Contract Fees so deferred shall bear additional Contract Fees
thereon at the rate of per annum (computed on the basis of the actual number of
days elapsed in a year of three hundred sixty-five (365) or three hundred
sixty-six (366) days, as the case may be), compounding on each succeeding
Payment Date, until paid in full. Deferred Contract Fees (and additional
Contract Fees accrued thereon) shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Purchase Contract
Agreement. No Contract Fees may be deferred to a date that is after the Final
Settlement Date.
The Purchase Contracts and the obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Fee, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Agent or the Company, if, on or prior to the Final
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall give written notice to the Agent and to
the Holders, at their addresses as they appear in the Security Register. Upon
and after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Securities from the Pledge. The Securities shall thereafter
represent the right to receive the Pledged Securities forming a part of such
Securities in accordance with the provisions of the Purchase Contract Agreement
and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement at the option of the Holder thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $________ or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Security Certificate, the Holder of this Security Certificate shall deliver this
Security Certificate to the Agent at the Corporate Trust Of rice duly endorsed
for transfer to the Company or in blank with the form of Election to Settle
Early set forth below duly completed and accompanied by payment in the form of a
certified or cashier's check payable to the order of the Company in immediately
available funds in an amount (the "Early Settlement Amount") equal to (i) the
product of (A) the Stated Amount times (B) the number of Purchase Con tracts
with respect to which the Holder has elected to effect Early Settlement minus
(ii) the aggregate amount of Contract Fees, if any, otherwise payable on or
prior to the immediately preceding Payment Date deferred at the option of the
Company pursuant to the Purchase Contract Agreement and remaining unpaid as of
such immediately preceding Payment Date plus (iii) if such delivery is made with
respect to any
Purchase Con tracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the sum of (x) the Contract Fees payable on such
Payment Date with respect to such Purchase Contracts plus (y)the distributions
with respect to the related Pledged Securities payable on such Payment Date.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Securities underlying such Securities shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive, a number of shares of Common Stock on account of each
Purchase Contract forming part of a Security as to which Early Settlement is
effected equal to the Early Settlement Rate. The Early Settlement Rate shall
initially be equal to and shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
The Security Certificates are issuable only in registered form and only
in denominations of a single Security and any integral multiple thereof. The
transfer of any Security Certificate will be registered and Security
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Security Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. For so long as the Purchase Contract underlying
a Security remains in effect, such Security shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Security
in respect of the Pledged Securities and Purchase Contract constituting such
Security may be transferred and exchanged only as a Security.
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Upon registration of transfer of this Security Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Security
Certificate. The Company covenants and agrees, and the Holder, by his acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
The Holder of this Security Certificate, by his acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Securities evidenced hereby on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Agent to enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Pledged Securities
underlying this Security Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of principal of the Pledged
Securities on the Final Settlement Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least a majority
of the Outstanding Securities.
All terms used herein which are defined in the Purchase Contract
Agreement have the meanings set forth therein.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Security Certificate is registered as the
owner of the Securities evidenced hereby for the purpose of receiving payments
of distributions on the Pledged Securities, receiving payments of Contract Fees,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent nor any such
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Final Settlement Date of the
Purchase Contracts underlying the number of Securities evidenced by this
Security Certificate be registered in the name of, and delivered, together with
a check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the under
signed, the undersigned will pay any transfer tax payable incident thereto.
Dated:
Signature
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<PAGE>
If shares are to be registered in the name of and delivered to
REGISTERED HOLDER a Person other than the Holder, please print such Person's
name and address: Please print name and address of Registered Holder:
Name
Address
Social Security or other Tax payer Identification Number, if any
ELECTION TO SETTLE EARLY
The undersigned Holder of this Security Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts under
lying the number of Securities evidenced by this Security Certificate specified
below. The option to effect Early Settlement may be exercised only with respect
to Purchase Contracts underlying Securities with an aggregate Stated Amount
equal to $___________ or an integral multiple thereof. The undersigned Holder
directs that a certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Security Certificate
representing any Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
Pledged Securities deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated:
Signature
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
REGISTERED HOLDER
If shares or Security Certificates are to be registered in the name of
and delivered to and Pledged Securities are to be transferred to a Person other
than the Holder, please print such Person's name and address:
Please print name and address of Registered Holder:
Name
Address
Social Security or other Tax payer Identification Number, if any
-4-
Exhibit 4.22
===============================================================================
PROVIDIAN FINANCIAL CORPORATION
AND
------------------
as Unit Agent
---------------------
MASTER UNIT AGREEMENT
---------------------
Dated as of ___________, 19__
===============================================================================
<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE
----
<C> <C>
1. Definitions and Other Provisions of General Application...............................1
1.1 Definitions..................................................................1
1.2 Compliance Certificates and Opinions.........................................8
1.3 Form of Documents Delivered to Unit Agent....................................8
1.4 Acts of Holders; Record Dates................................................9
1.5 Notices, etc............................................................... 10
1.6 Notice to Holders; Waiver.................................................. 11
1.7 Effect of Headings and Table of Contents................................... 11
1.8 Successors and Assigns..................................................... 11
1.9 Separability Clause........................................................ 11
1.10 Benefits of Agreement...................................................... 11
1.11 Governing Law.............................................................. 11
1.12 Legal Holidays............................................................. 11
1.13 Counterparts............................................................... 12
1.14 Inspection of Agreement.................................................... 12
2. Unit Certificate Forms.............................................................. 12
2.1 Forms of Unit Certificates Generally....................................... 12
2.2 Form of Agent's Certificate of Authentication.............................. 13
3. The Units........................................................................... 13
3.1 Title and Terms; Denominations............................................. 13
3.2 Rights and Obligations Evidenced by the Unit Certificates.................. 13
3.3 Execution, Authentication, Delivery and Dating............................. 13
3.4 Temporary Unit Certificates................................................ 14
3.5 Registration; Registration of Transfer and Exchange........................ 14
3.6 Mutilated, Destroyed, Lost and Stolen Unit Certificates.................... 16
3.7 Persons Deemed Owners...................................................... 17
3.8 Cancellation............................................................... 18
3.9 Substitution of Pledged Securities and Creation of Stripped Units; Units
Not Otherwise Separable.................................................... 18
3.10 Payments on the Units...................................................... 20
4. The Pledged Securities.............................................................. 20
4.1 Payments on the Pledged Securities......................................... 20
4.2 Transfer of Pledged Securities Upon Occurrence of Termination Event........ 21
5. The Purchase Contracts..................................................... 22
5.1 Purchase of Shares of Common Stock......................................... 22
5.2 Contract Fees.............................................................. 23
5.3 Deferral of Payment Dates For Contract Fee................................. 24
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<PAGE>
5.4 Payment of Purchase Price.................................................. 25
5.5 Issuance of Shares of Common Stock......................................... 26
5.6 Adjustment of Settlement Rate.............................................. 27
5.7 Notice of Adjustments and Certain Other Events............................. 32
5.8 No Fractional Shares....................................................... 33
5.9 Charges and Taxes.......................................................... 33
5.10 Termination Event; Notice.................................................. 34
6. Remedies............................................................................ 34
6.1 Unconditional Rights of Holders............................................ 34
6.2 Restoration of Rights and Remedies......................................... 34
6.3 Rights and Remedies Cumulative............................................. 34
6.4 Delay or Omission Not Waiver............................................... 34
6.5 Undertaking for Costs...................................................... 35
6.6 Waiver of Stay or Extension Laws........................................... 35
7. The Unit Agent...................................................................... 35
7.1 Certain Duties and Responsibilities........................................ 35
7.2 Notice of Default.......................................................... 36
7.3 Certain Rights of Unit Agent............................................... 36
7.4 Not Responsible for Recitals or Issuance of Units.......................... 37
7.5 May Hold Units............................................................. 37
7.6 Money Held in Trust........................................................ 37
7.7 Compensation and Reimbursement............................................. 37
7.8 Corporate Unit Agent Required; Eligibility................................. 38
7.9 Resignation and Removal; Appointment of Successor.......................... 38
7.10 Acceptance of Appointment by Successor..................................... 39
7.11 Merger, Conversion, Consolidation or Succession to Business................ 40
7.13 No Obligations of Unit Agent............................................... 40
7.14 Tax Compliance............................................................. 41
8. Supplemental Agreements............................................................. 41
8.1 Supplemental Agreements Without Consent of Holders......................... 41
8.2 Supplemental Agreements with Consent of Holders............................ 42
8.3 Execution of Supplemental Agreements....................................... 43
8.4 Effect of Supplemental Agreements.......................................... 43
8.5 Reference to Supplemental Agreements....................................... 43
9. Consolidation, Merger, Sale or Conveyance........................................... 43
9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions................................................... 43
9.2 Rights and Duties of Successor Corporation................................. 44
9.3 Opinion of Counsel to Unit Agent........................................... 44
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<PAGE>
10. Covenants........................................................................... 44
10.1 Performance Under Purchase Contracts....................................... 44
10.2 Maintenance of Office or Agency............................................ 44
10.3 Company to Reserve Common Stock............................................ 45
10.4 Covenants as to Common Stock............................................... 45
10.5 Statements of Officers of the Company as to Default........................ 45
</TABLE>
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<PAGE>
MASTER UNIT AGREEMENT
THIS MASTER UNIT AGREEMENT, dated as of __________, 199__, between
PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation (the "Company"), and
_________________, a New York banking corporation, acting as unit agent for the
Holders of Units from time to time (the "Unit Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Unit Certificates evidencing the Units.
All things necessary to make the Company's obligations under the Units,
when the Unit Certificates are executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Unit Agent, as in this
Agreement provided, the valid obligations of the Company, and to constitute
these presents a valid agreement of the Company, in accordance with its terms,
have been done.
W I T N E S S E T H :
For and in consideration of the premises and the purchase of the Units
by the Holders thereof, it is mutually agreed as follows:
1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
1.1 DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and
(b) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 1.4.
"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.
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<PAGE>
"Unit Agent" means the Person named as the "Unit Agent" in the first
paragraph of this instrument until a successor Unit Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter "Unit
Agent" shall mean the Person who is then the Unit Agent hereunder.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been 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 Unit Agent.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which banking institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to be closed.
"Call Option" means an option entitling the Call Option Holder to
acquire the QUIPS or Junior Subordinated Debentures underlying the related
Normal Unit on the terms and subject to the conditions set forth in the Call
Option Agreement.
"Call Option Agreement" means the Call Option Agreement, dated as of
the date hereof, between the Call Option Holder named therein and the Unit
Agent, on its own behalf and as attorney-in-fact for the Holders from time to
time of the Normal Units, the form of which is attached hereto as Exhibit C, as
the same may be amended from time to time in accordance with the terms hereof
and thereof.
"Call Option Holder" means the Person named as the Call Option Holder
in the Call Option Agreement.
"Call Settlement Date" means the date on which the Call Options are
settled pursuant to the Call Option Agreement.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral Agent" means __________________, as Collateral Agent under
the Pledge Agreement, until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
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<PAGE>
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
"Company" means the Person designated as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Contract Fee" means, with respect to each Purchase Contract, a fee
payable [TO] [BY] the Company [BY] [TO] the Holder of the related Unit, accruing
on the Stated Amount of such Unit from and including the date of first issuance
of any Units to but excluding the Stock Purchase Date and payable quarterly in
arrears on each Quarterly Payment Date to and including the Stock Purchase Date
at a rate per annum equal to the Contract Fee Rate (and computed on the basis of
a 360-day year of twelve 30-day months), plus any additional fees accrued
thereon pursuant to Section 5.3.
"Contract Fee Rate" means ____%.
"Corporate Trust Office" means the principal office of the Unit Agent
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date hereof is located at _______________, New York, New York _______.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Declaration" means the Declaration of Trust, dated as of February 10,
1998 and amended and restated as of the date hereof, executed by the Company and
certain trustees of the Trust, as the same may be amended or supplemented from
time to time in accordance with the terms thereof.
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Units as contemplated by Section
3.5.
"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Excess Treasury Securities" has the meaning specified in Section 4.2.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Unit Certificate" means a Unit Certificate that evidences all
or part of the Normal Units or a Unit Certificate that evidences all or a part
of the Stripped Units and is registered in the name of the Depositary or a
nominee thereof.
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<PAGE>
"Holder" means a Person in whose name a Unit Certificate is registered
in the Unit Register; "Holder", when used with respect to any particular Unit
Certificate (or Unit), means a Person in whose name such Unit Certificate (or
the Unit Certificate evidencing such Unit) is registered in the relevant Unit
Register.
"Indenture" means the Indenture, dated as of the date hereof, between
the Company and _________________, as Trustee, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Unit
Agent.
"Junior Subordinated Debenture Put Option" has the meaning specified
for the term "Put Option" in the Indenture.
"Junior Subordinated Debentures" means the ___% Junior Subordinated
Deferrable Interest Debentures due [________________, 2003] of the Company
issued under the Indenture.
"Normal Unit" means the rights to purchase Common Stock under a
Purchase Contract, together with ownership of the QUIPS or other Pledged
Securities pledged to secure the obligations referred to in (a) and (b) below,
subject to (a) the obligations owed to the Company under such Purchase Contract,
(b) for so long as any Call Options remain exercisable, the obligations owed to
the Call Option Holder under a Call Option and (c) the pledge arrangements
securing the foregoing obligations; provided, however, that the term "Normal
Unit" will not include any Stripped Unit.
"NYSE" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Unit Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.
"Outstanding Unit Certificates" means, as of the date of determination,
all Unit Certificates theretofore authenticated, executed and delivered pursuant
to this Agreement, except:
(a) Unit Certificates theretofore canceled by the Unit Agent or
delivered to the Unit Agent for cancellation; and
(b) Unit Certificates in exchange for or in lieu of which other Unit
Certificates have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other
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<PAGE>
than any such Unit Certificate in respect of which there shall have been
presented to the Unit Agent proof satisfactory to it that such Unit Certificate
is held by a bona fide purchaser in whose hands the Units evidenced by such Unit
Certificate are valid obligations of the Company.
"Outstanding Units" means, as of the date of determination, all Units
evidenced by then Outstanding Unit Certificates, except, if the Termination Date
or Stock Purchase Date has passed, Units for which the underlying Pledged
Securities or the Common Stock purchasable upon settlement of the underlying
Purchase Contracts, as the case may be, have been theretofore deposited with the
Unit Agent in trust for the Holders of such Units; provided, however, that in
determining whether the Holders of the requisite number of Units have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Units owned by the Company or any Affiliate of the Company shall be disregarded
and deemed not to be outstanding, except that, in determining whether the Unit
Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units which the Unit
Agent knows to be so owned shall be so disregarded. Units so owned which have
been pledged in good faith may be regarded as Outstanding Units if the pledges
establishes to the satisfaction of the Unit Agent the pledgee's right so to act
with respect to such Units and that the pledgee is not the Company or any
Affiliate of the Company.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" means the pledge of the Pledged Securities under the Pledge
Agreement.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, among the Company, the Call Option Holder, the Collateral Agent and the
Unit Agent, on its own behalf and as attorney-in-fact for the Holders from time
to time of the Units, the form of which is attached hereto as Exhibit D, as the
same may be amended from time to time in accordance with the terms hereof and
thereof.
"Pledged Securities" means the securities pledged to the Collateral
Agent pursuant to the Pledge and constituting a part of the Units.
"Predecessor Unit Certificate" of any particular Unit Certificate means
every previous Unit Certificate evidencing all or a portion of the rights and
obligations of the Holder under the Units evidenced thereby; and, for the
purposes of this definition, any Unit Certificate authenticated and delivered
under Section 3.6 in exchange for or in lieu of a mutilated, destroyed lost or
stolen Unit Certificate shall be deemed to evidence the same rights and
obligations of the Holder as the mutilated, destroyed, lost or stolen Unit
Certificate.
"Principal Agreements" means this Agreement, the Pledge Agreement and
the Call Option Agreement.
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<PAGE>
"Purchase Contract" means a contract obligating-the Company to sell and
the Holder of the related Unit to purchase Common Stock on the terms and subject
to the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quarterly Payment Date" means each ___________, ___________,
___________, and ___________, commencing __________, 199__.
"QUIPS"(sm)* means ____% Quarterly Income Preferred Securities of the
Trust issued under the Declaration, which term may refer to a single security or
more than one security as the context may require.
"Record Date", when used with respect to any payment date, means the
Business Day next preceding such payment date; provided, however, that if any
Units are no longer evidenced by a Global Unit Certificate, "Record Date", when
used with respect to any payment date for such Units, means the [FIRST DAY
OF][THE FIFTEENTH DAY OF][THE FIFTEENTH DAY OF THE MONTH PRECEDING] the month in
which such payment date falls; and provided further, that if payments are in
respect of QUIPS or Junior Subordinated Debentures underlying Normal Units,
"Record Date", when used with respect to such payments, means the record date
for such payments determined as provided under the Declaration or the Indenture,
as the case may be.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Responsible Officer", when used with respect to the Unit Agent, means
any officer of the Unit Agent assigned by the Unit Agent to administer its
corporate trust matters.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $__________ per Unit.
"Stock Purchase Date" means [___________, 2001.]
"Stripped Unit" means the rights to purchase Common Stock under a
Purchase Contract, together with ownership of the Treasury Securities pledged to
secure the obligations referred to in (a) below, subject to (a) the obligations
owed to the Company under such Purchase Contract and (b) the pledge arrangements
securing the foregoing obligations; provided, however, that the term "Stripped
Unit" will only include Units issued as a result of a Stripped Unit Creation as
contemplated by Section 3.9.
- --------
* QUIPS is a servicemark of Goldman, Sachs & Co.
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<PAGE>
"Stripped Unit Creation" has the meaning specified in Section 3.9(a).
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events
at any time on or prior to the Stock Purchase Date: (a) a decree or order of a
court having jurisdiction in the premises shall have been entered adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under the United States Bankruptcy Code or
any other similar applicable Federal or State law, and, unless such decree or
order shall have been entered within 60 days prior to the Stock Purchase Date,
such decree or order shall have continued undischarged and unstayed for a period
of 60 days, or (b) a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding up or liquidation of its affairs, shall have been entered, and, unless
such decree or order shall have been entered within 60 days prior to the Stock
Purchase Date, such decree or order shall have continued undischarged and
unstated for a period of 60 days, or (c) the Company shall institute proceedings
to be adjudicated a bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization under the United States Bankruptcy Code or any other similar
applicable Federal or State law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939 or any statute successor
thereto, in each case as amended from time to time.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Securities" means United States Treasury Securities.
"Trust" means [PROVIDIAN FINANCING __________], a statutory business
trust created under the laws of the State of Delaware.
"Underwriting Agreement" means the Underwriting Agreement dated
__________, 199_ among the Company, the Trust and ___________________________,
as the Underwriters named therein.
"Unit Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Normal Units or Stripped
Units, as the case may be, specified on such certificate.
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<PAGE>
"Unit Register" and "Unit Registrar" have the respective meanings
specified in Section 3.5.
"Units" means the Normal Units and, if any are issued, the Stripped
Units. The Purchase Contracts, Call Options and/or Pledged Securities
constituting a part of any Units are sometimes referred to herein as
"underlying" such Units and are sometimes herein said to "underlie" such Units.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly
provided by this Agreement, upon any application or request by the Company to
the Unit Agent to take any action under any provision of this Agreement, the
Company shall furnish to the Unit Agent an Officers' Certificate stating that
all conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) 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;
(c) 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
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
1.3 FORM OF DOCUMENTS DELIVERED TO UNIT AGENT. 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.
-8-
<PAGE>
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 Agreement, they may, but need not, be consolidated and
form one instrument.
1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement 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 Unit Agent 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
Agreement and (subject to Section 7.1) conclusive in favor of the Unit Agent and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Unit Agent deems sufficient.
(c) The ownership of Units shall be proved by the Unit Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Unit shall bind every future Holder of
the same Unit and the Holder of every Unit Certificate evidencing such Unit
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
Unit Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Unit Certificate.
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(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Units entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Units. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Units on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite number of Outstanding Units on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding Units on the date
such action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Unit Agent in writing and to each Holder of Units in the manner set
forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Unit Agent in writing, and to each Holder of Units in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
1.5 NOTICES, ETC. TO UNIT AGENT AND THE COMPANY. Any request, demand,
authorization, direction, notice, consent, waiver or other Act of Holders or
other document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with,
(a) the Unit Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Unit Agent at _________________, Attention:
______________, or at any other address previously furnished in writing by the
Unit Agent to the Holders and the Company, or
(b) the Company by the Unit Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at 201 Mission Street, 28th Floor,
San Francisco, California 94105, Attention: ____________, or at any other
address previously furnished in writing by the Company to the Unit Agent and the
Holders.
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1.6 NOTICE TO HOLDERS; WAIVER. Where this Agreement 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 Unit Register, not later than the latest date, and not earlier
than the earliest date, 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 this
Agreement 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 Unit Agent, 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 Unit Agent
shall constitute a sufficient notification for every purpose hereunder.
1.7 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.
1.8 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
1.9 SEPARABILITY CLAUSE. In case any provision in this Agreement or in
the Units shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any
way be affected or impaired thereby.
1.10 BENEFITS OF AGREEMENT. Nothing in this Agreement or in the Unit
Certificates, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefits or
any legal or equitable right, remedy or claim under this Agreement. The Holders
from time to time shall be beneficiaries of this Agreement and shall be bound by
all of the terms and conditions hereof and of the Units evidenced by their Unit
Certificates by their acceptance of delivery thereof.
1.11 GOVERNING LAW. THIS AGREEMENT AND THE UNITS SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
1.12 LEGAL HOLIDAYS. In any case where any Quarterly Payment Date or
the Stock Purchase Date shall not be a Business Day, then (notwithstanding any
other provision of this Agreement or of the Units) payment in respect of
distributions or interest on or principal of Pledged Securities or Contract Fees
shall not be made, Purchase Contracts shall not be performed and other actions
described herein shall not occur, but such payments shall be made, the Purchase
Contracts shall be performed and such other actions shall occur, as applicable,
on the next
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succeeding Business Day with the same force and effect as if made on such
Quarterly Payment Date or Stock Purchase Date, as the case may be; provided,
that no distributions or interest shall accrue or be payable by the Company or
any Holder for the period from and after any such Quarterly Payment Date or
Stock Purchase Date, as the case may be, to the date of payment or performance;
except that if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made or the Purchase Contracts shall be
performed on the immediately preceding Business Day with the same force and
effect as if made on such Quarterly Payment Date or the Stock Purchase Date.
1.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.
1.14 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the Corporate Trust Office for inspection
by any Holder.
2. UNIT CERTIFICATE FORMS.
2.1 FORMS OF UNIT CERTIFICATES GENERALLY. Unit Certificates evidencing
Normal Units shall be in substantially the form set forth in Exhibit A hereto
and Unit Certificates evidencing the Stripped Units shall be in substantially
the form of Exhibit B hereto, in each case with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Units are listed or Depositary therefor, or as
may, consistently herewith, be determined by the officers of the Company
executing such Unit Certificates, as evidenced by their execution of the Unit
Certificates.
The definitive Unit Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the Unit Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Unit Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS UNIT CERTIFICATE IS A GLOBAL UNIT CERTIFICATE WITHIN THE MEANING
OF THE MASTER UNIT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS UNIT CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A UNIT CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS UNIT CERTIFICATE 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 MASTER UNIT AGREEMENT.
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2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION. The form of the
Agent's certificate of authentication of the Units shall be in substantially the
form set forth on the form of the Unit Certificates.
3. THE UNITS.
3.1 TITLE AND TERMS; DENOMINATIONS. The aggregate number of Units
evidenced by Unit Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to [1,500,000 (SUBJECT TO INCREASE UP TO A
MAXIMUM OF 225,000 TO THE EXTENT THE OVER-ALLOTMENT OPTION OF THE UNDERWRITERS
UNDER THE UNDERWRITING AGREEMENT IS EXERCISED)], except for Unit Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Unit Certificates pursuant to Section 3.4,
3.5, 3.6 or 8.5.
All of the Unit Certificates authenticated, executed and delivered
hereunder shall be Normal Units except for any Unit Certificates evidencing
Stripped Units issued in connection with a Stripped Unit Creation pursuant to
Section 3.9 and Unit Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Unit
Certificates evidencing Stripped Units pursuant to Section 3.4, 3.5, 3.6 or 8.5.
Unit Certificates shall be issuable only in registered form and only in
denominations of a single Unit and any integral multiple thereof.
3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE UNIT CERTIFICATES. Each
Unit Certificate shall evidence the number of Units specified therein. Prior to
the purchase, if any, of shares of Common Stock under the Purchase Contracts,
the Units shall not entitle the Holders to any of the rights or privileges of a
holder of shares of Common Stock, including, without limitation, the right to
vote or receive any dividends or other distributions or to consent or to receive
notice as stockholders in respect of the meetings of stockholders or for the
election of directors of the Company or for any other matter.
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Subject to the
provisions of Section 3.9 hereof, upon the execution and delivery of this
Agreement, and at any time and from time to time thereafter, the Company may
deliver Unit Certificates executed by the Company to the Unit Agent for
authentication, execution on behalf of the Holders and delivery, together with
its Issuer Order for authentication of such Unit Certificates, and the Unit
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Unit Certificates.
The Unit Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, 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 Unit Certificates may be manual or facsimile.
Unit Certificates 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
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individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Unit Certificates or did not hold such
offices at the date of such Unit Certificates.
Each Unit Certificate shall be dated the date of its authentication.
No Purchase Contract or Call Option underlying a Unit evidenced by a
Unit Certificate shall be valid until such Unit Certificate has been executed on
behalf of the Holder by the manual signature of an authorized signatory of the
Unit Agent, as such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Unit Agent shall be conclusive evidence that the Holder of such
Unit Certificate has entered into the Purchase Contracts and Call Options
underlying the Units evidenced by such Unit Certificate.
No Unit Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Unit Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Unit Agent by
manual signature, and such certificate upon any Unit Certificate shall be
conclusive evidence, and the only evidence, that such Unit Certificate has been
duly authenticated and delivered hereunder.
3.4 TEMPORARY UNIT CERTIFICATES. Pending the preparation of definitive
Unit Certificates, the Company shall execute and deliver to the Unit Agent, and
the Unit Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Unit Certificates, temporary Unit
Certificates which are in substantially the form set forth in Exhibit A or
Exhibit B hereto, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Units are listed or Depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Unit Certificates, as
evidenced by their execution of the Unit Certificates.
If temporary Unit Certificates are issued, the Company will cause
definitive Unit Certificates to be prepared without unreasonable delay. After
the preparation of definitive Unit Certificates, the temporary Unit Certificates
shall be exchangeable for definitive Unit Certificates upon surrender of the
temporary Unit Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Unit Certificates, the Company shall execute and deliver
to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive Unit
Certificates of authorized denominations and evidencing a like number of Normal
Units or Stripped Units, as the case may be, as the temporary Unit Certificate
or Unit Certificates so surrendered. Until so exchanged, the temporary Unit
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the Units evidenced thereby as definitive Unit
Certificates.
3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Unit Agent
shall keep at the Corporate Trust Office registers (the registers maintained in
such office being herein referred
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to as the "Unit Registers") in which, subject to such reasonable regulations as
it may prescribe, the Unit Agent shall provide for the registration of Unit
Certificates evidencing the Normal Units and the Stripped Units and of transfers
of Unit Certificates evidencing the Normal Units and the Stripped Units (the
Unit Agent, in such capacity, the "Unit Registrar").
Upon surrender for registration of transfer of any Unit Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the Unit
Agent, and the Unit Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Unit Certificates evidencing a like
number of Normal Units or Stripped Units, as the case may be.
At the option of the Holder, Unit Certificates may be exchanged for
other Unit Certificates evidencing a like number of Normal Units or Stripped
Units, as the case may be, upon surrender of the Unit Certificates to be
exchanged at the Corporate Trust Office. Whenever any Unit Certificates are so
surrendered for exchange, the Company shall execute and deliver to the Unit
Agent, and the Unit Agent shall authenticate, execute on behalf of the Holder,
and deliver the Unit Certificates which the Holder making the exchange is
entitled to receive.
All Unit Certificates issued upon any registration of transfer or
exchange of a Unit Certificate shall evidence the ownership of the same number
of Normal Units or Stripped Units, as the case may be, and be entitled to the
same benefits and subject to the same obligations, under the Principal
Agreements as the Normal Units or Stripped Units, as the case may be, evidenced
by the Unit Certificate surrendered upon such registration of transfer or
exchange.
Every Unit Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Unit Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Unit Agent 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 a Unit Certificate, but the Company and the Unit Agent may require
payment from the Holder 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 Unit Certificates (which, for these purposes, includes a
Stripped Unit Creation or a transfer of Pledged Securities as contemplated by
Section 5.4(a)), other than any exchanges pursuant to Sections 3.6 and 8.5 not
involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any Unit
Certificate in respect of a Unit Certificate presented or surrendered for
registration of transfer or for exchange on or after the Stock Purchase Date or
the Termination Date. In lieu of delivery of a new Unit Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Unit Agent shall (a) if the Stock Purchase Date has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase Contracts
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forming a part of the Units evidenced by such Unit Certificate, or (b) if a
Termination Event shall have occurred on or prior to the Stock Purchase Date,
transfer the liquidation or principal amount of the Pledged Securities evidenced
thereby, in each case subject to the applicable conditions and in accordance
with the applicable provisions of Article Five hereof.
The provisions of Clauses (a), (b), (c) and (d) below shall apply only
to Global Unit Certificates:
(a) Each Global Unit Certificate authenticated and executed on behalf
of the Holders under this Agreement shall be registered in the name of the
Depositary designated for such Global Unit Certificate or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Unit Certificate shall constitute a single Unit Certificate for
all purposes of this Agreement.
(b) Notwithstanding any other provision in this Agreement, no Global
Unit Certificate may be exchanged in whole or in part for Unit Certificates
registered, and no transfer of a Global Unit Certificate in whole or in part may
be registered, in the name of any Person other than the Depositary for such
Global Unit Certificate or a nominee thereof unless (i) such Depositary (x) has
notified the Company that it is unwilling or unable to continue as Depositary
for such Global Unit Certificate or (y) has ceased to be a clearing agency
registered under the Exchange Act or (ii) there shall have occurred and be
continuing a default by the Company in respect of its obligations under one or
more Principal Agreements.
(c) Subject to Clause (b) above, any exchange of a Global Unit
Certificate for other Unit Certificates may be made in whole or in part, and all
Unit Certificates issued in exchange for a Global Unit Certificate or any
portion thereof shall be registered in such names as the Depositary for such
Global Unit Certificate shall direct.
(d) Every Unit Certificate authenticated and delivered upon
registration of transfer of, in exchange for or in lieu of a Global Unit
Certificate or any portion thereof, whether pursuant to this Section, Section
3.4, 3.6 or 8.5 or otherwise, shall be authenticated, executed on behalf of the
Holders and delivered in the form of, and shall be, a Global Unit Certificate,
unless such Unit Certificate is registered in the name of a Person other than
the Depositary for such Global Unit Certificate or a nominee thereof.
3.6 MUTILATED, DESTROYED, LOST AND STOLEN UNIT CERTIFICATES. If any
mutilated Unit Certificate is surrendered to the Unit Agent, the Company shall
execute and deliver to the Unit Agent, and the Unit Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new Unit
Certificate, evidencing the same number of Normal Units or Stripped Units, as
the case may be, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Unit Agent (a)
evidence to their satisfaction of the destruction, loss or theft of any Unit
Certificate, and (b) such security or indemnity as may be required by them to
save each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Unit Agent that such Unit
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Certificate has been acquired by a bona fide purchaser, the Company shall
execute and deliver to the Unit Agent, and the Unit Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Unit Certificate, a new Unit Certificate, evidencing
the same number of Normal Units or Stripped Units, as the case may be, and
bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the Holder, on
or after the Stock Purchase Date or the Termination Date, a Unit Certificate in
respect of any mutilated, destroyed, lost or stolen Unit Certificate. In lieu of
delivery of a new Unit Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Unit Agent shall (a)
if the Stock Purchase Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Units
evidenced by such Unit Certificate, or (b) if a Termination Event shall have
occurred on or prior to the Stock Purchase Date, transfer the liquidation or
principal amount of the Pledged Securities evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Upon the issuance of any new Unit Certificate under this Section, the
Company and the Unit Agent may require the payment by the Holder 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
Unit Agent) connected therewith.
Every new Unit Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Unit Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder, whether or
not the destroyed, lost or stolen Unit Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of the Principal Agreements equally and proportionately
with any and all other Unit Certificates delivered hereunder.
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
settlement of mutilated, destroyed, lost or stolen Unit Certificates.
3.7 PERSONS DEEMED OWNERS. Prior to due presentment of a Unit
Certificate for registration of transfer, the Company and the Unit Agent, and
any agent of the Company or the Unit Agent, may treat the Person in whose name
such Unit Certificate is registered as the owner of the Units evidenced thereby,
for the purpose of receiving payments of distributions or interest on the
Pledged Securities, receiving or making payments of Contract Fees and
performance of the underlying Purchase Contracts and Call Options and for all
other purposes whatsoever, whether or not the payment of distributions or
interest on the Pledged Securities or any Contract Fee payable in respect of the
Purchase Contracts constituting a part of the Units evidenced thereby shall be
overdue and notwithstanding any notice to the contrary, and neither the Company
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nor the Unit Agent, nor any agent of the Company or the Unit Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Unit
Certificate, nothing herein shall prevent the Company, the Unit Agent or any
agent of the Company or the Unit Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Depositary (or its
nominee), as a Holder, with respect to such Global Unit Certificate or impair,
as between such Depositary and owners of beneficial interests in such Global
Unit Certificate, the operation of customary practices governing the exercise of
rights of such Depositary (or its nominee) as Holder of such Global Unit
Certificate.
3.8 CANCELLATION. All Unit Certificates surrendered for delivery of
shares of Common Stock on or after the Stock Purchase Date, transfer of Pledged
Securities after the occurrence of a Termination Event or registration of
transfer or exchange shall, if surrendered to any Person other than the Unit
Agent, be delivered to the Unit Agent and, if not already canceled, shall be
promptly canceled by it. The Company may at any time deliver to the Unit Agent
for cancellation any Unit Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Unit Certificates so delivered shall, upon Issuer Order, be
promptly canceled by the Unit Agent. No Unit Certificates shall be
authenticated, executed on behalf of the Holder and delivered upon transfer of,
in exchange for or in lieu of any Unit Certificates canceled as provided in this
Section, except as expressly permitted by this Agreement. All canceled Unit
Certificates held by the Unit Agent shall be disposed of as directed by Issuer
Order.
If the Company or any Affiliate of the Company shall acquire any Unit
Certificate, such acquisition shall not operate as a cancellation of such Unit
Certificate unless and until such Unit Certificate is delivered to the Unit
Agent canceled or for cancellation.
3.9 SUBSTITUTION OF PLEDGED SECURITIES AND CREATION OF STRIPPED UNITS;
UNITS NOT OTHERWISE SEPARABLE.
(a) A Holder of Normal Units may obtain the release from the Pledge of
such Holder's Pledged Securities underlying such Normal Units, free and clear of
the Company's and the Call Option Holder's security interests therein, and
convert such Normal Units into Stripped Units (collectively, a "Stripped Unit
Creation") at any time after the original issuance of such Normal Units and on
or prior to the second Business Day immediately preceding the Stock Purchase
Date by:
(i) delivering to the Collateral Agent: (w) Treasury
Securities that through their scheduled payments will generate not
later than the Stock Purchase Date an amount of cash that is at least
equal to the aggregate Stated Amount of such Normal Units, (x) if any
Contract Fees are or will be payable by the Holders to the Company,
Treasury Securities that through their scheduled payments will generate
not later than each Quarterly Payment Date falling after the date on
which the requirements for such Stripped Unit Creation contained in
this
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Section 3.9(a) are satisfied and on or before the Stock Purchase Date
an amount of cash that is at least equal to the aggregate Contract Fees
that are scheduled to be payable in respect of the Purchase Contracts
underlying such Normal Units on such Quarterly Payment Date (assuming
for this purpose that no Contract Fees will then have been deferred
under Section 5.3); (y) if there are any deferred Contract Fees payable
by such Holder to the Company on the date on which the requirements for
such Stripped Unit Creation contained in this Section 3.9(a) are
satisfied, an amount of cash equal to (1) the aggregate unpaid amount
of such Contract Fees accrued to such date, if such date is a Quarterly
Payment Date, and (2) the aggregate unpaid amount of such Contract Fees
accrued to the Quarterly Payment Date immediately preceding such date
plus interest thereon at a rate per annum equal to the Contract Fee
Rate for the period from and including such Quarterly Payment Date to
but excluding such date (calculated on the basis of a 360-day year of
twelve 30-day months), if such date is not a Quarterly Payment Date;
and (z) if the Call Options underlying such Normal Units remain
exercisable on the date on which the requirements contained in this
Section 3.9(a) for such Stripped Unit Creation are satisfied, an
instrument from the Call Option Holder releasing its security interest
in the Pledged Securities securing such Call Options and agreeing that
such Call Options no longer underlie such Normal Units (or the Stripped
Units they become); and
(ii) surrendering the Unit Certificate evidencing such Normal
Units, with the form of Request to Create Stripped Units thereon duly
completed and executed, to the Unit Agent, whereupon the Unit Agent
shall promptly request the Collateral Agent to release the Pledged
Securities underlying such Normal Units;
provided, however, that if Treasury Securities are the Pledged Securities
underlying such Normal Units, a Stripped Unit Creation may only be effected with
respect to a number of Normal Units that will result in the release from the
Pledge of Treasury Securities in denominations of $1,000 or integral multiples
thereof.
(b) Upon receipt of the items described in clause (i) of Section 3.9(a)
above and the request from the Unit Agent described in clause (ii) of Section
3.9(a) above, the Collateral Agent will, in accordance with the terms of the
Pledge Agreement, release to the Unit Agent, on behalf of the Holder, from the
Pledge, free and clear of the Company's and the Call Option Holders's security
interests therein, the securities that theretofore had been the Pledged
Securities underlying such Normal Units, and upon receipt thereof the Unit Agent
shall promptly:
(i) cancel the Unit Certificate for such Normal Units;
(ii) transfer such released Pledged Securities to the Holder
or, subject to Section 3.5, the Holder's designee;
(iii) authenticate, execute on behalf of such Holder and
deliver to the Holder or, subject to Section 3.5, the Holder's designee
a Unit Certificate executed
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by the Company in accordance with Section 3.3 evidencing a number of
Stripped Units equal to the number of such Normal Units.
Concurrently with the release of the securities that theretofore had been the
Pledged Securities underlying such Normal Units as contemplated by the preceding
sentence, the Treasury Securities delivered to the Collateral Agent as
contemplated by clause (i) of Section 3.9(a) above shall thereupon be
substituted for such securities as Pledged Securities underlying the Stripped
Units created from such Normal Units.
(c) Except for a Stripped Unit Creation effected in compliance with
this Section 3.9, for so long as the Purchase Contract underlying a Normal Unit
remains in effect such Normal Unit shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Normal Unit in
respect of the Pledged Securities, Purchase Contract and Call Option underlying
such Normal Unit may be acquired, and may be transferred and exchanged, only as
an integrated Normal Unit. For so long as the Purchase Contract underlying a
Stripped Unit remains in effect such Stripped Unit shall not be separable into
its constituent parts, and the rights and obligations of the Holder of such
Stripped Unit in respect of the Pledged Securities and Purchase Contract
underlying such Stripped Unit may be acquired, and may be transferred and
exchanged, only as an integrated Stripped Unit. Other than a Unit Certificate,
no Holder of a Unit, nor any transferee thereof, shall be entitled to receive a
certificate evidencing the ownership of Pledged Securities or any other rights
or obligations underlying such Unit for so long as the Purchase Contract
underlying such Unit remains in effect.
3.10 PAYMENTS ON THE UNITS. Contract Fees (if any) payable by the
Company to the Holders, and all amounts payable to Holders as required by
Section 4.1 or 5.4(b), will be payable at the office of the Unit Agent in The
City of New York maintained for that purpose or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such address as
it appears on the relevant Unit Register; provided, however, that for so long as
any Units are evidenced by Global Certificates, the Unit Agent will pay each
such amount payable in respect of such Units by wire transfer in same-day funds,
no later than 2:00 p.m., New York City time, on the Business Day such amount is
received by the Unit Agent (or, if such amount is received by the Unit Agent
after 1:00 p.m., New York City time, on a Business Day or on a day that is not a
Business Day, no later than 10:00 a.m., New York City time, on the next
succeeding Business Day), to the Depositary, to the account or accounts
designated by it for such purpose.
4. THE PLEDGED SECURITIES.
4.1 PAYMENTS ON THE PLEDGED SECURITIES. As provided by the terms of the
Pledge Agreement, on each Quarterly Payment Date, subject to receipt by the
Collateral Agent of the relevant payments in respect of the Pledged Securities
underlying any Holder's Units, (a) the Collateral Agent (i) shall, on behalf of
such Holder, pay to the Company the Contract Fees, if any, then payable by such
Holder to the Company and (ii) shall, subject to Section 5.4(b), remit to the
Unit Agent the amount of such payments remaining after the payment referred to
in clause (i) and (b) the amount referred to in clause (a)(ii) above shall,
subject to receipt thereof by the
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Unit Agent from the Collateral Agent, be paid to the Person in whose name the
Unit Certificate (or one or more Predecessor Unit Certificates) evidencing such
Units is registered at the close of business on the Record Date next preceding
such Quarterly Payment Date.
In addition, in the event that (a) the Call Options are exercised and
the Aggregate Consideration Deliverable on Exercise of the Call Options includes
a cash amount in respect of deferred distributions on the QUIPS or deferred
interest payments on the Junior Subordinated Debentures and (b) the Call
Settlement Date is not a Quarterly Payment Date, pursuant to the Pledge
Agreement the Collateral Agent shall, on behalf of the Holders of the Normal
Units, pay to the Company on the Call Settlement Date an amount equal to the
Contract Fees, if any, then payable by such Holders to the Company.
4.2 TRANSFER OF PLEDGED SECURITIES UPON OCCURRENCE OF TERMINATION
EVENT. Upon the occurrence of a Termination Event and the transfer to the Unit
Agent of the Pledged Securities underlying each Holder's Units pursuant to the
terms of the Pledge Agreement, the Unit Agent shall request transfer
instructions with respect to such Pledged Securities from such Holder by written
request mailed to such Holder at his address as it appears in the relevant Unit
Register. Thereafter, upon surrender to the Unit Agent of a Unit Certificate
evidencing a Holder's Units, with transfer instructions in proper form for
transfer of the underlying Pledged Securities, the Unit Agent shall transfer the
Pledged Securities evidenced by such Unit Certificate to such Holder in
accordance with such instructions; provided, however, that if the Pledged
Securities are to be transferred to a Person other than the Person in whose name
such Unit Certificate is registered, no such transfer shall be made unless the
Person requesting the transfer has paid any transfer and other taxes required by
reason of such transfer to a Person other than the registered Holder of such
Unit Certificate or has established to the satisfaction of the Company that such
tax either has been paid or is not payable. Until the foregoing conditions to
transfer any of the Pledged Securities underlying any Units has been met, the
Unit Agent shall hold such Pledged Securities as custodian for the Holder of
such Units.
If upon a Termination Event any Holder of Units would, after satisfying
the foregoing conditions, otherwise be entitled to receive (or have transferred
to such Holder's designee) Treasury Securities of any series having a principal
amount that is not an integral multiple of $1,000, such Holder shall instead be
entitled to receive (or have transferred to such Holder's designee) Treasury
Securities of such series in a principal amount equal to the next lower integral
multiple of $1,000 plus a portion of the net proceeds from the sale of Treasury
Securities of such series contemplated by the succeeding sentence representing
such Holder's interest therein. As soon as practicable after transfer to the
Unit Agent of the Pledged Securities as provided in the Pledge Agreement, the
Unit Agent shall, on behalf of all Holders who, by virtue of the preceding
sentence, will not be entitled to a portion of the Treasury Securities of any
series to which they would otherwise be entitled aggregate and sell the Treasury
Securities of such series representing such portion to or through one or more
U.S. government securities dealers at then prevailing prices, deduct from the
proceeds of such sales all commissions and other out-of-pocket transaction costs
incurred in connection with such sales and, until the net proceeds therefrom
have been distributed to the Holders entitled thereto or their designees, hold
such proceeds in trust for such Holders.
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5. THE PURCHASE CONTRACTS.
5.1 PURCHASE OF SHARES OF COMMON STOCK. Each Purchase Contract
underlying a Unit shall obligate the Holder of such Unit to purchase, and the
Company to sell, on the Stock Purchase Date, at a price equal to the Stated
Amount, a number of shares of Common Stock equal to the Settlement Rate, unless,
on or prior to the Stock Purchase Date, there shall have occurred a Termination
Event. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is greater than or equal to $________ (the "Threshold
Appreciation Price"), _______________ of a share of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than the Stated Amount, a fractional share of
Common Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value (rounded upward or downward to the nearest 1/10,000th of
a share or, if there is not a nearest 1/10,000th of a share, to the next lower
1/10,000th of a share) and (c) if the Applicable Market Value is less than or
equal to the Stated Amount, one share of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in Section 5.6. As provided in
Section 5.9, no fractional shares of Common Stock will be issued upon settlement
of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the last Trading Day immediately preceding the Stock Purchase Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized investment
banking firm retained for this purpose by the Company. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
Each Holder of a Unit Certificate evidencing Normal Units, by his
acceptance thereof, irrevocably authorizes the Unit Agent to enter into and
perform the underlying Purchase Contracts and Call Options on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts
and Call Options, consents to the provisions of the Principal Agreements,
irrevocably authorizes the Unit Agent to enter into and perform the Call Option
Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Securities
underlying such Normal Units pursuant to the Pledge
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Agreement. Each Holder of a Unit Certificate evidencing Stripped Units, by his
acceptance thereof, irrevocably authorizes the Unit Agent to enter into and
perform the underlying Purchase Contracts on his behalf as his attorney-in-fact,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to
perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents
to and agrees to be bound by the Pledge of the Pledged Securities underlying
such Stripped Units pursuant to the Pledge Agreement. Each Holder of Units, by
his acceptance thereof, further irrevocably covenants and agrees that, unless
such Holder satisfies its obligations to the Company under the Purchase
Contracts underlying such Units as provided in Section 5.4(a), then to the
extent and in the manner provided in Section 5.4(b) and the Pledge Agreement,
but subject to the terms thereof, payments in respect of all or a portion of the
principal of or proceeds from the Pledged Securities on the Stock Purchase Date
shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.
Upon registration of transfer of a Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts and any Call Options
evidenced thereby and by the Pledge Agreement and the transferor shall be
released from all such obligations evidenced by the Unit Certificate so
transferred. The Company covenants and agrees, and each Holder of a Unit
Certificate, by his acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
5.2 CONTRACT FEES. Subject to Section 5.3, if any Contract Fees are or
will be payable by the Company to the Holders, the Company shall pay, prior to
2:00 p.m., New York City time, on each Quarterly Payment Date to and including
the Stock Purchase Date, the Contract Fees payable in respect of each Purchase
Contract to the Person in whose name the Unit Certificate (or one or more
Predecessor Unit Certificates) evidencing such Purchase Contract is registered
at the close of business on the Record Date next preceding such Quarterly
Payment Date. The Company's obligations with respect to such Contract Fees
[SUBORDINATION LANGUAGE FROM INDENTURE TO BE INSERTED].
Subject to Section 5.3, if any Contract Fees are or will be payable by
the Holders to the Company, the Collateral Agent, on behalf of the Holders,
shall pay, on each Quarterly Payment Date to and including the Stock Purchase
Date, the Contract Fees payable in respect of each Purchase Contract to the
Company. Such payment will be funded out of payments received by the Collateral
Agent in respect of Pledged Securities.
Each Unit Certificate delivered under this Agreement upon registration
of transfer of, in exchange for or in lieu of any other Unit Certificate shall
carry the rights to receive and obligations to pay Contract Fees accrued and
unpaid, and to accrue, which were carried by the Purchase Contracts evidenced by
such other Unit Certificate.
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5.3 DEFERRAL OF PAYMENT DATES FOR CONTRACT FEE. So long as no default
in the Company's obligations under the Principal Agreements has occurred and is
continuing, the Company shall have the right, at any time prior to the Stock
Purchase Date, to defer the payment of any or all of the Contract Fees, if any,
otherwise payable by the Company on any Quarterly Payment Date, but only if the
Company shall give the Holders and the Unit Agent written notice of its election
to defer such payment (specifying the amount to be deferred) at least five
Business Days prior to the earlier of (a) the next succeeding Quarterly Payment
Date or (b) the date the Company is required to give notice of the Record Date
or Quarterly Payment Date with respect to payment of such Contract Fee to the
NYSE or other applicable self-regulatory organization or to Holders, or (c) the
Record Date for such Quarterly Payment Date. Any Contract Fees so deferred shall
bear additional Contract Fees thereon at a rate per annum equal to the Contract
Fee Rate (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Quarterly Payment Date, until paid in full.
Deferred Contract Fees (and additional Contract Fees accrued thereon) shall be
due on the next succeeding Quarterly Payment Date except to the extent that
payment is deferred pursuant to this Section. No Contract Fees may be deferred
to a date that is after the Stock Purchase Date.
In the event the Company exercises its option to defer the payment of
Contract Fees (if any) payable by it, then, until all deferred Contract Fees
(including additional Contract Fees accrued thereon) have been paid in full, the
Company shall not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock, (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank part passu with or junior in right of payment to the Contract
Fees or (c) make any guarantee payments with respect to any guarantee by the
Company of any securities of any subsidiary of the Company if such guarantee
ranks pari passu or junior in right of payment to the Contract Fees (other than,
in the case of clauses (a), (b) and (c), (i) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Company, (ii) any declaration of a dividend in
connection with the implementation of a stockholder's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (iii) payments under the
Company's guarantee of the QUIPS, (iv) as a result of a reclassification of the
Company's capital stock solely into shares of one or more classes or series of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock, (v) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the securities being converted or exchanged and (vi)
purchases of common stock in connection with the satisfaction by the Company of
its obligations under any of the Company's benefit plans for its and its
subsidiaries' directors, officers or employees or any of the company's dividend
reinvestment plans).
If any Contract Fees are payable by a Holder to the Company and
payments made in respect of Pledged Securities underlying such Holder's Units
are insufficient to cover such Holder's obligation to pay such Contract Fees,
such obligation shall be deferred until the earlier of the date sufficient cash
is available and the Stock Purchase Date. Any such Contract Fees so deferred
shall bear additional Contract Fees thereon at a rate per annum equal to the
Contract Fee
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Rate (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Quarterly Payment Date, until paid in full.
5.4 PAYMENT OF PURCHASE PRICE.
(a) A Holder of Units shall, by no later than 10:00 a.m., New York City
time, on the Stock Purchase Date, deliver to the Unit Agent payment of the
purchase price for the shares of Common Stock to be purchased pursuant to the
Purchase Contracts underlying such Units, which payment shall be made in lawful
money of the United States by certified or cashier's check payable to the order
of the Company in immediately available funds in an amount equal to the
aggregate Stated Amount of such Holder's Units, plus, if there are unpaid
Contract Fees accrued and payable by such Holder to the Company on the Stock
Purchase Date and the cash received by the Collateral Agent on such date in
respect of the Pledged Securities underlying such Units is less than the amount
of such unpaid Contract Fees, an amount sufficient to cover such shortfall.
By 11:00 a.m., New York City time, on the Stock Purchase Date, the Unit
Agent shall (i) transfer to the Company all of the payments the Company shall
have received as contemplated by the preceding sentence, (ii) notify the
Collateral Agent and the Company as to the number of Normal Units and the number
of Stripped Units, respectively, with respect to which payment has been received
as aforesaid (such Units being collectively referred to as "Paid Units") and the
number of Normal Units and the number of Stripped Units, respectively, with
respect to which payment has not been received as aforesaid (such Units being
collectively referred to as "Unpaid Units"), and (iii) request the Collateral
Agent to release the Pledged Securities underlying the Paid Units (or, in the
case of Treasury Securities, the cash payments received thereon) from the Pledge
to the Unit Agent (for delivery to the Holders of such Units entitled thereto),
free and clear of the Company's security interest therein.
By 1:00 p.m., New York City time, on the Stock Purchase Date, the
Collateral Agent shall, as provided by the terms of the Pledge Agreement, comply
with the request referred to in clause (iii) of the preceding sentence (subject
to the Company's right to prevent the Collateral Agent from doing so to the
extent the aggregate amount the Company has received as contemplated by clause
(i) of the preceding sentence is less than the aggregate amount payable with
respect to the Units referred to in such request). The Unit Agent shall
thereupon, subject to its receipt from the Collateral Agent of the Pledged
Securities (or cash) referred to in such request and subject to Section 3.5,
transfer such released Pledged Securities (or cash) to the respective Holders
entitled thereto in accordance with the settlement instructions specified in the
form of Settlement Instructions appearing on the Unit Certificates evidencing
the Paid Units; provided, however, that if any such Unit Certificate is not
surrendered to the Unit Agent with the form of Settlement Instructions thereon
duly completed and executed, the Unit Agent shall hold such Pledged Securities
(or cash), and any distributions or interest received on such Pledged
Securities, as custodian for the Holder entitled thereto, to be delivered to
such Holder (without any interest thereon and subject to Section 3.5) upon
surrender of such Unit Certificate to the Unit Agent (with the form of
Settlement Instructions thereon duly completed and executed).
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(b) With respect to each Holder's Unpaid Units, pursuant to the terms
of the Pledge Agreement,
(i) (x) if QUIPS underlie such Unpaid Units, the Collateral
Agent, on behalf of such Holder, shall exercise such Holder's right
under the Declaration to require the Trust to distribute Junior
Subordinated Debentures having an aggregate principal amount equal to
the aggregate liquidation amount of such QUIPS, in exchange for such
QUIPS, and, upon receiving such Junior Subordinated Debentures, shall
thereupon, as Put Agent, exercise the Junior Subordinated Debenture Put
Option with respect thereto and (y) if Junior Subordinated Debentures
underlie such Unpaid Units, the Collateral Agent, on behalf of such
Holder, shall, as Put Agent, exercise the Junior Subordinated Debenture
Put Option with respect thereto;
(ii) the Collateral Agent shall deliver to the Company, out of
the proceeds from the exercise of such Junior Subordinated Debenture
Put Option or, if Treasury Securities underlie such Unpaid Units, the
proceeds from the payment of such Treasury Securities at maturity, an
amount equal to the aggregate Stated Amount of such Unpaid Units plus
the Unpaid Contract Fees, if any, payable by such Holder to the Company
in respect of such Unpaid Units to satisfy in full such Holder's
obligations under such Unpaid Units; and
(iii) the Collateral Agent shall remit to the Unit Agent, on
behalf of such Holder, the remainder of the proceeds, if any, from the
Pledged Securities underlying such Unpaid Units for distribution to
such Holder.
The amount referred to in clause (iii) above shall, subject to receipt thereof
by the Unit Agent from the Collateral Agent, be paid to the Person in whose name
the Unit Certificate (or one or more Predecessor Unit Certificates) evidencing
such Unpaid Units is registered at the close of Business on the Record Date next
preceding the Stock Purchase Date.
(c) Each Holder will be entitled to apply any unpaid amounts owing by
the Company to such Holder as a set-off to reduce, dollar-for-dollar, any
amounts then owing by such Holder to the Company in respect of such Holder's
Units, and such set-off amounts will be treated for all purposes as having been
paid in full by such Holder as required hereby.
(d) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder of the related Unit unless the Company shall have received payment in
full of the aggregate purchase price for the shares of Common Stock to be
purchased thereunder in the manner herein set forth (either directly or by
operation of set-off as contemplated by the preceding sentence).
5.5 ISSUANCE OF SHARES OF COMMON STOCK. On the Stock Purchase Date,
upon receipt by the Company of payment in full of the aggregate purchase price
for the shares of Common Stock purchased by the Holders pursuant to the
foregoing provisions of this Article, and subject to
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Section 5.6(b), the Company shall deposit with the Unit Agent, for the benefit
of the Holders of the Units, one or more certificates representing the shares of
Common Stock registered in the name of the Unit Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Common Stock,
together with any dividends or distributions with respect thereto, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which the
Holders are entitled hereunder. Subject to the foregoing, upon surrender of a
Unit Certificate to the Unit Agent on or after the Stock Purchase Date, with the
form of Settlement Instructions thereon duly completed and executed, the Holder
of such Unit Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Common Stock which such
Holder is entitled to receive pursuant to the provisions of this Article Five
(after taking into account all Units then held by such Holder) together with
cash in lieu of fractional shares as provided in Section 5.9 and any dividends
or distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Unit
Certificate so surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as specified in
the form of Settlement Instructions appearing on the surrendered Unit
Certificate.
If any shares of Common Stock issued in respect of a Purchase Contract
are to be registered to a Person other than the Person in whose name the Unit
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Unit Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common
Stock, the Settlement Rate in effect at the opening of business on the
day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business
on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
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(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Units upon settlement of the
Purchase Contracts underlying such Units) entitling them, for a period
expiring within 45 days after the record date for the determination of
stockholders entitled to receive such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price per share of the Common Stock on the
date fixed for the determination of stockholders entitled to receive
such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of
business on the day following the date fixed for such determination
shall be increased by dividing such Settlement Rate by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (2),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not issue any
such rights, options or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, in case outstanding
shares of Common Stock shall each be combined into a smaller number of
shares of Common Stock, the Settlement Rate in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any rights
or warrants referred to in paragraph (2) of this Section, any dividend
or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section), the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior
to the close of business on the date
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fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the Unit Agent) of the
portion of the assets or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall all
be such Current Market Price per share of the Common Stock, such
adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in
which this paragraph (4) is applicable, paragraph (2) of this Section
shall not be applicable.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed in a Reorganization Event to which Section 5.6(b)
applies or as part of a distribution referred to in paragraph (4) of
this Section) in an aggregate amount that, combined together with (I)
the aggregate amount of any other distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (II) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration
payable in respect of any tender or exchange offer by the Company or
any of its subsidiaries for all or any portion of the Common Stock
expiring within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has been made, exceeds
12.5% of the product of the Current Market Price per share of the
Common Stock on the date for the determination of holders of shares of
Common Stock entitled to receive such distribution times the number of
shares of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Settlement Rate shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution
by a fraction (i) the numerator of which shall be equal to the Current
Market Price peer share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the excess of
such combined amount over such 12.5% and (y) the number of shares of
Common Stock outstanding on such date for determination and (ii) the
denominator of which shall be equal to the Current Market Price per
share of the Common Stock on such date for determination.
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(6) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended upon
the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) that, combined together with (I) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange
offer, of consideration payable in respect of any other tender or
exchange offer by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this paragraph
(6) has been made and (II) the aggregate amount of any distributions to
all holders of the Company's Common Stock made exclusively in cash
within 12 months preceding the expiration of such tender or exchange
offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made, exceeds 12.5% of
the product of the Current Market Price per share of the Common Stock
as of the last time (the "Expiration Time") tenders could have been
made pursuant to such tender or exchange offer (as it may be amended)
times the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date
of the Expiration Time, the Settlement Rate shall be adjusted so that
the same shall equal the rate determined by dividing the Settlement
Rate immediately prior to the close of business on the date of the
Expiration Time by a fraction (i) the numerator of which shall be equal
to (A) the product of (I) the Current Market Price per share of the
Common Stock on the date of the Expiration Time and (II) the number of
shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time less (B) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of Purchased Shares, and
(ii) the denominator of which shall be equal to the product of (A) the
Current Market Price per share of the Common Stock as of the Expiration
Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the
number of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.6(b)
applies) shall be deemed to involve (i) a distribution of such
securities other than Common Stock to all holders of
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Common Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of stockholders
entitled to receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this Section),
and (ii) a subdivision or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision becomes
effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of
this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5
consecutive Trading Days selected by the Company commencing not more
than 20 Trading Days before, and ending not later than, the earlier of
the day in question and the day before the "ex" date with respect to
the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "'ex' date," when used with respect to any
issuance or distribution, shall mean the first date on which the Common
Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated
to the nearest 1/10,000th of a share of Common Stock (or, if there is
not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless
such adjustment would require an increase or decrease of at least one
percent therein; provided, however, that any adjustments which by
reason of this subparagraph are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of
Settlement Rate in Section 5.1 will apply on the Stock Purchase Date.
Such adjustment shall be made by multiplying the Applicable Market
Value by a fraction of which the numerator shall be the Settlement Rate
immediately after such adjustment pursuant to paragraph (l), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator
shall be the Settlement Rate immediately before such adjustment.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to
be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
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(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company (any such event, a "Reorganization Event"), the Settlement Rate will be
adjusted to provide that each Holder of Units will receive on the Stock Purchase
Date with respect to each Purchase Contract forming a part thereof, the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event by a Holder of the number of shares of Common Stock
issuable on account of each Purchase Contract if the Stock Purchase Date had
occurred immediately prior to such Reorganization Event, assuming such Holder of
Common Stock is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("constituent Person"), or an Affiliate of
a constituent Person, and failed to exercise his rights of election, if any, as
to the kind or amount of securities, cash and other property receivable upon
such Reorganization Event (provided that if the kind or amount of securities,
cash and other property receivable upon such Reorganization Event is not the
same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). In the event of
such a Reorganization Event, the Person formed by such consolidation, merger or
exchange or the Person which acquires the assets of the Company or, in the event
of a liquidation or dissolution of the Company, the Company or a liquidating
trust created in connection therewith, shall execute and deliver to the Unit
Agent an agreement supplemental hereto providing that the Holders of each
Outstanding Unit shall have the rights provided by this Section 5.6. Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the Unit Agent
an Officers' Certificate setting forth the Settlement Rate, the method
of calculation thereof in reasonable detail, and the facts requiring
such adjustment and upon which such adjustment is based; and
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(ii) within 10 Business Days following the occurrence of an
event that permits or requires an adjustment to the Settlement Rate
pursuant to Section 5.6 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware), provide a
written notice to the Holders of the Units of the occurrence of such
event and a statement in reasonable detail setting forth the method by
which the adjustment to the Settlement Rate was determined and setting
forth the adjusted Settlement Rate.
(b) The Unit Agent shall not at any time be under any duty or
responsibility to any holder of Units to determine whether any facts exist which
may require any adjustment of the Settlement Rate, or with respect to the nature
or extent or calculation of any such adjustment when made, or with respect to
the method employed in making the same. The Unit Agent shall not be accountable
with respect to the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property, which may at the time be issued
or delivered with respect to any Purchase Contract; and the Unit Agent makes no
representation with respect thereto. The Unit Agent shall not be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
5.8 NO FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued or delivered upon settlement
on the Stock Purchase Date. If Unit Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time by the same
Holder, the number of full shares of Common Stock which shall be delivered upon
settlement shall be computed on the basis of the aggregate number of Purchase
Contracts evidenced by the Unit Certificates so surrendered. Instead of any
fractional share of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Stock Purchase Date, the Company,
through the Unit Agent, shall make a cash payment in respect of such fractional
interest in an amount equal to such fraction times the Applicable Market Value.
The Company shall provide the Unit Agent from time to time with sufficient funds
to permit the Unit Agent to make all cash payments required by this Section 5.8
in a timely manner.
5.9 CHARGES AND TAXES. The Company will pay all stock transfer and
similar taxes attributable to the initial issuance and delivery of the shares of
Common Stock pursuant to the Purchase Contracts; provided, however, that the
Company shall not be required to pay any such tax or taxes which may be payable
in respect of any exchange of or substitution for a Unit Certificate evidencing
a Purchase Contract or any issuance of a share of Common Stock in a name other
than that of the registered Holder of a Unit Certificate surrendered in respect
of the Purchase Contracts evidenced thereby, other than in the name of the Unit
Agent, as custodian for such Holder, and the Company shall not be required to
issue or deliver such share certificates or Unit Certificates unless or until
the Person or Persons requesting the transfer or issuance thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
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5.10 TERMINATION EVENT; NOTICE. The Purchase Contracts and the
obligations and rights of the Company and the Holders thereunder, including,
without limitation, all obligations and rights to pay or receive any accrued or
deferred Contract Fees or to settle such Purchase Contracts pursuant to this
Article Five, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Unit Agent or the Company,
if, on or prior to the Stock Purchase Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Unit Agent, the Collateral Agent and the Holders, at their
addresses as they appear in the Unit Registers. Upon and after the occurrence of
a Termination Event, the provisions of this Article Five (other than this
Section 5.10) shall automatically terminate and be of no further force or
effect, and the Unit Certificates shall thereafter represent only the right to
receive the Pledged Securities forming a part of the Units theretofore evidenced
thereby in accordance with the provisions of Section 4.2 and the Pledge
Agreement.
6. REMEDIES.
6.1 UNCONDITIONAL RIGHTS OF HOLDERS. Notwithstanding any other
provision in this Agreement, the Holder of any Unit shall have the right, which
is absolute and unconditional, to purchase Common Stock pursuant to the Purchase
Contract underlying such Unit and to receive payment of Contract Fees, if any,
payable by the Company to such Holder with respect to such Purchase Contract
and, in each such case, to institute suit for the enforcement of any such right,
and such rights shall not be impaired without the consent of such Holder.
6.2 RESTORATION OF RIGHTS AND REMEDIES. If any Holder of Units has
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company and such Holder shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of such Holder shall continue as though no
such proceeding had been instituted.
6.3 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with
respect to the replacement of mutilated, destroyed, lost or stolen Unit
Certificates in the last paragraph of Section 3.6, no right or remedy herein
conferred upon or reserved to the Holders of Units 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.
6.4 DELAY OR OMISSION NOT WAIVER. No delay or omission of any Holder to
exercise any right or remedy shall impair any such right or remedy or constitute
a waiver of any such right. Every right and remedy given by this Article or by
law to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by such Holders.
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6.5 UNDERTAKING FOR COSTS. All parties to this Agreement agree, and
each Holder of any Unit by his acceptance of the Unit Certificate evidencing
such Unit shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Unit Agent for any action taken, suffered
or omitted by it as Unit Agent, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Unit Agent, to any suit instituted by any
Holder of Units, or group of Holders, holding in the aggregate more than 10% of
the Outstanding Units, or to any suit instituted by any Holder of Units for the
enforcement of payments due in respect of Pledged Securities or Contract Fees on
Purchase Contracts underlying such Units on or after the respective due dates
therefor, or for enforcement of the right to purchase shares of Common Stock
under the Purchase Contracts constituting a part of such Units.
6.6 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 Agreement; 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 Unit Agent or
the Holders, but will suffer and permit the execution of every such power as
though no such law had been enacted.
7. THE UNIT AGENT.
7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) (i) The Unit Agent undertakes to perform, with respect to
the Units, such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations shall
be read into this Agreement against the Unit Agent; and
(ii) in the absence of bad faith or negligence on its part,
the Unit Agent may, with respect to the Units, conclusively rely, as to
the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Unit
Agent and conforming to the requirements of this Agreement, but in the
case of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Unit Agent, the Unit Agent
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Agreement.
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(b) No provision of this Agreement shall be construed to relieve the
Unit Agent from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(ii) the Unit Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Unit Agent was negligent in ascertaining the
pertinent facts; and
(iii) no provision of this Agreement shall require the Unit
Agent 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.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Unit Agent shall be subject to the provisions of
this Section.
7.2 NOTICE OF DEFAULT. Within 90 days after the occurrence of any
default by the Company hereunder, of which a Responsible Officer of the Unit
Agent has actual knowledge, the Unit Agent shall transmit by mail to all Holders
of Units, as their names and addresses appear in the Unit Registers, notice of
such default hereunder, unless such default shall have been cured or waived.
7.3 CERTAIN RIGHTS OF UNIT AGENT. Subject to the provisions of Section
7.1:
(a) the Unit Agent 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 an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Unit Agent
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any-action-hereunder, the Unit Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate of the Company;
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(d) the Unit Agent 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 Unit Agent 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 Unit Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the issuance of the Units
and the execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Unit Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and promises
of the Company, personally or by agent or attorney; and
(f) the Unit Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Unit Agent shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF UNITS. The recitals
contained herein and in the Unit Certificates shall be taken as the statements
of the Company and the Unit Agent assumes no responsibility for their
correctness. The Unit Agent makes no representations as to the validity or
sufficiency of this Agreement or of the Units. The Unit Agent shall not be
accountable for the use or application by the Company of the proceeds in respect
of the QUIPS or Purchase Contracts.
7.5 MAY HOLD UNITS. Any Unit Registrar or any other agent of the
Company, or the Unit Agent, in its individual or any other capacity, may become
the owner or pledges of Units and may otherwise deal with the Company with the
same rights it would have if it were not Unit Registrar or such other agent, or
the Unit Agent.
7.6 MONEY HELD IN TRUST. Money held by the Unit Agent in trust
hereunder need not be segregated from the other funds except to the extent
required by law. The Unit Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed with
the Company.
7.7 COMPENSATION AND REIMBURSEMENT. The Company agrees:
(i) to pay to the Unit Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(ii) except as otherwise expressly provided herein, to
reimburse the Unit Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Unit Agent in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and
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disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify the Unit Agent and any predecessor Unit
Agent for, and to hold each of them harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder, 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.
7.8 CORPORATE UNIT AGENT REQUIRED; ELIGIBILITY. There shall at all
times be an Unit Agent hereunder which shall 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 exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
its Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation 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 corporation 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 Unit Agent 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.
7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Unit Agent and no appointment of a
successor Unit Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Unit Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Unit Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such resignation.
If the instrument of acceptance by a successor Unit Agent required by Section
7.10 shall not have been delivered to the Unit Agent within 30 days after the
giving of such notice of resignation, the resigning Unit Agent may petition any
court of competent jurisdiction for the appointment of a successor Unit Agent.
(c) The Unit Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Units delivered to the Unit Agent and
the Company.
(d) If at any time
(i) the Unit Agent fails to comply with Section 3.10(b) of the
TIA, as if the Unit Agent were an indenture trustee under an indenture
qualified under the
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TIA, after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Unit for at least six months, or
(ii) the Unit Agent shall cease to be eligible under Section
7.8 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(iii) the Unit Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Unit Agent or
of its property shall be appointed or any public officer shall take
charge or control of the Unit Agent or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Unit Agent, or (y) any Holder who has been a bona fide Holder of a Unit 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 Unit Agent
and the appointment of a successor Unit Agent.
(e) If the Unit Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Unit Agent for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Unit
Agent and shall comply with the applicable requirements of Section 7.10. If no
successor Unit Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder who has been a
bona fide Holder of a Unit 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 Unit Agent.
(f) The Company shall give, or shall cause such successor Unit Agent to
give, notice of each resignation and each removal of the Unit Agent and each
appointment of a successor Unit Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders of Units as their names and
addresses appear in the Unit Registers. Each notice shall include the name of
the successor Unit Agent and the address of its Corporate Trust Office.
7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Unit Agent,
every such successor Unit Agent so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Unit Agent an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring Unit
Agent shall become effective and such successor Unit Agent, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Unit Agent; but, on the request of the
Company or the successor Unit Agent, such retiring Unit Agent shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Unit Agent all the rights, powers and trusts of the retiring Unit
Agent and shall duly assign, transfer and deliver to such successor Unit Agent
all property and money held by such retiring Unit Agent hereunder.
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(b) Upon request of any such successor Unit Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Unit Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Unit Agent shall accept its appointment unless at the
time of such acceptance such successor Unit Agent shall be qualified and
eligible under this Article.
7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
corporation into which the Unit 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 the Unit Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the Unit
Agent, shall be the successor of the Unit Agent 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 Unit Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Unit Agent then in office, any successor by merger, conversion or consolidation
to such Unit Agent may adopt such authentication and execution and deliver the
Unit Certificates so authenticated and executed with the same effect as if such
successor Unit Agent had itself authenticated and executed such Units.
7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Unit Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the Unit
Agent in its capacity as Unit Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Unit Agent, and furnish to the Unit Agent reasonable proof
that each such applicant has owned a Unit for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Units and is accompanied by a copy of the form
of proxy or other communication which such applicants propose to transmit, then
the Unit Agent shall, within five Business Days after the receipt of such
application, afford such applicants access to the information preserved at the
time by the Unit Agent in accordance with Section 7.12(a).
(c) Every Holder of Units, by receiving and holding the Unit
Certificates evidencing the same, agrees with the Company and the Unit Agent
that none of the Company, the Unit Agent nor any agent of any of them shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with Section 7.12(b),
regardless of the source from which such information was derived.
7.13 NO OBLIGATIONS OF UNIT AGENT. Except to the extent otherwise
provided in this Agreement, the Unit Agent assumes no obligations and shall not
be subject to any liability under this Agreement or any Purchase Contract or
Call Option in respect of the obligations of the Holder of any Unit thereunder.
The Company agrees, and each Holder of a Unit Certificate, by
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his acceptance thereof, shall be deemed to have agreed, that the Agent's
execution of the Unit Certificates on behalf of the Holders shall be solely as
agent and attorney-in-fact for the Holders, and that the Unit Agent shall have
no obligation to perform such Purchase Contracts or Call Options on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
7.14 TAX COMPLIANCE.
(a) The Unit Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by applicable
tax laws, regulations or administrative practice with respect to (i) any
payments made with respect to the Units or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Units. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Unit Agent shall comply with any direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(ii) hereof.
(c) The Unit Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or to its authorized representative within a
reasonable period of time after receipt of such request.
8. SUPPLEMENTAL AGREEMENTS.
8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders, the parties to any Principal Agreement, at any time and
from time to time, may enter into one or more agreements supplemental hereto or
thereto, in form satisfactory to such parties, for any of the following
purposes:
(1) to evidence the succession of another Person to any such
party, and the assumption by any such successor of the covenants of
such party herein or therein and under the Units; or
(2) to add to the covenants of the Company for the benefit of
the Holders, 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 Unit Agent; or
(4) to evidence the succession of another Person to the rights
of the Call Option Holder under the Call Options, in connection with a
transfer of such rights by the Call Option Holder to such Person; or
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(5) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(6) to cure any ambiguity, to correct or supplement any
provisions herein or therein which may be inconsistent with any other
provisions herein or therein, or to make any other provisions with
respect to such matters or questions arising under such Principal
Agreement, provided such action shall not adversely affect the
interests of the Holders.
8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS. With the consent
of the Holders of not less than a majority of the Outstanding Units (or, with
respect to modifications that adversely affect only the Holders of Normal Units
or only the Holders of Stripped Units, with the consent of the Holders of not
less than a majority of the Outstanding Units that comprise Normal Units or
Stripped Units, as the case may be), by Act of said Holders delivered to the
parties to any Principal Agreement, such parties (when authorized, in the case
of the Company, by a Board Resolution) may enter into an agreement or agreements
supplemental to such Principal Agreement for the purpose of modifying in any
manner the terms of the Units, or the provisions of such Principal Agreement or
the rights of the Holders in respect of the Units; provided! however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Unit affected thereby,
(1) change any payment date;
(2) change the amount or type of Pledged Securities underlying
a Unit, impair the right of the Holder of any Unit to receive
distributions or interest payments on the underlying Pledged Securities
or otherwise adversely affect the Holder's rights in or to such Pledged
Securities (including the rights of Holders of Normal Units to effect a
Stripped Unit Creation);
(3) reduce the Contract Fees, if any, or other amounts
receivable by Holders in respect of Units or increase the Contract
Fees, if any, or other amounts payable by Holders in respect of Units
or change any place where, or the coin or currency in which, any
Contract Fees or other amounts receivable or payable in respect of
Units are payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Stock Purchase Date or otherwise adversely affect
the Holder's rights under any Purchase Contract; or
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(6) reduce the amount payable on exercise of any Call Option,
extend the Call Option Execution Date (as defined in the Call Option
Agreement) or otherwise adversely affect any Holder's rights under any
Call Option; or
(7) reduce the percentage of the Outstanding Units the consent
of whose Holders is required for any such supplemental agreement.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or accepting
the additional agencies created by, any supplemental agreement permitted by this
Article or the modifications thereby of the agencies created by this Agreement,
the Unit Agent shall be entitled to receive and (subject to Section 7.1) shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement. The Unit Agent may, but shall not be obligated to, enter into any
such supplemental agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of any
supplemental agreement under this Article, the relevant Principal Agreement
shall be modified in accordance therewith, and such supplemental agreement shall
form a part of such Principal Agreement for all purposes; and every Holder of
Unit Certificates theretofore or thereafter authenticated, executed on behalf of
the Holder and delivered hereunder shall be bound thereby.
8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS. Unit Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Unit Agent, bear a notation in form approved by the Unit
Agent as to any matter provided for in such supplemental agreement. If the
Company shall so determine, new Unit Certificates so modified as to conform, in
the opinion of the Unit Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Unit Agent in exchange
for Outstanding Unit Certificates evidencing the same number of Normal Units or
Stripped Units, as the case may be.
9. CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT
UNDER CERTAIN CONDITIONS. The Company covenants that it will not merge or
consolidate with any other Person or sell or convey all or substantially all of
its assets to any Person, except that the Company may merge or consolidate with,
or sell or convey all or substantially all of its assets to, any other Person,
provided that (a) the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof and
such corporation shall assume the obligations of the Company under the Purchase
Contracts and the Pledge Agreement by one or more
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<PAGE>
supplemental agreements in form satisfactory to the Unit Agent and, in the case
of the Pledge Agreement, the Collateral Agent, executed and delivered to the
Unit Agent, and, in the case of the Pledge Agreement, the Collateral Agent by
such corporation, and (b) the Company or such successor corporation, as the case
may be, shall not, immediately after such merger or consolidation, or such sale
or conveyance, be in default in the performance of any covenant or condition
under any Principal Amount or under any of the Units.
9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any such
consolidation, merger, sale or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Providian Financial
Corporation, any or all of the Unit Certificates evidencing Units issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Unit Agent; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Unit Agent shall authenticate and execute on
behalf of the Holders and deliver any Unit Certificates which previously shall
have been signed and delivered by the officers of the Company to the Unit Agent
for authentication and execution, and any Unit Certificate evidencing Units
which such successor corporation thereafter shall cause to be signed and
delivered to the Unit Agent for that purpose. All the Unit Certificates so
issued shall in all respects have the same legal rank and benefit under this
Agreement as the Unit Certificates theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such Unit
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
change in phraseology and form (but not in substance) may be made in the Unit
Certificates evidencing Units thereafter to be issued as may be appropriate.
9.3 OPINION OF COUNSEL TO UNIT AGENT. The Unit Agent, subject to
Sections 7.1 and 7.3, may receive an Opinion of Counsel as conclusive evidence
that any such consolidation, merger, sale or conveyance, and any such
assumption, complies with the provisions of this Article.
10. COVENANTS.
10.1 PERFORMANCE UNDER PURCHASE CONTRACTS. The Company covenants and
agrees for the benefit of the Holders from time to time of the Units that it
will duly and punctually perform its obligations under the Purchase Contracts in
accordance with the terms of the Purchase Contracts and this Agreement.
10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the
Borough of Manhattan, The City of New York an office or agency where Unit
Certificates may be presented or surrendered for acquisition of shares of Common
Stock upon settlement and for transfer of Pledged Securities upon occurrence of
a Termination Event, where Unit Certificates may be surrendered for registration
of transfer or exchange or for effecting Stripped Unit Creations,
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<PAGE>
where payment of Contract Fees, if any, payable by the Company to the Holders
may be made and where notices and demands to or upon the Company in respect of
the Units and this Agreement may be served. The Company will give prompt written
notice to the Unit Agent 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 Unit Agent with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Company hereby appoints the
Unit Agent as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other
offices or agencies where Unit Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Unit Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Units the
Corporate Trust Office and appoints the Unit Agent at its Corporate Trust Office
as paying agent in such city.
10.3 COMPANY TO RESERVE COMMON STOCK. The Company shall at all times
prior to the Stock Purchase Date reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock the full
number of shares of Common Stock issuable against tender of payment in respect
of all Purchase Contracts underlying the Units.
10.4 COVENANTS AS TO COMMON STOCK. The Company covenants that all
shares of Common Stock which may be issued against tender of payment in respect
of the Purchase Contracts underlying the Units will, upon issuance, be newly
issued (i.e., not issued out of treasury shares) and be duly authorized, validly
issued, fully paid and nonassessable.
10.5 STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT. The Company
will deliver to the Unit Agent, 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,
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<PAGE>
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PROVIDIAN FINANCIAL CORPORATION
By
----------------------------------------
Title
-------------------------------------
_________________, as Unit Agent
By
----------------------------------------
Title
-------------------------------------
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EXHIBIT A
FORM OF NORMAL UNIT CERTIFICATE
PROVIDIAN FINANCIAL CORPORATION
% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS
(STATED AMOUNT $_______ PER NORMAL UNIT)
No. ____ _______ Normal Units
This Unit Certificate certifies that is the registered Holder of the
number of Normal Units set forth above. Each Normal Unit represents the right to
purchase Common Stock under a Purchase Contract with Providian Financial
Corporation, a Delaware corporation (the "Company"), together with ownership of
the QUIPS(sm)* or other Pledged Securities pledged to secure the obligations
referred to in (a) and (b) below, subject to (a) the obligations owed to the
Company under such Purchase Contract, (b) for so long as any Call Options remain
exercisable, the obligations owed to the Call Option Holder under a Call Option
and (c) the pledge arrangements securing the foregoing obligations.
Each Purchase Contract evidenced hereby is governed by a Master Unit
Agreement, dated as of ____________, 199_ (the "Master Unit Agreement"), between
the Company and _________________, as unit agent (herein called the "Unit
Agent"). All terms used herein which are defined in the Master Unit Agreement
have the meanings set forth therein. Each Call Option evidenced hereby is
governed by the Call Option Agreement. The Pledge of the Pledged Securities
evidenced hereby is governed by the Pledge Agreement. Reference is hereby made
to the Master Unit Agreement, the Call Option Agreement and the Pledge
Agreement, and any supplemental agreements thereto, for a description of the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Unit Agent, the Company, the Call Option Holder, the
Collateral Agent and the Holders. The summary contained herein is qualified in
its entirety by the provisions of the Principal Agreements, and the Principal
Agreements shall govern the rights of the parties to the extent that there is
any conflict between such summary and such provisions.
Each Purchase Contract evidenced hereby obligates the Holder of this
Unit Certificate to purchase, and the Company to sell, on [__________, 2001]
(the "Stock Purchase Date"), at a price equal to $________ (the "Stated
Amount"), a number of shares of Common Stock, par value $.01 per share ("Common
Stock"), of the Company equal to the Settlement Rate, unless on or prior to the
Stock Purchase Date there shall have occurred a Termination Event. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined in
the Master Unit Agreement) is greater than or equal to $________ (the "Threshold
Appreciation Price"),
- --------
* QUIPS is a servicemark of Goldman, Sachs & Co.
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<PAGE>
_______________ of a share of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than the Stated Amount, a fractional share of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value
(rounded to the nearest 1/10,000th of a share or, if there is no nearest
1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share)
and (c) if the Applicable Market Amount is less than or equal to the Stated
Amount, one share of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Master Purchase Agreement. No fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts. The purchase
price for the shares of Common Stock to be purchased pursuant to each Purchase
Contract evidenced hereby, if not paid by 10:00 a.m., New York City time, on the
Stock Purchase Date, shall be paid by application of payments received by the
Company on the Stock Purchase Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the Pledged Securities pledged to secure such
Holder's obligations under such Purchase Contract.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations to receive and pay accrued or deferred Contract Fees, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Unit Agent or the Company, if, on or prior to the
Stock Purchase Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Securities from the Pledge. The Normal Units shall thereafter represent
the right to receive the Pledged Securities forming a part of such Normal Units
in accordance with the provisions of the Master Unit Agreement and the Pledge
Agreement.
The Call Options evidenced hereby entitle the Call Option Holder to
acquire the QUIPS (or Junior Subordinated Debentures substituted therefor)
evidenced hereby on or before [_________, 2001,] unless prior to the exercise
thereof there shall have occurred a Termination Event. The Call Option Holder
may exercise such Call Options only in whole together with the Call Options
underlying the other Normal Units, by delivering to the Unit Agent a notice of
exercise and delivering to the Collateral Agent the Aggregate Consideration
Deliverable Upon Exercise of Call Options, whereupon the QUIPS or Junior
Subordinated Debentures underlying the Normal Units will be released from the
Pledge and the Treasury Securities constituting all or part of the Aggregate
Consideration Deliverable Upon Exercise of Call Options delivered to the
Collateral Agent will be substituted as the Pledged Securities underlying the
Normal Units.
The [COMPANY] [HOLDER] shall pay, on each ____________, ____________,
and ____________, commencing ________, 199__ (each, a "Quarterly Payment Date"),
in respect of each Purchase Contract evidenced hereby, a fee (the "Contract
Fee") accruing on the Stated Amount of such Unit from and including the date of
first issuance of any Units at a rate per annum equal to ____% (the "Contract
Fee Rate") (computed on the basis of a 360- day year of twelve 30-day months and
subject to deferral as described in the Master Unit Agreement), plus any
additional fees accrued thereon pursuant to Section 5.3 of the Master Unit
Agreement. [THE COMPANY'S OBLIGATIONS WITH RESPECT TO CONTRACT FEES SHALL BE, TO
THE EXTENT PROVIDED IN THE MASTER UNIT AGREEMENT, SUBORDINATE AND
A-2
<PAGE>
SUBJECT IN RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS] [SUCH PAYMENT
WILL BE FUNDED OUT OF PAYMENTS MADE IN RESPECT OF THE PLEDGED
SECURITIES EVIDENCED HEREBY].
Payments due to the Holder in respect of the Normal Units evidenced
hereby will be payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of business on the
Record Date next preceding the relevant payment date.
The transfer of any Unit Certificate will be registered and Unit
Certificates may be exchanged as provided in the Master Unit Agreement. The Unit
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Master Unit Agreement. No
service charge shall be required for any such registration of transfer or
exchange, but the Company and the Unit Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Except as provided in the Master Unit Agreement in connection with a
Stripped Unit Creation, for so long as the Purchase Contract underlying a Normal
Unit remains in effect, such Normal Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Normal
Unit in respect of the Pledged Securities and Purchase Contract constituting
such Normal Unit may be transferred and exchanged only as an integrated Normal
Unit.
Upon registration of transfer of this Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts and Call Options evidenced
hereby and by the Pledge Agreement, and the transferor shall be released from
such obligations. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Unit Certificate, by his acceptance hereof,
irrevocably authorizes the Unit Agent to enter into and perform the related
Purchase Contracts and Call Options evidenced hereby on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts
and Call Options, consents to the provisions of the Principal Agreements,
irrevocably authorizes the Unit Agent to enter into and perform the Call Option
Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Securities
evidenced hereby pursuant to the Pledge Agreement.
Subject to certain exceptions, the provisions of the Principal
Agreements may be amended with the consent of the Holders of at least a majority
of the Outstanding Units or, if the amendment affects only the Holders of the
Normal Units or only the Holders of the Stripped Units, at least a majority of
the Outstanding Units comprising Normal Units or Stripped Units, as the case may
be.
The Purchase Contracts and Call Options shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
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<PAGE>
The Company, the Unit Agent and any agent of the Company or the Unit
Agent may treat the Person in whose name this Unit Certificate is registered as
the owner of the Normal Units evidenced hereby for the purpose of receiving
payments of distributions or interest on the Pledged Securities, receiving the
rights and performing the obligations under the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the Company,
the Unit Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
Copies of the Principal Agreements are available for inspection at the
offices of the Unit Agent.
Unless the certificate of authentication hereon has been executed by
the Unit Agent by manual signature, this Unit Certificate shall not be entitled
to any benefit under the Principal Agreements or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company and the Holder hereby agree to their
respective obligations under the Purchase Contracts evidenced by this
instrument, and the Holder hereby acknowledges that the Pledged Securities
evidenced by this instrument are subject to the Pledge under the Pledge
Agreement.
PROVIDIAN FINANCIAL CORPORATION
By
--------------------------------------
Title
-----------------------------------
HOLDER SPECIFIED ABOVE
By
--------------------------------------
As Attorney-in-Fact of such Holder
IN WITNESS WHEREOF, the Holder hereby agrees, for the benefit of the
Call Option Holder, to its obligations under any Call Options evidenced by this
instrument, and the Holder
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<PAGE>
hereby acknowledges, for the benefit of the Call Option Holder, that the Pledged
Securities evidenced by this instrument are subject to the Pledge under the
Pledge Agreement.
HOLDER SPECIFIED ABOVE
By
---------------------------------------
As Attorney-in-Fact of such Holder
Dated:
Agent's Certificate of Authentication
This is one of the Unit Certificates referred to in the within
mentioned Master Unit Agreement as Unit Agent.
By
---------------------------------------
By
---------------------------------------
A-5
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this Unit
Certificate be registered in the name of, and delivered, together with a check
in payment for any fractional share, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares
are to be registered in the name of a Person other than the under signed, the
undersigned will pay any transfer tax payable incident thereto.
Dated:__________
------------------------------------
Signature
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person
other than the Holder, please print Please print name and address of
such Person's name and address: Registered Holder:
Name Name
Address Address
Social Unit or other Taxpayer
Identification Number, if any
A-6
<PAGE>
REQUEST TO CREATE STRIPPED UNITS
The undersigned Holder directs that (a) the Pledged Securities
underlying the number of Normal Units indicated below (which number does not
exceed the number of Normal Units evidenced by this Unit Certificate) be
released from the Pledge and registered in the name of, and delivered, to the
undersigned at the address indicated below unless a different name and address
have been indicated below and (b) a corresponding number of Stripped Units be
registered in the name of, and delivered, to the undersigned at the address
indicated below unless a difference name and address have been indicated below.
If the released Pledged Securities or the Stripped Units are to be registered in
the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
The undersigned confirms that the requisite Treasury Securities, any
required cash and the instrument from the Call Option Holder have been delivered
to the Collateral Agent.
Dated: __________________
----------------------------------
Signature
If released Pledged Securities are to be REGISTERED HOLDER
registered in-the name of and delivered
to a Person other than the Holder,
please print Please print name and address of
such Person's name and address:
Registered Holder:
Name Name
Address Address
Social Unit or other Taxpayer
Identification Number, if any
If Stripped Units are to be registered
in the name of and delivered to a Person
other than the Holder, please print such
Person's name and address.
Name
Address
Social Unit or other Taxpayer
Identification Number, if any
A-7
<PAGE>
EXHIBIT B
FORM OF STRIPPED UNIT CERTIFICATE
Providian Financial Corporation
___% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS
(STATED AMOUNT $_________ PER UNIT)
No. _____ ______ Stripped Units
This Unit Certificate certifies that is the registered Holder of the
number of Stripped Units set forth above. Each Stripped Unit represents the
right to purchase Common Stock under a Purchase Contract with Providian
Financial Corporation, a Delaware corporation (the "Company"), together with
ownership of the Treasury Securities pledged to secure the obligations referred
to in (a) below, subject to (a) the obligations owed to the Company under such
Purchase Contract and (b) the pledge arrangements securing the foregoing
obligations.
Each Purchase Contract evidenced hereby is governed by a Master Unit
Agreement, dated as of __________, 199_ (the "Master Unit Agreement"), between
the Company and _________________, as unit agent (herein called the "Unit
Agent"). All terms used herein which are defined in the Master Unit Agreement
have the meanings set forth therein. The Pledge of the Pledged Securities
evidenced hereby is governed by the Pledge Agreement. Reference is hereby made
to the Master Unit Agreement and the Pledge Agreement, and any supplemental
agreements thereto, for a description of the respective rights, limitations of
rights, obligations, duties and immunities thereunder of the Unit Agent, the
Company, the Collateral Agent and the Holders. The summary contained herein is
qualified in its entirety by the provisions of the Principal Agreements, and the
Principal Agreements shall govern the rights of the parties to the extent that
there is any conflict between such summary and such provisions.
Each Purchase Contract evidenced hereby obligates the Holder of this
Unit Certificate to purchase, and the Company to sell, on [___________, 2001]
(the "Stock Purchase Date"), at a price equal to $ (the "Stated Amount"), a
number of shares of Common Stock, par value $.01 per share ("Common Stock"), of
the Company equal to the Settlement Rate, unless on or prior to the Stock
Purchase Date there shall have occurred a Termination Event. The "Settlement
Rate" is equal to (a) if the Applicable Market Value (as defined in the Master
Unit Agreement) is greater than or equal to $_______ (the "Threshold
Appreciation Price"), of a share of Common Stock per Purchase Contract, (b) if
the Applicable Market Value is less than the Threshold Appreciation Price but is
greater than the Stated Amount, a fractional share of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value
(rounded to the nearest 1/10,000th of a share or, if there is no nearest
1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share)
and (c) if the Applicable Market Amount is less than or equal to the Stated
Amount, one share of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Master Purchase Agreement. No fractional
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<PAGE>
shares of Common Stock will be issued upon settlement of Purchase Contracts. The
purchase price for the shares of Common Stock to be purchased pursuant to each
Purchase Contract evidenced hereby, if not paid by 10:00 a.m., New York City
time, on the Stock Purchase Date, shall be paid by application of payments
received by the Company on the Stock Purchase Date from the Collateral Agent
pursuant to the Pledge Agreement in respect of the Pledged Securities pledged to
secure such Holder's obligations under such Purchase Contract.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations to receive and pay accrued or deferred Contract Fees, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Unit Agent or the Company, if, on or prior to the
Stock Purchase Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Securities from the Pledge. The Stripped Units shall thereafter
represent the right to receive the Pledged Securities forming a part of such
Stripped Units in accordance with the provisions of the Master Unit Agreement
and the Pledge Agreement.
The [COMPANY] [HOLDER] shall pay, on each ________, ________, and
________, commencing ________, 199__ (each, a "Quarterly Payment Date"), in
respect of each Purchase Contract evidenced hereby, a fee (the "Contract Fee")
accruing on the Stated Amount of such Unit from and including the date of first
issuance of any Units at a rate per annum equal to _____% (the "Contract Fee
Rate") (computed on the basis of a 360- day year of twelve 30-day months and
subject to deferral as described in the Master Unit Agreement), plus any
additional fees accrued thereon pursuant to Section 5.3 of the Master Unit
Agreement. [THE COMPANY'S OBLIGATIONS WITH RESPECT TO CONTRACT FEES SHALL BE, TO
THE EXTENT PROVIDED IN THE MASTER UNIT AGREEMENT, SUBORDINATE AND SUBJECT IN
RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS] [SUCH PAYMENT WILL BE FUNDED OUT OF
PAYMENTS MADE IN RESPECT OF THE PLEDGED SECURITIES EVIDENCED HEREBY].
Payments due to the Holder in respect of the Stripped Units evidenced
hereby will be payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of business on the
Record Date next preceding the relevant payment date.
The transfer of any Unit Certificate will be registered and Unit
Certificates may be exchanged as provided in the Master Unit Agreement. The Unit
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Master Unit Agreement. No
service charge shall be required for any such registration of transfer or
exchange, but the Company and the Unit Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. For so long as the Purchase Contract underlying a Stripped Unit
remains in effect, such Stripped Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Stripped
Unit in respect of the Pledged Securities and Purchase Contract constituting
such Stripped Unit may be transferred and exchanged only as an integrated
Stripped Unit.
B-2
<PAGE>
Upon registration of transfer of this Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts evidenced hereby and by the
Pledge Agreement, and the transferor shall be released from such obligations.
The Company covenants and agrees, and the Holder, by his acceptance hereof,
likewise covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Unit Certificate, by his acceptance hereof,
irrevocably authorizes the Unit Agent to enter into and perform the related
Purchase Contracts evidenced hereby on his behalf as his attorney-in-fact,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Pledged Securities evidenced hereby pursuant to the Pledge Agreement.
Subject to certain exceptions, the provisions of the Principal
Agreements may be amended with the consent of the Holders of at least a majority
of the Outstanding Units or, if the amendment affects only the Holders of the
Normal Units or only the Holders of the Stripped Units, at least a majority of
the Outstanding Units comprising Normal Units or Stripped Units, as the case may
be.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Unit Agent and any agent of the Company or the Unit
Agent may treat the Person in whose name this Unit Certificate is registered as
the owner of the Stripped Units evidenced hereby for the purpose of receiving
payments of distributions or interest on the Pledged Securities, receiving the
rights and performing the obligations under the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the Company,
the Unit Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
Copies of the Principal Agreements are available for inspection at the
offices of the Unit Agent.
Unless the certificate of authentication hereon has been executed by
the Unit Agent by manual signature, this Unit Certificate shall not be entitled
to any benefit under the Principal Agreements or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company and the Holder hereby agree to their
respective obligations under the Purchase Contracts evidenced by this
instrument, and the Holder hereby
B-3
<PAGE>
acknowledges that the Pledged Securities evidenced by this instrument are
subject to the Pledge under the Pledge Agreement.
PROVIDIAN FINANCIAL CORPORATION
By
---------------------------------------
Title
------------------------------------
HOLDER SPECIFIED ABOVE
By
---------------------------------------
as Attorney-in-Fact of such Holder
Dated:
Agent's Certificate of Authentication
This is one of the Unit Certificates referred to in the within mentioned
Master Unit Agreement as Unit Agent
By
By
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<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Stripped Units evidenced by this
Unit Certificate be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the under
signed, the undersigned will pay any transfer tax payable incident thereto.
Dated ______________
-----------------------------
Signature
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person
other than the Holder, please print Please print name and address
such Person's name and address: of Registered Holder:
Name Name
Address Address
Social Unit or other Taxpayer
Identification Number, if any
B-5
Exhibit 4.23
===============================================================================
PROVIDIAN FINANCIAL CORPORATION
---------------,
as Call Option Holder
----------------
as Collateral Agent
AND
---------------,
as Unit Agent and as Attorney-In-Fact
----------------
PLEDGE AGREEMENT
----------------
Dated as of __________, 199__
===============================================================================
<PAGE>
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of __________, 199__, is made among
PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation (the "Company," as such
term is more fully defined in the Master Unit Agreement referred to below),
_______________, as Call Option Holder, _______________, as Collateral Agent,
and _______________, as Unit Agent and as attorney-in-fact of the Holders from
time to time of the Units.
RECITALS:
A. The Company and the Unit Agent are parties to the Master Unit
Agreement, dated as of the date hereof (as the same may be supplemented or
amended from time to time in accordance with the terms thereof, the "Master Unit
Agreement"). The Master Unit Agreement contemplates that the QUIPS(sm)*, Junior
Subordinated Debentures and Treasury Securities that from time to time underlie
the Units be pledged to the Collateral Agent to secure the obligations of the
Holders of Units under the Purchase Contracts and Call Options that underlie
such Units.
B. Pursuant to the terms of the Principal Agreements and the Unit
Certificates, the Holders from time to time of the Units irrevocably authorize
the Unit Agent, as attorney-in-fact of such Holders, to execute and deliver this
Agreement on behalf of such Holders and to grant the pledge provided hereby of
the Pledged Securities underlying such Units as provided herein and subject to
the terms hereof.
NOW, THEREFORE, the Company, the Call Option Holder, the Collateral
Agent and the Unit Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Units, agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) capitalized terms used herein and not defined are used herein as
defined in the Master Unit Agreement; and
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Aggregate Consideration Deliverable on Exercise of the Call Options"
has the meaning specified in the Call Option Agreement.
- --------
* QUIPS is a servicemark of _______________
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<PAGE>
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Treasury Regulations" means Subpart O-Book-Entry Procedure
of Title 31 of the Code of Federal Regulations (31 CFR section 306.115 et seq.)
and any other regulations of the United States Treasury Department from time to
time applicable to the transfer or pledge of book-entry Treasury Securities.
2. THE PLEDGE. The Holders from time to time of the Units acting
through the Unit Agent, as their attorney-in-fact, hereby pledge to the
Collateral Agent (for the benefit of the Company and the Call Option Holder as
their interests may appear), and grant to the Collateral Agent, the Company and
the Call Option Holder (as their interests may appear) a security interest in
all of the right, title and interest of such Holders in and to, the Pledged
Securities underlying such Units (and proceeds therefrom), as collateral
security to ensure the performance when due by such Holders of their respective
obligations under the Purchase Contracts and Call Options underlying such Units.
Concurrently with the execution of this Agreement, the initial Holders of the
first 1,500,000 Normal Units issued under the Master Unit Agreement, the Unit
Agent and the Collateral Agent are causing 1,500,000 QUIPS to be delivered to,
and registered in the name of, the Collateral Agent, and such QUIPS will
thereupon constitute Pledged Securities forming a part of such Normal Units. As
used in this Section 2, the term "delivery" shall have the meaning ascribed to
it in the Uniform Commercial Code of the State of New York. In the event that
any or all of the additional 225,000 Normal Units that may be issued as a result
of an exercise of the overallotment option of the underwriters under the
Underwriting Agreement are issued pursuant to the Master Unit Agreement at or
after the execution of this Agreement, the initial Holders of such Normal Units,
the Unit Agent and the Collateral Agent shall cause a number of QUIPS equal to
the number of such Normal Units to be delivered to, and registered in the name
of, the Collateral Agent, and such QUIPS will thereupon constitute Pledged
Securities forming a part of such Normal Units. In addition, the execution
hereof by the Unit Agent and the Collateral Agent shall constitute an
acknowledgment by the Collateral Agent (as securities intermediary or otherwise)
of the Pledge and of its holding of such QUIPS or other Pledged Securities
substituted therefor in accordance with the provisions hereof subject to the
Pledge and of its crediting such QUIPS or other Pledged Securities to a separate
account for purposes of perfecting the Pledge under applicable law, including,
to the extent applicable, the Uniform Commercial Code as adopted and in effect
in any applicable jurisdiction and the Applicable Treasury Regulations. Subject
to the Pledge, the Holders from time to time of the Units shall have full
beneficial ownership of the Pledged Securities underlying such Units, and shall
be entitled (directly or through the Collateral Agent) to all of the rights
provided by such Pledged Securities, and the Company and the Call Option Holder
shall have no rights with respect to such Pledged Securities other than their
respective security interests therein.
3. PAYMENTS IN RESPECT OF THE PLEDGED SECURITIES. Any payment received
by the Collateral Agent in respect of the Pledged Securities underlying any
Normal Units or Stripped Units shall be paid by the Collateral Agent, by wire
transfer in same day funds no later than 1:00 p.m., New York City time, on the
date of receipt (or, if such payment is received by the
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<PAGE>
Collateral Agent on a day that is not a Business Day or after noon, New York
City time, on a Business Day, then such payment shall be made by the Collateral
Agent no later than 10:00 a.m., New York City time, on the next succeeding
Business Day), as follows:
(a) in the case of payments not scheduled to fall on the Stock Purchase
Date, (i) first, to the Company, to the account designated by it for such
purpose, in an amount equal to the Contract Fees, if any, then payable to the
Company in respect of such Units, and (ii) second, to the extent of any amount
remaining after the payment (if any) referred to in clause (i) above, to the
Unit Agent, to the account designated by it for payments in respect of Normal
Units or the account designated by it for payments in respect of Stripped Units,
as the case may be; and
(b) in the case of payments scheduled to fall on the Stock Purchase
Date, (i) with respect to payments received in respect of Units which are Paid
Units (as specified in the notice from the Unit Agent referred to in Section 4),
(x) first, to the Company, to the account designated by it for such purpose, in
an amount equal to the unpaid Contract Fees, if any, payable to the Company in
respect of such Paid Units, and (y) second, to the extent of any amount
remaining after the payment (if any) referred to in clause (x) above, to the
Unit Agent, to the account designated by it for payments in respect of Paid
Units which are Normal Units or the account designated by it for payments in
respect of Paid Units which are Stripped Units, as the case may be; and (ii)
with respect to payments received in respect of Units which are Unpaid Units (as
specified in the notice from the Unit Agent referred to in Section 4), (x)
first, to the Company, to the account designated by it for such purpose, in an
amount equal to the unpaid Contract Fees, if any, payable to the Company in
respect of such Unpaid Units, and (y) second, to the extent of any amount
remaining after the payment (if any) referred to in (x) above, to the Unit
Agent, to the account designated by it for payments in respect of Unpaid Units
which are Normal Units; provided, however, that if the Company disputes the
notice from the Unit Agent referred to in Section 4 and notifies the Collateral
Agent, prior to noon, New York City time, on the Stock Purchase Date, that the
number of Paid Units or the number of Unpaid Units (or both) is different than
that indicated in such notice, the foregoing payments with respect to any Paid
Units or Unpaid Units subject to dispute shall not be paid until such dispute is
resolved.
All payments received by the Unit Agent as provided herein shall be
applied by the Unit Agent pursuant to the provisions of the Master Unit
Agreement.
4. NOTICE WITH RESPECT TO NUMBERS OF PAID UNITS AND UNPAID UNITS;
EXERCISE OF JUNIOR SUBORDINATED DEBENTURE PUT OPTIONS WITH RESPECT TO UNPAID
UNITS. By 11:00 a.m., New York City time, on the Stock Purchase Date, the Unit
Agent shall, as provided in the Master Unit Agreement, notify the Company and
the Collateral Agent as to the number of Normal Units and the number of Stripped
Units, respectively, which are Paid Units and the number of Normal Units and the
number of Stripped Units, respectively, which are Unpaid Units. Promptly after
receiving such notification, (a) if QUIPS underlie the Unpaid Units of any
Holder, the Collateral Agent, on behalf of such Holder, shall exercise such
Holder's right under the Declaration to require the Trust to distribute Junior
Subordinated Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of such QUIPS, in exchange for such QUIPS, and,
upon receiving such Junior Subordinated Debentures, shall thereupon, as Put
Agent, exercise the Junior
-3-
<PAGE>
Subordinated Debenture Put Option with respect thereto and (b) if Junior
Subordinated Debentures underlie such Unpaid Units, the Collateral Agent, on
behalf of such Holder, shall, as Put Agent, exercise the Junior Subordinated
Debenture Put Option with respect thereto. The payment received by the
Collateral Agent from the exercise of any Junior Subordinated Debenture Put
Option shall then be applied by the Collateral Agent in accordance with Section
3(b).
5. RELEASE AND SUBSTITUTION OF PLEDGED SECURITIES.
(a) Upon notice to the Collateral Agent by the Company or the Unit
Agent that there has occurred a Termination Event, the Collateral Agent shall
release all Pledged Securities from the Pledge and shall transfer such Pledged
Securities, free and clear of any lien, pledge or security interest created
hereby, to the Unit Agent for delivery by the Unit Agent pursuant to the
provisions of the Master Unit Agreement.
(b) Upon notice to the Collateral Agent by the Call Option Holder that
the Call Option Holder is exercising the Call Options in accordance with the
terms of the Call Option Agreement with respect to the QUIPS or Junior
Subordinated Debentures underlying the Normal Units, provided that the
Collateral Agent receives the requisite Aggregate Consideration Deliverable on
Exercise of the Call Options on the Call Settlement Date specified in such
notice, the Collateral Agent shall transfer such QUIPS or Junior Subordinated
Debentures, free and clear of any lien, pledge or security interest created
hereby, to the Call Option Holder or its designee as specified in such notice,
whereupon (i) the Treasury Securities constituting all or a part of the
Aggregate Consideration Deliverable Upon Exercise of the Call Options so
received by the Collateral Agent shall be subject to the Pledge with respect to
the Normal Units and (ii) the Pledge shall cease to constitute a security
interest for the benefit of the Call Option Holder.
(c) In connection with a Stripped Unit Creation, upon request by the
Unit Agent to the Collateral Agent to release the then Pledged Securities
underlying the number of Normal Units indicated in such request, provided that
the Collateral Agent has received (i) the Treasury Securities and cash required
by Section 309(a)(i) of the Master Unit Agreement for a Stripped Unit Creation
relating to such Normal Units and (ii) if the Call Options underlying such
Normal Units remain exercisable on the date of receipt of such instruction, an
instrument from the Call Option Holder releasing its security interest in the
Pledged Securities underlying such Normal Units and agreeing that such Call
Options no longer underlie such Normal Units (or the Stripped Units they
become), the Collateral Agent shall release such Pledged Securities, free and
clear of any lien, pledge or security interest created hereby, to the Unit Agent
for delivery by the Unit Agent pursuant to the provisions of the Master Unit
Agreement, whereupon the Treasury Securities so received by the Collateral Agent
shall be subject to the Pledge and constitute the Pledged Securities underlying
the Stripped Units so created.
(d) In connection with the delivery to the Collateral Agent of Treasury
Securities pursuant to Section 5(b) or (c), such delivery shall be by Federal
Reserve Bank-Wire to the account of the Collateral Agent designated by it for
such purpose, and the Collateral Agent and the Call Option Holder or
transferring Holder of Normal Units, as the case may be, shall take
-4-
<PAGE>
appropriate action (i) so that the applicable Federal Reserve Bank through which
such Treasury Securities have been purchased will reflect such transfer and the
Pledge of such Treasury Securities in accordance with Applicable Treasury
Regulations and (ii) as may be required to perfect the Pledge under Applicable
Treasury Regulations.
(e) In the event the Trust is dissolved while any QUIPS are Pledged
Securities underlying Normal Units, the Junior Subordinated Debentures issued
upon dissolution thereof shall be delivered to the Collateral Agent in exchange
for such QUIPS, whereupon such QUIPS shall cease to constitute Pledged
Securities and the Junior Subordinated Debentures so received by the Collateral
Agent shall be subject to the Pledge and constitute the Pledged Securities
underlying such Normal Units.
(f) On the Stock Purchase Date, the Collateral Agent shall release the
QUIPS or Junior Subordinated Debentures underlying Units which are Paid Units
(as specified in the notice from the Unit Agent referred to in Section 4), free
and clear of any lien, pledge or security interest created hereby, to the Unit
Agent for delivery pursuant to the provisions of the Master Unit Agreement;
provided, however, that if the Company disputes the notice from the Unit Agent
referred to in Section 4 and notifies the Collateral Agent, prior to noon, New
York City time, on the Stock Purchase Date, that the number of Paid Units is
different from that indicated in such notice, the foregoing release with respect
to any Paid Units subject to dispute shall not be made until such dispute is
resolved.
6. RIGHTS AND REMEDIES.
(a) The Collateral Agent shall have all of the rights and remedies with
respect to the Pledged Securities of a secured party under the Uniform
Commercial Code as in effect in the State of New York (the "Code") (whether or
not said Code is in effect in the jurisdiction where the rights and remedies are
asserted) and, with respect to Pledged Securities which are Treasury Securities,
the Applicable Treasury Regulations, and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments due to the Company pursuant to the Purchase Contracts
underlying any Units, the Collateral Agent shall have and may exercise, with
reference to the Pledged Securities underlying such Units and the obligations of
the Holders of such Units, any and all of the rights and remedies available to a
secured party under the Code and the Applicable Treasury Regulations after
default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of principal of or distributions
or interest on the Pledged Securities, in each case subject to the provisions
hereof.
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<PAGE>
(d) The Unit Agent, the Call Option Holder and each Holder of Units
agree that, from time to time, upon the written request of the Collateral Agent,
the Unit Agent, the Call Option Holder or such Holder of Units shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder.
7. THE COLLATERAL AGENT. The Collateral Agent, the Company and the Call
Option Holder hereby agree among themselves as follows (it being understood and
agreed that neither the Unit Agent nor any Holder of Units shall have any rights
under this Section 7):
(a) Appointment, Powers and Immunities. The Collateral Agent shall act
hereunder as agent for the Company and the Call Option Holder, with such powers
as are specifically vested in the Collateral Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
The Collateral Agent: (i) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (ii) shall not be responsible to the
Company or the Call Option Holder for any recitals contained in this Agreement,
or in any certificate or other document referred to or provided for in, or
received by it under, this Agreement, the Units, the Master Unit Agreement, or
the Call Option Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement (other than as
against the Collateral Agent), the Units, the Master Unit Agreement or the Call
Option Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company, the Call Option Holder, or any other
Person (except the Collateral Agent) to perform any of its obligations hereunder
or thereunder; (iii) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder (except pursuant to directions furnished
under Section 7(b) hereof); (iv) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith or therewith,
except for its own negligence; and (v) shall not be required to advise any party
as to selling or retaining, or taking or refraining from taking any action with
respect to, any Units or any property deposited hereunder. Subject to the
foregoing, during the term of this Agreement the Collateral Agent shall take all
reasonable action in connection with the safekeeping and preservation of the
Pledged Securities hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the value of the Pledged Securities.
(b) INSTRUCTIONS OF THE COMPANY. The Company (or, with respect to
matters relating to the Call Options, the Call Option Holder) shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for any right or remedy available to the Collateral Agent, or of
exercising any power conferred on the Collateral Agent, or to direct the taking
or refraining from
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<PAGE>
taking of any action authorized by this Agreement; provided, however, that (i)
no Company direction shall in any way adversely affect the rights of the Call
Option Holder hereunder or under the Call Options and no Call Option Holder
direction shall in any way adversely affect the rights of the Company hereunder
or under the Purchase Contracts, (ii) such direction shall not conflict with the
provisions of any law or of this Agreement and (iii) the Collateral Agent shall
be adequately indemnified as provided herein. Nothing in this Section 7(b) shall
impair the right of the Collateral Agent in its discretion to take any action or
omit to take any action which it deems proper and which is not inconsistent with
such direction.
(c) RELIANCE BY COLLATERAL AGENT. The Collateral Agent shall be
entitled to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it to be genuine and correct and
to have been signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any fact stated
therein), and upon advice and statements of legal counsel and other experts
selected by the Collateral Agent. As to any matters not expressly provided for
by this Agreement, the Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
given by the Company or the Call Option Holder, as the case may be, in
accordance with this Agreement.
(d) RIGHTS IN OTHER CAPACITIES. The Collateral Agent and its affiliates
may (without having to account therefor to the Company or the Call Option
Holder) accept deposits from, lend money to, make investments in and generally
engage in any kind of banking, trust or other business with the Unit Agent and
any Holder of Units as if it were not acting as the Collateral Agent, and the
Collateral Agent and its affiliates may accept fees and other consideration from
the Unit Agent and any Holder of Units without having to account for the same to
the Company or the Call Option Holder, provided that the Collateral Agent
covenants and agrees with the Company and the Call Option Holder that the
Collateral Agent shall not accept, receive or permit there to be created in its
favor any security interest, lien or other encumbrance of any kind in or upon
the Pledged Securities.
(e) NON-RELIANCE ON COLLATERAL AGENT. The Collateral Agent shall not be
required to keep itself informed as to the performance or observance by the Unit
Agent or any Holder of Units of this Agreement, the Master Unit Agreement, the
Call Option Agreement, the Units or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Unit Agent or
any Holder of Units. The Collateral Agent shall not have any duty or
responsibility to provide the Company or the Call Option Holder with any credit
or other information concerning the affairs, financial condition or business of
the Unit Agent or any Holder of Units that may come into the possession of the
Collateral Agent or any of its affiliates.
(f) COMPENSATION AND INDEMNITY. The Company agrees: (i) to pay the
Collateral Agent from time to time reasonable compensation for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the costs
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<PAGE>
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of such powers and duties.
(g) FAILURE TO ACT. In the event of any ambiguity in the provisions of
this Agreement or any dispute between or conflicting claims by or among the
undersigned and/or any other person or entity with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, at its
sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and the Collateral Agent shall not be or become liable
in any way to any of the undersigned for its failure or refusal to comply with
such conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing satisfactory to the Collateral Agent or (ii) the Collateral Agent shall
have received security or an indemnity satisfactory to the Collateral Agent
sufficient to save the Collateral Agent harmless from and against any and all
loss, liability or expense which the Collateral Agent may incur by reason of its
acting. The Collateral Agent may in addition elect to commence an interpleaded
action or seek other judicial relief or orders as the Collateral Agent may deem
necessary. Notwithstanding anything contained herein to the contrary, the
Collateral Agent shall not be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.
(h) RESIGNATION OF COLLATERAL AGENT. Subject to the appointment and
acceptance of a successor Collateral Agent as provided below, (i) the Collateral
Agent may resign at any time by giving notice thereof to the Company, the Unit
Agent and, if the Call Options are exercisable or have been exercised but not
settled, the Call Option Holder, (ii) the Collateral Agent may be removed at any
time by the Company (provided, that, if the Call Options are exercisable or have
been exercised but not settled, the Call Option Holder shall have consented to
such removal), and (iii) if the Collateral Agent fails to perform any of its
material obligations hereunder in any material respect for a period of not less
than twenty (20) days after receiving notice of such failure by the Unit Agent
and such failure shall be continuing, the Collateral Agent may be removed by the
Unit Agent. The Unit Agent shall promptly notify the Company and, if the Call
Options are exercisable or have been exercised but not settled, the Call Option
Holder of any removal of the Collateral Agent pursuant to clause (iii) of the
immediately preceding sentence. Upon any such resignation or removal, the
Company and, if the Call Options are exercisable or have been exercised but not
settled, the Call Option Holder shall have the right to appoint a successor
Collateral Agent. If no successor Collateral Agent shall have been so appointed
and shall have accepted such appointment within thirty (30) days after the
retiring Collateral Agent's giving of notice of resignation or such removal,
then the retiring Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent. The Collateral
Agent shall be a bank which has an office in New York, New York with a combined
capital and surplus of at least 050,000,000. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the
-8-
<PAGE>
retiring Collateral Agent, and the retiring Collateral Agent shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Pledged Securities) to such successor Collateral Agent. The
retiring Collateral Agent shall, upon such succession, be discharged from its
duties and obligations as Collateral Agent hereunder. After any retiring
Collateral Agent's resignation hereunder as Collateral Agent, the provisions of
this Section 6 shall continue in effect for its benefit in respect of an}
actions taken or omitted to be taken by it while it was acting as the Collateral
Agent.
(i) RIGHT TO APPOINT AGENT OR ADVISOR. The Collateral Agent shall have
the right to appoint agents or advisors in connection with any of its duties
hereunder, and the Collateral Agent shall not be liable for any action taken or
omitted by such agents or advisors selected in good faith.
The provisions of this Section 7 shall survive termination of this
Agreement and the resignation or removal of the Collateral Agent.
8. MISCELLANEOUS.
(a) AMENDMENTS. This Agreement may be amended in the manner set forth
in Section 8.1 of the Master Unit Agreement. In executing any amendment
permitted by this Section, the Collateral Agent shall be entitled to receive and
(subject to Section 8(a) hereof) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement.
(b) NO WAIVER. No failure on the part of the Collateral Agent or any of
its agents to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent or any
of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The
Company, the Call Option Holder, the Collateral Agent and the Holders from time
to time of the Units, acting through the Unit Agent as their attorney-in-fact,
hereby submit to the nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby. The
Company, the Call Option Holder, the Collateral Agent and the Holders from time
to time of the Units, acting through the Unit Agent as their attorney-in-fact,
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
-9-
<PAGE>
(d) LEGAL HOLIDAYS. In any case where any Quarterly Payment Date or the
Stock Purchase Date shall not be a Business Day, then (notwithstanding any other
provision of this Agreement or of the Units) the actions required by this
Agreement to occur on such date shall not occur on such date, but instead shall
occur on the next succeeding Business Day with the same force and effect as if
they had occurred on such Quarterly Payment Date or Stock Purchase Date, as the
case may be; except that if such next succeeding Business Day is in the next
calendar year, such actions shall occur on the immediately preceding Business
Day with the same force and effect as if made on such Quarterly Payment Date or
Stock Purchase Date.
(e) NOTICES. All notices, requests, consents and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be designated by such
party in a notice to the other parties. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Company,
the Call Option Holder, the Collateral Agent and the Unit Agent, and the Holders
from time to time of the Units, by their acceptance of the same, shall be deemed
to have agreed to be bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the Unit Agent.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
(h) SEVERABILITY. If any provision hereof is invalid or unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (ii) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
(i) EXPENSES, ETC. The Company agrees to reimburse the Collateral Agent
for: (i) all reasonable out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and expenses of counsel to
the Collateral Agent), in connection with (ii) the negotiation, preparation,
execution and delivery or performance of this Agreement and (iii) any
modification, supplement or waiver of any of the terms of this Agreement; (iv)
all reasonable costs and expenses of the Collateral Agent (including, without
limitation, reasonable fees and expenses of counsel) in connection with (A) any
enforcement or proceedings resulting or incurred in connection with causing any
Holder of Units to satisfy its obligations under the Purchase Contracts or Call
Options forming a part of the Units and (B) the enforcement of this
-10-
<PAGE>
Section 8(i); and (v) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated hereby.
(j) SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and
security interests hereunder, and all obligations of the Holders from time to
time of the Units here under, shall be absolute and unconditional irrespective
of:
(i) any lack of validity or enforceability of any provision of
the Units or any other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Units under the related Purchase Contracts or
Call Options or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Master Unit
Agreement or any Units or any other agreement or instrument relating
thereto; or
(iii) any other circumstance which might otherwise constitute
a defense available to, or discharge of, borrower, a guarantor or a
pledger.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PROVIDIAN FINANCIAL CORPORATION
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
Address for Notices:
201 Mission Street, 18th Floor
San Francisco, CA 94105
Attention: __________________________
Telecopy: ___________________________
-11-
<PAGE>
[_______________], as Call Option Holder
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
Address for Notices:
________________________________________
________________________________________
________________________________________
Attention: _____________________________
[_______________], as Collateral Agent
By
-----------------------------------
Name
---------------------------------
Title
--------------------------------
________________________________________
________________________________________
________________________________________
Attention: _____________________________
-12-
<PAGE>
[_______________], as Unit Agent and as
attorney-in-fact of the Holders from time
to time of the Units
By
--------------------------------------
Name
------------------------------------
Title
-----------------------------------
Address for Notices:
________________________________________
________________________________________
________________________________________
Attention: _____________________________
-13-
Exhibit 4.24
===============================================================================
---------------,
as Call Option Holder
AND
---------------,
as Unit Agent and as Attorney-In-Fact
------------------
CALL OPTION AGREEMENT
------------------
Dated as of __________, 199__
===============================================================================
<PAGE>
CALL OPTION AGREEMENT
THIS CALL OPTION AGREEMENT, dated as of __________, 199__, is made
between _______________, as Call Option Holder, and _______________, as Unit
Agent and as attorney-in-fact of the Holders from time to time of the Normal
Units.
RECITALS:
A. Providian Financial Corporation and the Unit Agent are parties to
the Master Unit Agreement, dated as the date hereof (as the same may be
supplemented or amended in accordance with the terms thereof, the "Master Unit
Agreement"). The Master Unit Agreement contemplates that the Company will issue
QUIPS(sm)* and Junior Subordinated Debentures, and that QUIPS or Junior
Subordinated Debentures will underlie Normal Units outstanding from time to time
thereunder.
B. It is intended that the Holders from time to time of the Normal
Units grant Call Options entitling the Call Option Holder to acquire the QUIPS
or Junior Subordinated Debentures underlying the related Normal Units on the
terms and subject to the conditions set forth herein. Pursuant to the terms of
the Principal Agreements and the Unit Certificates for the Normal Units, the
Holders from time to time of the Normal Units irrevocably authorize the Unit
Agent, as attorney-in-fact of such Holders, to enter into such Call Options and
execute and deliver this Agreement on behalf of such Holders.
NOW, THEREFORE, the Call Option Holder and the Unit Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the Normal
Units, agree as follows:
1. DEFINITIONS. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) capitalized terms used herein and not defined are used herein as
defined in the Master Unit Agreement; and
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Aggregate Consideration Deliverable on Exercise of the Call Options"
means consideration comprised of:
(i) Treasury Securities that through their scheduled payments
will generate not later than each Quarterly Payment Date falling after
the Call Settlement Date and on or before the Stock Purchase Date an
amount of cash that is at least equal
- --------
* QUIPS is a servicemark of _______________.
-1-
<PAGE>
to the aggregate distributions or interest payments that are scheduled
to be payable in respect of the QUIPS or Junior Subordinated Debentures
underlying the Normal Units on such Quarterly Payment Date (assuming
for this purpose that no distributions or payments will then have been
deferred);
(ii) Treasury Securities that through their scheduled payments
will generate not later than the Stock Purchase Date an amount of cash
equal to the aggregate Liquidation Amount of the QUIPS or principal
amount of the Junior Subordinated Debentures underlying the Normal
Units; and
(iii) if the Company is, at the Call Settlement Date,
deferring distributions on the QUIPS or interest payments on the Junior
Subordinated Debentures, an amount in cash equal to (A) the aggregate
deferred distributions on the QUIPS or deferred interest payments on
the Junior Subordinated Debentures underlying the Normal Units accrued
to the Call Settlement Date, if the Call Settlement Date is a Quarterly
Payment Date, and (B) the aggregate deferred distributions on the QUIPS
or deferred interest payments on the Junior Subordinated Debentures
underlying the Normal Units accrued to the Quarterly Payment Date
immediately preceding the Call Settlement Date plus interest thereon at
the QUIPS Distribution Rate for the period from and including such
Quarterly Payment Date to but excluding such Call Settlement Date
(computed on the basis of a three hundred sixty (360) day year of
twelve (12) thirty (30) day months), if the Call Settlement Date is not
a Quarterly Payment Date.
"Call Option Expiration Date" means [________, 2001] (or, if such date
is not a Business Day, the next succeeding Business Day).
2. CALL OPTION.
2.1 GRANT. The Unit Agent, on behalf of and as attorney-in-fact for the
Holders from time to time of the Normal Units, hereby grants the Call Options to
the Call Option Holder on the terms and subject to the conditions set forth
herein.
2.2 CONSIDERATION. As consideration for such Call Options, concurrently
with the execution hereof, the Call Option Holder is paying to the underwriters
under the Underwriting Agreement (who are acting in this regard on behalf of the
initial investors in the Normal Units) an amount equal to $________ per Call
Option.
2.3 EXPIRATION OR TERMINATION OF CALL OPTIONS. The Call Options shall
be irrevocable, but the Call Options and the rights of the Call Option Holder
and the obligations of the Holders of Normal Units thereunder shall (a) expire
on the Call Option Expiration Date if the Call Settlement Date has not occurred
on or prior to such date and (b) automatically terminate upon the occurrence of
a Termination Event.
-2-
<PAGE>
3. EXERCISE OF CALL OPTIONS.
3.1 EXERCISE MECHANICS.
(a) The Call Option Holder may exercise all (but not less than all) the
Call Options by (i) delivering to the Unit Agent and the Collateral Agent, on or
prior to the Call Option Settlement Date, a notice, substantially in the form
set forth in Annex A attached hereto, stating that the Call Option Holder is
exercising its Call Options and specifying the Call Settlement Date therefor
(which may not be after the Call Option Expiration Date) and (ii) delivering to
the Collateral Agent, by Noon, New York City time, on the Call Settlement Date,
the Aggregate Consideration Deliverable on Exercise of the Call Options.
(b) Pursuant to the Pledge Agreement, upon receipt by the Collateral
Agent of the Aggregate Consideration Deliverable on Exercise of the Call Options
in the manner contemplated hereby and by the Pledge Agreement, the Collateral
Agent shall transfer the QUIPS or Junior Subordinated Debentures underlying the
Normal Units, free and clear of any lien, pledge or security interest created by
the Pledge Agreement, to the Call Option Holder or its designee as specified in
the notice referred to in Section 3.1(a) above.
(c) The Unit Agent shall, not later than three (3) Business Days
following the Call Settlement Date, mail notice of the exercise of the Call
Options to the Holders in the manner prescribed by the Master Unit Agreement.
4. MISCELLANEOUS.
4.1 AMENDMENTS. This Agreement may be amended in the manner set forth
in Section 801 of the Master Unit Agreement.
4.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The Call Option Holder, the
Unit Agent and the Holders from time to time of the Normal Units, acting through
the Unit Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Call Option Holder, the Unit Agent
and the Holders from time to time of the Normal Units, acting through the Unit
Agent as their attorney-in-fact, irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of the venue of any such proceeding brought in such a court and
any claim that any such proceeding brought in such a court has been brought in
an inconvenient forum.
4.3 NOTICES. All notices, requests, consents and other communications
provided for herein (including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telecopy) delivered to the intended recipient
at the "Address for Notices" specified below its name on the
-3-
<PAGE>
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
4.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the Call Option
Holder and the Unit Agent, and the Holders from time to time of the Normal
Units, by their acceptance of the same, shall be deemed to have agreed to be
bound by the provisions hereof and to have ratified the agreements of, and the
grant of the Call Options hereunder by, the Unit Agent.
4.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
4.6 SEVERABILITY. If any provision hereof is invalid or unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in order to carry out the intentions of the parties
hereto as nearly as may be possible and (b) the invalidity or unenforceability
of any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
[---------------]
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
Address for Notices:
_______________________________________
________________________________________
________________________________________
Attention: _____________________________
-4-
<PAGE>
[---------------]
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
Address for Notices:
_______________________________________
________________________________________
________________________________________
Attention: _____________________________
-5-
<PAGE>
ANNEX I
EXERCISE NOTICE
Reference is made to the Call Option Agreement, dated as of __________,
199_ (the "Call Option Agreement"), between _______________, as Call Option
Holder, and _______________, as Unit Agent and attorney-in-fact of the Holders
from time to time of the Normal Units. Capitalized terms used herein but not
defined are used herein as defined in the Call Option Agreement.
The undersigned hereby exercises all of the Call Options underlying the
Normal Units and specifies __________________ as the Call Settlement Date.
Certificates representing the QUIPS or Junior Subordinated Debentures underlying
the Normal Units should be registered in the name of and delivered to [insert
address].
Dated: __________, 199__
[---------------]
By
------------------------------------
Name
----------------------------------
Title
---------------------------------
I-1
Exhibit 5.1(a)
(415) 983-1000
June 3, 1998
Providian Financial Corporation
201 Mission Street
San Francisco, CA 94105
Ladies and Gentlemen:
This opinion is being delivered in connection with the proposed
issuance and sale by Providian Financial Corporation, a Delaware corporation
("Providian"), of (a) shares of its common stock, $0.01 par value per share
("Common Stock"), (b) shares of its preferred stock, $0.01 par value per share
("Preferred Stock"), in one or more series, (c) depositary shares evidenced by
depositary receipts, each representing fractional interests in Preferred Stock
("Depositary Shares"), (d) unsecured senior or subordinated debt securities of
Providian ("Debt Securities"), (e) options, warrants and other rights to
purchase shares of Common Stock ("Common Stock Warrants") or shares of Preferred
Stock ("Preferred Stock Warrants"), (f) options, warrants and other rights to
purchase shares of capital stock or debt of another corporation or entity
("Third Party Warrants"), (g) options, warrants and other rights to purchase
Debt Securities ("Debt Warrants"), (h) stock purchase contracts ("Stock Purchase
Contracts") to purchase Common Stock or Preferred Stock, (i) stock purchase
units ("Stock Purchase Units") each representing ownership of a Stock Purchase
Contract and Preferred Stock, Debt Securities, debt obligations of third
parties, including the United States of America or agencies or instrumentalities
thereof or Preferred Securities (as defined below), securing the holder's
obligation to purchase Common Stock or Preferred Stock under the Stock Purchase
Contract, (j) guarantees ("Guarantees") on payments of periodic cash
distributions and payments on liquidation, redemption or otherwise with respect
to preferred securities offered from time to time by Providian Financing I,
Providian Financing II, Providian Financing III, and Providian Financing IV,
each a statutory business trust formed under the laws of the State of Delaware
(each a "Providian Trust"), the Common Securities of which will be wholly-owned
by Providian, representing undivided beneficial interests in the assets of the
applicable Providian Trust ("Preferred Securities"), out of moneys held by each
of the Providian Trusts or (k) other units ("Other Units"), each of which may
represent any combination of the foregoing, each on terms to be determined at
the time of sale (the Common Stock, Preferred Stock, Depositary Shares, Debt
Securities, Common Stock Warrants, Preferred Stock Warrants, Third Party
Warrants, Debt Warrants, Stock Purchase Units, Preferred Securities, Guarantees
or Other Units are collectively referred to herein as, the "Securities"), having
an aggregate initial public offering price of up to U.S.$2,000,000,000 or the
equivalent thereof. The Securities are to be issued pursuant to a Registration
Statement on Form S-3 ("Registration Statement") filed by Providian, Providian
Financing I, Providian
<PAGE>
Providian Financial Corporation
June 3, 1998
Page 2
Financing II, Providian Financing III and Providian Financing IV with the
Securities and Exchange Commission on June 3, 1998 under the Securities Act of
1933, as amended.
We are familiar with proceedings to date by Providian with respect to
the issuance and sale of the Securities and have examined such records,
documents and matters of law as we have deemed necessary for purposes of this
opinion.
Based upon the foregoing, we are of the opinion that:
1. Providian is a corporation duly organized and validly existing under
the laws of the State of Delaware.
2. With respect to the Common Stock, when (a) the Board of Directors of
Providian or a duly authorized committee of the Board (such Board of Directors
or committee being referred to herein as the "Board"), has taken all necessary
corporate action to approve the issuance of and establish the terms of the
offering of the Common Stock and related matters and (b) issued, sold and
delivered in the manner and for the consideration (not less than the par value
of the Common Stock) stated in the applicable definitive purchase, underwriting
or similar agreement or upon conversion, exchange or exercise of any other
Security in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion, exchange or exercise as
approved by the Board, for the consideration approved by the Board (not less
than the par value of the Common Stock), the Common Stock will be duly
authorized, validly issued, fully paid and nonassessable.
3. With respect to the Preferred Stock, when (a) the Board has taken
all necessary corporate action to approve the issuance of and establish the
terms of any particular series of Preferred Stock, the offering thereof and
related matters, including the filing of a statement of designation conforming
to the Delaware General Corporation Law regarding the Preferred Stock with the
Secretary of State of the State of Delaware, and (c) the Preferred Stock has
been issued, sold and delivered in the manner and for the consideration (not
less than the par value of the Preferred Stock) stated in the applicable
definitive purchase, underwriting or similar agreement or upon conversion,
exchange or exercise of any other Security in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion, exchange or exercise as approved by the Board, for the consideration
approved by the Board (not less than the par value of the Preferred Stock), the
Preferred Stock will be duly authorized, validly issued, fully paid and
nonassessable.
4. With respect to the Depositary Shares, when (a) the Board has taken
all necessary corporate action to approve the issuance of and establish the
terms of any particular series of Preferred Stock, the offering thereof and
related matters, including the filing of a statement of designation conforming
to the Delaware General Corporation Law regarding the Preferred Stock with the
Secretary of State of the State of Delaware, (c) the Preferred Stock has been
deposited with a bank or trust company (which meets the requirements set forth
in the
<PAGE>
Providian Financial Corporation
June 3, 1998
Page 3
Registration Statement or any amendment or prospectus supplement relating
thereto) under one or more deposit agreements (substantially in the form of the
Deposit Agreement filed as Exhibit 4.18 to the Registration Statement or with
such other provisions as are contained in a document which will be filed as an
exhibit to or incorporated by reference in the Registration Statement, which
have been duly authorized and validly executed) and (d) Depositary Shares,
evidenced by depositary receipts, are issued, sold and delivered in the manner
and for the consideration stated in the applicable definitive purchase,
underwriting or similar agreement approved by the Board, and in accordance with
the appropriate depositary agreement, upon payment of the consideration provided
for therein the Depositary Shares will be duly and validly issued, fully paid
and nonassessable.
5. With respect to the Debt Securities to be issued under the Senior
Debt Indenture filed as Exhibit 4.15 to the Registration Statement, when (a) the
Senior Debt Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended, (b) the Board has taken all necessary corporate action to
approve the issuance of and establish the terms of such Debt Securities, the
terms of the offering and related matters, (c) the Debt Securities have been
executed and authenticated in accordance with the terms of the Senior Debt
Indenture and (d) the Debt Securities have been issued, sold and delivered in
the manner and for the consideration stated in the applicable definitive
purchase, underwriting or similar agreement approved by the Board, upon payment
of the consideration provided for therein, or upon exercise of any other
Security in accordance with the terms of such Security or the instrument
governing such Security providing for such conversion, exchange or exercise as
approved by the Board, and the Senior Debt Indenture, the Debt Securities to be
issued under the Senior Debt Indenture will be legal, valid and binding
obligations of Providian, enforceable against Providian in accordance with their
terms, except that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting generally the enforcement of
creditors' rights and by equitable principles of general application (whether
applied at law or in equity).
6. With respect to the Debt Securities to be issued under the
Subordinated Debt Indenture filed as Exhibit 4.19 to the Registration Statement,
when (a) the Subordinated Debt Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended, (b) the Board has taken all necessary
corporate action to approve the issuance of and establish the terms of such Debt
Securities, the terms of the offering and related matters, (c) the Debt
Securities have been executed and authenticated in accordance with the terms of
the Subordinated Debt Indenture and (d) the Debt Securities have been issued,
sold and delivered in the manner and for the consideration stated in the
applicable definitive purchase, underwriting or similar agreement approved by
the Board, upon payment of the consideration therefor provided for therein, or
upon exercise of any other Security in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion, exchange or exercise as approved by the Board, and the Subordinated
Debt Indenture, the Debt Securities to be issued under the Subordinated Debt
Indenture will be legal, valid and binding obligations of Providian, enforceable
against Providian in accordance
<PAGE>
Providian Financial Corporation
June 3, 1998
Page 4
with their terms, except that enforcement thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting generally the
enforcement of creditors' rights and by equitable principles of general
application (whether applied at law or in equity).
7. With respect to the Common Stock Warrants and the Preferred Stock
Warrants (collectively, the "Stock Warrants"), when (a) one or more agreements
(incorporating the form of Standard Stock Warrant Provisions filed as Exhibit
4.16 to the Registration Statement or such other provisions as are contained in
a document which will be filed as an exhibit to or incorporated by reference in
the Registration Statement,) have been duly executed and delivered by Providian
and a warrant agent, (b) the Board has taken all necessary corporate action to
approve the terms of the Stock Warrants, (c) the Stock Warrant certificates have
been executed and authenticated in accordance with the terms of the appropriate
agreement and (d) the Stock Warrants have been issued, sold and delivered in the
manner and for the consideration stated in the applicable definitive purchase,
underwriting or similar agreement approved by the Board, upon payment of the
consideration therefor provided for therein, and the appropriate Third Party
Warrant agreement, the Third Party Warrants will be legal, valid and binding
obligations of Providian, enforceable against Providian in accordance with their
terms, except as may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting generally the enforcement of creditors' rights and
by equitable principles of general application (whether applied at law or in
equity).
8. With respect to the Third Party Warrants, when (a) one or more
agreements (incorporating the form of Standard Stock Warrant Provisions filed as
Exhibit 4.16 to the Registration Statement or such other provisions as are
contained in a document which will be filed as an exhibit to or incorporated by
reference in the Registration Statement) have been duly executed and delivered
by Providian and a warrant agent, (b) the Board has taken all necessary
corporate action to approve the terms of the Third Party Warrants, (c) the Third
Party Warrant certificates have been executed and authenticated in accordance
with the terms of the appropriate agreement and (d) the Third Party Warrants
have been issued, sold and delivered in the manner and for the consideration
stated in the applicable definitive purchase, underwriting or similar agreement
approved by the Board, upon payment of the consideration therefor provided for
therein, and the appropriate Third Party Warrant agreement, the Third Party
Warrants will be legal, valid and binding obligations of Providian, enforceable
against Providian in accordance with their terms, except as may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting generally
the enforcement of creditors' rights and by equitable principles of general
application (whether applied at law or in equity).
9. With respect to the Debt Warrants, when (a) one or more agreements
(incorporating the form of Debt Securities Warrant Agreement filed as Exhibit
4.17 to the Registration Statement or such other provisions as are contained in
a document which will be filed as an exhibit to or incorporated by reference in
the Registration Statement) have been duly executed and delivered by Providian
and a warrant agent, (b) the Board has taken all necessary corporate action to
approve the terms of the Debt Warrants, (c) the Debt Warrant
<PAGE>
Providian Financial Corporation
June 3, 1998
Page 5
certificates have been executed and authenticated in accordance with the terms
of the appropriate agreement and (d) the Debt Warrants have been issued, sold
and delivered in the manner and for the consideration stated in the applicable
definitive purchase, underwriting or similar agreement approved by the Board,
upon payment of the consideration therefor provided for therein, and the
appropriate Debt Warrant agreement, the Debt Warrants will be legal, valid and
binding obligations of Providian, enforceable against Providian in accordance
with their terms, except as may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting generally the enforcement of
creditors' rights and by equitable principles of general application (whether
applied at law or in equity).
10. With respect to the Stock Purchase Contracts, when (a) one or more
agreements (incorporating the form of Stock Purchase Contract Agreement filed as
Exhibit 4.21 to the Registration Statement or such other agreement which will be
filed as an exhibit to or incorporated by reference in the Registration
Statement) have duly executed and delivered by Providian and a stock purchase
contract agent, (b) the Board has taken all necessary corporate action to
approve the terms of the Stock Purchase Contracts, (c) the Stock Purchase
Contracts have been executed and authenticated in accordance with the terms of
the appropriate Stock Purchase Contract agreement and (d) the Stock Purchase
Contracts have been issued, sold and delivered in the manner and for the
consideration stated in the applicable definitive purchase, underwriting or
similar agreement approved by the Board, upon payment of the consideration
therefor provided for therein, and the appropriate Stock Purchase Contract
agreement, the Stock Purchase Contracts will be legal, valid and binding
obligations of Providian, enforceable against Providian in accordance with their
terms, except as may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights and by
equitable principles of general application (whether applied at law or in
equity).
11. With respect to the Stock Purchase Units, when (a) one or more
agreements (incorporating the form of Stock Purchase Contract Agreement filed as
Exhibit 4.21 to the Registration Statement or such other agreement which will be
filed as an exhibit to or incorporated by reference in the Registration
Statement) have been duly executed and delivered by Providian and a stock
purchase unit agent, (b) the Board has taken all necessary corporate action to
approve and establish the terms of the Stock Purchase Units, (c) the Stock
Purchase Units have been executed and authenticated in accordance with the terms
of the appropriate agreement and (d) the Stock Purchase Units have been issued,
sold and delivered in the manner and for the consideration stated in the
applicable definitive purchase, underwriting or similar agreement approved by
the Board, upon payment of the consideration therefor provided for therein, and
the appropriate Stock Purchase Unit agreement, the Stock Purchase Units will be
legal, valid and binding obligations of Providian, enforceable against Providian
in accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting generally the
enforcement of creditors' rights and by equitable principles of general
application (whether applied at law or in equity).
<PAGE>
Providian Financial Corporation
June 3, 1998
Page 6
12. With respect to the Guarantees, when (a) one or more agreements
(incorporating the form of Preferred Securities Guarantee Agreement filed as
Exhibit 4.20 to the Registration Statement) have been duly executed and
delivered by Providian and a Preferred Securities Guarantee trustee, (b) the
Board has taken all necessary corporate action to approve and establish the
terms of the Guarantee, (c) the Preferred Securities Guarantee Agreement has
been executed and authenticated in accordance with the terms of the appropriate
agreement and (d) the Guarantee has been issued, and delivered in the manner and
for the consideration stated in the applicable agreement, the Guarantee will be
a legal, valid and binding obligation of Providian, enforceable against
Providian in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, or other similar laws affecting generally the
enforcement of creditors' rights and by equitable principles of general
application (whether applied at law or in equity).
In connection with our opinions expressed above, we have assumed that,
at or prior to the time of the delivery of any such Security, the Registration
Statement, and any amendments thereto (including post-effective amendments) will
have been declared effective, a Prospectus Supplement will have been prepared
and filed with the Commission describing the Securities offered thereby, the
authorization of the Securities applicable to such Security will not have been
modified or rescinded by the Board and there will not have occurred any change
in law affecting the validity or enforceability of such Security. We have also
assumed that none of the terms of any Security to be established subsequent to
the date hereof nor the issuance and delivery of such Security, nor the
compliance by Providian with the terms of such Security, will violate any
applicable federal or state law or will result in a violation of any provision
of any instrument or agreement then binding upon Providian or any restriction
imposed by any court or governmental body having jurisdiction over Providian.
We are members of the Bar of the State of California and the foregoing
opinion is limited to the laws of the State of California, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission in connection with the filing of the Registration Statement
referred to above. We also consent to the use or our name in the related
prospectus and prospectus supplement under the heading "Legal Matters."
Very truly yours,
Pillsbury Madison & Sutro LLP
[Letterhead of Morris, Nichols, Arsht and Tunnell]
June 2, 1998
Providian Financing I
c/o Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Re: Providian Financing I
Ladies and Gentlemen:
We have acted as special Delaware counsel to Providian Financing I, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the organization of the Trust and the proposed issuance of
Preferred Securities to beneficial owners pursuant to and as described in the
Registration Statement (and the prospectus forming a part thereof (the
"Prospectus")) on Form S-3 filed by Providian Financial Corporation, Providian
Financing II, Providian Financing III, Providian Financing IV and the Trust with
the Securities and Exchange Commission (the "Commission") on or about the date
hereof (the "Registration Statement"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Amended and Restated
Declaration of Trust of the Trust in the form attached as Exhibit 4.13 to the
Registration Statement (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of the Trust as
filed in the Office of the Secretary of State of the State of Delaware (the
"State Office") on May 29, 1998 (the "Certificate"); a Declaration of Trust of
the Trust dated as of May 29, 1998 (the "Original Governing Instrument"); the
Governing Instrument; the Registration Statement; and a certification of good
standing of the Trust obtained as of a recent date from the State Office. In
such examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as drafts or
copies or forms of documents to be executed and the legal capacity of natural
persons to complete the execution of documents. We have further assumed for
purposes of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity (other than the Trust) that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents (including, without limitation, the due execution and
delivery of the Governing Instrument and the underwriting agreement and the
pricing agreement relating to the
<PAGE>
Providian Financing I
June 2, 1998
Page 2
Preferred Securities (which underwriting agreement and pricing agreement will
have terms consistent with the requirement of the Governing Instrument)
(respectively, the "Underwriting Agreement" and the "Pricing Agreement") prior
to the first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate, or will occur prior to the issuance
of the Preferred Securities, that would cause a dissolution or liquidation of
the Trust under the Original Governing Instrument or the Governing Instrument,
as applicable; (iv) that the activities of the Trust have been and will be
conducted in accordance with the Original Governing Instrument or the Governing
Instrument, as applicable, and the Delaware Business Trust Act, 12 Del. C.
sections 3801 et seq. (the "Delaware Act"); (v) that each Holder of a Preferred
Security will make payment of the required consideration therefor and will have
a Preferred Security or Preferred Securities registered in the name of such
Holder in the Register in consideration thereof, all in accordance with the
terms and conditions of the Governing Instrument, the Registration Statement,
the Underwriting Agreement and the Pricing Agreement; (vi) that the Preferred
Securities are issued and sold to the Preferred Securities Holders in accordance
with the terms, conditions, requirements and procedures set forth in the
Governing Instrument, the Registration Statement, the Underwriting Agreement and
the Pricing Agreement; and (vii) that the documents examined by us are in full
force and effect (or, as applicable, will be in full force and effect prior to
the issuance of the Preferred Securities), express the entire understanding of
the parties thereto with respect to the subject matter thereof and have not been
(or, as applicable, at the time of issuance of the Preferred Securities will not
have been) modified, supplemented or otherwise amended, except as herein
referenced. No opinion is expressed with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws. We have not
participated in the preparation of the Registration Statement or any other
offering materials relating to the Preferred Securities and we assume no
responsibility for their contents. As to any fact material to our opinion, other
than those assumed, we have relied without independent investigation on the
above-referenced documents and on the accuracy, as of the date hereof, of the
matters therein contained.
Based on and subject to the foregoing (and the further assumptions set
forth below), and limited in all respects to matters of Delaware law, it is our
opinion that:
1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Preferred Securities, upon issuance, will constitute validly
issued and, subject to the qualifications set forth in paragraph 3 below, fully
paid and nonassessable beneficial interests in the trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Preferred Security Holder of the Trust, in such capacity, will be entitled
to the same limitation of personal liability as that extended to stockholders of
private corporations for
<PAGE>
Providian Financing I
June 2, 1998
Page 3
profit organized under the General Corporation Law of the State of Delaware;
provided, however, we express no opinion with respect to the liability of any
Preferred Security Holder who is, was or may become a named Trustee of the
Trust. Notwithstanding the foregoing, we note that pursuant to the Governing
Instrument, the Trust may withhold amounts otherwise distributable to a Holder
and pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
In connection with the foregoing opinions, we have assumed that at or
prior to the time of the issuance and delivery of any applicable Preferred
Securities, the registration Statement and any amendments thereto (including
post-effective amendments) will have been delivered and remain effective, a
prospectus supplement will have been prepared and filed with the commission
describing the Preferred Securities offered thereby (the terms of which will be
consistent with the requirements of the Governing Instrument), all required
approvals for the issuance of such Preferred Securities under the Governing
Instrument, the Underwriting Agreement and the Pricing Agreement will be in full
force and effect and will not have been modified or rescinded and there shall
not have occurred any change in law affecting the validity or enforceability of
such Preferred Securities. We have also assumed that none of the terms of any
Preferred Security to be established subsequent to the date hereof nor the
issuance and delivery of such Preferred Security, nor the compliance by the
Trust with the terms of such Preferred Security, will violate any applicable
federal or state law or will result in a violation of any provision of any
instrument or agreement then binding on the Trust or any restriction imposed by
any court or governmental body having jurisdiction over the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus and the prospectus supplement relating to the
issuance of Preferred Securities. In giving this consent, we do not thereby
admit that we come within the category of person whose consent is required under
section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder. This opinion speaks only as of the
date hereof and is based on our understandings or assumptions as to present
facts, and on our review of the above-referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the
<PAGE>
Providian Financing I
June 2, 1998
Page 4
addressee hereof in connection with the matters contemplated hereby and may not
be relied on by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
[Letterhead of Morris, Nichols, Arsht and Tunnell]
June 2, 1998
Providian Financing II
c/o Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Re: Providian Financing II
Ladies and Gentlemen:
We have acted as special Delaware counsel to Providian Financing II, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the organization of the Trust and the proposed issuance of
Preferred Securities to beneficial owners pursuant to and as described in the
Registration Statement (and the prospectus forming a part thereof (the
"Prospectus")) on Form S-3 filed by Providian Financial Corporation, Providian
Financing I, Providian Financing III, Providian Financing IV and the Trust with
the Securities and Exchange Commission (the "Commission") on or about the date
hereof (the "Registration Statement"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Amended and Restated
Declaration of Trust of the Trust in the form attached as Exhibit 4.13 to the
Registration Statement (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of the Trust as
filed in the Office of the Secretary of State of the State of Delaware (the
"State Office") on May 29, 1998 (the "Certificate"); a Declaration of Trust of
the Trust dated as of May 29, 1998 (the "Original Governing Instrument"); the
Governing Instrument; the Registration Statement; and a certification of good
standing of the Trust obtained as of a recent date from the State Office. In
such examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as drafts or
copies or forms of documents to be executed and the legal capacity of natural
persons to complete the execution of documents. We have further assumed for
purposes of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity (other than the Trust) that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents (including, without limitation, the due execution and
delivery of the Governing Instrument and the underwriting agreement and the
pricing agreement relating to the
<PAGE>
Providian Financing II
June 2, 1998
Page 2
Preferred Securities (which underwriting agreement and pricing agreement will
have terms consistent with the requirement of the Governing Instrument)
(respectively, the "Underwriting Agreement" and the "Pricing Agreement") prior
to the first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate, or will occur prior to the issuance
of the Preferred Securities, that would cause a dissolution or liquidation of
the Trust under the Original Governing Instrument or the Governing Instrument,
as applicable; (iv) that the activities of the Trust have been and will be
conducted in accordance with the Original Governing Instrument or the Governing
Instrument, as applicable, and the Delaware Business Trust Act, 12 Del. C.
sections 3801 et seq. (the "Delaware Act"); (v) that each Holder of a Preferred
Security will make payment of the required consideration therefor and will have
a Preferred Security or Preferred Securities registered in the name of such
Holder in the Register in consideration thereof, all in accordance with the
terms and conditions of the Governing Instrument, the Registration Statement,
the Underwriting Agreement and the Pricing Agreement; (vi) that the Preferred
Securities are issued and sold to the Preferred Securities Holders in accordance
with the terms, conditions, requirements and procedures set forth in the
Governing Instrument, the Registration Statement, the Underwriting Agreement and
the Pricing Agreement; and (vii) that the documents examined by us are in full
force and effect (or, as applicable, will be in full force and effect prior to
the issuance of the Preferred Securities), express the entire understanding of
the parties thereto with respect to the subject matter thereof and have not been
(or, as applicable, at the time of issuance of the Preferred Securities will not
have been) modified, supplemented or otherwise amended, except as herein
referenced. No opinion is expressed with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws. We have not
participated in the preparation of the Registration Statement or any other
offering materials relating to the Preferred Securities and we assume no
responsibility for their contents. As to any fact material to our opinion, other
than those assumed, we have relied without independent investigation on the
above-referenced documents and on the accuracy, as of the date hereof, of the
matters therein contained.
Based on and subject to the foregoing (and the further assumptions set
forth below), and limited in all respects to matters of Delaware law, it is our
opinion that:
1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Preferred Securities, upon issuance, will constitute validly
issued and, subject to the qualifications set forth in paragraph 3 below, fully
paid and nonassessable beneficial interests in the trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Preferred Security Holder of the Trust, in such capacity, will be entitled
to the same limitation of personal liability as that extended to stockholders of
private corporations for
<PAGE>
Providian Financing II
June 2, 1998
Page 3
profit organized under the General Corporation Law of the State of Delaware;
provided, however, we express no opinion with respect to the liability of any
Preferred Security Holder who is, was or may become a named Trustee of the
Trust. Notwithstanding the foregoing, we note that pursuant to the Governing
Instrument, the Trust may withhold amounts otherwise distributable to a Holder
and pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
In connection with the foregoing opinions, we have assumed that at or
prior to the time of the issuance and delivery of any applicable Preferred
Securities, the registration Statement and any amendments thereto (including
post-effective amendments) will have been delivered and remain effective, a
prospectus supplement will have been prepared and filed with the commission
describing the Preferred Securities offered thereby (the terms of which will be
consistent with the requirements of the Governing Instrument), all required
approvals for the issuance of such Preferred Securities under the Governing
Instrument, the Underwriting Agreement and the Pricing Agreement will be in full
force and effect and will not have been modified or rescinded and there shall
not have occurred any change in law affecting the validity or enforceability of
such Preferred Securities. We have also assumed that none of the terms of any
Preferred Security to be established subsequent to the date hereof nor the
issuance and delivery of such Preferred Security, nor the compliance by the
Trust with the terms of such Preferred Security, will violate any applicable
federal or state law or will result in a violation of any provision of any
instrument or agreement then binding on the Trust or any restriction imposed by
any court or governmental body having jurisdiction over the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus and the prospectus supplement relating to the
issuance of Preferred Securities. In giving this consent, we do not thereby
admit that we come within the category of person whose consent is required under
section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder. This opinion speaks only as of the
date hereof and is based on our understandings or assumptions as to present
facts, and on our review of the above-referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the
<PAGE>
Providian Financing II
June 2, 1998
Page 4
addressee hereof in connection with the matters contemplated hereby and may not
be relied on by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
[Letterhead of Morris, Nichols, Arsht and Tunnell]
June 2, 1998
Providian Financing III
c/o Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Re: Providian Financing III
Ladies and Gentlemen:
We have acted as special Delaware counsel to Providian Financing III, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the organization of the Trust and the proposed issuance of
Preferred Securities to beneficial owners pursuant to and as described in the
Registration Statement (and the prospectus forming a part thereof (the
"Prospectus")) on Form S-3 filed by Providian Financial Corporation, Providian
Financing I, Providian Financing II, Providian Financing IV and the Trust with
the Securities and Exchange Commission (the "Commission") on or about the date
hereof (the "Registration Statement"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Amended and Restated
Declaration of Trust of the Trust in the form attached as Exhibit 4.13 to the
Registration Statement (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of the Trust as
filed in the Office of the Secretary of State of the State of Delaware (the
"State Office") on May 29, 1998 (the "Certificate"); a Declaration of Trust of
the Trust dated as of May 29, 1998 (the "Original Governing Instrument"); the
Governing Instrument; the Registration Statement; and a certification of good
standing of the Trust obtained as of a recent date from the State Office. In
such examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as drafts or
copies or forms of documents to be executed and the legal capacity of natural
persons to complete the execution of documents. We have further assumed for
purposes of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity (other than the Trust) that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents (including, without limitation, the due execution and
delivery of the Governing Instrument and the underwriting agreement and the
pricing agreement relating to the
<PAGE>
Providian Financing III
June 2, 1998
Page 2
Preferred Securities (which underwriting agreement and pricing agreement will
have terms consistent with the requirement of the Governing Instrument)
(respectively, the "Underwriting Agreement" and the "Pricing Agreement") prior
to the first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate, or will occur prior to the issuance
of the Preferred Securities, that would cause a dissolution or liquidation of
the Trust under the Original Governing Instrument or the Governing Instrument,
as applicable; (iv) that the activities of the Trust have been and will be
conducted in accordance with the Original Governing Instrument or the Governing
Instrument, as applicable, and the Delaware Business Trust Act, 12 Del. C.
sections 3801 et seq. (the "Delaware Act"); (v) that each Holder of a Preferred
Security will make payment of the required consideration therefor and will have
a Preferred Security or Preferred Securities registered in the name of such
Holder in the Register in consideration thereof, all in accordance with the
terms and conditions of the Governing Instrument, the Registration Statement,
the Underwriting Agreement and the Pricing Agreement; (vi) that the Preferred
Securities are issued and sold to the Preferred Securities Holders in accordance
with the terms, conditions, requirements and procedures set forth in the
Governing Instrument, the Registration Statement, the Underwriting Agreement and
the Pricing Agreement; and (vii) that the documents examined by us are in full
force and effect (or, as applicable, will be in full force and effect prior to
the issuance of the Preferred Securities), express the entire understanding of
the parties thereto with respect to the subject matter thereof and have not been
(or, as applicable, at the time of issuance of the Preferred Securities will not
have been) modified, supplemented or otherwise amended, except as herein
referenced. No opinion is expressed with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws. We have not
participated in the preparation of the Registration Statement or any other
offering materials relating to the Preferred Securities and we assume no
responsibility for their contents. As to any fact material to our opinion, other
than those assumed, we have relied without independent investigation on the
above-referenced documents and on the accuracy, as of the date hereof, of the
matters therein contained.
Based on and subject to the foregoing (and the further assumptions set
forth below), and limited in all respects to matters of Delaware law, it is our
opinion that:
1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Preferred Securities, upon issuance, will constitute validly
issued and, subject to the qualifications set forth in paragraph 3 below, fully
paid and nonassessable beneficial interests in the trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Preferred Security Holder of the Trust, in such capacity, will be entitled
to the same limitation of personal liability as that extended to stockholders of
private corporations for
<PAGE>
Providian Financing III
June 2, 1998
Page 3
profit organized under the General Corporation Law of the State of Delaware;
provided, however, we express no opinion with respect to the liability of any
Preferred Security Holder who is, was or may become a named Trustee of the
Trust. Notwithstanding the foregoing, we note that pursuant to the Governing
Instrument, the Trust may withhold amounts otherwise distributable to a Holder
and pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
In connection with the foregoing opinions, we have assumed that at or
prior to the time of the issuance and delivery of any applicable Preferred
Securities, the registration Statement and any amendments thereto (including
post-effective amendments) will have been delivered and remain effective, a
prospectus supplement will have been prepared and filed with the commission
describing the Preferred Securities offered thereby (the terms of which will be
consistent with the requirements of the Governing Instrument), all required
approvals for the issuance of such Preferred Securities under the Governing
Instrument, the Underwriting Agreement and the Pricing Agreement will be in full
force and effect and will not have been modified or rescinded and there shall
not have occurred any change in law affecting the validity or enforceability of
such Preferred Securities. We have also assumed that none of the terms of any
Preferred Security to be established subsequent to the date hereof nor the
issuance and delivery of such Preferred Security, nor the compliance by the
Trust with the terms of such Preferred Security, will violate any applicable
federal or state law or will result in a violation of any provision of any
instrument or agreement then binding on the Trust or any restriction imposed by
any court or governmental body having jurisdiction over the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus and the prospectus supplement relating to the
issuance of Preferred Securities. In giving this consent, we do not thereby
admit that we come within the category of person whose consent is required under
section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder. This opinion speaks only as of the
date hereof and is based on our understandings or assumptions as to present
facts, and on our review of the above-referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the
<PAGE>
Providian Financing III
June 2, 1998
Page 4
addressee hereof in connection with the matters contemplated hereby and may not
be relied on by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
[Letterhead of Morris, Nichols, Arsht and Tunnell]
June 2, 1998
Providian Financing IV
c/o Providian Financial Corporation
201 Mission Street
San Francisco, California 94105
Re: Providian Financing IV
Ladies and Gentlemen:
We have acted as special Delaware counsel to Providian Financing IV, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the organization of the Trust and the proposed issuance of
Preferred Securities to beneficial owners pursuant to and as described in the
Registration Statement (and the prospectus forming a part thereof (the
"Prospectus")) on Form S-3 filed by Providian Financial Corporation, Providian
Financing I, Providian Financing II, Providian Financing III and the Trust with
the Securities and Exchange Commission (the "Commission") on or about the date
hereof (the "Registration Statement"). Capitalized terms used herein and not
otherwise herein defined are used as defined in the Amended and Restated
Declaration of Trust of the Trust in the form attached as Exhibit 4.13 to the
Registration Statement (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of the Trust as
filed in the Office of the Secretary of State of the State of Delaware (the
"State Office") on May 29, 1998 (the "Certificate"); a Declaration of Trust of
the Trust dated as of May 29, 1998 (the "Original Governing Instrument"); the
Governing Instrument; the Registration Statement; and a certification of good
standing of the Trust obtained as of a recent date from the State Office. In
such examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as drafts or
copies or forms of documents to be executed and the legal capacity of natural
persons to complete the execution of documents. We have further assumed for
purposes of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity (other than the Trust) that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the
above-referenced documents (including, without limitation, the due execution and
delivery of the Governing Instrument and the underwriting agreement and the
pricing agreement relating to the
<PAGE>
Providian Financing II
June 2, 1998
Page 2
Preferred Securities (which underwriting agreement and pricing agreement will
have terms consistent with the requirement of the Governing Instrument)
(respectively, the "Underwriting Agreement" and the "Pricing Agreement") prior
to the first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate, or will occur prior to the issuance
of the Preferred Securities, that would cause a dissolution or liquidation of
the Trust under the Original Governing Instrument or the Governing Instrument,
as applicable; (iv) that the activities of the Trust have been and will be
conducted in accordance with the Original Governing Instrument or the Governing
Instrument, as applicable, and the Delaware Business Trust Act, 12 Del. C.
sections 3801 et seq. (the "Delaware Act"); (v) that each Holder of a Preferred
Security will make payment of the required consideration therefor and will have
a Preferred Security or Preferred Securities registered in the name of such
Holder in the Register in consideration thereof, all in accordance with the
terms and conditions of the Governing Instrument, the Registration Statement,
the Underwriting Agreement and the Pricing Agreement; (vi) that the Preferred
Securities are issued and sold to the Preferred Securities Holders in accordance
with the terms, conditions, requirements and procedures set forth in the
Governing Instrument, the Registration Statement, the Underwriting Agreement and
the Pricing Agreement; and (vii) that the documents examined by us are in full
force and effect (or, as applicable, will be in full force and effect prior to
the issuance of the Preferred Securities), express the entire understanding of
the parties thereto with respect to the subject matter thereof and have not been
(or, as applicable, at the time of issuance of the Preferred Securities will not
have been) modified, supplemented or otherwise amended, except as herein
referenced. No opinion is expressed with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws. We have not
participated in the preparation of the Registration Statement or any other
offering materials relating to the Preferred Securities and we assume no
responsibility for their contents. As to any fact material to our opinion, other
than those assumed, we have relied without independent investigation on the
above-referenced documents and on the accuracy, as of the date hereof, of the
matters therein contained.
Based on and subject to the foregoing (and the further assumptions set
forth below), and limited in all respects to matters of Delaware law, it is our
opinion that:
1. The Trust is a duly organized and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The Preferred Securities, upon issuance, will constitute validly
issued and, subject to the qualifications set forth in paragraph 3 below, fully
paid and nonassessable beneficial interests in the trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Preferred Security Holder of the Trust, in such capacity, will be entitled
to the same limitation of personal liability as that extended to stockholders of
private corporations for
<PAGE>
Providian Financing II
June 2, 1998
Page 3
profit organized under the General Corporation Law of the State of Delaware;
provided, however, we express no opinion with respect to the liability of any
Preferred Security Holder who is, was or may become a named Trustee of the
Trust. Notwithstanding the foregoing, we note that pursuant to the Governing
Instrument, the Trust may withhold amounts otherwise distributable to a Holder
and pay over such amounts to the applicable jurisdictions in accordance with
federal, state and local law and any amount withheld will be deemed to have been
distributed to such Holder and that, pursuant to the Governing Instrument,
Preferred Security Holders may be obligated to make payments or provide
indemnity or security under the circumstances set forth therein.
In connection with the foregoing opinions, we have assumed that at or
prior to the time of the issuance and delivery of any applicable Preferred
Securities, the registration Statement and any amendments thereto (including
post-effective amendments) will have been delivered and remain effective, a
prospectus supplement will have been prepared and filed with the commission
describing the Preferred Securities offered thereby (the terms of which will be
consistent with the requirements of the Governing Instrument), all required
approvals for the issuance of such Preferred Securities under the Governing
Instrument, the Underwriting Agreement and the Pricing Agreement will be in full
force and effect and will not have been modified or rescinded and there shall
not have occurred any change in law affecting the validity or enforceability of
such Preferred Securities. We have also assumed that none of the terms of any
Preferred Security to be established subsequent to the date hereof nor the
issuance and delivery of such Preferred Security, nor the compliance by the
Trust with the terms of such Preferred Security, will violate any applicable
federal or state law or will result in a violation of any provision of any
instrument or agreement then binding on the Trust or any restriction imposed by
any court or governmental body having jurisdiction over the Trust.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "LEGAL
MATTERS" in the Prospectus and the prospectus supplement relating to the
issuance of Preferred Securities. In giving this consent, we do not thereby
admit that we come within the category of person whose consent is required under
section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Commission thereunder. This opinion speaks only as of the
date hereof and is based on our understandings or assumptions as to present
facts, and on our review of the above-referenced documents and the application
of Delaware law as the same exist as of the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the
<PAGE>
Providian Financing II
June 2, 1998
Page 4
addressee hereof in connection with the matters contemplated hereby and may not
be relied on by any other person or entity or for any other purpose without our
prior written consent.
Very truly yours,
/s/ MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
<TABLE>
<CAPTION>
PROVIDIAN FINANCIAL CORP.
Select Financial Data
Q1 Year Ended December 31
-----------------------------------------------------
(dollars in thousands) 1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
a. Ratio of Earnings to Fixed Charges
INCLUDING INTEREST ON DEPOSITS:
EARNINGS:
Income before income taxes 92,815 311,300 257,251 214,863 175,203 136,643
Fixed charges 56,177 187,843 192,536 160,183 103,926 108,546
-------- -------- -------- -------- -------- --------
Earnings, for computation purposes 148,992 499,143 449,787 375,046 279,129 245,189
======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest on borrowings 8,603 18,858 49,208 52,732 39,739 52,918
Interest on deposits 46,153 164,252 140,361 105,151 61,920 54,028
Portion of rents representative of the interest factor 1,421 4,733 2,967 2,300 2,267 1,600
-------- -------- -------- -------- -------- --------
Fixed charges, including interest on deposits,
for computation purposes 56,177 187,843 192,536 160,183 103,926 108,546
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges, including
interest on deposits 2.65 2.66 2.34 2.34 2.69 2.26
EXCLUDING INTEREST ON DEPOSITS:
EARNINGS:
Income before income taxes 92,815 311,300 257,251 214,863 175,203 136,643
Fixed charges 10,024 23,591 52,175 55,032 42,006 54,518
-------- -------- -------- -------- -------- --------
Earnings, for computation purposes 102,839 334,891 309,426 269,895 217,209 191,161
======== ======== ======== ======== ======== ========
FIXED CHARGES:
Interest on borrowings 8,603 18,858 49,208 52,732 39,739 52,918
Portion of rents representative of the interest factor 1,421 4,733 2,967 2,300 2,267 1,600
-------- -------- -------- -------- -------- --------
Fixed charges, excluding interest on deposits,
for computation purposes 10,024 23,591 52,175 55,032 42,006 54,518
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges, excluding
interest on deposits 10.26 14.20 5.93 4.90 5.17 3.51
b. Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividend Requirements
INCLUDING INTEREST ON DEPOSITS:
EARNINGS:
Income before income taxes 92,815 311,300 257,251 214,863 175,203 136,643
Fixed charges 56,177 187,843 192,536 160,183 103,926 108,546
-------- -------- -------- -------- -------- --------
Earnings, for computation purposes 148,992 499,143 449,787 375,046 279,129 245,189
======== ======== ======== ======== ======== ========
FIXED CHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS
Interest on borrowings 8,603 18,858 49,208 52,732 39,739 52,918
Interest on deposits 46,153 164,252 140,361 105,151 61,920 54,028
Portion of rents representative of the interest factor 1,421 4,733 2,967 2,300 2,267 1,600
-------- -------- -------- -------- -------- --------
Fixed charges, including interest on deposits,
for computation purposes 56,177 187,843 192,536 160,183 103,926 108,546
Preferred stock dividend requirements - 1,636 7,397 7,397 7,397 7,397
-------- -------- -------- -------- -------- --------
Fixed charges and preferred stock dividend requirements,
including interest on deposits, for
computation purposes 56,177 189,479 199,932 167,580 111,322 115,943
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges and preferred stock
dividend requirements, including interest on deposits 2.65 2.63 2.25 2.24 2.51 2.11
EXCLUDING INTEREST ON DEPOSITS:
EARNINGS:
INCOME BEFORE INCOME TAXES 92,815 311,300 257,251 214,863 175,203 136,643
Fixed charges 10,024 23,591 52,175 55,032 42,006 54,518
-------- -------- -------- -------- -------- --------
Earnings, for computation purposes 102,839 334,891 309,426 269,895 217,209 191,161
======== ======== ======== ======== ======== ========
FIXED CHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS
Interest on borrowings 8,603 18,858 49,208 52,732 39,739 52,918
Portion of rents representative of the interest factor 1,421 4,733 2,967 2,300 2,267 1,600
-------- -------- -------- -------- -------- --------
Fixed charges, excluding interest on deposits,
for computation purposes 10,024 23,591 52,175 55,032 42,006 54,518
Preferred stock dividend requirements - 1,636 7,397 7,397 7,397 7,397
-------- -------- -------- -------- -------- --------
Fixed charges and preferred stock dividend requirements,
excluding interest on deposits, for
computation purposes 10,024 25,227 59,571 62,429 49,402 61,915
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges and preferred stock
dividend requirements, excluding interest on deposits 10.26 13.28 5.19 4.32 4.40 3.09
</TABLE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-XXXX) and related Prospectus of
Providian Financial Corporation and to the incorporation by reference therein of
our report dated January 22, 1998, with respect to the consolidated financial
statements of Providian Financial Corporation incorporated by reference in its
Annual Report on Form 10-K for the year ended December 31, 1997 filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
June 2, 1998
