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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported):
September 27, 1996
PROVIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-6701 51-0108922
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
400 West Market Street, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip Code)
(502) 560-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
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(c) Exhibits.
The following exhibits relating to Providian Corporation's (the
"Company") Medium-Term Notes, Series E (the "Notes"), to be issued
under the Indenture dated as of January 1, 1994, between the Company
and First Trust of New York, National Association (as successor to
Morgan Guaranty Trust Company of New York), as Trustee, are filed
herewith:
(1) Distribution Agreement, dated September 27, 1996, among the
Company, Goldman, Sachs & Co., and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
(4.1) Forms of Fixed Rate Note and Floating Rate Note.
(4.2) Paying, Calculation and Issuing Agent Appointment Letter, dated
September 27, 1996, between the Company and First Trust of New
York, National Association.
(4.3) Letter of Representations, dated September 27, 1996, among the
Company, First Trust of New York, National Association, and The
Depository Trust Company.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated September 27, 1996
PROVIDIAN CORPORATION
By: /s/ R. Michael Slaven
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R. Michael Slaven
Assistant Secretary
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INDEX OF EXHIBITS
NUMBER DESCRIPTION
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(1) Distribution Agreement, dated
September 27, 1996, among the
Company, Goldman, Sachs & Co., and
Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated.
(4.1) Forms of Fixed Rate Note and Floating
Rate Note.
(4.2) Paying, Calculation and Issuing Agent
Appointment Letter, dated September 27,
1996, between the Company and First
Trust of New York, National Association.
(4.3) Letter of Representations, dated
September 27, 1996, among the Company,
First Trust of New York, National
Association, and The Depository Trust
Company.
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EXHIBIT 1
PROVIDIAN CORPORATION
$500,000,000
MEDIUM-TERM NOTES, SERIES E
DISTRIBUTION AGREEMENT
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September 27, 1996
Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner
& Smith Incorporated,
North Tower,
World Financial Center,
New York, New York 10281-1323.
Ladies and Gentlemen:
Providian Corporation, a Delaware corporation (the "Company"), proposes to
issue and sell from time to time its Medium-Term Notes, Series E (the
"Securities") at an aggregate initial public offering price of up to
$500,000,000 and agrees with each of you (individually, an "Agent", and
collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(which agreement may either be in writing, or the terms of which may be agreed
upon orally, with written confirmation prepared by the Agent and mailed or
transmitted to the Company, each a "Terms Agreement"), substantially in the form
of Annex I hereto, relating to such sale in accordance with Section 2(b) hereof.
This Distribution Agreement shall not be construed to create either an
obligation on the part of the Company to sell
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any Securities or an obligation of any of the Agents to purchase Securities as
principal.
The Securities will be issued under the Indenture, dated as of January 1,
1994 (the "Indenture"), between the Company and First Trust of New York,
National Association (successor to Morgan Guaranty Trust Company of New York),
as Trustee (the "Trustee"). The Securities shall have the maturity ranges,
interest rates, if any, redemption provisions and other terms set forth in the
Prospectus referred to below as it may be amended or supplemented from time to
time. The Securities will be issued, and the terms and rights thereof
established, from time to time by the Company in accordance with the Indenture.
1. The Company represents and warrants to, and agrees with, each Agent
that:
(a) Two registration statements on Form S-3 (file nos. 33-49719 and 333-
10123) in respect of the Securities have been filed with the Securities and
Exchange Commission (the "Commission"); such registration statements and any
post-effective amendment thereto, each in the form heretofore delivered or to be
delivered to such Agent and excluding exhibits to such registration statements
but including all documents incorporated by reference in the prospectus relating
to such debt securities contained in the latest registration statement, have
been declared effective by the Commission in such form; no other document with
respect to such registration statements or document incorporated by reference
therein has heretofore been filed or transmitted for filing with the Commission
(other than prospectuses filed pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Securities Act of 1933, as amended (the
"Act"), each in the form heretofore delivered to the Agents); and no stop order
suspending the effectiveness of any such registration statement or any post-
effective amendment thereto has been issued and no proceeding for that purpose
has been instituted or threatened by the Commission (any preliminary prospectus
included in such registration statements or filed with the Commission pursuant
to Rule 424(a) of the rules and regulations of the Commission under the Act,
being hereinafter called a "Preliminary Prospectus"; the various parts of such
registration statements, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in such registration
statements at the time such part of such registration statements became
effective but excluding Form T-1, each as amended at the time such part of the
registration statements became effective, being hereinafter collectively called
the "Registration Statement"; the prospectus (including the prospectus
supplement) relating to the Securities, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or prior
to the date of this Agreement, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to the
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applicable form under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as of the date of such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus, including any supplement to the Prospectus that
sets forth only the terms of the particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any documents filed after
the date of such Preliminary Prospectus or Prospectus, as the case may be, under
the Act, and incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by reference
in the Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as amended
or supplemented (including by the applicable Pricing Supplement filed in
accordance with Section 4(a) hereof) in relation to Securities sold pursuant to
this Agreement, in the form in which it is filed with the Commission pursuant to
Rule 424(b) under the Act and in accordance with Section 4(a) hereof, including
any documents incorporated by reference therein as of the date of such filing);
(b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents 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; and any further
documents so filed and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular issuance of
Securities;
(c) The Registration Statement and the Prospectus conform, and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations of the Commission thereunder and do not and will not, as of
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the applicable effective date in the case of the Registration Statement and any
amendment thereto and as of the applicable filing date in the case of the
Prospectus and any amendment or supplement thereto, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any statements
or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by any Agent expressly for use in the Prospectus as
amended or supplemented to relate to a particular issuance of Securities;
(d) Neither the Company nor any of its Subsidiaries has sustained since
the date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the capital stock
(except as a result of issuances relating to employee stock option or other
benefit plans of the Company) or long-term debt of the Company or any of its
Subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the Company and its Subsidiaries, otherwise than as set forth or contemplated in
the Prospectus (the term "Subsidiary" as used in this Agreement refers to
Commonwealth Life Insurance Company, Providian Bancorp, Inc., Peoples Security
Life Insurance Company, Providian Life and Health Insurance Company and any
other subsidiary of the Company that would constitute a "significant subsidiary"
of the Company under Rule 1.02(v) of Regulation S-X under the Act);
(e) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable; and all of the issued shares of capital stock of each Subsidiary
have been duly and validly authorized and issued, are fully paid and non-
assessable and (except for directors' qualifying shares) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims;
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(g) The Securities have been duly authorized, and, when Securities are
issued and delivered pursuant to this Agreement and any Terms Agreement, such
Securities will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Company entitled to
the benefits provided by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indenture has been duly
authorized, executed and delivered and duly qualified under the Trust Indenture
Act and constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and the
Indenture conforms, and the Securities of any particular issuance of Securities
will conform, to the descriptions thereof contained in the Prospectus as amended
or supplemented to relate to such issuance of Securities;
(h) The issue and sale of the Securities, the compliance by the Company
with all of the provisions of the Securities, the Indenture, this Agreement and
any Terms Agreement, and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound nor will such action result in any violation
of the provisions of the Certificate of Incorporation, as amended, or the By-
Laws of the Company or any statute or any order, rule or regulation of any such
court or governmental agency or body having jurisdiction over the Company or any
of its Subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the solicitation of offers to
purchase Securities, the issue and sale of the Securities or the consummation by
the Company of the other transactions contemplated by this Agreement, any Terms
Agreement or the Indenture, except such as have been, or will have been prior to
the Commencement Date (as defined in Section 3 hereof), obtained under the Act
or the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities,
insurance or Blue Sky laws in connection with the solicitation by such Agent of
offers to purchase Securities from the Company and with purchases of Securities
by such Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(i) There are no legal or governmental proceedings pending to which the
Company or any of its Subsidiaries is a party or of which any property of the
Company or any of its Subsidiaries is the subject, other than as set forth in
the Prospectus and other than litigation incident to the kind of business
conducted by the Company and its Subsidiaries which, in the judgment of the
Company, would
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not individually or in the aggregate have a material adverse effect on the
financial position, stockholders' equity or results of operations of the Company
and its Subsidiaries; to the best of the Company's knowledge no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others; the amounts accrued for taxes on the latest consolidated statement of
financial condition of the Company and its subsidiaries included or incorporated
by reference in the Prospectus are sufficient for the payment of all federal,
state, county and local taxes of the Company and its Subsidiaries, whether or
not disputed, which are properly accruable; and all federal, state, county and
local taxes due and payable by the Company, any of its Subsidiaries or Capital
Liberty, L.P. have been paid or adequate provision has been made for such
payment;
(j) Immediately after any sale of Securities by the Company hereunder or
under any Terms Agreement, the aggregate amount of Securities which shall have
been issued and sold by the Company hereunder or under any Terms Agreement and
of any debt securities of the Company (other than such Securities) that shall
have been issued and sold pursuant to the Registration Statement will not exceed
the amount of debt securities registered under the Registration Statement;
(k) The statements set forth in the Prospectus under the captions
"Description of Debt Securities" (and in the corresponding caption in the
Prospectus as amended or supplemented), insofar as they purport to constitute a
summary of the terms of the Securities, are accurate, complete and fair;
(l) The Company is not and, after giving effect to the offering and sale
of the Securities, will not be an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act");
(m) Neither the Company 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; and
(n) Ernst & Young LLP, who have certified certain financial statements of
the Company and its subsidiaries, are independent certified public accountants
as required by the Act and the rules and regulations of the Commission
thereunder.
2. (a) On the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, each of the
Agents hereby severally and not jointly agrees, as agent of the Company, to use
its reasonable efforts to solicit and receive offers to purchase the Securities
from the Company upon the terms and conditions set forth in the Prospectus as
amended or
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supplemented from time to time. So long as the provisions of this Agreement
relating to the solicitation of offers to purchase Securities from the Company
shall not have been terminated pursuant to Section 10 with respect to any Agent,
the Company shall not, without the consent of such Agent, solicit or accept
offers to purchase, or sell, any debt securities with a maturity at the time of
original issuance of 9 months or more except pursuant to this Agreement or any
Terms Agreement or except pursuant to a private placement not constituting a
public offering under the Act or except in connection with a firm commitment
underwriting pursuant to an underwriting agreement that does not provide for a
continuous offering of medium-term debt securities. However, (i) the Company
reserves the right to sell, and may solicit and accept offers to purchase,
Securities directly on its own behalf, and, in the case of any such sale not
resulting from a solicitation made by any Agent, no commission will be payable
with respect to such sale; and (ii) the Company shall have the right at any time
to request the Agents to execute, prior to the date fifteen business days after
such request, an amendment to this Agreement to provide for another person as an
Agent hereunder on substantially the same terms as the Agents hereunder on the
date of such request and each Agent shall have the right either to execute such
amendment or to terminate the provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company pursuant to
Section 10 with respect to such Agent. These provisions shall not limit Section
4(f) hereof or any similar provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities, the
solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedure attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct the
Agents to suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Securities. As soon as practicable, but
in any event not later than one business day in New York City, after receipt of
notice from the Company, the Agents will suspend solicitation of offers to
purchase Securities from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. During such period, the
Company shall not be required to comply with the provisions of Sections 4(h),
4(i), 4(j) and 4(k). Upon advising the Agents that such solicitation may be
resumed, however, the Company
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shall simultaneously provide the documents required to be delivered by Sections
4(h), 4(i), 4(j) and 4(k), and the Agents shall have no obligation to solicit
offers to purchase the Securities until such documents have been received by the
Agents. In addition, any failure by the Company to comply with its obligations
hereunder, including without limitation its obligations to deliver the documents
required by Sections 4(h), 4(i), 4(j) and 4(k), shall automatically terminate
the Agents' obligations hereunder, including without limitation its obligations
to solicit offers to purchase the Securities hereunder as agent or to purchase
Securities hereunder as principal.
The Company agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by the Company as a result of a
solicitation made by such Agent, in an amount equal to the following applicable
percentage of the principal amount of such Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities Sold)
------------------- --------------------
From 9 months to less than 1 year ................ .125%
From 1 year to less than 18 months................ .150%
From 18 months to less than 2 years............... .200%
From 2 years to less than 3 years................. .250%
From 3 years to less than 4 years................. .350%
From 4 years to less than 5 years................. .450%
From 5 years to less than 6 years................. .500%
From 6 years to less than 7 years................. .550%
From 7 years to less than 10 years................ .600%
From 10 years to less than 15 years............... .625%
From 15 years to less than 20 years............... .675%
For 20 years and more............................. .750%
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement which will provide for the sale
of such Securities to, and the purchase thereof by, such Agent. A Terms
Agreement may also specify certain provisions relating to the reoffering of such
Securities by such Agent. Such Agent may offer the Securities they have
purchased as principal to other dealers. Such Agent may sell such Securities to
any dealer at a discount and, unless otherwise specified in the applicable
Pricing Supplement, such discount allowed to any dealer may include all or part
of the discount to be received from the Company. The commitment of any Agent to
purchase Securities as principal,
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whether pursuant to any Terms Agreement or otherwise, shall be deemed to have
been made on the basis of the representations and warranties of the Company
herein contained and shall be subject to the terms and conditions herein set
forth. Each Terms Agreement shall specify the principal amount of Securities to
be purchased by any Agent pursuant thereto, the price to be paid to the Company
for such Securities, any provisions relating to rights of, and default by,
underwriters acting together with such Agent in the reoffering of the Securities
and the time and date and place of delivery of and payment for such Securities.
Such Terms Agreement shall also specify any requirements for opinions of
counsel, accountants' letters and officers' certificates pursuant to Section 4
hereof. Each Agent proposes to offer Securities purchased by it as principal for
sale at prevailing market prices or prices related thereto at the time of sale,
which may be equal to, greater than or less than the price at which such
Securities are purchased by such Agent from the Company.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an Agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a commission (or grant an equivalent discount) as provided in
Section 2(a) hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery".
(c) Each Agent agrees, with respect to any Security denominated in a
currency other than U.S. dollars, as agent, directly or indirectly, not to
solicit offers to purchase, and as principal under any Terms Agreement or
otherwise, directly or indirectly, not to offer, sell or deliver, such Security
in, or to residents of, the country issuing such currency (or, if such Security
is denominated in a composite currency, in any country issuing a currency
comprising a portion of such composite currency), except as permitted by
applicable law.
3. The documents required to be delivered pursuant to Section 6 hereof
on the Commencement Date (as defined below) shall be delivered to the Agents at
the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York, at
11:00 a.m., New York City time, on the date of this Agreement, which date and
time of such delivery may be postponed by agreement between the Agents and the
Company but in no event shall be later than the day prior to the date on which
solicitation of offers to purchase Securities is commenced or on
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which any Terms Agreement is executed (such time and date being referred to
herein as the "Commencement Date").
4. The Company covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which shall be
disapproved by any Agent promptly after reasonable notice thereof or (B) after
the date of any Terms Agreement or other agreement by an Agent to purchase
Securities as principal and prior to the related Time of Delivery which shall be
disapproved by any Agent party to such Terms Agreement or so purchasing as
principal promptly after reasonable notice thereof; (ii) to prepare, with
respect to any Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing Supplement pursuant
to Rule 424(b)(3) under the Act not later than the close of business of the
Commission on the fifth business day after the date on which such Pricing
Supplement is first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus, other than any Pricing Supplement, at any
time prior to having afforded each Agent a reasonable opportunity to review and
comment on it; (iv) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the offering or sale
of the Securities, and during such same period to advise such Agent, promptly
after the Company receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or has become effective or any supplement
to the Prospectus or any amended Prospectus (other than any Pricing Supplement
that relates to Securities not purchased through or by such Agent) has been
filed with, or mailed for filing to, the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Securities, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and (v) in the event of
the issuance of any such stop order or of any such order preventing or
suspending the use of any prospectus relating to the Securities or suspending
any such qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as such Agent may request and to comply
with such laws so as to permit the continuance of sales and dealings therein for
as long as may be necessary to complete the distribution or sale of the
Securities; provided,
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however, that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) To furnish such Agent with copies of the Registration Statement
and each amendment thereto, with copies of the Prospectus in New York City as
each time amended or supplemented, other than any Pricing Supplement (except as
provided in the Administrative Procedure), in the form in which it is filed with
the Commission pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such quantities as such
Agent may reasonably request from time to time; and, if the delivery of a
prospectus is required at any time in connection with the offering or sale of
the Securities (including Securities purchased from the Company by such Agent as
principal) and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same period to amend or
supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify such Agent and request such
Agent, in its capacity as agent of the Company, to suspend solicitation of
offers to purchase Securities from the Company (and, if so notified, such Agent
shall cease such solicitations as soon as practicable, but in any event not
later than one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus as then amended or
supplemented, to so advise such Agent promptly by telephone (with confirmation
in writing) and to prepare and cause to be filed promptly with the Commission an
amendment or supplement to the Registration Statement or the Prospectus as then
amended or supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period such Agent
continues to own Securities purchased from the Company by such Agent as
principal or such Agent is otherwise required to deliver a prospectus in respect
of transactions in the Securities, the Company shall promptly prepare and file
with the Commission such an amendment or supplement;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after (i) the
effective date of the Registration Statement (as defined in Rule 158(c)), (ii)
the effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K that is incorporated by reference in the
Registration Statement, an earning statement of the Company and its subsidiaries
(which need not be audited)
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complying with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158);
(e) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or other)
furnished to stockholders, and deliver to such Agent (i) as soon as they are
available, copies of any reports and financial statements furnished to or filed
with the Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as such Agent may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders generally
or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and continuing
to and including the later of (i) the termination of the trading restrictions
for the Securities purchased thereunder, as notified to the Company by such
Agent and (ii) the related Time of Delivery, the Company will not, without the
prior written consent of such Agent, offer, sell, contract to sell or otherwise
dispose of any debt securities of the Company which both mature more than 9
months after such Time of Delivery and are substantially similar to the
Securities;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as principal not
pursuant to a Terms Agreement), and each execution and delivery by the Company
of a Terms Agreement with such Agent, shall be deemed to be an affirmation to
such Agent that the representations and warranties of the Company contained in
or made pursuant to this Agreement are true and correct as of the date of such
acceptance or of such Terms Agreement, as the case may be, as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the settlement date for the Securities relating
to such acceptance or as of the Time of Delivery relating to such sale, as the
case may be, as though made at and as of such date (except that such
representations and warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented relating to such
Securities);
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other than by a
Pricing Supplement) and each time a document filed under the Act or the Exchange
Act is incorporated by reference into the Prospectus, and each time the Company
sells Securities to such Agent as principal pursuant to a Terms Agreement and
such Terms Agreement specifies the delivery of an opinion or opinions by
Sullivan & Cromwell, counsel to the Agents, as a condition to the purchase of
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Securities pursuant to such Terms Agreement, the Company shall furnish to such
counsel such papers and information as they may reasonably request to enable
them to furnish to such Agent the opinion or opinions referred to in Section
6(b) hereof;
(i) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus and each time the Company sells Securities to such Agent as
principal pursuant to a Terms Agreement and such Terms Agreement specifies the
delivery of an opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, the Company shall furnish or cause
to be furnished forthwith to such Agent a written opinion of Stites & Harbison,
counsel for the Company, or other counsel for the Company satisfactory to such
Agent, dated the date of such amendment, supplement or incorporation or the Time
of Delivery relating to such sale, as the case may be, in form satisfactory to
such Agent, to the effect that such Agent may rely on the opinion of such
counsel referred to in Section 6(c) hereof which was last furnished to such
Agent to the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last opinion shall be
deemed to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such opinion, an opinion of the same
tenor as the opinion of such counsel referred to in Section 6(c) hereof but
modified to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date;
(j) That each time the Company files an annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement and such
Terms Agreement specifies the delivery of an opinion under this Section 4(j) as
a condition to the purchase of Securities pursuant to such Terms Agreement, the
Company shall furnish or cause to be furnished forthwith to such Agent a written
opinion of the General Counsel of the Company in form and substance satisfactory
to such Agent, dated the date of such filing or the Time of Delivery relating to
such sale, as the case may be, in form satisfactory to such Agent, to the effect
that such Agent may rely on the opinion of such counsel referred to in Section
6(d) hereof which was last furnished to such Agent to the same extent as though
it were dated the date of such letter authorizing reliance;
(k) That each time the Registration Statement or the Prospectus shall
be amended or supplemented and each time that a document filed under the Act or
the Exchange Act is incorporated by reference into the Prospectus, in either
case to set forth financial information included in or derived from the
Company's consolidated financial statements or accounting records, and each time
the Company sells Securities to such Agent as principal pursuant to a Terms
Agreement
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and such Terms Agreement specifies the delivery of a letter under this Section
4(k) as a condition to the purchase of Securities pursuant to such Terms
Agreement, the Company shall cause the independent certified public accountants
who have audited the financial statements of the Company and its subsidiaries
included or incorporated by reference in the Registration Statement to furnish
such Agent a letter, dated the date of such amendment, supplement or
incorporation or the Time of Delivery relating to such sale, as the case may be,
and furnished no later than the date (the "Comfort Letter Delivery Date") that
is five business days after the date of such amendment, supplement or
incorporation or at such Time of Delivery, as the case may be, in form
satisfactory to such Agent, of the same tenor as the letter referred to in
Section 6(e) hereof but modified to relate to the Registration Statement and the
Prospectus as amended or supplemented to the date of such letter, with such
changes as may be necessary to reflect changes in the financial statements and
other information derived from the accounting records of the Company, to the
extent such financial statements and other information are available as of a
date not more than five business days prior to the date of such letter;
provided, however, that, with respect to any financial information or other
matter, such letter may reconfirm as true and correct at such date as though
made at and as of such date, rather than repeat, statements with respect to such
financial information or other matter made in the letter referred to in Section
6(e) hereof which was last furnished to such Agent;
(l) That each time the Registration Statement or the Prospectus shall
be amended or supplemented (other than by a Pricing Supplement), each time a
document filed under the Act or the Exchange Act is incorporated by reference
into the Prospectus, and each time the Company sells Securities to such Agent as
principal and the applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(l) as a condition to the purchase of Securities
pursuant to such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of such
supplement, amendment or incorporation or the Time of Delivery relating to such
sale, as the case may be, in such form and executed by such officers of the
Company as shall be satisfactory to such Agent, to the effect that the
statements contained in the certificates referred to in Section 6(h) hereof
which were last furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements shall be deemed
to relate to the Registration Statement and the Prospectus as amended and
supplemented to such date) or, in lieu of such certificate, certificates of the
same tenor as the certificates referred to in said Section 6(h) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to such date; and
(m) To offer to any person who has agreed to purchase Securities from
the Company as the result of an offer to purchase solicited by such Agent the
right to refuse to purchase and pay for such Securities if, on the related
settlement
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date fixed pursuant to the Administrative Procedure, any condition set forth in
Section 6(a), 6(f) or 6(g) hereof shall not have been satisfied (it being
understood that the judgment of such person with respect to the impracticability
or inadvisability of such purchase of Securities shall be substituted, for
purposes of this Section 4(m), for the respective judgments of an Agent with
respect to certain matters referred to in such Sections 6(a), 6(f) and 6(g), and
that such Agent shall have no duty or obligation whatsoever to exercise the
judgment permitted under such Sections 6(a), 6(f) and 6(g) on behalf of any such
person).
5. The Company covenants and agrees with each Agent that the Company
will pay or cause to be paid the following: (i) the fees and expenses of the
Company's counsel and accountants in connection with the registration of the
Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary
Prospectus, the Prospectus and any Pricing Supplements and all other amendments
and supplements thereto and the mailing and delivering of copies thereof to such
Agent; (ii) the reasonable fees and reasonable expenses of counsel for the
Agents in connection with the establishment of the program contemplated hereby,
any opinions to be rendered by such counsel hereunder and under any Terms
Agreement and the transactions contemplated hereunder and under any Terms
Agreement; (iii) the cost of printing, preparing by word processor or
reproducing this Agreement, any Terms Agreement, the Indenture, any Blue Sky and
Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Securities; (iv) all expenses in
connection with the qualification of the Securities for offering and sale under
state securities laws as provided in Section 4(b) hereof, including fees and
disbursements of counsel for the Agents in connection with such qualification
and in connection with the Blue Sky and legal investment surveys; (v) any fees
charged by securities rating services for rating the Securities; (vi) any filing
fees incident to any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vii) the cost of
preparing, and providing any CUSIP or other identification numbers for, the
Securities; (viii) the fees and expenses of the Trustee and any agent of the
Trustee and any transfer or paying agent of the Company and the fees and
disbursements of counsel for any Trustee or such agent in connection with any
Indenture and the Securities; (ix) the fees and expenses of any Depositary (as
defined in the Indenture) and any nominees thereof in connection with the
Securities; (x) any advertising expenses connected with the solicitation of
offers to purchase and the sale of Securities so long as such advertising
expenses have been approved in advance by the Company; and (xi) all other costs
and expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section. Except as
provided in Sections 7 and 8 hereof, each Agent shall pay all other expenses it
incurs.
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6. The obligation of any Agent, as agent of the Company, at any time
("Solicitation Time") to solicit offers to purchase the Securities and the
obligation of any Agent to purchase Securities as principal, pursuant to any
Terms Agreement or otherwise, shall in each case be subject, in such Agent's
discretion, to the condition that all representations and warranties and other
statements of the Company herein (and, in the case of an obligation of an Agent
under a Terms Agreement, in or incorporated in such Terms Agreement by
reference) are true and correct at and as of the Commencement Date and any
applicable date referred to in Section 4(l) hereof that is prior to such
Solicitation Time or Time of Delivery, as the case may be, and at and as of such
Solicitation Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case may be, the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the Prospectus
as amended or supplemented (including the Pricing Supplement) with respect
to such Securities shall have been filed with the Commission pursuant to
Rule 424(b) under the Act within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 4(a) hereof; (ii) no stop order suspending the effectiveness
of the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or threatened
by the Commission; and (iii) all requests for additional information on the
part of the Commission shall have been complied with to the reasonable
satisfaction of such Agent;
(b) Sullivan & Cromwell, counsel to the Agents, shall have furnished
to such Agent (i) such opinion or opinions, dated the Commencement Date,
with respect to this agreement, the incorporation of the Company, the
validity of the Indenture, the Securities, the Registration Statement, the
Prospectus as amended or supplemented and other related matters as such
Agent may reasonably request, and (ii) if and to the extent requested by
such Agent, with respect to each applicable date referred to in Section
4(h) hereof that is on or prior to such Solicitation Time or Time of
Delivery, as the case may be, an opinion or opinions, dated such applicable
date, to the effect that such Agent may rely on the opinion or opinions
which were last furnished to such Agent pursuant to this Section 6(b) to
the same extent as though it or they were dated the date of such letter
authorizing reliance (except that the statements in such last opinion or
opinions shall be deemed to relate to the Registration Statement and the
Prospectus as amended and
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supplemented to such date) or, in any case, in lieu of such an opinion or
opinions, an opinion or opinions of the same tenor as the opinion or
opinions referred to in clause (i) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to
such date; and in each case such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon
such matters;
(c) Stites & Harbison, counsel for the Company, or other counsel for
the Company satisfactory to such Agent, shall have furnished to such Agent
their written opinions, dated the Commencement Date and each applicable
date referred to in Section 4(i) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, in form and
substance satisfactory to such Agent, to the effect that (such counsel
being entitled to (x) rely in respect of the opinions in clause (iv) below
upon opinions of local counsel and in respect of any matters of fact upon
certificates of officers of the Company and its Subsidiaries and of public
officials, provided that such counsel shall state that they believe that
both the Agents and they are justified in relying upon such opinions and
certificates and (y) state in respect of the opinion in clause (viii) below
that they have assumed that at the time of the issuance, sale and delivery
of each Security the authorization of the Securities will not have been
modified or rescinded and there will not have occurred any change in law
affecting the validity or legally binding character of the Securities and
that they have also assumed that neither the issuance, sale and delivery of
any Security, nor any of the terms of such Security nor the compliance by
the Company with such terms will violate any applicable law, instrument or
agreement then binding upon the Company, or any restriction imposed by any
court or governmental body having jurisdiction over the Company):
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented and all of the issued shares
of capital stock of the Company have been duly and validly authorized
and issued and are fully paid and non-assessable;
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<PAGE>
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification;
(iv) Each Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification and as to which failure to be so qualified would subject
such Subsidiary to any material liability or disability; and each
Subsidiary has all necessary authorizations, approvals, orders,
licenses, certificates and permits of and from all governmental
regulatory officials and bodies (including, without limitation, each
insurance commission having jurisdiction over any insurance
Subsidiary) to own or lease its properties and to conduct its business
as described in the Prospectus;
(v) All of the issued shares of capital stock of each Subsidiary
have been duly and validly authorized and issued, are fully paid and
nonassessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(vi) To the best of such counsel's knowledge, there are no legal
or governmental proceedings pending to which the Company or any of its
Subsidiaries is a party or of which any property of the Company or any
of its Subsidiaries is the subject, other than as set forth in the
Prospectus and other than litigation incident to the kind of business
conducted by the Company and its Subsidiaries, which, in the opinion
of such counsel, individually and in the aggregate is not material to
the Company and its Subsidiaries; to the best of such counsels'
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and, to the best of
such counsel's knowledge, the Company, its Subsidiaries and Capital
Liberty, L.P. are in substantial compliance with all applicable
federal and state tax statutes, regulations and official rulings and
interpretations;
(vii) This Agreement and any applicable Terms Agreement have
been duly authorized, executed and delivered by the Company;
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(viii) The Securities have been duly authorized and, when duly
executed, authenticated, issued and delivered by the Company, will
constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; and the Indenture
conforms and the Securities will conform to the descriptions thereof
in the Prospectus as amended or supplemented;
(ix) The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indenture has been duly qualified under the Trust
Indenture Act;
(x) The issue and sale of the Securities, the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any applicable Terms Agreement and the consummation
of the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (a) any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company is a party or by
which the Company is bound or (b) any indenture, mortgage, deed of
trust, loan agreement, financing agreement or instrument, lease or
agreement relating to an acquisition or divestiture known to such
counsel to which any of the Subsidiaries is a party or by which any of
the Subsidiaries is bound, nor will such action result in any
violation of the provisions of the Certificate of Incorporation, as
amended, of the Company or the By-Laws of the Company or any statute
or any order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries or any of their properties;
(xi) No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body is
required for the solicitation of offers to purchase Securities, the
issue and sale of the Securities or the consummation by the Company of
the other transactions contemplated by this Agreement, any applicable
Terms Agreement or the Indenture, except such as have been obtained
under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as
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may be required under state securities, insurance or Blue Sky laws in
connection with the solicitation by the Agents of offers to purchase
Securities from the Company and with purchases of Securities by an
Agent as principal, as the case may be, in each case in the manner
contemplated hereby;
(xii) The statements set forth in the Prospectus under the
captions "Description of Debt Securities" (and in the corresponding
caption in the Prospectus as amended or supplemented), insofar as they
purport to constitute a summary of the terms of the Securities, and
under the captions "United States Taxation" and "Plan of Distribution"
(and in the corresponding captions in the Prospectus as amended or
supplemented), insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and
fair (provided that such counsel need express no opinion with respect
to statements set forth in the Prospectus under the caption "Plan of
Distribution" (and in the corresponding caption in the Prospectus as
amended or supplemented) but only to the extent such statements are
made in reliance upon and conformity with information furnished in
writing to the Company by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities);
(xiii) The Company is not and, after giving effect to the
offering and sale of the Securities, will not be an "investment
company" or an entity "controlled" by an "investment company", as such
terms are defined in the Investment Company Act;
(xiv) The documents incorporated by reference in the Prospectus
or any amendment or supplement thereto (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, 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, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a
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material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed, not
misleading; and
(xv) The Registration Statement and the Prospectus as amended
and supplemented and any further amendments and supplements thereto
made by the Company prior to the date of such opinion (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act
and the rules and regulations thereunder; although they do not assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
as amended or supplemented, except for those referred to in the
opinion in subsection (xii) of this Section 6(c), they have no reason
to believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the Company prior to the date
of such opinion (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the date of such
opinion (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that, as
of the date of such opinion, either the Registration Statement or the
Prospectus as amended or supplemented or any amendment or supplement
thereto made by the Company prior to the date of such opinion (other
than the financial statements and related schedules therein, as to
which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a 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; and they do not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or
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required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required;
(d) The General Counsel of the Company, shall have furnished to you
his written opinions, dated the Commencement Date and each applicable date
referred to in Section 4(j) hereof that is on or prior to such Solicitation
Time or Time of Delivery, as the case may be, in form and substance
satisfactory to such Agent, to the effect that the issue and sale of the
Securities, the compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and any applicable Terms
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to him to which any of the Subsidiaries is a party or by
which any of the Subsidiaries is bound (such counsel being entitled to rely
in respect of any matters of fact upon certificates of officers of the
Subsidiaries and of public officials, provided that such counsel shall
state that he believes that both such Agent and he are justified in relying
upon such certificates);
(e) (i) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each Comfort Letter Delivery Date or Time of
Delivery referred to in Section 4(k) hereof that is on or prior to such
Solicitation Time or Time of Delivery, as the case may be, the independent
certified public accountants who have certified the financial statements of
the Company and its subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to such Agent a letter,
dated the Commencement Date or the related applicable date referred to in
Section 4(k), as the case may be, and (ii) if such Solicitation Time is on
or after any applicable date referred to in Section 4(k) but prior to the
related Comfort Letter Delivery Date, such accountants shall have furnished
to such Agent a letter, dated such applicable date, such letters being, in
any such case described in clause (i) or (ii), in form and substance
satisfactory to such Agent, to the effect set forth in Annex III hereto;
(f) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of
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Delivery any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating to the
Securities to be delivered at the relevant Time of Delivery, and (ii) since
the respective dates as of which information is given in the Prospectus as
amended or supplemented prior to the date of the Pricing Supplement
relating to the Securities to be delivered at the relevant Time of Delivery
there shall not have been any change in the capital stock or long-term debt
of the Company on a consolidated basis or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its Subsidiaries, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented prior to the
date of the Pricing Supplement relating to the Securities to be delivered
at the relevant Time of Delivery, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of such Agent so
material and adverse as to make it impracticable or inadvisable to proceed
with the solicitation by such Agent of offers to purchase Securities from
the Company or the purchase by such Agent of Securities from the Company as
principal, as the case may be, on the terms and in the manner contemplated
in the Prospectus as amended or supplemented;
(g) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities of the Company
in particular or securities generally on the New York Stock Exchange; (ii)
a general moratorium on commercial banking activities declared by either
Federal or New York State authorities; (iii) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war, if the effect of any such event
specified in this clause (iii) in the judgment of such Agent makes it
impracticable or inadvisable to proceed with the solicitation of offers to
purchase Securities or the purchase of Securities from the Company as
principal, pursuant to the applicable Terms Agreement or otherwise, as the
case may be, on the terms and in the manner contemplated in the Prospectus
as amended or supplemented; (iv) any downgrading in the rating accorded the
Company's debt securities by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act; or (v) any such "nationally recognized
statistical rating organization" shall have publicly
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announced that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(h) The Company shall have furnished or caused to be furnished to such
Agent certificates of officers of the Company dated the Commencement Date
and each applicable date referred to in Section 4(l) hereof that is on or
prior to such Solicitation Time or Time of Delivery, as the case may be, in
such form and executed by such officers of the Company as shall be
satisfactory to such Agent, as to the accuracy of the representations and
warranties of the Company herein at and as of the Commencement Date or such
applicable date, as the case may be, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to the
Commencement Date or such applicable date, as the case may be, as to the
matters set forth in subsections (a) and (f) of this Section 6, and as to
such other matters as such Agent may reasonably request; and
(i) With respect to any Security denominated in a currency other than
the U.S. dollar, more than one currency or a composite currency or any
Security the principal or interest of which is indexed to such currency,
currencies or composite currency, there shall not have occurred a
suspension or material limitation in foreign exchange trading in such
currency, currencies or composite currency by a major international bank, a
general moratorium on commercial banking activities in the country or
countries issuing such currency, currencies or composite currency, the
outbreak or escalation of hostilities involving, the occurrence of any
material adverse change in the existing financial, political or economic
conditions of, or the declaration of war or a national emergency by, the
country or countries issuing such currency, currencies or composite
currency or the imposition or proposal of exchange controls by any
governmental authority in the country or countries issuing such currency,
currencies or composite currency.
7. (a) The Company will indemnify and hold harmless each Agent against
any losses, claims, damages or liabilities, joint or several, to which such
Agent may become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration Statement, the
Prospectus, the Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement thereto, 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 will reimburse such Agent for any legal or other
expenses reasonably incurred by it in
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<PAGE>
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall 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 an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement, the Prospectus, the Prospectus as amended or
supplemented or any other prospectus relating to the Securities, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by such Agent expressly for use therein.
(b) Each Agent will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement thereto, 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,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement, the Prospectus, the
Prospectus as amended or supplemented or any other prospectus relating to the
Securities, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company by such Agent
expressly for use therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the
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<PAGE>
defense thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. The indemnifying party shall not be required to indemnify the
indemnified party for any amount paid or payable by the indemnified party in the
settlement of any action, proceeding or investigation without the written
consent of the indemnifying party, which consent shall not be unreasonably
withheld.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and each Agent on the
other from the offering of the Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and each Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and each Agent on the other shall be deemed to be in the same
proportion as the total net proceeds from the sale of such Securities (before
deducting expenses) received by the Company bear to the total commissions or
discounts received by such Agent in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or by any Agent on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and each Agent agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by per capita
allocation (even if all Agents were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim.
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<PAGE>
Notwithstanding the provisions of this subsection (d), an Agent shall not be
required to contribute any amount in excess of the amount by which the total
public offering price at which the Securities purchased by or through it were
sold exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subsection (d) to contribute are
several in proportion to the respective purchases made by or through it to which
such loss, claim, damage or liability (or action in respect thereof) relates and
are not joint.
(e) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Agent within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act; and the obligations of each Agent under this Section 7 shall be in addition
to any liability which such Agent may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act.
8. Each Agent, in soliciting offers to purchase Securities from the
Company and in performing the other obligations of such Agent hereunder (other
than in respect of any purchase by an Agent as principal, pursuant to a Terms
Agreement or otherwise) is acting solely as agent for the Company and not as
principal. Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase Securities from
the Company was solicited by such Agent and has been accepted by the Company,
but such Agent shall not have any liability to the Company in the event such
purchase is not consummated for any reason. If the Company shall default on its
obligation to deliver Securities to a purchaser whose offer it has accepted, the
Company shall (i) hold each Agent harmless against any loss, claim or damage
arising from or as a result of such default by the Company and (ii)
notwithstanding such default, pay to the Agent that solicited such offer any
commission to which it would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the Company set forth in or
made pursuant to this Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results thereof) made by or on
behalf of any Agent or any controlling person of any Agent or the Company, or
any officer or director or any controlling person of the Company, and shall
survive each delivery of and payment for any of the Securities.
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<PAGE>
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company in subsection (a) of Section 7 hereof, the
representations and warranties in subsections (b), (c) and (d) of Section 1
hereof and any representation or warranty as to the accuracy of the Registration
Statement, the Prospectus or any amendment or supplement thereto contained in
any certificate furnished by the Company pursuant to Section 6 hereof, insofar
as they may constitute a basis for indemnification for liabilities (other than
payment by the Company of expenses incurred or paid in the successful defense of
any action, suit or proceeding) arising under the Act, shall not extend to the
extent of any interest therein of a controlling person or partner of an Agent
who is a director, officer or controlling person of the Company when and after
the Registration Statement has become effective, except in each case to the
extent that an interest of such character shall have been determined by a court
of appropriate jurisdiction as not against public policy as expressed in the
Act. Unless in the opinion of counsel for the Company the matter has been
settled by controlling precedent, the Company will, if a claim for such
indemnification is asserted, submit to a court of appropriate jurisdiction the
question whether such interest is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
10. The provisions of this Agreement relating to the solicitation of
offers to purchase Securities from the Company may be suspended or terminated at
any time by the Company as to any Agent or by any Agent as to such Agent upon
the giving of written notice of such suspension or termination to such Agent or
the Company, as the case may be. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain in full force and
effect with respect to any Agent as to which such suspension or termination has
not occurred, (y) this Agreement shall remain in full force and effect with
respect to the rights and obligations of any party which have previously accrued
or which relate to Securities which are already issued, agreed to be issued or
the subject of a pending offer at the time of such suspension or termination and
(z) in any event, this Agreement shall remain in full force and effect insofar
as the fourth paragraph of Section 2(a), Section 4(d), Section 4(e), Section 5,
Section 7, Section 8 and Section 9 hereof are concerned.
11. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to Goldman, Sachs & Co. shall be sufficient in all respects when
delivered or sent by facsimile transmission or registered mail to 85 Broad
Street, New York, New York 10004, Facsimile Transmission No. (212) 363-7609,
Attention: Credit Department, and if to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated shall be sufficient in all respects when
delivered or sent by telex, facsimile transmission or registered mail to World
Financial Center, North Tower, New York, New York 10281, Facsimile Transmission
No. (212) 449-2234, Attention: MTN
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<PAGE>
Product Management and if to the Company shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to it at its
address set forth in the Prospectus.
12. This Agreement and any Terms Agreement shall be binding upon, and
inure solely to the benefit of, each Agent and the Company, and to the extent
provided in Section 7, Section 8 and Section 9 hereof, the officers and
directors of the Company and any person who controls any Agent or the Company,
and their respective personal representatives, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the Securities through
or from any Agent hereunder shall be deemed a successor or assign by reason of
such purchase.
13. Time shall be of the essence in this Agreement and any Terms
Agreement. As used herein, the term "business day" shall mean any day when the
office of the Commission in Washington, D.C. is open for business.
14. This Agreement and any Terms Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
15. This Agreement and any Terms Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
PROVIDIAN CORPORATION
By: /s/ Gregory P. Givan
--------------------------------------
Name: Gregory P. Givan
Title: Second Vice President,
Corporate Finance
Accepted in New York, New York,
as of the date hereof:
/s/ Goldman, Sachs & Co.
- --------------------------------------
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott G. Primrose
-----------------------------------
Name: Scott G. Primrose
Title: Authorized Signatory
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<PAGE>
ANNEX I
-------
PROVIDIAN CORPORATION
[Title of Security]
Terms Agreement
---------------
............, 19..
[Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.]
[Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
North Tower,
World Financial Center,
New York, New York 10281-1323]
Ladies and Gentlemen:
Providian Corporation (the "Company") proposes, subject to the terms
and conditions stated herein and in the Distribution Agreement, dated January
14, 1994 (the "Distribution Agreement"), between the Company on the one hand and
Goldman, Sachs & Co. and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (the "Agents") on the other, to issue and sell to [Goldman,
Sachs & Co.] [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated] the securities specified in the Schedule hereto (the "Purchased
Securities"). Each of the provisions of the Distribution Agreement not
specifically related to the solicitation by the Agents, as agents of the
Company, of offers to purchase Securities is incorporated herein by reference in
its entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Nothing
contained herein or in the Distribution Agreement shall make any party hereto an
agent of the Company or make such party subject to the provisions therein
relating to the solicitation of offers to purchase securities from the Company,
solely by virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 1 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
I-1
<PAGE>
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Goldman, Sachs & Co.] [Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated] and [Goldman, Sachs & Co.] [Merrill Lynch,
Pierce, Fenner & Smith Incorporated] agree[s] to purchase from the Company the
Purchased Securities, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us ...... counterparts hereof, and upon acceptance hereof by you
this letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
PROVIDIAN CORPORATION
By:
...................
([Title])
Accepted:
[...........................
(Goldman, Sachs & Co.)]
[MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
...................
([Title])]
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<PAGE>
Schedule to Annex I
TITLE OF PURCHASED SECURITIES:
[ %] Medium-Term Notes, Series E
AGGREGATE PRINCIPAL AMOUNT:
[$ or units of other Specified Currency]
[PRICE TO PUBLIC:]
PURCHASE PRICE BY [Goldman, Sachs & Co.]
[Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated]:
% of the principal amount of the Purchased Securities[, plus accrued
interest, if any, from to ][and accrued amortization,
if any, from to ]
FORM OF DESIGNATED SECURITIES:
[Definitive form to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery at the office of [The
Depository Trust Company or its designated custodian][the
Representatives].]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
METHOD OF AND SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
By wire transfer to a bank account specified by the Company in Federal
(same day) funds
INDENTURE:
Indenture, dated as of January 1, 1994, between the Company and First Trust
of New York, National Association (successor to Morgan Guaranty Trust
Company of New York), as Trustee
I-4
<PAGE>
TIME OF DELIVERY:
CLOSING LOCATION:
MATURITY:
INTEREST RATE:
[ %]
INTEREST PAYMENT DATES:
[months and dates]
DOCUMENTS TO BE DELIVERED:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the
Agents referred to in Section 4(h).]
[(2) The opinion of counsel to the Company
referred to in Section 4(i).]
[(3) The opinion of the General Counsel of the
Company referred to in Section 4(j).]
[(4) The accountants' letter referred to in
Section 4(k).]
[(5) The officers' certificate referred to in
Section 4(l).]
OTHER PROVISIONS:
I-5
<PAGE>
ANNEX II
PROVIDIAN CORPORATION
Administrative Procedure
------------------------
This Administrative Procedure relates to the Securities defined in the
Distribution Agreement, dated September 27, 1996 (the "Distribution Agreement"),
between Providian Corporation (the "Company") and Goldman, Sachs & Co. and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
(together, the "Agents"), to which this Administrative Procedure is attached as
Annex II. Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the Prospectus as
amended or supplemented or the Indenture. To the extent any procedure set forth
below conflicts with the provisions of the Securities, the Indenture or the
Distribution Agreement, the relevant provisions of the Securities, the Indenture
and the Distribution Agreement shall control.
The procedures to be followed with respect to the settlement of sales
of Securities directly by the Company to purchasers solicited by an Agent, as
agent, are set forth below. Part I describes procedures of general applicability
with respect to such Securities. Part II below describes procedures specifically
and exclusively applicable (any procedure in Part I below to the contrary
notwithstanding) to such Securities which are either Permanent Global Securities
or Book-Entry Securities (each as defined below). The terms and settlement
details related to a purchase of Securities by an Agent, as principal, from the
Company will be set forth in a Terms Agreement pursuant to the Distribution
Agreement, unless the Company and such Agent otherwise agree as provided in
Section 2(b) of the Distribution Agreement, in which case the procedures to be
followed in respect of the settlement of such sale will be as set forth below.
An Agent, in relation to a purchase of a Security by a purchaser solicited by
such Agent, is referred to herein as the "Selling Agent" and, in relation to a
purchase of a Security by such Agent as principal other than pursuant to a Terms
Agreement, as the "Purchasing Agent".
The Company will advise each Agent in writing of those persons with
whom such Agent is to communicate regarding offers to purchase Securities and
the related settlement details.
Each Security will be issued only in fully registered form and will be
initially represented by either a permanent global certificate (a "Global
Certificate") delivered to the Trustee, as agent for The Depository Trust
Company, New York, New York (the "Depositary"), or a certificate (a "Definitive
Certificate") delivered to a person designated by an Agent. Each security which
is represented by a Global Certificate is referred to herein as a "Book-Entry
Security" (it being understood that
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<PAGE>
only such Global Certificate -- and not any such Book-Entry Security represented
thereby -- constitutes a "Security" under the Indenture).
Pursuant to Sections 301 and 1002 of the Indenture, the Company has
appointed First Trust of New York, National Association ("First Trust") as
Paying Agent (the "Paying Agent") and as Calculation Agent (the "Calculation
Agent") for the Securities. Pursuant to Section 614 of the Indenture, the
Trustee has appointed First Trust as Authenticating Agent (the "Authenticating
Agent") with respect to the Securities. In addition, the Company has appointed
First Trust as its agent (the "Issuing Agent") in connection with certain
procedures to be followed with respect to the settlement of sales of Securities
as set forth in this Administrative Procedure.
PART I: PROCEDURES OF GENERAL APPLICABILITY
Posting Rates by Company:
- ------------------------
The Company and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Securities that may be
sold as a result of the solicitation of offers by an Agent. The Company may
establish a fixed set of interest rates and maturities for an offering period
("posting"). If the Company decides to change already posted rates, it will
promptly advise the Agents to suspend solicitation of offers until the new
posted rates have been established with the Agents.
Acceptance of Offers by Company:
- -------------------------------
Each Agent will promptly advise the Company by telephone or other
appropriate means of all reasonable offers to purchase Securities, other than
those rejected by such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it in whole or in part. Each Agent also
may make offers to the Company to purchase Securities as a Purchasing Agent. The
Company will have the sole right to accept offers to purchase Securities and may
reject any such offer in whole or in part.
The Company will promptly notify the Selling Agent or Purchasing
Agent, as the case may be, of its acceptance or rejection of an offer to
purchase Securities. If the Company accepts an offer to purchase Securities, it
will confirm such acceptance in writing to the Selling Agent or Purchasing
Agent, as the case may be, and the Issuing Agent.
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<PAGE>
Communication of Sale Information
to Company by Selling Agent:
- ---------------------------------
After the acceptance of an offer by the Company, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the following details of
the terms of such offer (the "Sale Information") to the Company by telephone
(confirmed in writing) or by facsimile transmission or other acceptable written
means:
(1) Principal amount of Securities to be purchased;
(2) If a Fixed Rate Security, the interest rate;
(3) The Interest Payment Date on a Fixed Rate Security, if other than
[March 15] and [September 15] of each year and at Maturity;
(4) The Regular Record Date on a Fixed Rate Note, if other than the
[September 1] and [March 1] (whether or not a Business Day (as
defined in Part II hereof)), as the case may be, next preceding
the [September 15] and [March 15] Interest Payment Dates;
(5) Maturity Date;
(6) Specified Currency and, if the Specified Currency is other than
U.S. dollars, the applicable Exchange Rate for such Specified
Currency;
(7) Issue Price;
(8) Selling Agent's commission or Purchasing Agent's discount, as the
case may be;
(9) Net proceeds to the Company;
(10) Trade Date and Settlement Date (each as defined below);
(11) If a redeemable Security, such of the following as are
applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
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<PAGE>
(iii) Amount (% of par) that the Redemption Price shall decline
(but not below par) on each anniversary of the Redemption
Commencement Date.
(12) If a Floating Rate Security, such of the following as are
applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Rate,
(v) Minimum Rate,
(vi) Initial Interest Rate,
(vii) Interest Reset Dates,
(viii) Calculation Dates,
(ix) Interest Determination Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
(13) Name, address and taxpayer identification number of the
registered owner; and
(14) Denomination of certificates to be delivered at settlement.
Preparation of Pricing Supplement by Company:
- --------------------------------------------
If the Company accepts an offer to purchase a Security, it will
prepare a Pricing Supplement. The Company will supply at least ten copies of
such Pricing Supplement to the Selling Agent or Purchasing Agent, as the case
may be, not later than 5:00 p.m., New York City time, on the Business Day
following the Trade Date, or if the Company and the purchaser agree to
settlement on the date of such acceptance, not later than noon, New York City
time, on such date. The Company will arrange to have ten Pricing Supplements
filed with the Commission not later than the close of business of the Commission
on the fifth business day following the date on which such Pricing Supplement is
first used. One copy of such filed document will be sent by telecopy or
overnight express (for delivery not later than 11:00 A.M. on the Business Day
next following the trade date) to the Agents at the following applicable
address: if to Goldman, Sachs & Co., to [Donald T. Hansen], Registration
Department, Goldman, Sachs & Co., 85 Broad Street, 10th Floor, New York, New
York 10004, telecopy 212-902-3000; if to Merrill Lynch, to Tritech Services, 40
Colonial Drive, Piscataway, New Jersey 08854, telecopy 908-855-2774/75/76,
Attention: Nachman Kimerling, Final Prospectus Unit. For record keeping
purposes, one copy of each Pricing Supplement shall also be mailed or telecopied
to the Agents at the following addresses: [Donald T. Hansen], Registration
Department, Goldman, Sachs & Co., 85 Broad Street, 10th Floor, New
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<PAGE>
York, New York 10004, telecopy 212-902-3000; Product Management - MTNs, Merrill
Lynch & Co., Merrill Lynch World Headquarters, World Financial Center, North
Tower, 23rd Floor, New York, New York 10281-1310, telecopy 212-449-2234.
Delivery of Confirmation and
Prospectus to Purchaser by Selling Agent:
- ----------------------------------------
The Selling Agent will deliver to the purchaser of a Security a
written confirmation of the sale and delivery and payment instructions. In
addition, the Selling Agent will deliver to such purchaser or its agent the
Prospectus as amended or supplemented (including the Pricing Supplement) in
relation to such Security prior to or together with the earlier of the delivery
to such purchaser or its agent of (a) the confirmation of sale (including, in
the case of a Book-Entry Security, the confirmation through the Depositary's
Institutional Delivery System) or (b) the Security.
Date of Settlement:
- ------------------
The receipt by the Company of immediately available funds in payment
for a Book-Entry Security and the authentication and issuance of the Global
Security representing such Book-Entry Security shall constitute "settlement"
with respect to such Book-Entry Security. All offers solicited by a Selling
Agent or made by a Purchasing Agent and accepted by the Company on a particular
date (the "Trade Date") will be settled on a date (the "Settlement Date" or
"Original Issue Date") which is the third Business Day after the Trade Date,
unless the Company and the purchaser agree to settlement (a) on any other
business day after the acceptance of such offer or (b) with respect to an offer
accepted by the Company prior to 10:00 a.m., New York City time, on the Trade
Date.
Instruction from the Company to
Issuing Agent for Preparation of Securities:
- -------------------------------------------
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, the Company will communicate such Sale
Information to the Issuing Agent by telephone (confirmed in writing) or by
facsimile transmission or other acceptable written means.
The Company will instruct the Authenticating Agent by facsimile
transmission or other acceptable written means to authenticate and deliver the
Securities no later than 2:15 p.m., New York City time, on the Settlement Date.
Such instruction will be given by the Company prior to 2:00 p.m., New York City
time, on the second business day prior to the Settlement Date unless, in the
case of Securities evidenced by a Definitive Certificate, the Settlement Date is
the date of
II-5
<PAGE>
acceptance by the Company of the offer to purchase such Securities in which case
such instruction will be given by the Company by 11:00 a.m., New York City time.
The Authenticating Agent will authenticate and deliver to the Issuing Agent each
Security in accordance with the Company's instruction.
Preparation and Delivery of Securities
by Issuing Agent and Receipt of Payment Therefor:
- ------------------------------------------------
The Issuing Agent will prepare each Security and appropriate receipts
that will serve as the documentary control of the transaction.
In the case of a sale of Securities to a purchaser solicited by an
Agent, the Issuing Agent will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Securities to the Selling Agent for the benefit of
the purchaser of such Securities against delivery by the Selling Agent of a
receipt therefor. On the Settlement Date the Selling Agent will deliver payment
for such Securities in immediately available funds to the Company in an amount
equal to the issue price of the Securities less the Selling Agent's commission;
provided that the Selling Agent reserves the right to withhold payment for which
it has not received funds from the purchaser. The Company shall not use any
proceeds advanced by a Selling Agent to purchase securities or carry any
securities in violation of Regulations G, T, U or X of the Federal Reserve Board
or otherwise in violation of law.
In the case of a sale of Securities to a Purchasing Agent, the Issuing
Agent will, by 2:15 p.m., New York City time, on the Settlement Date, deliver
the Securities to the Purchasing Agent against delivery by the Purchasing Agent
of a receipt therefor. On the Settlement Date the Purchasing Agent will deliver
payment for such Securities in immediately available funds to the Company in an
amount equal to the issue price of the Securities less the Purchasing Agent's
discount.
Failure of Purchaser to Pay Selling Agent:
- -----------------------------------------
If a purchaser (other than a Purchasing Agent) fails to make payment
to the Selling Agent for a Security, the Selling Agent will promptly notify the
Authenticating Agent and the Company thereof by telephone (confirmed in writing)
or by facsimile transmission or other acceptable written means. The Selling
Agent will immediately return the Security to the Issuing Agent. Immediately
upon receipt of such Security by the Issuing Agent, the Company will return to
the Selling Agent an amount equal to the amount previously paid to the Company
in respect of such Security. The Company will reimburse the Selling Agent on an
equitable basis for its loss of the use of funds during the period when they
were credited to the account of the Company.
II-6
<PAGE>
The Issuing Agent will deliver to the Trustee for cancellation the
Security in respect of which the failure occurred, instruct the Trustee to make
appropriate entries in its records and, unless otherwise instructed by the
Company, to destroy the Security.
PART II: PROCEDURES APPLICABLE TO BOOK-ENTRY
SECURITIES AND GLOBAL SECURITIES
In connection with the qualification of Book-Entry Securities for
eligibility in the book-entry system maintained by the Depositary, the Issuing
Agent, the Authenticating Agent and the Paying Agent will perform the custodial,
document control and administrative functions described below, in accordance
with their respective obligations under a Letter of Representations from the
Company and First Trust, as Issuing Agent and Paying Agent, to the Depositary,
dated ____ __, 1996, and a Medium-Term Note Certificate Agreement, dated _____
__, 19__, between First Trust and the Depositary (the "Certificate Agreement"),
and the obligations of First Trust as a participant in the Depositary, including
the Depositary's Same-Day Funds Settlement System ("SDFS"). It is understood
that the ownership interests of purchasers of Book-Entry Securities will be
credited to the book-entry accounts of one or more participants in the
Depositary (each a "Participant") in accordance with the Depositary's customary
practices and reflected in the records of such Participants or one or more
indirect participants in the Depositary designated by such purchasers in
accordance with the arrangements between such purchasers and such Participants
and indirect participants. As used in this Part II, the term "Business Day"
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in The City of New York are authorized or obligated
by law or executive order to close.
Issuance: All Fixed Rate Securities which are Book-Entry Securities
and have the same Original Issue Date, redemption
provisions, Interest Payment Dates, interest rate, interest
payment periods, Specified Currency and Stated Maturity
(collectively, the "Fixed Rate Terms") will be represented
initially by a single Global Certificate in fully registered
form without coupons; all Floating Rate Securities which are
Book-Entry Securities and have the same Original Issue Date,
redemption provisions, Interest Payment Dates, interest
payment periods, Interest Rate Basis, Initial Interest Rate,
Index Maturity, Spread or Spread Multiplier, if any, Minimum
Interest Rate, if any, Maximum Interest Rate, if any,
Specified Currency and Stated Maturity (collectively, the
"Floating Rate Terms") will be represented initially by a
single Global Certificate in fully registered form without
coupons; and all Zero
II-7
<PAGE>
Coupon Securities which are Book-Entry Securities and have
the same Original Issue Date, redemption provisions, Yield
to Maturity, Specified Currency and Stated Maturity
(collectively, the "Zero Coupon Terms") will be represented
initially by a single Global Certificate in fully registered
form without coupons.
Identification: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau")
for the reservation of approximately 900 CUSIP numbers which
have been reserved for future assignment and relating to
Book-Entry Securities, and the Company has delivered to the
Issuing Agent and the Depositary such list of such CUSIP
numbers. The Issuing Agent will assign CUSIP numbers to
Book-Entry Securities as described below under Settlement
Procedure B. The Depositary will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Issuing
Agent has assigned to Book-Entry Securities. The Issuing
Agent will notify the Company at any time when fewer than
100 of the reserved CUSIP numbers remain unassigned to Book-
Entry Securities, and, if it deems necessary, the Company
will reserve additional CUSIP numbers for assignment to
Book-Entry Securities. Upon obtaining such additional CUSIP
numbers, the Company will deliver a list of such additional
numbers to the Issuing Agent and the Depositary. Book-Entry
Securities having an aggregate principal amount in excess of
$200,000,000 and otherwise required to be represented by the
same Global Certificate will instead be represented by two
or more Global Certificates which shall all be assigned the
same CUSIP number.
Registration: Each Global Certificate will be registered in the name of
Cede & Co., as nominee for the Depositary, on the Security
Register maintained by the Trustee under the Indenture. On
the first Business Day of each month, the Authenticating
Agent will deliver to the Company a written statement
indicating the total principal amount of Outstanding Book-
Entry Securities as of the immediately preceding Business
Day.
II-8
<PAGE>
Transfers: Transfers of interests in a Book-Entry Security will be
effected in accordance with arrangements in effect between
Participants (and in certain cases, one or more indirect
participants in the Depositary) and the beneficial
transferors and beneficial transferees of such Book-Entry
Security, and the interests of Participants therein will be
reflected as appropriate by book entries made by the
Depositary.
Exchanges: The Company may deliver to the Depositary and the CUSIP
Service Bureau at any time a written notice specifying (a)
the CUSIP numbers of two or more Global Certificates (i)
having the same Fixed Rate Terms, Floating Rate Terms or
Zero Coupon Terms, as the case may be (except that Original
Issue Dates need not be the same), (ii) for which interest
(if any) has been paid to the same date and (iii) which
otherwise constitute Securities of the same series and tenor
under the Indenture; (b) a date, occurring at least 30 days
after such written notice is delivered and at least 30 days
before the next Interest Payment Date (if any) for such
Book-Entry Securities, on which such Global Certificates
shall be exchanged for a single replacement Global
Certificate; and (c) a new CUSIP number, obtained from the
Company, to be assigned to such replacement Global
Certificate. Upon receipt of such a notice, the Depositary
will send to its participants (including the Issuing Agent)
a written reorganization notice to the effect that such
exchange will occur on such date. Prior to the specified
exchange date, the Company will deliver to the CUSIP Service
Bureau written notice setting forth such exchange date and
the new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Certificates to be
exchanged will no longer be valid. On the specified exchange
date, the Issuing Agent will exchange such Global
Certificates for a single Global Certificate authenticated
by the Authenticating Agent and bearing the new CUSIP
number, and the CUSIP numbers of the exchanged Global
Certificates will, in accordance with CUSIP Service Bureau
procedures, be retired and not reassigned. Notwithstanding
the foregoing, if the Global Certificates to be exchanged
exceed $200,000,000
II-9
<PAGE>
in aggregate principal amount, one replacement Global
Certificate will be authenticated and issued to represent
each $200,000,000 of principal amount of the exchanged
Global Certificates and an additional Global Certificate
will be authenticated and issued to represent any remaining
principal amount of such Global Certificates (see
"Denominations" below).
Denominations: All Book-Entry Securities will be denominated in U.S.
dollars. Book-Entry Securities will be issued in
denominations of $100,000 and any larger denomination which
is an integral multiple of $1,000. Global Certificates will
be denominated in principal amounts not in excess of
$200,000,000. If one or more Book-Entry Securities having an
aggregate principal amount in excess of $200,000,000 would,
but for the preceding sentence, be represented by a single
Global Certificate, then one Global Certificate will be
issued to represent each $200,000,000 principal amount of
such Book-Entry Security or Book-Entry Securities and an
additional Global Certificate will be issued to represent
any remaining principal amount of such Book-Entry Security
or Book-Entry Securities. In such a case, each of the Global
Certificates representing such Book-Entry Security or
Securities shall be assigned the same CUSIP number.
Interest: General. The Depositary will arrange for each pending
deposit message described under Settlement Procedure C below
to be transmitted to Standard & Poor's Corporation, which
will use the message to include certain information
regarding the related Book-Entry Notes in the appropriate
daily bond report published by Standard & Poor's
Corporation.
Notice of Interest Payments and Regular Record Dates. On the
first Business Day of [January, April, July and October] of
each year, the Paying Agent will deliver to the Company and
to the Dividend Department of the Depositary a written list
of Regular Record Dates and Interest Payment Dates that will
occur during the six-month period beginning on such first
Business Day with
II-10
<PAGE>
respect to Book-Entry Securities which are Floating Rate
Notes. Promptly after each Interest Determination Date
for Book-Entry Securities which are Floating Rate Notes,
the Calculation Agent will notify Standard & Poor's
Corporation of the interest rates determined on such
Interest Determination Date.
Payments of
Principal
and Interest: Payments of Interest Only. Promptly after each Regular
Record Date, the Paying Agent will deliver to the Company
and the Dividend Department of the Depositary a written
notice specifying by CUSIP number the amount of interest
(if any) to be paid on each Book-Entry Security on the
following Interest Payment Date (other than an Interest
Payment Date coinciding with the Maturity of such
Security) and the total of such amounts. The Depositary
will confirm the amount payable (if any) on each Book-
Entry Security on such Interest Payment Date by reference
to the daily bond reports published by Standard & Poor's
Corporation. On such Interest Payment Date, the Company
will pay to the Paying Agent, and the Paying Agent in
turn will pay to the Depositary, such total amount of
interest due (other than at Maturity of such Security),
at the times and in the manner set forth below under
"Manner of Payment".
Payments at Maturity. On or about the first Business Day
of each month, the Paying Agent will deliver to the
Company and the Depositary a written list of principal,
premium, if any, and interest to be paid on each Book-
Entry Security maturing either at Stated Maturity or on a
Redemption Date ("Maturity") in the following month. The
Paying Agent, the Company and the Depositary will confirm
the amounts of such principal, premium (if any) and
interest payments with respect to each such Book-Entry
Security on or about the fifth Business Day preceding the
Maturity of such Book-Entry Security. At such Maturity,
the Company will pay to the Paying Agent, and the Paying
Agent in turn will pay to the Depositary, the principal
amount of such Book-
II-11
<PAGE>
Entry Security, together with interest and premium, if
any, due at such Maturity, at the times and in the manner
set forth below under "Manner of Payment". Promptly
after payment to the Depositary of the principal,
interest and premium, if any, due at the Maturity of all
Book-Entry Securities represented by a particular Global
Certificate, the Paying Agent will deliver to the Trustee
for cancellation such Global Certificate.
Manner of Payment. The total amount of any principal,
premium and interest due on Book-Entry Securities on any
Interest Payment Date or at Maturity shall be paid by the
Company to the Paying Agent, in funds immediately
available for use by the Issuing and Paying Agent as of
9:30 a.m., New York City time, on such date. The Company
will make such payment on such Book-Entry Securities by
wire transfer to the Paying Agent or by instructing the
Paying Agent to withdraw funds from an account maintained
by the Company at the Paying Agent. The Company will
confirm such instructions in writing to the Paying Agent.
For principal payments at Maturity, prior to 10:00 a.m.,
New York City time, on such Maturity or as soon as
possible thereafter, the Paying Agent will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously specified by the
Depositary) to an account at the Federal Reserve Bank of
New York previously specified by the Depositary, in funds
available for immediate use by the Depositary, each
payment of interest, principal and premium, if any, due
on Book-Entry Securities on such date; and for interest
payments, the Paying Agent will pay the Depositary in
same-day funds on the Interest Payment Date in accordance
with existing arrangements between the Paying Agent and
the Depositary. Thereafter on each such date, the
Depositary will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
Participants in whose names such Book-Entry Securities
are recorded in the book-entry system maintained by the
Depositary. Once payment has been made to the
Depositary, neither the Company, the Trustee nor the
Paying Agent shall have any responsibility
II-12
<PAGE>
or liability for the payment by the Depositary of the
principal of, or premium, if any, or interest on, the
Book-Entry Securities to such Participants.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a Book-Entry Security will be determined and
withheld by the Participant, indirect participant in the
Depositary or other Person responsible for forwarding
payments and materials directly to the beneficial owner
of such Book-Entry Security, or as applicable law may
otherwise require.
Settlement
Procedures: Settlement Procedures with regard to each Book-Entry
Security sold by each Agent, as agent of the Company,
will be as follows:
A. After the acceptance of an offer by the Company
with respect to a Book-Entry Security, the
Selling Agent or Purchasing Agent, as the case
may be, will communicate promptly, but no later
than the time set forth under the "Settlement
Procedures Timetable" below, the following
details of the terms of such offer (the "Book-
Entry Sale Information") to the Company by
telephone confirmed in writing or by facsimile
transmission or other acceptable written means:
(1) Principal amount of the Book-Entry Security
to be purchased;
(2) If a Fixed Rate Security, the interest
rate;
(3) Stated Maturity;
(4) Issue Price;
(5) Selling Agent's commission or Purchasing
Agent's discount, as the case may be;
II-13
<PAGE>
(6) Net proceeds to the Company;
(7) Trade Date and Settlement Date;
(8) If a Security redeemable by the Company,
such of the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par),
and
(iii) Amount (% of par) that the Redemption
Price shall decline (but not below
par) on each anniversary of the
Redemption Commencement Date;
(9) If a Floating Rate Security, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread or Spread Multiplier,
(iv) Maximum Interest Rate,
(v) Minimum Interest Rate,
(vi) Initial Interest Rate,
(vii) Interest Rate Reset Period,
(viii) Calculation Dates,
(ix) Interest Calculation Dates,
(x) Interest Payment Dates,
(xi) Regular Record Dates, and
(xii) Calculation Agent;
II-14
<PAGE>
(10) If the amount of principal payable on a
Security will be determined by reference to
an index or formula, a full description of
such index or formula;
(11) If an OID Note, the total amount of OID,
the Yield to Maturity and the initial
accrual period of OID; and
(12) The taxpayer identification number of the
purchaser.
B. Upon receiving the Book-Entry Sale Information
from the Selling Agent or the Purchasing
Agent, as the case may be, the Company will
advise the Issuing Agent by telephone
(confirmed by facsimile or electronic
transmission) of the Book-Entry Sale
Information received from the Selling Agent or
the Purchasing Agent, as the case may be, and
the name of such Agent.
C. The Issuing Agent will assign a CUSIP number
to the Global Certificate representing such
Book-Entry Security and will communicate to
the Depositary, such Agent and Standard &
Poor's Corporation, through the Depositary's
Participant Terminal System, a pending deposit
message (the form of which has been previously
furnished to the Issuing Agent by the Company)
specifying the following settlement
information:
1. The Book-Entry Sale Information.
2. Identification numbers of the
participant accounts maintained by the
Depositary on behalf of the Issuing
Agent and such Agent.
II-15
<PAGE>
3. Identification as a Fixed Rate Security,
Floating Rate Security or Zero Coupon
Security.
4. Initial Interest Payment Date for such
Security, number of days by which such date
succeeds the related record date for
Depositary purposes (or, in the case of
Floating Rate Notes which reset daily or
weekly, the date five calendar days
preceding such Initial Interest Payment
Date) and, if then calculable, the amount
of interest payable on such Initial
Interest Payment Date (which amount shall
have been confirmed by the Trustee).
5. CUSIP number of the Global Certificate
representing such Book-Entry Security.
6. Whether such Global Certificate will
represent any other Book-Entry Securities
issued or to be issued (to the extent then
known).
D. The Company will complete and deliver to the
Issuing Agent a Global Certificate representing
such Book-Entry Security, and the Company will
instruct the Authenticating Agent by facsimile
transmission or other acceptable written means to
authenticate such Global Certificate, to register
such Global Certificate in the name of Cede &
Co., as nominee of the Depositary, and to effect
delivery thereof to the Depositary by the Issuing
Agent's possession of such authenticated Global
Certificate as agent for the Depositary.
E. The Authenticating Agent will authenticate the
Global Certificate representing such Book-Entry
Security,
II-16
<PAGE>
register such Global Certificate in the name of
Cede & Co., as nominee of the Depositary. The
Issuing Agent will take delivery thereof as agent
for the Depositary.
F. The Depositary will credit such Book-Entry
Security to the participant account of the
Issuing Agent maintained by the Depositary.
G. The Issuing Agent will enter an SDFS deliver
order through the Depositary's Participant
Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to the Issuing
Agent's participant account and credit such Book-
Entry Security to the participant account of the
Selling Agent or the Purchasing Agent, as the
case may be, maintained by the Depositary and
(ii) to debit the settlement account of the
Selling Agent or the Purchasing Agent, as the
case may be, and credit the settlement account of
the Issuing Agent maintained by the Depositary,
in an amount equal to the price of such Book-
Entry Security less such Agent's commission or
discount, as the case may be. Any entry of such
a deliver order shall be deemed to constitute a
confirmation by the Authenticating Agent and the
Issuing Agent to the Depositary that (i) the
Global Certificate representing such Book-Entry
Security has been issued and authenticated and
(ii) the Issuing Agent is holding such Global
Certificate as agent of the Depositary pursuant
to the Certificate Agreement.
H. The Selling Agent or the Purchasing Agent, as the
case may be, will enter an SDFS deliver
instruction through the Depositary's Participant
Terminal System instructing the Depositary (i) to
debit such Book-Entry Security to the
II-17
<PAGE>
participant account of such Agent and
credit such Book-Entry Security to the
participant accounts of the Participants
with respect to such Book-Entry Security
maintained by the Depositary and (ii) to
debit the settlement accounts of such
Participants and credit the settlement
account of such Agent maintained by the
Depositary in an amount equal to the
price of such Book-Entry Security.
I. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures G and H will be
settled in accordance with SDFS operating
procedures in effect on the Settlement
Date.
J. The Issuing Agent will credit to an
account of the Company maintained at the
Issuing Agent funds available for
immediate use in the amount transferred
to the Issuing Agent in accordance with
Settlement Procedure G.
K. The Issuing Agent will send a copy of the
Global Certificate by first-class mail to
the Company together with a statement
setting forth the principal amount of
Securities Outstanding and of Book-Entry
Securities Outstanding as of the related
Settlement Date after giving effect to
such transaction and all other offers to
purchase Securities of which the Company
has advised the Issuing Agent but which
have not yet been settled.
L. The Selling Agent or the Purchasing
Agent, as the case may be, will confirm
the purchase of such Book-Entry Security
to the purchaser either by transmitting
to the Participants with respect to such
Book-Entry Security a confirmation order
through the Depositary's Participant
Terminal System or by
II-18
<PAGE>
mailing a written confirmation to such
purchaser.
M. Notwithstanding the foregoing, the
Selling Agent shall in all cases take the
actions described under the caption
"Delivery of Confirmation and Prospectus
to Purchaser by Selling Agent" in Part I
of this Administrative Procedure, at the
time or times specified under such
caption for such actions.
Settlement
Procedures
Timetable: For all orders of Book-Entry Securities solicited by
a Selling Agent and accepted by the Company for
settlement on the third Business Day after the Trade
Date, Settlement Procedures "A" through "L" set forth
above shall be completed as soon as possible but not
later than the respective times (New York City time)
set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the trade date
B 12:00 Noon on the trade date
C 2:00 p.m. on the trade date
D 3:00 p.m. on the Business Day
before Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H 2:00 p.m. on Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day
after the trade date, Settlement Procedures A, B, and
C may, if necessary, be completed at any time prior
to the specified times on the first Business Day
after the trade date. In connection with a sale which
is to be settled more than one Business Day after the
trade date, if the initial interest rate for a
Floating Rate Note is not known at the time that
Settlement Procedure A is completed, Settlement
Procedures B and C shall be completed as soon as such
rates have been determined, but no later than 11:00
a.m. and 2:00 p.m., New York City time, respectively,
on the
II-19
<PAGE>
second Business Day before the Settlement Date.
Settlement Procedure I is subject to extension of
Fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect
on the settlement date.
If settlement of a Book-Entry Security is rescheduled
or cancelled, the Company will as soon as practicable
give the Issuing Agent notice to such effect. The
Issuing Agent will deliver to the Depositary, through
the Depositary's Participant Terminal System, a
cancellation message (the form of which has been
previously furnished to the Issuing Agent by the
Depositary) to such effect by no later than 2:00 p.m.,
New York City time, on the Business Day immediately
preceding the scheduled Settlement Date (provided the
Issuing Agent received such notice from the Company by
noon on the Business Day immediately preceding the
Settlement Date) and in any case as soon as
practicable. A copy of such message will be routed
through the facilities of the Depositary to the
Selling Agent and Standard & Poor's Corporation.
Failure to
Settle: If the Issuing Agent fails to enter in timely fashion
an SDFS deliver order with respect to any portion of a
Book-Entry Security pursuant to Settlement Procedure
G, or if the Selling Agent or the Purchasing Agent, as
the case may be, fails to enter in timely fashion an
SDFS deliver order with respect to such Book-Entry
Security pursuant to Settlement Procedure H, the
Issuing Agent may deliver to the Depositary, through
the Depositary's Participant Terminal System, as soon
as practicable a withdrawal message (the form of which
has been previously furnished to the Issuing Agent by
the Depositary) instructing the Depositary to debit
such Book-Entry Security to the participant account of
the Issuing Agent maintained at the Depositary. A copy
of such message will be routed through the facilities
of the Depositary to such Agent. The Depositary will
process the withdrawal message, provided that such
participant account contains Book-Entry Securities
having the same Fixed Rate Terms, Floating Rate Terms
or Zero Coupon Terms, as the case may be, having an
aggregate principal
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<PAGE>
amount that is at least equal to the principal amount
to be debited. If withdrawal messages are processed
with respect to all the Book-Entry Securities
represented by a particular Global Certificate, the
Issuing Agent will instruct the Trustee to cancel
immediately such Global Certificate, make appropriate
entries in its records and, unless otherwise
instructed by the Company, destroy the Global
Certificate. The CUSIP number assigned to such Global
Certificate shall, in accordance with CUSIP Service
Bureau procedures, be retired and not reassigned. If
withdrawal messages are processed with respect to only
a portion of the Book-Entry Securities represented by
a particular Global Certificate, the Issuing Agent
will exchange such Global Certificate for two Global
Certificates authenticated by the Authenticating
Agent, one of which shall represent the Book-Entry
Securities for which withdrawal messages are processed
and shall be cancelled by the Trustee and destroyed
immediately after issuance, and the other of which
shall represent the other Book-Entry Securities
previously represented by the surrendered Global
Certificate and shall bear the CUSIP number of the
surrendered Global Certificate. The Company will
reimburse such Agent on an equitable basis for its
loss of the use of funds during any period when the
funds were credited to the account of the Company in
connection with such attempted settlement.
If the purchase price for any Book-Entry Security is
not timely paid to the Participants with respect to
such Security by the beneficial purchaser thereof or
by a person, including an indirect participant in the
Depositary, acting on behalf of such purchaser (other
than the Purchasing Agent, if any), such Participants
and, in turn, the Selling Agent or the Purchasing
Agent, as the case may be, may enter SDFS deliver
orders through the Depositary's Participant Terminal
System reversing the orders entered pursuant to
Settlement Procedures G and H, respectively.
Immediately thereafter, the Issuing Agent will deliver
the withdrawal message and take the related actions
described in the preceding paragraph. The Company will
reimburse such Agent on an equitable basis for its
loss of the use
II-21
<PAGE>
of funds during any period when the funds were credited
to the account of the Company in connection with such
attempted settlement.
Notwithstanding the foregoing, upon any failure to settle
with respect to any portion of a Book-Entry Security, the
Depositary may take any actions in accordance with its
SDFS operating procedures then in effect. In the event
of a failure to settle with respect to any portion of a
Book-Entry Security that was to have been represented by
a Global Certificate also representing other Book-Entry
Securities, the Issuing Agent will provide, in accordance
with Settlement Procedures D and E, for the
authentication and issuance of a Global Certificate
representing the remaining principal amount to have been
represented by such Global Certificate and will make
appropriate entries in its records.
Issuing and Paying
Agents Not to
Risk Funds: Nothing herein will be deemed to require the Issuing
Agent or the Paying Agent to risk or expend its own funds
in connection with any payment to the Company, the
Agents, the Depositary or any Securityholder, it being
understood by all parties that payments made by the
Issuing Agent or the Paying Agent to any party will be
made only to the extent that funds are provided to the
Issuing Agent or the Paying Agent, as the case may be,
for such purpose.
II-22
<PAGE>
ANNEX III
---------
Accountant's Letter
-------------------
Pursuant to Section 4(k) and Section 6(e), as the case may be, of the
Distribution Agreement, the Company's independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) (A) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) audited by them and included
or incorporated by reference in the Registration Statement or the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and (B) if they have made a review
in accordance with standards established by the American Institute of Certified
Public Accountants of any consolidated interim financial statements, selected
financial data, pro forma financial information and/or condensed financial
statements derived from audited financial statements of the Company included or
incorporated by reference in the Registration Statement or the Prospectus, they
have made such reviews in accordance with standards established by the American
Institute of Certified Public Accountants for the periods specified in such
letter as indicated in their reports thereon, copies of which have been
furnished to the Agents;
(iii) They have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial Information, on the
unaudited condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the Prospectus
and/or included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Registration Statement and Prospectus; and on the basis of
the foregoing procedure and other specified procedures including inquiries of
certain officials of the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed consolidated
financial statements referred to above comply as to form in all material
respects with the applicable accounting requirements of the Act and the Exchange
Act as it applies to Form 10-Q and the related published rules and regulations
and whether those unaudited condensed consolidated financial statements are in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated financial
statements incorporated by reference in the Registration Statement and the
Prospectus, nothing came to their attention that caused them to believe that (a)
any material modifications should be made to such unaudited condensed
consolidated financial statements for them to be in conformity with generally
accepted accounting principles applied on a basis substantially
III-1
<PAGE>
consistent with that of the audited consolidated financial statements
incorporated by reference in the Registration Statement and the Prospectus and
(b) the unaudited condensed consolidated financial statements do not comply as
to form in all material respects with the applicable accounting requirements of
the Act and the Exchange Act as it applies to Form 10-Q and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements
for the five such fiscal years which were included or incorporated by reference
in the Company's Annual Reports on Form 10-K for such fiscal years;
(v) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards, consisting
of a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute books
of the Company, Commonwealth Life Insurance Company, Peoples Security Life
Insurance Company, Providian Life and Health Insurance Company, Providian
National Bank and First Deposit National Bank (all of which are direct or
indirect subsidiaries of the Company) since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
inquiries of certain officials of the Company responsible for financial and
accounting matters and such other inquiries and procedures as may be specified
in such letter, nothing came to their attention that caused them to believe
that:
(A) any unaudited pro forma consolidated condensed
financial statements included or incorporated by
reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting
requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have
not been properly applied to the historical amounts in
the compilation of those statements;
(B) (1) as of a specified date not more than five days
prior to the date of such letter, there have been any
changes in the capital stock of the Company (other than
issuances of capital stock upon exercise of options which
were outstanding on the date of the latest statement of
financial condition included or incorporated by reference
in the Prospectus) or any change in the consolidated
III-2
<PAGE>
capital stock (other than any such issuances) or any
increase in the consolidated short-term or long-term debt
of the Company and its consolidated subsidiaries, or (2)
as of the date of the most recent consolidated financial
statements available for internal use or otherwise
available on the date which is five days prior to the
date of such letter, there have been any decreases in
consolidated total assets, total cash and investments or
shareholders' equity, in each case as compared with
amounts shown in the latest statement of financial
condition included or incorporated by reference in the
Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(C) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the date of the most recent consolidated
financial statements available for internal use or
otherwise available on the date which is five days prior
to the date of such letter, there were any decreases in
the total or per share amounts of consolidated income
before federal income taxes, consolidated premiums and
other considerations or consolidated investment income,
net of expenses, in each case as compared with the
comparable period of the preceding year, except in each
case for increases or decreases which the Prospectus
discloses have occurred or may occur or which are
described in such letter;
(vi) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus and the
limited procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii), (iv) and (v) above, they have carried out
certain specified procedures, not constituting an examination in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Agents which are included
in or can be derived from (a) the audited consolidated financial statements and
related financial statement schedules, or (b) the unaudited condensed
consolidated financial statements, or (c) analyses prepared by the Company from
accounting records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by the Agents
or in documents incorporated by reference in the Prospectus specified by the
Agents, and have compared such amounts, percentages and financial information
with (a) the audited consolidated financial statements
III-3
<PAGE>
and related financial statement schedules, or (b) the unaudited condensed
consolidated financial statements, or (c) analyses prepared by the Company from
accounting records of the Company and its subsidiaries, and have found them to
be in agreement except as indicated in such letter.
All references in this Annex III to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Distribution Agreement as of the Commencement Date
referred to in Section 6(e) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such letter under
Section 4(k) thereof.
III-4
<PAGE>
Exhibit 4.1
[Form of Face of Security]
[Fixed Rate Medium-Term Note]
REGISTERED REGISTERED
No. FXR- PRINCIPAL AMOUNT:
CUSIP
PROVIDIAN CORPORATION
MEDIUM-TERM NOTE, SERIES E
[Insert if the Security is to be a Global Security -- This Security is
a Global Security within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary. This
Security may not be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary or a nominee
thereof and no such transfer may be registered, except under the limited
circumstances described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of,
this Security shall be a Global Security subject to the foregoing, except under
such limited circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of, this
Security is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
[IF THIS SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --FOR
PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY
IS _____% OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS _________, 19__[,] [AND]
THE YIELD TO MATURITY IS _____%.]
<PAGE>
SPECIFIED CURRENCY: EXCHANGE RATE
AGENT:
EXCHANGE RATE: U.S.$1.00=
-----
ORIGINAL MATURITY
ISSUE DATE: DATE:
INTEREST RATE: % REDEMPTION
COMMENCEMENT
DATE:
REDEMPTION REDEMPTION
PERIODS: PRICES:
REPAYMENT REPAYMENT
COMMENCEMENT PERIODS:
DATE:
REPAYMENT
PRICES:
ORIGINAL ISSUE DEFAULT RATE: %
DISCOUNT SECURITY: (applicable only if
Security is an
Yes: No: Original Issue
--- --- Discount Security)
OTHER PROVISIONS:
PROVIDIAN CORPORATION, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the
-2-
<PAGE>
reverse hereof), for value received, hereby promises to pay to
______________________________________________________, or registered assigns,
the principal sum of ________________________________, in a currency specified
above as at the time of payment shall be legal tender for the payment of public
and private debt, on the Maturity Date specified above [If the Security is to
bear interest prior to Maturity, insert --, and to pay interest thereon in like
currency from the Original Issue Date specified above or from the most recent
Interest Payment Date to which interest has been paid or duly provided for,
unless otherwise specified above in "Other Provisions", semi-annually on
September 15 and March 15 of each year and at Maturity, commencing on the first
such Interest Payment Date next succeeding the Original Issue Date (or, if the
Original Issue Date is after a Regular Record Date and before the Interest
Payment Date immediately following such Regular Record Date, on the second such
Interest Payment Date next succeeding the Original Issue Date), at the Interest
Rate per annum specified above, until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall, unless otherwise specified above in "Other
Provisions", be the September 1 and March 1 (whether or not a Business Day), as
the case may be, next preceding, unless otherwise specified above in "Other
Provisions", the September 15 and March 15 Interest Payment Dates; provided,
however, that interest payable at Maturity will be payable to the Person to whom
principal shall be payable. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice of which shall be given to the Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity, insert --
The principal of this Security shall not bear interest except in the case of a
default in payment of
-3-
<PAGE>
principal upon acceleration, upon redemption, upon repayment or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the Default Rate per annum specified above (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the Default Rate per annum specified above
(to the extent that the payment of such interest shall be legally enforceable),
which shall accrue from the date of such demand for payment to the date payment
of such interest has been made or duly provided for, and such interest shall
also be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made in the Specified
Currency specified above; provided, however, that, if this Security is
denominated in other than U.S. dollars, payments of principal (and premium, if
any) and interest on this Security will nevertheless be made in U.S. dollars:
(a) at the option of the Holder of this Security under the procedures described
in the two next succeeding paragraphs and (b) at the Company's option in the
case of imposition of exchange controls as described in the fifth succeeding
paragraph. The Company will at all times appoint and maintain a Paying Agent
(which may be the Trustee) authorized by the Company to pay the principal of
(and premium, if any) or interest on any Securities of this series on behalf of
the Company and having an office or agency (the "Paying Agency Office") in the
Borough of Manhattan, The City of New York (the "Place of Payment") where
Securities of this series may be presented or surrendered for payment and where
notices, designations or requests in respect of payments with respect to
Securities of this series may be served. The Company has initially appointed
First Trust of New York, National Association as such Paying Agent and will give
prompt written notice to the Trustee of any change in such appointment.
Except as provided in the next paragraph, payments of interest and
principal (and premium, if any) for any Security of this series denominated in a
Specified Currency other than U.S. dollars will be made in U.S. dollars if the
registered Holder of such Security on the relevant Regular Record Date or at the
Maturity of such Security, as the case may be, has transmitted a written request
for such payment in U.S. dollars to the Paying Agent at the Paying Agency
-4-
<PAGE>
Office in the Place of Payment on or before such Regular Record Date or the date
15 days before such Maturity, as the case may be. Such request may be in writing
(mailed or hand delivered) or by cable, telex or other form of facsimile
transmission. Any such request made for any Security by a registered Holder will
remain in effect for any further payments of interest and principal (and
premium, if any) on such Security payable to such Holder, unless such request is
revoked on or before the relevant Regular Record Date or the date 15 days before
the Maturity of such Security, as the case may be.
The U.S. dollar amount to be received by a Holder of a Security
denominated in a Specified Currency other than U.S. dollars who elects to
receive payment in U.S. dollars will be based upon the rate of exchange equal to
the highest bid quotation in The City of New York for U.S. dollars received by
the Exchange Rate Agent (as defined below) as of 11:00 a.m., New York City time,
on the second Business Day next preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) for the purchase by the quoting dealer of such Specified Currency for
U.S. dollars for settlement on such payment date in the aggregate amount of such
Specified Currency payable to all Holders of Securities of this series
denominated in such Specified Currency electing to receive U.S. dollar payments
on such payment date and at which the applicable dealer commits to execute a
contract. If three such bid quotations are not available on the second Business
Day preceding the payment of principal (and premium, if any) or interest for any
such Security, such payment will be made in the Specified Currency. All currency
exchange costs associated with any payment in U.S. dollars on any such Security
will be borne by the Holder thereof by deductions from such payment. If this
Security is denominated in a Specified Currency other than U.S. dollars, (i) the
Company will at all times appoint and maintain a banking institution that is not
an Affiliate of the Company as Exchange Rate Agent hereunder; and (ii) the
Company has initially appointed the Exchange Rate Agent specified above as such
Exchange Rate Agent and will give prompt written notice to the Trustee of any
change in such appointment.
Payment of the principal of (and premium, if any) and interest on any
Security of this series due at the Maturity of such Security to be made in U.S.
dollars will be made in immediately available funds upon surrender of such
Security to the Paying Agent at the Paying Agency Office in the Place of
Payment; provided that such Security is presented to the Paying Agent in time
for the Paying Agent
-5-
<PAGE>
to make such payment in accordance with its normal procedures. Payments of
interest on any Security of this series to be made in U.S. dollars (other than
at the Maturity of such Security) will be made by check mailed to the address of
the Person entitled thereto as it appears in the Security Register or by wire
transfer to such account as may have been appropriately designated to the Paying
Agent by such Person.
Payments of interest and principal (and premium, if any) with respect
to any Security of this series to be made in a Specified Currency other than
U.S. dollars will be made by wire transfer to such account with a bank located
in the country issuing the Specified Currency (or, if such Security is
denominated in ECUs, in an ECU account) or other jurisdiction acceptable to the
Company and the Paying Agent as shall have been designated at least 5 days prior
to the Interest Payment Date or the Maturity of such Security, as the case may
be, by the registered Holder of such Security on the relevant Regular Record
Date or at such Maturity, provided that, in the case of payment of principal of
(and premium, if any) and any interest due at such Maturity, such Security is
presented to the Paying Agent in time for the Paying Agent to make such payments
in such funds in accordance with its normal procedures. Such designation shall
be made by filing the appropriate information with the Paying Agent at the
Paying Agency Office in the Place of Payment, and, unless revoked, any such
designation made with respect to any Security of this series by a registered
Holder will remain in effect with respect to any further payments with respect
to such Security payable to such Holder. If a payment in a Specified Currency
other than U.S. dollars with respect to any Security of this series cannot be
made by wire transfer because the required designation has not been received by
the Paying Agent on or before the requisite date or for any other reason, the
Company will mail a notice to the Holder of such Security at its registered
address requesting a designation pursuant to which such wire transfer can be
made and, upon the Paying Agent's receipt of such a designation, such payment
will be made within 5 days of such receipt. The Company will pay any
administrative costs imposed by banks in connection with making payments by wire
transfer with respect to any Security of this series, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holder of such
Security.
If the principal of (and premium, if any) or interest on any Security
of this series is payable in other than U.S. dollars and such Specified Currency
is not available, due to the imposition of exchange controls or
-6-
<PAGE>
other circumstances beyond the control of the Company, the Company will be
entitled to satisfy its obligations to the Holder of such Security by making
payments in U.S. dollars on the basis of the most recently available Exchange
Rate (as defined on the reverse hereof).
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: PROVIDIAN CORPORATION
[SEAL] By____________________________
Authorized Officer
Attest:
____________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
As Trustee
By__________________________
Authorized Officer
-7-
<PAGE>
[Form of Reverse of Security]
[Fixed Rate Medium-Term Note]
PROVIDIAN CORPORATION
MEDIUM-TERM NOTE, SERIES E
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of January 1, 1994, (the "Indenture"),
between the Company and First Trust of New York, National Association (as
successor to Morgan Guaranty Trust Company of New York), as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee and the Holders of
the Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest, if any, at different
rates, may be subject to different redemption provisions, if any, may be subject
to different sinking, purchase or analogous funds, if any, may be subject to
different covenants and events of default, and may otherwise vary as provided or
permitted in the Indenture. This Security is one of a series of the Securities,
which series is limited in aggregate principal amount to $500,000,000,
designated as the Medium-Term Notes, Series E of the Company. The Securities
may mature at different times, bear interest, if any, at different rates, be
redeemable at different times or not at all, be repayable at the option of the
holder at different times or not at all, be issued at an original issue
discount, be extendable and be denominated in different currencies.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date.
Interest hereon shall be computed on the basis of a 360-day year of twelve 30-
day months.
Any payment on this Security due on any day which is not a Business
Day in The City of New York (and, if the Specified Currency specified on the
face hereof is other than U.S. dollars, in the country issuing such Specified
-8-
<PAGE>
Currency (or, for ECUs, in an ECU account)) need not be made on such day, but
may be made on the next succeeding such Business Day with the same force and
effect as if made on such due date, and no interest shall accrue for the period
from and after such date. "Business Day," for any particular location, means
each Monday, Tuesday, Wednesday, Thursday, and Friday which is not a day on
which banking institutions in such location are authorized or obligated by law,
regulation or executive order to close.
Unless a Redemption Commencement Date is specified on the face hereof,
this Security shall not be redeemable before the Maturity Date specified on the
face hereof. If a Redemption Commencement Date is so specified, this Security
is subject to redemption upon not less than 30 days' notice by first class mail
at any time on or after the Redemption Commencement Date, as a whole or in part,
at the election of the Company, at the Redemption Price specified on the face
hereof (expressed as a percentage of the principal amount of this Security)
applicable to the Redemption Period so specified during which this Security is
to be redeemed, together in the case of any such redemption with accrued
interest to the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holder of this
Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor and for a principal
amount equal to the unredeemed portion will be issued in the name of the Holder
upon the cancellation hereof.
If a Repayment Commencement Date is specified on the face hereof, this
Security will be repayable in whole or in part in an amount equal to the
Authorized Denominations specified below provided that the remaining principal
amount of any Security surrendered for partial repayment shall be at least the
Authorized Denomination, on any Business Day on or after the Repayment
Commencement Date, at the option of the holder, at 100% of the principal amount
to be repaid, plus accrued interest, if any, to the repayment date. In order
for the exercise of the option to be effective and the Securities to be repaid,
the Company must receive at the applicable address of the Paying Agent set forth
below or at such other place or places of which the Company shall from time to
time notify the holder of the within Security, on or before the fifteenth, but
not earlier than the twenty-fifth calendar day, or, if such day is not a
Business Day, the
-9-
<PAGE>
next succeeding Business Day, prior to the repayment date, either (i) this
Security, with the form below entitled "Option to Elect Repayment" duly
completed, or (ii) a telegram, telex, facsimile transmission, or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the holder of this Security, (b) the principal amount of this Security and the
amount of this Security to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby, and (d) a guarantee stating that the
Company will receive this Security, with the form below entitled "Option to
Elect Repayment" duly completed, not later than 5 Business Days after the date
of such telegram, telex, facsimile transmission or letter (and this Security
and form duly completed are received by the Company by such fifth Business
Day). Any such election shall be irrevocable. The address to which such
deliveries are to be made is First Trust of New York, National Association,
Attention: ______________, 100 Wall Street, New York, New York 10005 (or, at
such other places as the Company shall notify the holders of the Securities).
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Security for repayment will be determined by the Company,
whose determination will be final and binding.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
(or, in the case of any Securities of this series that are Original Issue
Discount Securities, the Default Amount (as defined below) thereof) may be
declared due and payable in the manner and with the effect provided in the
Indenture.
If this Security is an Original Issue Discount Security and if an
Event of Default with respect to the Securities shall have occurred and be
continuing, the "Default Amount" of principal of this Security may be declared
due and payable in the manner and with the effect provided in the Indenture.
Such Default Amount shall be equal to the adjusted issue price as at the first
day of the accrual period as determined under Proposed Treasury Regulation
Section 1.1272-1 (or any successor regulation) under the United States Internal
Revenue Code of 1986, as amended, in which the date of acceleration occurs
increased by the original issue discount allocable to such accrual period ending
on the date of acceleration, as determined under Proposed Treasury Regulation
Section 1.1272-1 (or any successor regulation) under the United States Internal
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<PAGE>
Revenue Code of 1986, as amended. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest (in each case to the extent that the payment of such interest
shall be legally enforceable), all of the Company's obligations in respect of
the payment of the principal of and interest, if any, on this Security shall
terminate.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security or (ii) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. The principal amount of an Original Issue
Discount Security or a Security denominated in a Specified Currency other than
U.S. dollars that shall be deemed to be Outstanding for purposes of the
foregoing shall be determined as provided in the Indenture. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security or
Securities issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
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<PAGE>
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, if this Security is a Global Security, certain additional
limitations) therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in the Place of Payment, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar, duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations (the "Authorized Denomination") of (i) if
denominated in U.S. dollars, $100,000 and any integral multiple of $1,000 in
excess thereof or (ii) if denominated in a Specified Currency other than U.S.
dollars, the amount of such Specified Currency equivalent, at the noon buying
rate in The City of New York for cable transfers for such Specified Currency
(the "Exchange Rate") on the sixth Business Day in The City of New York and in
the country issuing such currency (or, for ECUs, in an ECU account) next
preceding the Original Issue Date, to U.S. $100,000 (rounded down to an integral
multiple of 10,000 units of the Specified Currency) and any greater amount that
is an integral multiple of 10,000 units of such Specified Currency. The
Securities of this series may be issued, in whole or in part, in the form of one
or more Global Securities bearing
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<PAGE>
the legend specified in the Indenture regarding certain restrictions on
registration of transfer and exchange and issued to The Depository Trust Company
as depositary for the Global Securities of this series (the "Depositary") or its
nominee and registered in the name of the Depositary or such nominee. As
provided in the Indenture and subject to certain limitations (including, if this
Security is a Global Security, certain additional limitations) therein set
forth, Securities of this series issued in definitive registered form are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-13-
<PAGE>
PROVIDIAN CORPORATION
MEDIUM-TERM NOTE, SERIES E CUSIP ____
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Security (or portion thereof specified below) pursuant to
its terms at a price equal to the principal amount thereof, together with
interest to the repayment date, to the undersigned, at
________________________________________________________________________________
(please print or typewrite name and address of the undersigned)
For this Security to be repaid the Company must receive at the
applicable address of the Paying Agent set forth below or at such other place or
places of which the Company shall from time to time notify the holder of the
within Security, on or before the [fifteenth], but not earlier than the [twenty-
fifth], calendar day, or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, (i) this Security, with this "Option
to Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth (a) the name, address and
telephone number of the holder of the Security, (b) the principal amount of the
Security and the amount of the Security to be repaid, (c) a statement that the
option to elect repayment is being exercised thereby, and (d) a guarantee
stating that the Security to be repaid with the form entitled "Option to Elect
Repayment" on the addendum to the Security duly completed will be received by
the Company not later than 5 Business Days after the date of such telegram,
telex, facsimile transmission or letter (and such Security and form duly
completed are received by the Company by such fifth Business Day). The address
to which such deliveries are to be made is First Trust of New York, National
Association, Attention: ______________, 100 Wall Street, New York, New York
10005 (or, at such other places as the Company shall notify the holders of the
Securities).
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<PAGE>
If less than the entire principal amount of the within Security is to
be repaid, specify the portion thereof (which shall be equal to the Authorized
Denominations) which the holder elects to have repaid: _______________; and
specify the denomination or denominations (which shall be equal to the
Authorized Denominations) of the Security or Securities to be issued to the
holder for the portion of the within Security not being repaid (in the absence
of any specification, one such Security will be issued for the portion not being
repaid): _______________.
Date: _______________
________________________________
Notice: The signature to this Option to Elect
Repayment must correspond with the name written
upon page 3 of the Security in every particular
without alteration or enlargement or any other
change whatsoever.
-15-
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - __________ Custodian _________
(Cust) (Minor)
under Uniform Gifts to Minors Act
______________________________
(State)
Additional abbreviations may also be used
though not in the above list.
_____________________________
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<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto_____________________________________________________________
_____________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________
/__________________________/
_____________________________________________________________________________
_____________________________________________________________________________
(Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee)
_____________________________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints_____________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:______________
Signature Guaranteed
____________________________ ______________________________
NOTICE: Signature must be NOTICE: The signature to this
guaranteed by a member assignment must correspond
firm of the New York State with the name as written upon
Stock Exchange or a the face of the within
commercial bank or trust Security in every particular,
company. without alteration or
enlargement or any change
whatever.
-17-
<PAGE>
[Form of Face of Security]
[Floating Rate (Resetting Weekly,
Monthly, Quarterly, Semi-Annually or Annually)
U.S. Dollar Specified Currency,
Non-Original Issue Discount
Medium-Term Note]
REGISTERED REGISTERED
No. FLR- $_________
CUSIP
PROVIDIAN CORPORATION
MEDIUM-TERM NOTE, SERIES E
[Insert if the Security is to be a Global Security --This Security is
a Global Security within the meaning of the Indenture hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary.
This Security may not be transferred to, or registered or exchanged for
Securities registered in the name of, any Person other than the Depositary or a
nominee thereof and no such transfer may be registered, except under the limited
circumstances described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of,
this Security shall be a Global Security subject to the foregoing, except under
such limited circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company or
its agent for registration of transfer, exchange, or payment, and any Security
issued upon registration of transfer of, or in exchange for, or in lieu of, this
Security is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of DTC (and any payment hereon is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]
SPECIFIED CURRENCY: EXCHANGE RATE
AGENT:
EXCHANGE RATE: U.S.$1.00= _____
<PAGE>
ORIGINAL INITIAL MATURITY
ISSUE DATE: INTEREST DATE:
RATE: %
INDEX MATURITY: INTEREST RATE
BASIS:
SPREAD (plus SPREAD
or minus): MULTIPLIER:
MINIMUM MAXIMUM
INTEREST RATE: INTEREST RATE:
INTEREST PAYMENT
DATES:
Third Wednesday of: __ March
__ June
__ September
__ December
_____________
_____________
INTEREST INTEREST
RESET RESET
DATES: PERIOD:
(applicable only if
Interest Reset
Period is
semi-annual
or annual)
Third Wednesday of:
CALCULATION REDEMPTION
AGENT: First Trust COMMENCEMENT
of New York, DATE:
National Association
-2-
<PAGE>
REDEMPTION REDEMPTION
PERIODS: PRICES:
REPAYMENT COMMENCEMENT DATE: REPAYMENT PERIODS:
REPAYMENT PRICES:
OTHER PROVISIONS:
PROVIDIAN CORPORATION, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to _______________________,
or registered assigns, the principal sum of____________________ , in a currency
specified above as at the time of payment shall be legal tender for the payment
of public and private debts, on the Maturity Date specified above (or, if such
date is not a Market Day (as defined on the reverse hereof) for this Security,
the next succeeding such Market Day (or, if the Interest Rate Basis specified
above is LIBOR and such next succeeding such Market Day falls in the next
calendar month, the next preceding such Market Day)), and to pay interest
thereon in like currency from the Original Issue Date specified above or from
the most recent Interest Payment Date (or, if the Interest Reset Period
specified above is weekly, from the day following the most recent Regular Record
Date) to which interest has been paid or duly provided for, on the Interest
Payment Dates in each year specified above (or if any such date is not a Market
Day (as defined on the reverse hereof) for this Security, the next succeeding
such Market Day (or, if the Interest Rate Basis specified above is LIBOR and
such next succeeding such Market Day falls in the next calendar month, the next
preceding such Market Day)) and at Maturity, commencing on the first such
Interest Payment Date next succeeding the Original Issue Date (or, if the
Original Issue Date is after a Regular Record Date and before the Interest
Payment Date immediately following such Regular Record Date, on the second such
Interest Payment Date next succeeding the Original Issue Date), at a rate per
annum equal to the Initial Interest Rate specified above until the first
Interest Reset Date following the Original Issue Date and on and after such
Interest Reset Date at the rate determined in accordance with the provisions set
forth on the reverse hereof, until the principal hereof is paid or made
available for payment. The interest so
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<PAGE>
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which shall be the 15th
day (whether or not a Business Day) next preceding such Interest Payment Date;
provided, however, that interest payable at Maturity will be payable to the
Person to whom principal shall be payable. Any such interest not so punctually
paid or duly provided for shall forthwith cease to be payable to the registered
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice of which shall be given to the
Holders of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which this Security may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture.
Payment of the principal of (and premium, if any) and interest on this
Security will be made in the Specified Currency specified above; provided,
however, that, if this Security is denominated in other than U.S. dollars,
payments of principal (and premium, if any) and interest on this Security will
nevertheless be made in U.S. dollars: (a) at the option of the Holder of this
Security under the procedures described in the two next succeeding paragraphs
and (b) at the Company's option in the case of imposition of exchange controls
as described in the fifth succeeding paragraph. The Company will at all times
appoint and maintain a Paying Agent (which may be the Trustee) authorized by the
Company to pay the principal of (and premium, if any) or interest on any
Securities of this series on behalf of the Company and having an office or
agency (the "Paying Agency Office") in the Borough of Manhattan, The City of New
York (the "Place of Payment") where Securities of this series may be presented
or surrendered for payment and where notices, designations or requests in
respect of payments with respect to Securities of this series may be served. The
Company has initially appointed First Trust of New York, National Association as
such Paying Agent and will give prompt written notice to the Trustee of any
change in such appointment.
Except as provided in the next paragraph, payments of interest and
principal (and premium, if any) for any Security of this series denominated in a
Specified Currency other than U.S. dollars will be made in U.S. dollars if the
registered Holder of such Security on the relevant Regular Record Date or at the
Maturity of such Security, as the case may be, has transmitted a written request
for such payment in U.S. dollars to the Paying Agent at the Paying Agency Office
in the Place of Payment on or
-4-
<PAGE>
before such Regular Record Date or the date 15 days before such Maturity, as the
case may be. Such request may be in writing (mailed or hand delivered) or by
cable, telex or other form of facsimile transmission. Any such request made for
any Security by a registered Holder will remain in effect for any further
payments of interest and principal (and premium, if any) on such Security
payable to such Holder, unless such request is revoked on or before the relevant
Regular Record Date or the date 15 days before the Maturity of such Security, as
the case may be.
The U.S. dollar amount to be received by a Holder of a Security
denominated in a Specified Currency other than U.S. dollars who elects to
receive payment in U.S. dollars will be based upon the rate of exchange equal to
the highest bid quotation in The City of New York for U.S. dollars received by
the Exchange Rate Agent (as defined below) as of 11:00 a.m., New York City time,
on the second Business Day next preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent) for the purchase by the quoting dealer of such Specified Currency for
U.S. dollars for settlement on such payment date in the aggregate amount of such
Specified Currency payable to all Holders of Securities of this series
denominated in such Specified Currency electing to receive U.S. dollar payments
on such payment date and at which the applicable dealer commits to execute a
contract. If three such bid quotations are not available on the second Business
Day preceding the payment of principal (and premium, if any) or interest for any
such Security, such payment will be made in the Specified Currency. All currency
exchange costs associated with any payment in U.S. dollars on any such Security
will be borne by the Holder thereof by deductions from such payment. If this
Security is denominated in a Specified Currency other than U.S. dollars, (i) the
Company will at all times appoint and maintain a banking institution that is not
an Affiliate of the Company as Exchange Rate Agent hereunder; and (ii) the
Company has initially appointed the Exchange Rate Agent specified above as such
Exchange Rate Agent and will give prompt written notice to the Trustee of any
change in such appointment.
Payment of the principal of (and premium, if any) and interest on any
Security of this series due at the Maturity of such Security to be made in U.S.
dollars will be made in immediately available funds upon surrender of such
Security to the Paying Agent at the Paying Agency Office in the Place of
Payment; provided that such Security is presented to the Paying Agent in time
for the Paying Agent to make such payment in accordance with its normal
procedures. Payments of interest on any Security of this series to be made in
U.S. dollars (other than at the Maturity of such Security) will be made by check
mailed to the address of the Person entitled thereto as it appears in the
Security Register or by wire transfer to such account as may have been
appropriately designated to the Paying Agent by such Person.
-5-
<PAGE>
Payments of interest and principal (and premium, if any) with respect
to any Security of this series to be made in a Specified Currency other than
U.S. dollars will be made by wire transfer to such account with a bank located
in the country issuing the Specified Currency (or, if such Security is
denominated in ECUs, in an ECU account) or other jurisdiction acceptable to the
Company and the Paying Agent as shall have been designated at least 5 days prior
to the Interest Payment Date or the Maturity of such Security, as the case may
be, by the registered Holder of such Security on the relevant Regular Record
Date or at such Maturity, provided that, in the case of payment of principal of
(and premium, if any) and any interest due at such Maturity, such Security is
presented to the Paying Agent in time for the Paying Agent to make such payments
in such funds in accordance with its normal procedures. Such designation shall
be made by filing the appropriate information with the Paying Agent at the
Paying Agency Office in the Place of Payment, and, unless revoked, any such
designation made with respect to any Security of this series by a registered
Holder will remain in effect with respect to any further payments with respect
to such Security payable to such Holder. If a payment in a Specified Currency
other than U.S. dollars with respect to any Security of this series cannot be
made by wire transfer because the required designation has not been received by
the Paying Agent on or before the requisite date or for any other reason, the
Company will mail a notice to the Holder of such Security at its registered
address requesting a designation pursuant to which such wire transfer can be
made and, upon the Paying Agent's receipt of such a designation, such payment
will be made within 5 days of such receipt. The Company will pay any
administrative costs imposed by banks in connection with making payments by wire
transfer with respect to any Security of this series, but any tax, assessment or
governmental charge imposed upon payments will be borne by the Holder of such
Security.
If the principal of (and premium, if any) or interest on any Security
of this series is payable in other than U.S. dollars and such Specified Currency
is not available, due to the imposition of exchange controls or other
circumstances beyond the control of the Company, the Company will be entitled to
satisfy its obligations to the Holder of such Security by making payments in
U.S. dollars on the basis of the most recently available Exchange Rate (as
defined on the reverse hereof).
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual
-6-
<PAGE>
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: PROVIDIAN CORPORATION
By____________________________
[SEAL] Authorized Officer
Attest:
______________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION,
As Trustee
By_______________________
Authorized Officer
-7-
<PAGE>
[Form of Reverse of Security]
[Floating Rate (Resetting Weekly,
Monthly, Quarterly, Semi-Annually or Annually)
U.S. Dollar Specified Currency,
Non-Original Issue Discount
Medium-Term Note]
PROVIDIAN CORPORATION
MEDIUM-TERM NOTE, SERIES E
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of January 1, 1994 (the
"Indenture"), between the Company and First Trust of New York, National
Association (as successor to Morgan Guaranty Trust Company of New York), as
Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and
delivered. The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates,
may be subject to different redemption provisions, if any, may be subject
to different sinking, purchase or analogous funds, if any, may be subject
to different covenants and events of default, and may otherwise vary as
provided or permitted in the Indenture. This Security is one of a series of
the Securities, which series is limited in aggregate principal amount to
$500,000,000, designated as the Medium-Term Notes, Series E of the Company.
The Securities may mature at different times, bear interest, if any, at
different rates, be redeemable at different times or not at all, be
repayable at the option of the holder at different times or not at all, be
issued at an original issue discount, be extendable and be denominated in
different currencies.
Unless a Redemption Commencement Date is specified on the face
hereof, this Security shall not be redeemable before the Maturity Date
specified on the face hereof. If a Redemption Commencement Date is so
specified, this Security is subject to redemption, upon not less than 30
days' notice by first class mail at any time on or after the Redemption
-8-
<PAGE>
Commencement Date, as a whole or in part, at the election of the Company,
at the Redemption Price specified on the face hereof (expressed as a
percentage of the principal amount of this Security) applicable to the
Redemption Period so specified during which this Security is to be
redeemed, together in the case of any such redemption with accrued interest
to the Redemption Date, but interest installments whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holder of this
Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all
as provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor and for a principal
amount equal to the unredeemed portion will be issued in the name of the
Holder upon the cancellation hereof.
If a Repayment Commencement Date is specified on the face hereof,
this Security will be repayable in whole or in part in an amount equal to
the Authorized Denominations specified below provided that the remaining
principal amount of any Security surrendered for partial repayment shall be
at least the Authorized Denomination, on any Business Day on or after the
Repayment Commencement Date, at the option of the holder, at 100% of the
principal amount to be repaid, plus accrued interest, if any, to the
repayment date. In order for the exercise of the option to be effective
and the Securities to be repaid, the Company must receive at the applicable
address of the Paying Agent set forth below or at such other place or
places of which the Company shall from time to time notify the holder of
the within Security, on or before the fifteenth, but not earlier than the
twenty-fifth calendar day, or, if such day is not a Business Day, the next
succeeding Business Day, prior to the repayment date, either (i) this
Security, with the form below entitled "Option to Elect Repayment" duly
completed, or (ii) a telegram, telex, facsimile transmission, or letter
from a member of a national securities exchange or the National Association
of Securities Dealers, Inc. or a commercial bank or a trust company in the
United States of America setting forth (a) the name, address and telephone
number of the holder of this Security, (b) the principal amount of this
Security and the amount of this Security to be repaid, (c) a statement that
the option to elect repayment is being exercised thereby, and (d) a
guarantee stating that the Company will receive this Security, with the
form below entitled "Option to Elect Repayment" duly completed, not later
than 5 Business Days after the date of such telegram, telex, facsimile
transmission or letter (and this Security and form duly completed are
received by the
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<PAGE>
Company by such fifth Business Day). Any such election shall be
irrevocable. The address to which such deliveries are to be made is First
Trust of New York, National Association, Attention: ______________, 100
Wall Street, New York, New York 10005 (or, at such other places as the
Company shall notify the holders of the Securities). All questions as to
the validity, eligibility (including time of receipt) and acceptance of any
Security for repayment will be determined by the Company, whose
determination will be final and binding.
The rate of interest on this Security will be reset weekly,
monthly, quarterly, semi-annually or annually (each an "Interest Reset
Date"), depending on the Interest Reset Period specified on the face
hereof; provided, however, that (i) the interest rate in effect from the
Original Issue Date to the first Interest Reset Date will be the Initial
Interest Rate specified on the face hereof, and (ii) the interest rate in
effect for the ten calendar days immediately before Maturity or earlier
Redemption Date or Repayment Date of this Security will be that in effect
hereon on the tenth calendar day preceding such Maturity, Redemption Date
or Repayment Date. Except as provided in the next sentence and in the
sixth succeeding paragraph, the Interest Reset Date will be, if this
Security resets weekly (unless the Interest Rate Basis for this Security is
the Treasury Rate), the Wednesday of each week; if this Security resets
weekly and the Interest Reset Basis for this Security is the Treasury Rate,
the Tuesday of each week; if this Security resets monthly, the third
Wednesday of each month; if this Security resets quarterly, the third
Wednesday of each March, June, September and December; if this Security
resets semi-annually, the third Wednesday of two months of each year, as
specified on the face hereof; and if this Security resets annually, the
third Wednesday of one month of each year, as specified on the face hereof.
If any Interest Reset Date would otherwise be a day that is not a Market
Day (as defined below) for this Security, the Interest Reset Date shall be
postponed to the next day that is a Market Day for this Security, except
that if the Interest Rate Basis specified on the face hereof is LIBOR and
such Market Day is in the next succeeding calendar month, such Interest
Reset Date shall be the immediately preceding Market Day for this Security.
Any payment on this Security due on any day which is not a Market
Day for this Security need not be made on such day, but may be made on the
next succeeding such Market Day (or, if the Interest Rate Basis specified
on the face hereof is LIBOR and such Market Day is in the next succeeding
calendar month, such payment shall be made on the immediately preceding
Market Day for this Security) with the same force
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and effect as if made on such due date, and no interest shall accrue for
the period from and after such date.
"Market Day" means, for any Security other than a Security the
rate of interest on which shall be determined in accordance with the
provisions under the heading "LIBOR" below, any Business Day in The City of
New York, and, for any Security the rate of interest on which shall be
determined in accordance with the provisions under the heading "LIBOR"
below, any such Business Day on which dealings in deposits in U.S. dollars
are transacted in the London interbank market. "Business Day", as used
herein with respect to any particular location, means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in such location are authorized or obligated by law or
executive order to close.
The rate of interest on this Security in effect on any day on or
after the first Interest Reset Date shall equal either (i) if such day is
an Interest Reset Date, the interest rate for such Interest Reset Date or
(ii) if such day is not an Interest Reset Date, the interest rate for the
immediately preceding Interest Reset Date; provided, however, that the
interest rate in effect for the ten calendar days immediately before
Maturity of this Security will be that in effect hereon on the tenth
calendar day preceding such Maturity.
Except as otherwise specified in this paragraph, the rate of
interest on this Security for each Interest Reset Date shall be the rate
determined in accordance with the provisions below under the heading below
corresponding to the Interest Rate Basis specified on the face hereof:
Commercial Paper Rate. If the Interest Rate Basis of this
Security is the Commercial Paper Rate, the interest rate hereon for
any Interest Reset Date shall equal (a) the Money Market Yield
(calculated as described below) of the per annum rate (quoted on a
bank discount basis) on the relevant Commercial Paper Interest
Determination Date for commercial paper having the Index Maturity
specified on the face hereof, (i) as such rate is published by the
Board of Governors of the Federal Reserve System in "Statistical
Release H.15(519), Selected Interest Rates" or any successor
publication of the Board of Governors of the Federal Reserve System
("H.15(519)") under the heading "Commercial Paper" or (ii) if such
rate is not published before 3:00 p.m., New York City time, on the
relevant Calculation Date, then as such rate is published by the
Federal Reserve Bank of New York in its daily statistical release,
"Composite 3:30 p.m. Quotations for U.S. Government Securities" or
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any successor publication published by the Federal Reserve Bank of New
York ("Composite Quotations") under the heading "Commercial Paper" or
(b) if by 3:00 p.m. New York City time, on such Calculation Date, such
rate is not yet published in either H.15(519) or Composite Quotations,
the Money Market Yield of the arithmetic mean of the offered per annum
rates (quoted on a bank discount basis) as of 11:00 a.m., New York
City time, on such Commercial Paper Interest Determination Date, of
three leading dealers of commercial paper in The City of New York
(which may include one or more of the Agents) selected by the
Calculation Agent for commercial paper of the Index Maturity specified
on the face hereof placed for an industrial issuer whose bond rating
is "AA", or the equivalent, from a nationally recognized rating
agency[, in any of the above cases (a) or (b) as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face
hereof, and then (y) by the multiplication by the Spread Multiplier,
if any, specified on the face hereof]; provided, however, that, if
fewer than three dealers selected as provided above by the Calculation
Agent are quoting as mentioned in this sentence, the interest rate
hereon for such Interest Reset Date will be the interest rate hereon
in effect on such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = 100 x 360 x D ,
-------------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on
a bank discount basis and expressed as a decimal and "M" refers to the
actual number of days in the period for which interest is being
calculated.
Prime Rate. If the Interest Rate Basis of this Security is the
Prime Rate, the interest rate hereon for any Interest Reset Date shall
equal (a)(i) the rate for the relevant Prime Rate Interest
Determination Date set forth in H.15(519) under the heading "Bank
Prime Loan", or (ii) if such rate is not published before 9:00 a.m.,
New York City time, on the relevant Calculation Date, then the
arithmetic mean of the rates of interest publicly announced by each
bank that appears on the display designated as page "USPRIME1" on the
Reuter Monitor Money Rates Service (or such other page as may replace
the USPRIME1 page on that service for the purpose of displaying prime
rates or base lending rates of major United States banks) ("Reuters
Screen USPRIME1 Page") as
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such bank's prime rate or base lending rate as in effect for such
Prime Rate Interest Determination Date as quoted on the Reuters Screen
USPRIME1 Page on such Prime Rate Interest Determination Date or (b) if
fewer than four such rates appear on the Reuters Screen USPRIME1 Page
on such Prime Rate Interest Determination Date, the arithmetic mean of
the prime rates or base lending rates (quoted on the basis of the
actual number of days in the year divided by a 360-day year) as of the
close of business on such Prime Rate Interest Determination Date by
three major banks in The City of New York selected by the Calculation
Agent, in any of the above cases (a) or (b) as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face
hereof, and then (y) by the multiplication by the Spread Multiplier,
if any, specified on the face hereof; provided, however, that, if
fewer than three banks selected as provided above by the Calculation
Agent are quoting as mentioned in this sentence, the interest rate
hereon for such Interest Reset Date will be the interest rate hereon
in effect on such Prime Rate Interest Determination Date.
LIBOR. If the Interest Rate Basis of this Security is LIBOR, the
interest rate hereon for any Interest Reset Date shall be determined
in accordance with the following provisions:
(a) On the relevant LIBOR Interest Determination Date, the
interest rate will be either (i) if "LIBOR Reuters" is specified on
the face hereof, the arithmetic mean of the offered rates (unless the
Designated LIBOR Page by its terms provides only for a single rate, in
which case such single rate shall be used) for deposits in the Index
Currency having the Index Maturity specified on the face hereof,
commencing on the applicable Interest Reset Date, that appear (or, if
only a single rate is required as aforesaid, appears) on the
Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date, or (ii) if "LIBOR Telerate" is specified
on the face hereof or if neither "LIBOR Reuters" nor "LIBOR Telerate"
is specified on the face hereof as the method of calculating LIBOR,
the rate for deposits in the Index Currency having the Index Maturity
specified, commencing on such Interest Reset Date, that appears on the
Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR
Interest Determination Date in any of the above cases (i) or (ii) as
adjusted (x) by the addition or subtraction of the Spread, if any,
specified on the face hereof, and then (y) by the multiplication by
the Spread Multiplier, if any, specified on the face hereof. If fewer
than two offered rates appear, or if no
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rate appears, the interest rate hereon for such LIBOR Interest Reset
Date will be determined as described in (b) below.
(b) For a LIBOR Interest Determination Date on which fewer than two
offered rates for the Index Maturity specified on the face hereof appear on
the Designated LIBOR Page, the Calculation Agent will request the principal
London offices of each of four major reference banks in the London
interbank market, as selected by the Calculation Agent after consultation
with the Company, to provide the Calculation Agent with its offered
quotation for deposits in the Index Currency for the period of the Index
Maturity designated in the applicable Pricing Supplement, commencing on the
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination
Date and in a principal amount that is representative for a single
transaction in such Index Currency in such market at such time. If at least
two such quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., or such other time specified in the applicable
Pricing Supplement, in the applicable Principal Financial Center, on such
LIBOR Interest Determination Date by three major banks in such Principal
Financial Center selected by the Calculation Agent after consultation with
the Company for loans in the Index Currency to leading European banks,
having the Index Maturity designated in the applicable Pricing Supplement
and in a principal amount that is representative for a single transaction
in such Index Currency in such market at such time, as adjusted (x) by the
addition or subtraction of the Spread, if any, specified on the face
hereof, and by (y) the multiplication of the Spread Multiplier, if any,
specified on the face hereof; provided, however, that if the banks so
selected by the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR determined on such LIBOR Interest Determination Date will
be LIBOR in effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in
the applicable Pricing Supplement, the display on the Reuter Monitor Money Rates
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency, or (b) if
"LIBOR Telerate" is specified in the applicable Pricing
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<PAGE>
Supplement or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified in the
applicable Pricing Supplement as the method for calculating LIBOR, the display
on the Dow Jones Telerate Service (or any successor service) for the purpose of
displaying the London interbank rates of major banks for the applicable Index
Currency.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be United States dollars.
"Principal Financial Center" means the capital city of the country
issuing the currency or composite currency in which any payment in respect of
the relevant Securities is to be made or, solely with respect to the calculation
of LIBOR, the Index Currency, except that with respect to U.S. dollars, Deutsche
marks, Italian lira, Swiss francs, Dutch guilders and ECUs, the Principal
Financial Center shall be The City of New York, Frankfurt, Milan, Zurich,
Amsterdam and Brussels, respectively.
Treasury Rate. If the Interest Rate Basis of this Security is the
Treasury Rate, the interest rate hereon for any Interest Reset Date shall
equal (a) the rate for the auction on the relevant Treasury Interest
Determination Date of direct obligations of the United States ("Treasury
Bills") having the Index Maturity specified on the face hereof, (i) as such
rate is published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Auction Average (Investment)" or (ii) if such
rate is not so published by 9:00 a.m., New York City time, on the relevant
Calculation Date, then the auction average rate (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) for such auction as otherwise announced by the
United States Department of the Treasury or (b) if the results of such
auction of Treasury bills having the Index Maturity specified on the face
hereof are not published or reported as provided above by 3:00 p.m., New
York City time, on such Calculation Date or if no such auction is held
during such week, then the rate set forth in H.15(519) for the relevant
Treasury Interest Determination Date for the Index Maturity specified on
the face hereof under the heading "U.S. Government Securities/Treasury
Bills/Secondary Market" or (c) if such rate is not so published by 3:00
p.m., New York City time, on the relevant Calculation Date, then the yield
to maturity (expressed as a bond equivalent, on
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the basis of a year of 365 or 366 days, as applicable, and applied on a
daily basis) of the arithmetic mean of the secondary market bid rates as of
approximately 3:30 p.m., New York City time, on such Treasury Interest
Determination Date, of three primary United States government securities
dealers in The City of New York selected by the Calculation Agent for the
issue of Treasury Bills with a remaining maturity closest to the Index
Maturity specified on the face hereof, in any of the above cases (a), (b)
or (c) as adjusted (x) by the addition or subtraction of the Spread, if
any, specified on the face hereof, and then (y) by the multiplication by
the Spread Multiplier, if any, specified on the face hereof; provided,
however, that, if fewer than three dealers selected as provided above by
the Calculation Agent are quoting as mentioned in this sentence, the
interest rate hereon for such Interest Reset Date will be the interest rate
hereon in effect on such Treasury Interest Determination Date.
CD Rate. If the Interest Rate Basis of this Security is the CD Rate,
the interest rate hereon for any Interest Reset Date shall equal (a) the
rate for the relevant CD Rate Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified on the face
hereof (i) as published in H.15(519) under the heading "CDs (Secondary
Market)" or (ii) if such rate is not published before 9:00 a.m., New York
City time, on the relevant Calculation Date, then the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit having
the Index Maturity specified on the face hereof as published in Composite
Quotations under the heading "Certificates of Deposit" or (b) if by 3:00
p.m., New York City time, on such Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, the arithmetic mean
of the secondary market offered rates, as of 10:00 a.m., New York City
time, on such CD Rate Interest Determination Date, of three leading nonbank
dealers of negotiable U.S. dollar certificates of deposit in The City of
New York selected by the Calculation Agent for negotiable certificates of
deposit of major United States money market banks with a remaining maturity
closest to the Index Maturity specified on the face hereof in a
denomination of U.S. $5,000,000, in any of the above cases (a) or (b) as
adjusted (x) by the addition or subtraction of the Spread, if any,
specified on the face hereof, and then (y) by the multiplication by the
Spread Multiplier, if any, specified on the face hereof; provided, however,
that, if fewer than three dealers selected as provided above by the
Calculation Agent are
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<PAGE>
quoting as mentioned in this sentence, the interest rate hereon for such
Interest Reset Date will be the interest rate hereon in effect on such CD
Rate Interest Determination Date.
Federal Funds Rate. If the Interest Rate Basis of this Security is the
Federal Funds Rate, the interest rate hereon for any Interest Reset Date
shall equal (a) the rate on the relevant Federal Funds Interest
Determination Date for Federal Funds (i) as published in H.15(519) under
the heading "Federal Funds (Effective)" or (ii) if such rate is not
published before 9:00 a.m., New York City time, on the relevant Calculation
Date, then the rate on such Federal Funds Interest Determination Date as
published in Composite Quotations under the heading "Federal
Funds/Effective Rate" or (b) if by 3:00 p.m., New York City time, on such
Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, the arithmetic mean of the rates, as of 9:00 a.m.,
New York City time, on such Federal Funds Interest Determination Date, for
the last transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York selected by
the Calculation Agent, in any of the above cases (a) or (b) as adjusted (x)
by the addition or subtraction of the Spread, if any, specified on the face
hereof, and then (y) by the multiplication by the Spread Multiplier, if
any, specified on the face hereof; provided, however, that, if fewer than
three brokers selected as provided above by the Calculation Agent are
quoting as mentioned in this sentence, the interest rate hereon for such
Interest Reset Date will be the interest rate hereon in effect on such
Federal Funds Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified on the face hereof. In addition, the interest rate hereon will
in no event be higher than the maximum rate permitted by New York law, as the
same may be modified by United States law of general application.
The Company will at all times appoint and maintain a banking
institution that is not an Affiliate of the Company as Calculation Agent
hereunder. The Company has initially appointed the Calculation Agent specified
on the face hereof as such Calculation Agent and will give prompt written notice
to the Trustee of any change in such appointment. The Company will cause the
Calculation Agent to calculate the interest rate on this Security for any
Interest Reset Date in accor-
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dance with the foregoing on or before the Calculation Date pertaining to the
related Interest Determination Date. Except as otherwise provided herein, all
percentages resulting from any calculations will be rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point
(e.g., 9.876541% (or .09876541) being rounded to 9.87655% (or .0987655)), and
all U.S. dollar amounts used in or resulting from such calculations will be
rounded to the nearest cent (with one-half cent being rounded upwards). The
Calculation Agent's determination of any interest rate will be final and binding
in the absence of manifest error.
Upon the request of the Holder of this Security, the Company will
cause the Calculation Agent to provide to such Holder the interest rate hereon
then in effect and, if determined, the interest rate hereon which will become
effective on the next Interest Reset Date.
The Interest Determination Date pertaining to an Interest Reset Date
if the rate of interest hereon shall be determined in accordance with the
provisions under the headings above entitled "Commercial Paper Rate" (the
"Commercial Paper Interest Determination Date"), "Prime Rate" (the "Prime Rate
Interest Determination Date"), "LIBOR" (the "LIBOR Interest Determination
Date"), "CD Rate" (the "CD Rate Interest Determination Date") and "Federal Funds
Rate" (the "Federal Funds Rate Interest Determination Date") will be the second
Market Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date if the rate of interest hereon shall be
determined in accordance with the provisions under the heading above entitled
"Treasury Rate" (the "Treasury Interest Determination Date") will be the day of
the week in which such Interest Reset Date falls on which Treasury bills would
normally be auctioned. Treasury bills are usually sold at auction on Monday of
each week, unless that day is a legal holiday, in which case the auction is
usually held on the following Tuesday, except that such auction may be held on
the preceding Friday. If, as the result of a legal holiday, an auction is so
held on the preceding Friday, such Friday will be the Treasury Interest
Determination Date pertaining to the Interest Reset Date occurring in the next
succeeding week. If an auction date shall fall on any Interest Reset Date for a
Treasury Rate Security, then such Interest Reset Date shall instead be the first
Market Day immediately following such auction date.
The Calculation Date pertaining to any LIBOR Interest Determination
Date for any Security shall be such LIBOR Interest Determination Date, and the
Calculation Date pertaining to any other Interest Determination Date for any
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Security shall be the tenth day after such Interest Determination Date or, if
any such day is not a Market Day for such Security, the next succeeding such
Market Day.
Payments of interest hereon with respect to any Interest Payment Date
will include interest accrued to but excluding such Interest Payment Date;
provided, however, that, if the Interest Reset Period with respect to this
Security is weekly, the interest payable on any Interest Payment Date, other
than interest payable on the date on which principal is payable, will include
interest accrued to but excluding the day following the next preceding Regular
Record Date.
Accrued interest hereon from the Original Issue Date or from the last
date to which interest has been paid is calculated by multiplying the principal
amount of this Security by an accrued interest factor. Such accrued interest
factor is computed by adding the interest factor calculated for each day from
the Original Issue Date, or from the last date to which interest has been paid,
to but excluding the date for which accrued interest is being calculated. The
interest factor (expressed as a decimal) for each such day is computed by
dividing the interest rate (expressed as a decimal) applicable to such day by
360 or, if the Interest Rate Basis for this Security is the Treasury Rate, by
the actual number of days in the year.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security or (ii) certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain
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<PAGE>
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security or Securities issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, in the case of any Global Security, certain additional limitations)
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company at the Place of Payment, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar, duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
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<PAGE>
The Securities of this series are issuable only in registered form
without coupons in denominations (the "Authorized Denomination") of (i) if
denominated in U.S. dollars, $100,000 and any integral multiple of $1,000 in
excess thereof or (ii) if denominated in a Specified Currency other than U.S.
dollars, the amount of such Specified Currency equivalent, at the noon buying
rate in The City of New York for cable transfers for such Specified Currency
(the "Exchange Rate") on the sixth Business Day in The City of New York and in
the country issuing such currency (or, for ECUs, in an ECU account) next
preceding the Original Issue Date, to U.S. $100,000 (rounded down to an integral
multiple of 10,000 units of the Specified Currency) and any greater amount that
is an integral multiple of 10,000 units of such Specified Currency. The
Securities of this series may be issued, in whole or in part, in the form of one
or more Global Securities bearing the legend specified in the Indenture
regarding certain restrictions on registration of transfer and exchange and
issued to The Depository Trust Company as depositary for the Global Securities
of this series (the "Depositary") or its nominee and registered in the name of
the Depositary or such nominee. As provided in the Indenture and subject to
certain limitations (including, if this Security is a Global Security, certain
additional limitations) therein set forth, Securities of this series issued in
definitive registered form are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security shall be governed by and construed in accordance with
the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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<PAGE>
PROVIDIAN CORPORATION
MEDIUM-TERM NOTE, SERIES E CUSIP ____
OPTION TO ELECT REPAYMENT
TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE
AT THE OPTION OF THE HOLDER AND THE HOLDER
ELECTS TO EXERCISE SUCH RIGHT
The undersigned hereby irrevocably requests and instructs the Company
to repay the within Security (or portion thereof specified below) pursuant to
its terms at a price equal to the principal amount thereof, together with
interest to the repayment date, to the undersigned, at
________________________________________________________________________________
(please print or typewrite name and address of the undersigned)
For this Security to be repaid the Company must receive at the
applicable address of the Paying Agent set forth below or at such other place or
places of which the Company shall from time to time notify the holder of the
within Security, on or before the [fifteenth], but not earlier than the [twenty-
fifth], calendar day, or, if such day is not a Business Day, the next succeeding
Business Day, prior to the repayment date, (i) this Security, with this "Option
to Elect Repayment" form duly completed, or (ii) a telegram, telex, facsimile
transmission, or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or a trust
company in the United States of America setting forth (a) the name, address and
telephone number of the holder of the Security, (b) the principal amount of the
Security and the amount of the Security to be repaid, (c) a statement that the
option to elect repayment is being exercised thereby, and (d) a guarantee
stating that the Security to be repaid with the form entitled "Option to Elect
Repayment" on the addendum to the Security duly completed will be received by
the Company not later than 5 Business Days after the date of such telegram,
telex, facsimile transmission or letter (and such Security and form duly
completed are received by the Company by such fifth Business Day). The address
to which such deliveries are to be made is First Trust of New York, National
Association, Attention: ______________, 100 Wall Street, New York, New York
10005 (or, at such other places as the Company shall notify the holders of the
Securities).
If less than the entire principal amount of the within Security is to
be repaid, specify the portion thereof
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(which shall be equal to the Authorized Denominations) which the holder elects
to have repaid: _______________; and specify the denomination or denominations
(which shall be equal to the Authorized Denomination) of the Security or
Securities to be issued to the holder for the portion of the within Security not
being repaid (in the absence of any specification, one such Security will be
issued for the portion not being repaid): _______________.
Date: _______________ ________________________________
Notice: The signature to this Option to
Elect Repayment must correspond with the
name written upon page 3 of the Security
in every particular without alteration or
enlargement or any other change
whatsoever.
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<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of the within Security, 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 the right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - __________ Custodian _________
(Cust) (Minor)
under Uniform Gifts to Minors Act
______________________________
(State)
Additional abbreviations may also be used
though not in the above list.
_____________________________
-24-
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto__________
___________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_______________________
/______________________/
___________________________________________________________________________
___________________________________________________________________________
(Please Print or Typewrite Name and Address
Including Postal Zip Code of Assignee)
___________________________________________________________________________
the within Security and all rights thereunder, and hereby irrevocably
constitutes and appoints __________________________________________________
___________________________________________________________________________
to transfer said Security on the books of the Company, with full power of
substitution in the premises.
Dated:______________
Signature Guaranteed
____________________________________ _______________________________
NOTICE: Signature must be guaranteed NOTICE: The signature to this
by a member firm of the New York assignment must correspond with
Stock Exchange or a commercial bank the name as written upon the
or trust company. face of the within Security in
in every particular, without
alteration or enlargement or
any change whatever.
-25-
<PAGE>
Exhibit 4.2
PROVIDIAN CORPORATION
Providian Center
400 West Market Street
Louisville, Kentucky 40202
September 27, 1996
First Trust of New York, National Association
100 Wall Street
New York, New York 10005
Gentlemen:
This Letter Agreement confirms our appointment of you and any corporation
into which you may be merged or converted or with which you may be consolidated,
or any corporation resulting from any merger, consolidation or conversion to
which you shall be a party, or any corporation succeeding to your corporate
agency or corporate trust business as Paying Agent and Calculation Agent in
respect of, and in accordance with the terms and provisions of a series of
Securities to be issued under the Indenture, dated as of January 1, 1994,
(herein called the "Indenture"), between Providian Corporation (the "Company")
and First Trust of New York, National Association (as successor to Morgan
Guaranty Trust Company of New York) as Trustee (the "Trustee"), and entitled the
Medium-Term Notes, Series E (the "Medium-Term Notes") of the Company, which
Medium-Term Notes are to be issued substantially in the forms attached hereto as
Annex I. All capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Indenture.
This Letter Agreement further confirms our appointment of you and any such
successor corporation as Issuing Agent in connection with certain procedures to
be followed with respect to the settlement of sales of Medium-Term Notes in
accordance with the Administrative Procedure (the "Procedure") attached hereto
as Annex II.
You agree to perform the duties and obligations and carry out the
transactions ascribed to the Paying Agent and Calculation Agent in the
Indenture, the Notes and the Procedure (the Indenture, the Notes, the Procedure
and this Letter Agreement being referred to collectively herein as the
"Documents") and to the Issuing Agent in the Procedure. In addition, you will
<PAGE>
furnish the Company with appropriate records of all transactions carried out by
you as Paying Agent and as Calculation Agent and as Issuing Agent at such
intervals as the Company shall from time to time request.
You and the Company agree as follows:
(i) You undertake to perform such duties and only such duties as are
specifically set forth in the Documents, you shall be responsible only for the
performance of such duties and obligations as are specifically set forth in the
Documents and no implied covenants or obligations shall be read into the
Documents against you.
(ii) In the absence of bad faith on your part, you may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to you and conforming to the
requirements of the Documents; but in the case of any such certificates or
opinions which pursuant to the Documents are specifically required to be
furnished to you, you shall be under a duty to examine the same to determine
whether or not they conform to the requirements of the Documents.
(iii) No provision of the Documents shall be construed to relieve you from
liability for your own negligent action, your own negligent failure to act, or
your own wilful misconduct, except that
(a) this clause (iii) shall not be construed to limit the effect of
clauses (i) and (ii) above;
(b) you shall not be liable for any error of judgment made in good
faith by any of your officers or employees unless it shall be proved
that you or they were negligent in ascertaining the pertinent facts;
and
(c) no provision of the Documents shall require you to expend or risk
your own funds or otherwise incur any financial liability in the
performance of any of your duties under the Documents, or in the
exercise of any of your rights or powers, if you shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
you.
(iv) Whether or not therein expressly so provided, every provision of the
Documents relating to your conduct, affecting your liability or affording
protection to you shall be subject to the provisions of clauses (i), (ii) and
(iii) above.
-2-
<PAGE>
(v) Subject to clauses (i), (ii), (iii) and (iv) above:
(a) you 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 you 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 in the Documents
shall be sufficiently evidenced by a written request or order signed
in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary, an Assistant Secretary, or an Assistant General Counsel and
any resolution of the Board of Directors may be sufficiently evidenced
by a copy of a resolution certified by the Secretary, an Assistant
Secretary, or an Assistant General Counsel 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;
(c) whenever in the performance of your duties under the Documents you
shall deem it reasonably desirable that a matter be proved or
established prior to taking, suffering or omitting any action under
the Documents, you (unless other evidence be specifically prescribed
in the Documents) may, in the absence of bad faith on your part, rely
upon a certificate signed by the Chairman of the Board, the President
or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary, an Assistant Secretary or an Assistant General Counsel of
the Company;
(d) you may consult with counsel and the written advice of such
counsel or any written opinion of such counsel as shall be acceptable
to you (and who may be counsel to the Company) shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by you under the Documents in good faith and in
reliance thereon;
(e) you 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 you, in your discretion,
-3-
<PAGE>
may make such further inquiry or investigation into such facts or
matters as you may reasonably see fit, and, if you shall determine to
make such further inquiry or investigation, you shall be entitled to
conduct, during the Company's regular business hours, a reasonable
examination of the books, records and premises of the Company,
personally or by agent or attorney; and
(f) you shall not be liable for any action taken or omitted by you in
good faith and believed by you to be authorized or within the
discretion, rights or powers conferred upon you by the Documents.
Neither you nor your officers or employees shall be required to
ascertain whether any issuance or sale of Notes has been duly
authorized or is in compliance with any other agreement to which the
Company is a party.
The Company agrees:
(i) to pay to you such reasonable compensation as shall be agreed to by
you and the Company from time to time for all services rendered by you pursuant
to the Documents;
(ii) to reimburse you upon your request for all reasonable expenses,
disbursements and advances incurred or made by you in accordance with the
Documents (including the reasonable compensation and the reasonable expenses and
disbursements of your agents and counsel), except to the extent any such
expense, disbursement or advance is caused by your own negligence, bad faith, or
wilful misconduct;
(iii) to indemnify and hold harmless First Trust of New York, National
Association, its directors, officers, employees and duly authorized agents from
and against any loss, liability (including liability for penalties), claim,
damage, action, suit, judgment, cost or expense except to the extent caused by
the negligence, bad faith, or wilful misconduct of First Trust of New York,
National Association, or such director, officer, employee or agent, arising out
of or in connection with the performance of its or their duties under the
Documents, including the reasonable costs and expenses of defending yourself
against any such claim or liability.
The obligations of the Company under clauses (ii) and (iii) immediately
above shall survive termination of this Agreement.
(iv) from time to time to furnish you with a certificate of the Company
certifying the incumbency and specimen signatures of officers authorized (a) to
execute Notes on behalf of the Company by manual or facsimile signature and (b)
to give
-4-
<PAGE>
instructions to you in connection with the issuance of Notes (an "Authorized
Representative").
All Note issuance instructions shall be given by an Authorized
Representative by telephone, facsimile transmission, or in writing. Instructions
given by telephone, facsimile transmission, or in writing shall be given by an
Authorized Representative who has been previously certified in writing to you as
a person authorized to give such instructions hereunder. All instructions must
be received by you in the times set forth in the Procedure.
It is understood that although you are instructed to deliver Notes against
payment in immediately available funds, delivery of any certificated Notes, in
accordance with the custom prevailing in the market, will be made before actual
receipt of payment. Once you have delivered any certificated Notes to an Agent
or its designated consignee or the designated consignee of the Company against
receipt for payment, the Company shall bear the risk that such Agent or
designated consignee fails to remit payment for such Notes or to return the same
to you. It is further understood that each delivery of Notes hereunder shall be
subject to the rules of the New York Clearing House in effect at the time of
such delivery.
Telephone instructions given by an Authorized Representative to you will be
electronically voice-recorded by you, and the Company hereby consents to such
recording. All issuance instructions given by telephone shall be immediately
repeated back to the party giving such instructions to confirm that such
instructions were correctly understood. Should any discrepancy develop with
respect to such telephonic instructions, the instructions as repeated by you
will be deemed the controlling and proper instructions. Subject to clauses (i),
(ii), (iii), and (iv) appearing on pages two and three of this Letter Agreement,
you shall incur no liability to the Company in acting hereunder upon telephonic
or other instructions contemplated hereby which the recipient thereof believed
in good faith to have been given by an Authorized Representative.
You may at any time resign as Paying Agent, Calculation Agent or Issuing
Agent by giving written notice to the Company of such intention on your part,
specifying the date on which your desired resignation shall become effective;
provided, however, that such date shall be not less than three months after the
giving of such notice. You may be removed at any time by the filing with you of
an instrument in writing signed by a duly authorized officer of the Company and
specifying such removal and the date upon which it is intended to become
effective. Such resignation or removal shall take effect on the date of the
appointment by the Company of a successor agent(s) and the acceptance of such
appointment by such successor agent(s). In
-5-
<PAGE>
the event of your resignation, if a successor agent(s) has not been appointed by
the Company within three months after the giving of notice by you of your
intention to resign, you may, at the expense of the Company, petition any court
of competent jurisdiction for appointment of a successor agent(s).
If the foregoing is in accordance with your understanding, please sign and
return to us seven counterparts hereof, whereupon this letter and the acceptance
thereof by you shall constitute a binding agreement between you and us in
accordance with its terms.
Very truly yours,
PROVIDIAN CORPORATION
By: /s/ R. Michael Slaven
-----------------------
R. Michael Slaven
Assistant Secretary
Accepted in New York,
New York, as of the date
hereof:
FIRST TRUST OF NEW YORK,
NATIONAL ASSOCIATION
By: /s/ M. Fahey
-----------------------
Name:
Title:
-6-
<PAGE>
EXHIBIT 4.3
[LOGO]
BOOK-ENTRY-ONLY MEDIUM-TERM NOTE, DEPOSIT NOTE, OR
MEDIUM-TERM BANK NOTE
(MASTER NOTE AND/OR GLOBAL CERTIFICATES) PROGRAM
Letter of Representations
(To be Completed by Issuer, Issuing Agent, and Paying Agent)
PROVIDIAN CORPORATION
---------------------------------------------
(Name of Issuer)
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
DTC PARTICIPANT NUMBER 2897
---------------------------------------------
(Name and DTC Participant Number of Issuing Agent)
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
DTC PARTICIPANT NUMBER 2897
---------------------------------------------
(Name and DTC Participant Number of Paying Agent)
September 27, 1996
------------------
(Date)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
RE: PROVIDIAN CORPORATION
----------------------------------------------------------------------
MEDIUM - TERM NOTES, SERIES E
----------------------------------------------------------------------
----------------------------------------------------------------------
(Description of Note Program, including, as applicable, (i) series
designator (ii) rank of indebtedness and (iii) reference to the
provision of the Securities Act of 1933, as amended, pursuant to
which Note Program is exempt from registration)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the issuance by Issuer from time to time of notes under its note
program described above (the "Securities"). Issuing Agent will act as issuing
agent with respect to the Securities. Paying Agent will act as paying agent
with respect to the Securities. The Securities will be issued pursuant to a
prospectus supplement, private placement memorandum, or other such document
authorizing the issuance of the Securities, dated as of September 27, 1996.
Paying Agent has entered into a Money Market Instrument Master Note and/or
Global Certificates Certificate Agreement, or a Medium-Term Note Certificate
Agreement, with The Depository Trust Company ("DTC") dated as of January 31,
1991, pursuant to which Paying Agent will act as custodian of a Master Note
Certificate and/or Global Certificates evidencing the Securities, when issued.
Paying Agent will amend Exhibit A to such Certificate Agreement to include the
note program described above, prior to issuance of the Securities.
To induce DTC to accept the Securities as eligible for deposit at DTC and to
act in accordance with its Rules with respect to the Securities, Issuer, Issuing
Agent, and Paying Agent make the following representations to DTC:
<PAGE>
1. All or certain issues of the Securities shall be evidenced by one Master
Note Certificate, or by one or more Global Certificates for each issue, in
registered form registered in the name of DTC's nominee, Cede & Co., and such
Certificate or Certificates shall represent 100% of the principal amount of the
Securities issued through DTC. The Master Note Certificate, if any, shall
include the substance of all material provisions set forth in the appropriate
DTC model Master Note for the note program described above, a copy of which
previously has been furnished to Issuing Agent and Paying Agent, and may include
additional provisions as long as they do not conflict with the material
provisions set forth in the DTC model. If the principal amount of an issue of
the Securities to be evidenced by one or more Global Certificates, if any,
exceeds $200,000,000, one Global Certificate shall be issued with respect to
each $200,000,000 of principal amount and an additional Global Certificate
shall be issued with respect to any remaining principal amount. Paying Agent
shall cause each Global Certificate to be stamped with the following legend:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC). ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. Issuer or Issuing Agent has obtained from the CUSIP Service Bureau a
written list of approximately 900 nine-character numbers (the basic first six
characters of which are the same and uniquely identify Issuer and the Securities
to be issued under its note program described above). The CUSIP numbers on such
list have been reserved for future assignment to issues of the Securities. At
any time when fewer than 100 of the CUSIP numbers on such list remain
unassigned, Issuer or Issuing Agent shall promptly obtain from the CUSIP Service
Bureau an additional written list of approximately 900 such numbers.
3. When Securities are to be issued through DTC, Issuing Agent shall give
notice to Paying Agent and issuance instructions to DTC in accordance with DTC's
Procedures, including DTC's Final Plan for DTC Money Market Programs, and DTC's
Issuing/Paying Agent General Operating Procedures and Participant Terminal
System Procedures for Medium-Term Notes (MTNs) Including Deposit Notes and
Medium-Term Bank Notes (the "Procedures"), a copy of which previously has been
furnished to Issuing Agent and Paying Agent. The giving of such issuance
instructions, which include delivery instructions, to DTC shall constitute: (a)
a representation that the Securities are issued in accordance with applicable
law; and (b) a confirmation that a Master Note Certificate, or a Global
Certificate (or Certificates), evidencing such Securities, in the form described
in Paragraph 1, has been issued and authenticated.
4. Issuer recognizes that DTC does not in any way undertake to, and shall not
have any responsibility to, monitor or ascertain the compliance of any
transactions in the Securities' with any exemptions from registration under the
Securities Act of 1933 or of any other state or federal securities laws.
5. If issuance of Securities through DTC is scheduled to take place one or
more days after Issuing Agent has given issuance instructions to DTC, Issuing
Agent may cancel such issuance by giving a cancellation instruction to DTC in
accordance with the Procedures.
6. At any time that Paying Agent has Securities in its DTC accounts, it may
request withdrawal of such Securities from DTC by giving a withdrawal
instruction to DTC in accordance with the Procedures. Upon DTC's acceptance of
such withdrawal instruction. Paying Agent shall reduce the principal amount of
the Securities evidenced, as the case may be, by the Master Note Certificate, or
by one or more Global Certificates, accordingly.
<PAGE>
7. In the event of any solicitation of consents from or voting by holders of
the Securities, Issuer, Issuing Agent, or Paying Agent shall establish a record
date for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. If delivered by hand or sent by mail overnight delivery such notice shall
be sent to:
Supervisor; Proxy
Reorganization Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
If sent by telecopy, such notice shall be sent to (212) 709-6896 or (212) 709-
6897. Issuer, Issuing Agent, or Paying Agent shall confirm DTC's receipt of such
telecopy by telephoning (212) 709-6870.
8. Notices of reorganization events (corporate actions) with respect to the
Securities, including full or partial redemptions (calls), repayments (puts),
extensions of maturities, resets of interest rates or spreads, mandatory
tenders, and consolidations of individual issues, shall be given to DTC by
Paying Agent in accordance with the Procedures.
9. Paying Agent may override DTC's determination of interest and principal
payment dates, in accordance with the Procedures.
10. Notice regarding the amount of variable interest and principal payments on
the Securities shall be given to DTC by Paying Agent in accordance with the
Procedures.
11. All notices sent to DTC shall contain the CUSIP number of the Securities.
12. Paying Agent shall confirm with DTC daily by CUSIP number the face value
of the Securities outstanding, and Paying Agent's corresponding interest and
principal payment obligation, in accordance with the Procedures.
13. DTC may direct Issuer, Issuing Agent, or Paying Agent to use any other
number or address as the number or address to which notices may be sent.
14. Payments on the Securities, including payments in currencies other than
U.S. Dollar, shall be made by Paying Agent in accordance with the Procedures.
15. In the event that Issuer determines that beneficial owners of Securities
shall be able to obtain certificated Securities, Issuer or Paying Agent shall
notify DTC of the availability of certificates. In such event, Issuer or Paying
Agent shall issue, transfer, and exchange certificates in appropriate amounts,
as required by DTC and others.
16. DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to Issuer or
Paying Agent (at which time DTC will confirm with Issuer or Paying Agent the
aggregate amount of Securities outstanding by CUSIP number). Under such
circumstances, at DTC's request Issuer and Paying Agent shall cooperate fully
with DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
17. Issuer: (a) understands that DTC has no obligation to, and will not,
communicate to its Participants or to any person having an interest in the
Securities any information contained in the Master Note Certificate, if any, or
the Global Certificates, if any; and (b) acknowledges that neither
<PAGE>
DTC's Participants nor any person having an interest in the Securities shall be
deemed to have notice of the provisions of such Certificate or Certificates by
virtue of submission of such Certificate or Certificates to DTC.
18. Issuer authorizes DTC to provide to Issuing Agent or Paying Agent listings
of DTC Participants' holdings with respect to the Securities from time to time
at the request of Issuing Agent or Paying Agent. Issuer authorizes Issuing Agent
and Paying Agent to provide DTC with such signatures, exemplars of signatures,
and authorizations to act as may be deemed necessary by DTC to permit DTC to
discharge its obligations to DTC Participants and appropriate regulatory
authorities.
19. Nothing herein shall be deemed to require Issuing Agent or Paying Agent to
advance funds on behalf of Issuer.
Note:
- -----
Schedule A contains statements that DTC believes accurately describe DTC, the
method of effecting book-entry transfers of securities distributed through DTC,
and certain related matters.
Very truly yours,
Providian Corporation
---------------------------------------------
(Issuer)
By: /s/ Gregory P. Givan
------------------------------------------
(Authorized Officer's Signature)
First Trust of New York, National Association
---------------------------------------------
(Issuing Agent)
By: /s/ M. Fahey
-----------------------------------------
(Authorized Officer's Signature)
First Trust of New York, National Association
---------------------------------------------
(Paying Agent)
By: /s/ M. Fahey
-----------------------------------------
(Authorized Officer's Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ James Femia
------------------------------------
<PAGE>
SCHEDULE A
----------
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
-----------------------------------
(Prepared by DTC--bracketed material may be applicable only to certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will act as securities
depository for the securities (the "Securities"). The Securities will be issued
as fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Security certificate will be issued
for [each issue of] the Securities, [each] in the aggregate principal amount of
such issue, and will be deposited with DTC. [If however, the aggregate
principal amount of [any] issue exceeds $200 million, one certificate will be
issued with respect to each $200 million of principal amount and an additional
certificate will be issued with respect to any remaining principal amount of
such issue.]
2. DTC is limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Participants")
deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in Participants' accounts,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The Rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Securities on DTC's
records. The ownership interest of each actual purchaser of each Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to receive
written confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Securities are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in Securities,
except in the event that use of the book-entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Securities with DTC and their registration in the
name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
<PAGE>
[6. Redemption notices shall be sent to Cede & Co. If less than all of the
Securities within an issue are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each Direct Participant in such issue to be
redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to DTC.
DTC's practice is to credit Direct Participants accounts on payable date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of DTC, the Agent, or the Issuer,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to DTC is the responsibility of
the Issuer or the Agent, disbursement of such payments to Direct Participants
shall be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities
purchased or tendered, through its Participant, to the [Tender/Remarketing]
Agent, and shall effect delivery of such Securities by causing the Direct
Participant to transfer the Participant's interest in the Securities, on DTC's
records, to the [Tender/Remarketing] Agent. The requirement for physical
delivery of Securities in connection with a demand for purchase or a mandatory
purchase will be deemed satisfied when the ownership rights in the Securities
are transferred by Direct Participants on DTC's records.]
10. DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to the Issuer
or the Agent. Under such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to be printed and
delivered.
11. The Issuer may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuer believes to be reliable, but the
Issuer takes no responsibility for the accuracy thereof.
