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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
Date of Report (Date of earliest event reported): July 8, 1996
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Advanta Corp.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-14120 23-1462070
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
</TABLE>
<TABLE>
<S> <C>
Five Horsham Business Center, 300 Welsh Road, Horsham, Pennsylvania 19703
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (215) 657-4000
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Form 8-K Advanta Corp.
July 8, 1996
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
The exhibits listed in the accompanying Index to Exhibits
relate to the Registration Statement (No.333-05701) on Form
S-3 of the registrant and are filed herewith for incorporation
by reference in such Registration Statement.
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Form 8-K Advanta Corp.
July 8, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of l934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Advanta Corp.
By: /s/ Gene S. Schneyer
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Gene S. Schneyer, Vice President
and General Counsel
July 8, 1996
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Form 8-K Advanta Corp.
July 8, 1996
Index to Exhibits
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<CAPTION>
Exhibit Number Per
Item 60l of
Regulation S-K Description of Document
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<S> <C>
1.3 Distribution Agreement, dated as of July 8, 1996,
among Advanta Corp. and Salomon Brothers
Inc, CS First Boston Corporation, Donaldson, Lufkin &
Jenrette Securities Corporation and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4.1 Form of Fixed Rate Global Medium-Term Note,
Series C
4.2 Form of Floating Rate Global Medium-Term Note,
Series C
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EXHIBIT 1.3
ADVANTA CORP.
MEDIUM-TERM NOTES DUE
9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
July 8, 1996
SALOMON BROTHERS INC
Seven World Trade Center
New York, NY 10048
CS FIRST BOSTON CORPORATION
Park Plaza Avenue
55 East 52nd Street
New York, NY 10055
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
140 Broadway
New York, NY 10005
MERRILL LYNCH & CO.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower, 10th Floor
New York, NY 10281-1310
Dear Sirs:
Advanta Corp., a Delaware corporation (the "Company"), confirms its
agreement with Salomon Brothers Inc, CS First Boston Corporation, Donaldson,
Lufkin & Jenrette Securities Corporation and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated (each referred to as an "Agent" and
collectively referred to as the "Agents") with respect to the issue and
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sale by the Company of its Medium-Term Notes described herein (the "Notes").
The Notes are to be issued pursuant to an indenture (the "Indenture") dated as
of November 15, 1993 between the Company and The Chase Manhattan Bank,
(National Association, as trustee (the "Trustee"). As of the date hereof, the
Company has authorized the issuance and sale of up to U.S. $500,000,000
aggregate principal amount (or its equivalent, based upon the applicable
exchange rate at the time of issuance, in such foreign or composite currencies
as the Company shall designate at the time of issuance) of Notes designated as
its "Medium-Term Notes, Series C" to or through the Agents pursuant to the
terms of this Agreement. It is understood, however, that the Company may from
time to time authorize the issuance of additional series of Notes and that such
additional Notes may be sold to or through the Agents pursuant to the terms of
this Agreement.
This Agreement provides both for the sale of Notes by the Company to
an Agent as principal for resale to investors and other purchasers and for the
sale of Notes by the Company directly to investors (as may from time to time be
agreed to by the Company and the applicable Agent), in which case the
applicable Agent will act as an agent of the Company in soliciting Note
purchases.
The Company has filed with the Securities and Exchange Commission (the
"SEC") two registration statements on Form S-3 (Nos. 33-50883 and 333-05701)
for the registration of debt securities, including the Notes, under the
Securities Act of 1933 (the "1933 Act") and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the SEC under
the 1933 Act (the "1933 Act Regulations"). Such registration statements have
been declared effective by the SEC and the Indenture has been qualified under
the Trust Indenture Act of 1939 (the "1939 Act"). Registration statement No.
333-05701 and, to the extent applicable, registration statement No. 33-50883
(and any further registration statements which may be filed by the Company for
the purpose of registering additional Notes and in connection with which this
Agreement is included or incorporated by reference as an exhibit) and the
prospectus constituting a part thereof, and any prospectus supplements relating
to the Notes, including all documents incorporated therein by reference, as
from time to time amended or supplemented by the filing of documents pursuant
to the Securities Exchange Act of 1934 (the "1934 Act") or the 1933 Act or
otherwise, are referred to herein as the "Registration Statement" and the
"Prospectus", respectively, except that if any revised prospectus shall be
provided to the Agents by the Company for use in connection with the offering
of the Notes, whether or not such revised prospectus is required to be filed by
the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to each Agent for such use. For purposes of this Agreement,
all references to the Registration Statement, the Prospectus or any amendment
or supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System ("EDGAR").
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SECTION 1. Appointment as Agents.
(a) Appointment. Subject to the terms and conditions stated
herein and subject to the reservation by the Company of the right to sell Notes
directly on its own behalf, the Company hereby agrees that Notes will be sold
to or through the Agents. Each Agent is authorized to engage the services of
any other broker or dealer in connection with the offer or sale of the Notes
purchased by such Agent as principal for resale to others but is not authorized
to appoint sub-agents. In connection with sales by an Agent of Notes purchased
by such Agent as principal to other brokers or dealers, such Agent may allow
any portion of the discount it has received in connection with such purchase
from the Company to such brokers or dealers. Each Agent is acting in
connection with the Notes individually and not collectively or jointly. The
appointment of the Agents hereunder is not exclusive and the Company may from
time to time offer Notes for sale otherwise than to or through an Agent;
provided, however, that so long as this Agreement is in effect the Company will
not appoint any other agent for the purpose of soliciting purchases of the
Notes on a continuous basis. It is understood, however, that if from time to
time the Company is approached by a prospective agent offering to solicit a
specific purchase of Notes, the Company may engage such agent with respect to
such specific purchase, provided that (i) such agent is engaged on terms
substantially similar to the applicable terms of this Agreement (including the
same commission schedule as set forth hereto as Schedule A) and (ii) the Agents
are given notice of such purchase promptly, in each case after the purchase is
agreed to.
(b) Sale of Notes. The Company shall not sell or approve the
solicitation of purchases of Notes in excess of the amount which shall be
authorized by the Company from time to time or in excess of the principal
amount of Notes registered pursuant to the Registration Statement. The Agents
will have no responsibility for maintaining records with respect to the
aggregate principal amount of Notes sold, or of otherwise monitoring the
availability of Notes for sale, under the Registration Statement.
(c) Purchases as Principal. The Agents shall not have any
obligation to purchase Notes from the Company as principal, but each Agent may
agree from time to time to purchase Notes as principal. Any such purchase of
Notes by an Agent as principal shall be made in accordance with Section 3(a)
hereof.
(d) Solicitations as Agent. If agreed upon by the Agents and the
Company, the Agents, acting solely as agents for the Company and not as
principal, will solicit purchases of the Notes. Each Agent will communicate to
the Company, orally, each offer to purchase Notes solicited by such Agent on an
agency basis, other than those offers rejected by such Agent. Each Agent shall
have the right, in its discretion reasonably exercised, to reject any proposed
purchase of Notes, as a whole or in part, and any such rejection shall not be
deemed a breach of such Agent's agreement contained herein. The Company may
accept or reject any proposed purchase of the Notes, in whole or in part. Each
Agent shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been
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solicited by such Agent and accepted by the Company. The Agents shall not have
any liability to the Company in the event any such agency purchase is not
consummated for any reason. If the Company shall default on its obligation to
deliver Notes to a purchaser whose offer it has accepted, the Company shall (i)
hold the applicable 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 applicable Agent any commission to which it would be
entitled in connection with such sale.
(e) Reliance. The Company and each Agent agree that any Notes
purchased by such Agent shall be purchased, and any Notes the placement of
which such Agent arranges shall be placed by such Agent, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the
date hereof, as of the date of each acceptance by the Company of an offer for
the purchase of Notes (whether to an Agent as principal or through an Agent as
agent), as of the date of each delivery of Notes (whether to an Agent as
principal or through an Agent as agent) (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall be amended
or supplemented or there is filed with the SEC any document incorporated by
reference into the Prospectus (each of the times referenced above being
referred to herein as a "Representation Date") as follows:
(i) Due Incorporation and Qualification. The
Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Delaware
with corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus;
and the Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify and be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings or business affairs of the Company and its subsidiaries
considered as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company
which is a significant subsidiary (each, a "Significant Subsidiary")
as defined in Rule 405 of Regulation C of the 1933 Act Regulations has
been duly incorporated and is validly existing as a corporation (or,
in the case of Advanta National Bank ("ANB"), validly existing as a
national banking association) in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and conduct its business as
described in the Prospectus and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction
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in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except
where the failure to so qualify and be in good standing would not have
a material adverse effect on the condition, financial or otherwise, or
the earnings or business affairs of the Company and its subsidiaries
considered as one enterprise; and all of the issued and outstanding
capital stock of each Significant Subsidiary has been duly authorized
and validly issued, is fully paid and non-assessable (subject, in the
case of the shares issued by the ANB, to the provisions of Section 55,
Title 12, United States Code) and, except for directors' qualifying
shares, is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(iii) Registration Statement and Prospectus. At
the time the Registration Statement became effective, the Registration
Statement complied, and as of each applicable Representation Date will
comply, in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the SEC promulgated thereunder. The Registration
Statement, at the time it became effective, did not, and at each time
thereafter at which any amendment to the Registration Statement
becomes effective or any Annual Report on Form 10-K is filed by the
Company with the SEC and as of each Representation Date, 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. The Prospectus, as of the date
hereof does not, and as of each Representation Date will not, include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Agents expressly for use in the Registration Statement or Prospectus.
(iv) Incorporated Documents. The documents
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the SEC, complied or when so filed will
comply, as the case may be, in all material respects with the
requirements of the 1934 Act and the rules and regulations promulgated
thereunder (the "1934 Act Regulations").
(v) Accountants. The accountants who certified
the financial statements included or incorporated by reference in the
Prospectus are independent public accountants within the meaning of
the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial
statements and any supporting schedules of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
consolidated
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financial position of the Company and its consolidated subsidiaries as
of the dates indicated and the consolidated results of their
operations for the periods specified; and, except as stated therein,
said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis; and the supporting schedules included in the Registration
Statement present fairly the information required to be stated
therein.
(vii) Authorization and Validity of this Agreement,
the Indenture and the Notes. This Agreement has been duly authorized,
executed and delivered by the Company and, upon execution and delivery
by the Agents, will be a valid and legally binding agreement of the
Company; the Indenture has been duly authorized, executed and
delivered by the Company and, upon execution and delivery by the
Trustee, will be a valid and legally binding obligation of the Company
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and
except further as enforcement thereof may be limited by (i)
requirements that a claim with respect to any Notes denominated other
than in U.S. dollars (or a foreign currency or currency unit judgment
in respect of such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to applicable law or
(ii) governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes have been duly and
validly authorized for issuance, offer and sale pursuant to this
Agreement and, when issued, authenticated and delivered pursuant to
the provisions of this Agreement and the Indenture against payment of
the consideration therefor specified in the Prospectus or agreed upon
pursuant to the provisions of this Agreement, the Notes will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting enforcement of
creditors' rights generally or by general equity principles, and
except further as enforcement thereof may be limited by (i)
requirements that a claim with respect to any Notes denominated other
than in U.S. dollars (or a foreign currency or currency unit judgment
in respect of such claim) be converted into U.S. dollars at a rate or
exchange prevailing on a date determined pursuant to applicable law or
(ii) governmental authority to limit, delay or prohibit the making of
payments outside the United States; the Notes and the Indenture will
be substantially in the form heretofore delivered to the Agents and
conform in all material respects to all statements relating thereto
contained in the Prospectus; and each holder of Notes will be entitled
to the benefits of the Indenture.
(viii) Material Changes. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as may otherwise be stated therein or contemplated
thereby there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
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business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of
business.
(ix) No Defaults; Regulatory Approvals. Neither
the Company nor any of its Significant Subsidiaries is in violation of
its charter or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or any of them or
their properties may be bound, the violation or default of which would
have a material adverse effect on the Company and its subsidiaries
considered as one enterprise; the execution and delivery of this
Agreement and the Indenture and the consummation of the transactions
contemplated herein and therein have been duly authorized by all
necessary corporate action and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
to which the Company or any of its subsidiaries is a party or by which
it or any of them may be bound or to which any of the property or
assets of the Company or any such subsidiary is subject, nor will such
action result in any violation of the provisions of the charter or
by-laws of the Company or any law, administrative regulation or
administrative or court order or decree; and no consent, approval,
authorization, order or decree of any court or governmental agency or
body is required for the consummation by the Company of the
transactions contemplated by this Agreement or in connection with the
sale of Notes hereunder, except such as have been obtained or
rendered, as the case may be, or as may be required under the
securities laws of any state or other jurisdiction of the United
States (the "Blue Sky" laws).
(x) Legal Proceedings; Contracts. No legal or
governmental proceedings are pending to which the Company or any of
its subsidiaries is a party or to which the property of the Company or
any of its subsidiaries is subject that would reasonably be expected
to materially and adversely affect the consummation of this Agreement
or the Indenture or any transaction contemplated hereby or thereby or
which are required to be described in the Registration Statement or
the Prospectus and are not described therein, and to the knowledge of
the Company no proceedings required to be so described have been
threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties; and no contract or
other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations
which has not been so described or filed as required.
(xi) Company and Bank Status. The Company is a
company described in Section 4(f)(1) of the Bank Holding Company Act
of 1956, as amended (the "BHCA"). ANB and Advanta National Bank USA
("AUS", and together with ANB, the "Banks") are in compliance in all
material respects with all regulations of the Office of the
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Comptroller of the Currency, the Board of Governors of the Federal
Reserve System and the Federal Deposit Insurance Corporation (the
"FDIC") the failure to comply with which would have a material adverse
effect on the Company and its subsidiaries considered as one
enterprise. AUS is in compliance with each of the limitations
contained in Section 4(f)(3) of the BHCA.
(xii) The Company is in compliance with all of the
provisions of Section 517.075 of the Florida statutes, and all rules
and regulations promulgated thereunder relating to issuers doing
business in Cuba.
(xiii) Debt Securities Ratings. Unless the Agents
have been otherwise notified in writing, the ratings assigned to any debt
securities of the Company by any nationally recognized statistical rating
organization have not been downgraded from the ratings assigned by such
organizations as of the date of this Agreement and no public announcement has
been made by any nationally recognized statistical rating organization that it
has under surveillance or review, with negative implications, its rating of any
debt securities of the Company.
(b) Additional Certifications. Any certificate signed by any
director or officer of the Company and delivered to the Agents or to counsel
for the Agents in connection with an offering of Notes through an Agent as
agent or the sale of Notes to an Agent as principal shall be deemed a
representation and warranty by the Company to such Agent as to the matters
covered thereby on the date of such certificate and at each Representation Date
subsequent thereto.
SECTION 3. Purchases as Principal; Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by an Agent
and the Company, Notes shall be purchased by such Agent as principal. Such
purchases shall be made in accordance with terms agreed upon by such Agent and
the Company (which terms shall be agreed upon orally, with written confirmation
prepared by such Agent and delivered to the Company). Each Agent's commitment
to purchase Notes as principal 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 purchase of
Notes, unless otherwise agreed, shall be at a discount from the principal
amount of each such Note equivalent to the applicable commission set forth in
Schedule A hereto. The Agents may engage the services of any other broker or
dealer in connection with the resale of the Notes purchased as principal and
may allow any portion of the discount received in connection with such
purchases from the Company to such brokers and dealers. At the time of each
purchase of Notes by an Agent as principal, such Agent shall specify the
requirements, if any, for the stand-off agreement, officer's certificate,
opinion of counsel and comfort letter pursuant to Sections 4(k), 7(b), 7(c) and
7(d) hereof.
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(b) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions herein
set forth, when agreed by the Company and an Agent, such Agent, as an agent of
the Company, will use its reasonable efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth herein and in the Prospectus.
All Notes sold through an Agent as agent will be sold at 100% of their
principal amount unless otherwise agreed to in writing signed by the Company
and such Agent. In connection with any Notes sold by an Agent as agent for the
Company, the Agent shall prepare and deliver to the Company written
confirmation of the terms agreed upon by the Agent and the Company and shall
prepare and deliver to the Company a representation letter substantially in the
form of Exhibit B hereto (the "Agent Representation Letter").
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through an Agent, as agent, commencing
at any time for any period of time or permanently. Upon receipt of
instructions from the Company, the Agents will forthwith suspend solicitation
of purchases from the Company until such time as the Company has advised the
Agents that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, in the form of a
discount, equal to the applicable percentage of the principal amount of each
Note sold by the Company as a result of a solicitation made by such Agent as
set forth in Schedule A hereto.
(c) Administrative Procedures. The purchase price, interest rate
or formula, maturity date and other terms of the Notes (as applicable)
specified in Exhibit A hereto shall be agreed upon by the Company and the
applicable Agent and set forth in a pricing supplement to the Prospectus to be
prepared in connection with each sale of Notes. Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of U.S.$100,000 or any larger amount that is an integral multiple
of U.S. $1,000. Administrative procedures with respect to the sale of Notes
shall be agreed upon from time to time by the Agents, the Company and the
Trustee (the "Procedures"). The Agents and the Company agree to perform the
respective duties and obligations specifically provided to be performed by them
in the Procedures.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify the Agents
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the SEC for filing of any supplement to
the Prospectus relating to the sale of Notes through such Agent or any document
to be filed pursuant to the 1934 Act which will be incorporated by reference in
the Prospectus, (iii) of the receipt of any comments from the SEC with respect
to the Registration Statement or the Prospectus, (iv) of any request by the SEC
for any amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional
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information, and (v) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will give the
Agents advance notice of its intention to file or prepare any additional
registration statement with respect to the registration of additional Notes,
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus (other than an amendment or supplement providing solely for a
change in the interest rates of Notes or any amendment or supplement which
relates exclusively to an offering of debt securities other than the Notes),
whether by the filing of documents pursuant to the 1934 Act, the 1933 Act or
otherwise, and will furnish the Agents with copies of any such amendment or
supplement or other documents proposed to be filed or prepared a reasonable
time in advance of such proposed filing or preparation, as the case may be, and
will not file any such amendment or supplement or other documents in a form to
which the Agents or counsel for the Agents shall reasonably object.
(c) Copies of the Registration Statement and the Prospectus. The
Company will deliver to the Agents one signed and as many conformed copies of
the Registration Statement (as originally filed) and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as the Agents may
reasonably request. The Company will furnish to the Agents as many copies of
the Prospectus (as amended or supplemented) as the Agents shall reasonably
request so long as the Agents are required to deliver a Prospectus in
connection with sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare,
with respect to any Notes to be sold through or to the Agents pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agents and will file such Pricing Supplement pursuant to Rule
424(b)(3) under the 1933 Act not later than the close of business of the SEC on
the fifth business day after the date on which such Pricing Supplement is first
used.
(e) Revisions of Prospectus -- Material Changes. Except as
otherwise provided in subsection (l) of this Section, if at any time during the
term of this Agreement any event shall occur or condition exist as a result of
which it is necessary, in the reasonable opinion of counsel for the Agents or
counsel for the Company, to further amend or supplement the Prospectus in order
that the Prospectus will not include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
the Prospectus is delivered to a purchaser, or if it shall be necessary, in the
reasonable opinion of either such counsel, to amend or supplement the
Registration Statement or the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, immediate notice
shall be given, and confirmed in writing, to the Agents to cease the
solicitation of offers to purchase the Notes in the Agents' capacity as agent
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and to cease sales of any Notes the Agents may then own as principal, and the
Company will promptly amend the Registration Statement and the Prospectus,
whether by filing documents pursuant to the 1934 Act, the 1933 Act or
otherwise, as may be necessary to correct such untrue statement or omission or
to make the Registration Statement and Prospectus comply with such
requirements.
(f) Prospectus Revisions -- Periodic Financial Information.
Except as otherwise provided in subsection (1) of this Section, on or prior to
the date on which there shall be released to the general public interim
financial statement information related to the Company with respect to each of
the first three quarters of any fiscal year or preliminary financial statement
information with respect to any fiscal year, the Company shall cause the
Prospectus to be amended or supplemented to include or incorporate by reference
financial information with respect thereto and corresponding information for
the comparable period of the preceding fiscal year, as well as such other
information and explanations as shall be necessary for an understanding thereof
or as shall be required by the 1933 Act or the 1933 Act Regulations and shall
provide copies of such amendment or supplement to the Agents upon the filing
thereof.
(g) Prospectus Revisions -- Audited Financial Information. Except
as otherwise provided in subsection (1) of this Section, on or prior to the
date on which there shall be released to the general public financial
information included in or derived from the audited financial statements of the
Company for the preceding fiscal year, the Company shall cause the Registration
Statement and the Prospectus to be amended, whether by the filing of documents
pursuant to the 1934 Act, the 1933 Act or otherwise, to include or incorporate
by reference such audited financial statements and the report or reports, and
consent or consents to such inclusion or incorporation by reference, of the
independent accountants with respect thereto, as well as such other information
and explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
(h) Earnings Statements. The Company will make generally
available to its security holders as soon as practicable after the close of the
period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the 1933 Act) covering each twelve month period
beginning, in each case, not later than the first day of the Company's fiscal
quarter next following the "effective date" (as defined in such Rule 158) of
the Registration Statement with respect to each sale of Notes.
(i) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable Blue Sky laws of such states and other jurisdictions of the
United States as the Agents may designate, and will maintain such
qualifications in effect for as long as may be required for the distribution of
the Notes; provided, however, that the Company shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. The Company
will file such statements and reports as may be required by the laws of each
jurisdiction in which the Notes have been qualified as above provided. The
Company will
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promptly advise the Agents of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Notes for sale in
any such state or jurisdiction or the initiating or threatening of any
proceeding for such purpose.
(j) 1934 Act Filings. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file promptly
all documents required to be filed with the SEC pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act.
(k) Stand-Off Agreement. If specified by an Agent in connection
with a purchase by it of Notes as principal, between the date of the agreement
to purchase such Notes and the Settlement Date with respect to such purchase,
the Company will not, without such Agent's prior written consent, offer or
sell, or enter into any agreement to sell, any debt securities of the Company
(other than the Notes that are to be sold pursuant to such agreement,
commercial paper in the ordinary course of business, debt securities sold by
the Company or its selling agents pursuant to the Company's existing retail
note program and any retail medium-term note program subsequently established
by the Company).
(l) Suspension of Certain Obligations. The Company shall not be
required to comply with the provisions of subsections (e), (f) or (g) of this
Section during any period from the time (i) the Agents shall have suspended
solicitation of purchases of the Notes in its capacity as agent pursuant to a
request from the Company and (ii) the Agents shall not then hold any Notes
purchased as principal pursuant hereto, until the time the Company shall
determine that solicitation of purchases of the Notes should be resumed or the
Agent shall subsequently purchase Notes from the Company as principal.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to purchase Notes as principal and to
solicit offers to purchase the Notes as agent of the Company, and the
obligations of any purchasers of the Notes sold through each Agent as agent,
will be subject to the accuracy of the representations and warranties on the
part of the Company herein and to the accuracy of the statements of the
Company's officers made in any certificate furnished pursuant to the provisions
hereof, to the performance and observance by the Company of all its covenants
and agreements herein contained and to the following additional conditions
precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have
received the following legal opinions, dated as of the date hereof and in form
and substance satisfactory to the Agents:
(1) Opinion of Company Counsel. The opinion of Gene S.
Schneyer, Vice President, Secretary and General Counsel to the
Company, to the effect that:
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(i) The Company has been duly incorporated
and is validly existing as a corporation
in good standing under the laws of the
State of Delaware.
(ii) The Company has corporate power and
authority to own, lease and operate its
properties and to conduct its business as
described in the Prospectus.
(iii) To the best of such counsel's knowledge,
the Company is duly qualified as a foreign
corporation to transact business and is
in good standing in each jurisdiction in
which such qualification is required,
whether by reason of the ownership or
leasing of property or the conduct of
business, except where the failure to so
qualify and be in good standing would not
have a material adverse effect on the
condition, financial or otherwise, or the
earnings or business affairs of the
Company and its subsidiaries considered
as one enterprise.
(iv) Each Significant Subsidiary of the Company
has been duly incorporated and is validly
existing as a corporation (or, in the case
of ANB, validly existing as a national
banking association) in good standing
under the laws of the jurisdiction of its
incorporation, has corporate power and
authority to own, lease and operate its
properties and conduct its business as
described in the Prospectus, and, to the
best of such counsel's knowledge, is duly
qualified as a foreign corporation to
transact business and is in good standing
in each jurisdiction in which such
qualification is required, whether by
reason of the ownership or leasing of
property or the conduct of business,
except where the failure to so qualify and
be in good standing would not have a
material adverse effect on the condition,
financial or otherwise, or the earnings or
business affairs of the Company and its
subsidiaries considered as one enterprise;
all of the issued and outstanding capital
stock of each such Significant Subsidiary
has been duly authorized and validly
issued, is fully paid and non-assessable
(subject, in the case of ANB, to the
provisions of Section 55, Title 12, United
States Code), and, except for directors'
qualifying shares, is owned by the Company
directly or indirectly through one of its
wholly-owned subsidiaries, free and clear
of any mortgage, pledge, lien,
encumbrance, claim or equity.
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<PAGE> 14
(v) This Agreement has been duly and validly
authorized, executed and delivered by the
Company.
(vi) The Indenture has been duly and validly
authorized, executed and delivered by the
Company and (assuming the Indenture has
been duly authorized, executed and
delivered by the Trustee) constitutes a
legal, valid and binding agreement of the
Company, enforceable in accordance with
its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws
relating to or affecting enforcement of
creditors' rights generally, or by general
equity principles, and except further as
enforcement thereof may be limited by (A)
requirements that a claim with respect to
any Notes denominated other than in U.S.
dollars (or a foreign currency or foreign
currency unit judgment in respect of such
claim) be converted into United States
dollars at a rate of exchange prevailing
on a date determined pursuant to
applicable law or (B) governmental
authority to limit, delay or prohibit the
making of payments in foreign currency or
currency units or payments outside the
United States.
(vii) The Notes, are in the form contemplated by
the Indenture, have been duly authorized
for issuance, offer and sale pursuant to
this Agreement and, when issued,
authenticated and delivered pursuant to
the provisions of this Agreement and the
Indenture against payment of the
consideration therefor, will constitute
valid and legally binding obligations of
the Company, enforceable in accordance
with their terms, except as enforcement
thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or
other laws relating to or affecting
enforcement of creditors' rights generally
or by general equity principles, and
except further as enforcement thereof may
be limited by (A) requirements that a
claim with respect to any Notes
denominated other than in U.S. dollars (or
a foreign currency or foreign currency
unit judgment in respect of such claim) be
converted into United States dollars at a
rate of exchange prevailing on a date
determined pursuant to applicable law or
(B) governmental authority to limit, delay
or prohibit the making of payments in
foreign currency or currency units or
payments outside the United States, and
each holder of Notes will be entitled to
the benefits of the Indenture.
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<PAGE> 15
(viii) The statements in the Prospectus under the
captions "Description of Notes" and
"Description of Debt Securities" insofar
as they purport to summarize certain
provisions of documents specifically
referred to therein, are accurate
summaries of such provisions.
(ix) The Indenture is qualified under the 1939
Act.
(x) The Registration Statement is effective
under the 1933 Act and, to the best of such
counsel's knowledge, no stop order
suspending the effectiveness of the
Registration Statement has been issued
under the 1933 Act or proceedings therefor
initiated or threatened by the SEC.
(xi) At the time the Registration Statement
became effective, the Registration
Statement (other than the financial
statements included therein, as to which
no opinion need be rendered) complied as
to form in all material respects with the
requirements of the 1933 Act, the 1939 Act
and the regulations under each of those
Acts.
(xii) To the best of such counsel's knowledge,
there are no legal or governmental
proceedings pending or threatened which
are required to be disclosed in the
Prospectus, other than those disclosed
therein, and all pending legal or
governmental proceedings to which the
Company or any subsidiary of the Company
is a party or of which any of their
property is the subject which are not
described in the Registration Statement,
including ordinary routine litigation
incidental to the business of the Company
or any such subsidiary, are, considered in
the aggregate, not material.
(xiii) To the best of such counsel's knowledge,
neither the Company nor any of its
Significant Subsidiaries is in violation
of its charter or in default in the
performance or observance of any material
obligation, agreement, covenant or
condition contained in any contract,
indenture, mortgage, loan agreement, note
or lease to which it is a party or by
which it or any of them or their
properties may be bound, the violation or
default of which would have a material
adverse effect on the Company and its
subsidiaries considered as one enterprise.
The execution and delivery of this
Agreement or of the Indenture, or the
consummation by the Company of the
transactions con-
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<PAGE> 16
templated herein and therein have been
duly authorized by all necessary corporate
action and will not conflict with or
constitute a breach of, or default under,
or result in the creation or imposition of
any lien, charge or encumbrance upon any
property or assets of the Company or any
of its Significant Subsidiaries pursuant
to, any contract, indenture, mortgage,
loan agreement, note, lease or other
instrument known to such counsel and to
which the Company or any such subsidiary
is a party or by which it or any of them
may be bound or to which any of the
property or assets of the Company or any
such subsidiary is subject, or any law,
administrative regulation or
administrative or court decree known to
such counsel to be applicable to the
Company of any court or governmental
agency, authority or body or any
arbitrator having jurisdiction over the
Company; nor will such action result in
any violation of the provisions of the
charter or by-laws of the Company.
(xiv) To the best of such counsel's knowledge,
there are no contracts, indentures,
mortgages, loan agreements, notes, leases
or other instruments or documents
required to be described or referred to
in the Registration Statement or to be
filed as exhibits thereto other than
those described or referred to therein or
filed or incorporated by reference as
exhibits thereto, the descriptions
thereof or references thereto are
correct, and no default exists in the due
performance or observance of any material
obligation, agreement, covenant or
condition contained in any contract,
indenture, mortgage, loan agreement,
note, lease or other instrument so
described, referred to, filed or
incorporated by reference which would
have a material adverse effect on the
Company and its subsidiaries considered
as one enterprise.
(xv) No consent, approval, authorization, order
or decree of any court or governmental
agency or body (including the SEC) is
required for the consummation by the
Company of the transactions contemplated
by this Agreement or in connection with
the sale of Notes hereunder, except such
as have been obtained or rendered, as the
case may be, or as may be required under
Blue Sky laws.
(xvi) Each document filed pursuant to the 1934
Act and incorporated by reference in the
Prospectus complied when filed as to form
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<PAGE> 17
in all material respects with the 1934
Act and the 1934 Act Regulations
thereunder.
(xvii) The information contained in the
Prospectus under the caption "Government
Regulation" and under the caption
"Government Regulation" in the Company's
Annual Report on Form 10-K, to the
extent that it constitutes matters of
law or legal conclusions, has been
reviewed by such counsel and is correct.
(xviii) The Company is a company described in
Section 4(f)(1) of the BHCA. The Banks
are in compliance in all material
respects with all regulations of the
Office of the Comptroller of the
Currency, the Board of Governors of the
Federal Reserve System and the FDIC the
failure to comply with which would have a
material adverse effect on the Company
and its subsidiaries considered as one
enterprise. AUS is in compliance with
each of the limitations contained in
Section 4(f)(3) of the BHCA.
In rendering such opinion, Mr. Schneyer may rely on the
opinion of counsel for the Agents as to matters of New York law.
(2) Opinion of Counsel to the Agents. The opinion of
Brown & Wood, counsel to the Agents, covering the matters referred to
in subparagraph (1) under the subheadings (i) and (v) to (xi),
inclusive, above.
(3) In giving their opinions required by subsection
(a)(1) and (a)(2) of this Section, Gene S. Schneyer, Esq. and Brown &
Wood shall each additionally state that nothing has come to their
attention that would lead them to believe that the Registration
Statement, at the time it became effective or, if an amendment to the
Registration Statement or an Annual Report on Form 10-K has been filed
by the Company with the SEC subsequent to the effectiveness of the
Registration Statement, then at the time such amendment became
effective or at the time of the most recent such filing, as the case
may be, contained an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading or
that the Prospectus, as amended or supplemented at the date hereof, or
(if such opinion is being delivered in connection with the purchase of
Notes by an Agent as principal pursuant to Section 7(c) hereof) at the
date of any agreement by such Agent to purchase Notes as principal and
at the Settlement Date with respect thereto, as the case may be,
included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
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<PAGE> 18
(b) Officers' Certificate. At the date hereof, the Agents shall
have received a certificate of the President or any Vice President and the
chief financial or chief accounting officer of the Company, dated as of the
date hereof, to the effect that (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus or since
the date of any agreement by an Agent to purchase Notes as principal, there has
not been any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) the other representations and warranties of
the Company contained in Section 2 hereof are true and correct with the same
force and effect as though expressly made at and as of the date of such
certificate, (iii) the Company has performed or complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to the date of such certificate, and (iv) that no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the SEC.
(c) Comfort Letter. On the date hereof, the Agents shall have
received a letter from Arthur Andersen LLP, dated as of the date hereof in the
form heretofore agreed to by the Agents.
(d) Other Documents. On the date hereof and on each Settlement
Date, counsel to the Agents shall have been furnished with such documents and
opinions as such counsel may reasonably require for the purpose of enabling
such counsel to pass upon the issuance and sale of Notes as herein contemplated
and related proceedings, or in order to evidence the accuracy and completeness
of any of the representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of Notes as herein contemplated shall be
satisfactory in form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of the applicable Agent, any applicable agreement by such Agent to
purchase Notes as principal) may be terminated by the Agents by notice to the
Company at any time and any such termination shall be without liability of any
party to any other party, except that the covenant regarding provision of an
earnings statement set forth in Section 4(h) hereof, the provisions concerning
payment of expenses under Section 10 hereof, the indemnity and contribution
agreement set forth in Sections 8 and 9 hereof, the provisions concerning the
representations, warranties and agreements to survive delivery of Section 11
hereof, the provisions relating to governing law set forth in Section 14 and
the provisions set forth under "Parties" of Section 15 hereof shall remain in
effect.
SECTION 6. Delivery of and Payment for Notes Sold through the Agents.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser only against payment
therefor in immediately available funds. In the event that a purchaser shall
fail either to accept delivery of or to make payment for a
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<PAGE> 19
Note on the date fixed for settlement, the applicable Agent shall promptly
notify the Company and deliver the Note to the Company, and, if such Agent has
theretofore paid the Company for such Note, the Company will promptly return
such funds to such Agent. If such failure occurred for any reason other than
default by an Agent in the performance of its obligations hereunder, the
Company will reimburse such Agent on an equitable basis for its loss of the use
of the funds for the period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company covenants and agrees with each Agent that:
(a) Reaffirmation of Representations and Warranties. Each
acceptance by it of an offer for the purchase of Notes (whether to an Agent as
principal or through an Agent as agent), and each delivery of Notes to an Agent
(whether to an Agent as principal or through an Agent as agent), shall be
deemed to be an affirmation that the representations and warranties of the
Company contained in this Agreement and in any certificate theretofore
delivered to such Agents pursuant hereto are true and correct at the time of
such acceptance or sale, as the case may be, and an undertaking that such
representations and warranties will be true and correct at the time of delivery
to the purchaser or its agent, or to such Agent, of the Note or Notes relating
to such acceptance or sale, as the case may be, as though made at and as of
each such time (and it is understood that such representations and warranties
shall relate to the Registration Statement and Prospectus as amended and
supplemented to each such time).
(b) Subsequent Delivery of Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rates of Notes or similar changes, and other than by an amendment or
supplement which relates exclusively to an offering of debt securities other
than the Notes), (ii) there is filed with the SEC any document incorporated by
reference into the Prospectus (other than any Current Report on Form 8-K unless
the Agents shall otherwise specify), (iii) (if required in connection with the
purchase of Notes by an Agent as principal) the Company sells Notes to an Agent
as principal or (iv) the Company issues and sells Notes in a form not
previously certified to the Agents by the Company, the Company shall furnish or
cause to be furnished to the Agents forthwith a certificate dated the date of
filing with the SEC of such supplement or document, the date of effectiveness
of such amendment, or the date of such sale, as the case may be, in form
satisfactory to the Agents or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in said Section 5(b), modified as
necessary to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such certificate; provided that the
certificate delivered with respect to (iv) above may be limited to the due
authorization, execution, delivery and enforceability of such Notes.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented
(other than by an amendment or supplement providing solely for a change in the
interest rates of the Notes or similar changes or
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<PAGE> 20
solely for the inclusion of additional financial information, and, other than
by an amendment or supplement which relates exclusively to an offering of debt
securities other than the Notes), (ii) there is filed with the SEC any document
incorporated by reference into the Prospectus (other than any Current Report on
Form 8-K, unless the Agents shall otherwise specify), (iii) (if required in
connection with the purchase of Notes by an Agent as principal) the Company
sells Notes to an Agent as principal or (iv) if the Company issues and sells
Notes in a form not previously certified to the Agents by the Company, the
Company shall furnish or cause to be furnished forthwith to the Agents and to
counsel to the Agents a written opinion of Gene S. Schneyer, Esq., General
Counsel to the Company, or other counsel satisfactory to the Agents dated the
date of filing with the SEC of such supplement or document, the date of
effectiveness of such amendment, or the date of such sale, as the case may be,
in form and substance satisfactory to the Agents, or, in lieu of such opinion,
counsel last furnishing such opinion to the Agents shall furnish the Agents
with a letter to the effect that the Agents may rely on such last opinion to
the same extent as though it was dated the date of such letter authorizing
reliance (except that statements in such last opinion shall be deemed to relate
to the Registration Statement and the Prospectus as amended and supplemented to
the time of delivery of such letter authorizing reliance); provided that the
opinion delivered with respect to (iv) above may be limited to the due
authorization, execution, delivery and enforceability of such Notes.
(d) Subsequent Delivery of Comfort Letters. Each time that (i)
the Registration Statement or the Prospectus shall be amended or supplemented
to include additional financial information or there is filed with the SEC
(other than any Current Report on Form 8-K, unless the Agents shall otherwise
reasonably specify) any document incorporated by reference into the Prospectus
which contains additional financial information, or (ii) (if required in
connection with the purchase of Notes by an Agent as principal) the Company
sells Notes to an Agent as principal, the Company shall cause Arthur Andersen
LLP forthwith to furnish such Agent a letter, dated the date of effectiveness
of such amendment, supplement or document with the SEC, or the date of such
sale, as the case may be, in form satisfactory to such Agent, of the same tenor
as the letter referred to in Section 5(c) hereof but modified to relate to the
Registration Statement and Prospectus, as amended and supplemented to the date
of such letter, and 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; provided, however, that if the Registration Statement
or the Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Arthur Andersen LLP may limit the
scope of such letter to the unaudited financial statements included in such
amendment or supplement unless any other information included therein of an
accounting, financial or statistical nature is of such a nature that, in the
reasonable judgment of such Agent, such letter should cover such other
information.
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each Agent and each person, if any, who controls
each Agent within the meaning of Section 15 of the 1933 Act as follows:
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<PAGE> 21
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out
of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged
omission therefrom of a material fact necessary to make
the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a
material fact included in the Prospectus (or any
amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary
to make the statements therein, in the light of the
circumstances under which they were made, not
misleading, unless such untrue statement or omission or
such alleged untrue statement or omission was made in
reliance upon and in conformity with written information
furnished to the Company by the Agents expressly for use
in the Registration Statement or the Prospectus;
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any
litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as
incurred, (including the fees and disbursements of
counsel chosen by the Agents) reasonably incurred in
investigating, preparing or defending against any
litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above.
(b) Indemnification of Company. Each Agent severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers
who signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity
with written information furnished to the Company by the Agents expressly for
use in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto).
(c) General. Each indemnified party shall give prompt notice to
each indemnifying party of any action commenced against it in respect of which
indemnity may be sought
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hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) for all indemnified parties in
connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 hereof
is for any reason held to be unavailable to or insufficient to hold harmless
the indemnified parties although applicable in accordance with its terms, the
Company and the Agents shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Agents, as incurred, in such
proportions that each Agent is responsible for that portion represented by the
percentage that the total commissions and underwriting discounts received by
such Agent to the date of such liability bears to the total sales price from
the sale of Notes sold to or through such Agent to the date of such liability,
and the Company is responsible for the balance; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section, each person, if any, who controls each Agent within the meaning of
Section 15 of the 1933 Act shall have the same rights to contribution as such
Agent, and each director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and
all amendments thereto and the Prospectus and any amendments or supplements
thereto;
(b) The preparation, filing and reproduction of this Agreement;
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of book-entry notes;
(d) The fees and disbursements of the Company's accountants and
counsel, of the Trustee and its counsel, and of any Calculation Agent or
Exchange Rate Agent;
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(e) The reasonable fees and disbursements of counsel to the Agents
incurred in connection with the establishment of the program relating to the
Notes and incurred from time to time in connection with the transactions
contemplated hereby;
(f) The qualification of the Notes under the Blue Sky laws in
accordance with the provisions of Section 4(i) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation of any Blue Sky
Survey;
(g) The printing and delivery to the Agents in quantities as
hereinabove stated of copies of the Registration Statement and any amendments
thereto, and of the Prospectus and any amendments or supplements thereto, and
the delivery by the Agents of the Prospectus and any amendments or supplements
thereto in connection with solicitations or confirmations of sales of the
Notes;
(h) The preparation, printing, reproducing and delivery to the
Agents of copies of the Indenture and all supplements and amendments thereto;
(i) Any fees charged by rating agencies for the rating of the
Notes;
(j) The fees and expenses incurred in connection with the listing
of the Notes on any securities exchange;
(k) The fees and expenses, if any, incurred with respect to any
filing with the National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company;
(m) The cost of providing any CUSIP or other identification
numbers for the Notes; and
(n) The fees and expenses of any Depositary (as defined in the
Indenture) and any nominees thereof in connection with the Notes.
SECTION 11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of the Agents, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
23
<PAGE> 24
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any
agreement hereunder by an Agent to purchase Notes as principal) may be
terminated for any reason, at any time by either the Company or an Agent (as to
such Agent) upon the giving of written notice of such termination to the other
party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. Each
Agent may terminate any agreement hereunder by such Agent to purchase Notes as
principal, immediately upon notice to the Company, at any time prior to the
Settlement Date relating thereto (i) if there has been, since the date of such
agreement or since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there shall have
occurred any material adverse change in the financial markets in the United
States or any outbreak or escalation of hostilities or other national or
international calamity or crisis the effect of which is such as to make it, in
the judgment of such Agent, impracticable to market the Notes or enforce
contracts for the sale of the Notes, or (iii) if trading in any securities of
the Company has been suspended by the SEC or a national securities exchange, or
if trading generally on either the American Stock Exchange or the New York
Stock Exchange shall have been suspended, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices for securities have been
required, by either of said exchanges or by order of the SEC or any other
governmental authority, or if a banking moratorium shall have been declared by
either Federal, New York or Pennsylvania authorities or if a banking moratorium
shall have been declared by the relevant authorities in the country or
countries of origin of any foreign currency or currencies in which the Notes
are denominated or payable, or (iv) if the rating assigned by any nationally
recognized securities rating agency to any debt securities of the Company as of
the date of any applicable principal purchase shall have been lowered since
that date or if any such rating agency shall have publicly announced that it
has under surveillance or review, with possible negative implications, its
rating of any debt securities of the Company, or (v) if there shall have come
to such Agent's attention any facts that would cause such Agent to believe that
the Prospectus, at the time it was required to be delivered to a purchaser of
Notes, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of
the circumstances existing at the time of such delivery, not misleading.
(c) General. In the event of any such termination, neither party
will have any liability to the other party hereto, except that (i) the
applicable Agent shall be entitled to any commission earned in accordance with
the third paragraph of Section 3(b) hereof, (ii) if at the time of termination
(a) the applicable Agent shall own any Notes purchased by it as principal with
the intention of reselling them or (b) an offer to purchase any of the Notes
has been accepted by the Company but the time of delivery to the purchaser or
his agent of the Note or Notes relating
24
<PAGE> 25
thereto has not occurred, the covenants set forth in Sections 4 and 7 hereof
shall remain in effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 4(h) hereof, the provisions
of Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms
and provisions hereof shall be in writing, either delivered by hand, by mail or
by telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Advanta Corp.
Five Horsham Business Center
300 Welsh Road
Horsham, Pennsylvania 19044
Attention: Gene S. Schneyer, General Counsel
If to Salomon Brothers Inc:
Seven World Trade Center
32nd Floor
New York, NY 10048
Attention: Medium-Term Note Group
If to CS First Boston Corporation:
Park Avenue Plaza
New York, New York 10055
Fax: 212-318-1498
Attention: Short and Medium-Term Finance Dept.
If to Donaldson, Lufkin & Jenrette Securities Corporation:
277 Park Avenue
New York, NY 10172
25
<PAGE> 26
If to Merrill Lynch, Pierce, Fenner & Smith Incorporated:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower, 10th Floor
New York, NY 10281-1310
Attention: MTN Product Management
Telephone: (212) 449-7476
Telecopier: (212) 449-2234
or at such other address as such party may designate from time to time by
notice duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law; Forum.
This Agreement and all the rights and obligations of the parties shall
be governed by and construed in accordance with the laws of the State of New
York applicable to agreements made and to be performed in such State. Any
suit, action or proceeding brought by the Company against the Agents in
connection with or arising under this Agreement shall be brought solely in the
state or federal court of appropriate jurisdiction located in the Borough of
Manhattan, The City of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Agents and the Company and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to
in Sections 8 and 9 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Notes shall be deemed to be
a successor by reason merely of such purchase.
26
<PAGE> 27
If the foregoing is in accordance with the Agents' understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument along with all counterparts will become a binding
agreement between the Agents and the Company in accordance with its terms.
Very truly yours,
Advanta Corp.
By:
----------------------
Name:
Title:
Accepted:
Salomon Brothers Inc
By:
---------------------------------------
Name:
Title:
CS First Boston Corporation
By:
---------------------------------------
Name:
Title:
Donaldson, Lufkin & Jenrette
Securities Corporation
By:
---------------------------------------
Name:
Title:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By:
---------------------------------------
Name:
Title:
27
<PAGE> 28
EXHIBIT A
The following terms, if applicable, shall be agreed to by the
applicable Agent and the Company in connection with each sale of Notes:
Principal Amount: $_______
(or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Date(s):
Interest Payment Date(s):
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If Repayable:
Optional Repayment Date(s):
Date of Maturity:
Purchase Price: ___%
Settlement Date and Time:
Currency of Denomination:
Denominations (if currency is other than U.S. dollar):
Currency of Payment:
Additional Terms:
Also, in connection with the purchase of Notes by an Agent as principal,
agreement as to whether the following will be required:
Officer's Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c)of the Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the Distribution
Agreement.
<PAGE> 29
SCHEDULE A
As compensation for the services of the Agents hereunder, the Company
shall pay to the applicable Agent, on a discount basis, a commission for the
sale of each Note equal to the principal amount of such Note multiplied by the
appropriate percentage set forth below:
<TABLE>
<CAPTION>
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
- --------------- ----------------
<S> <C>
LESS THAN 1 YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . .100%
FROM 1 YEAR TO LESS THAN 18 MONTHS . . . . . . . . . . . . . . . . . .125%
FROM 18 MONTHS TO LESS THAN 2 YEARS . . . . . . . . . . . . . . . . . .175%
FROM 2 YEARS TO LESS THAN 3 YEARS . . . . . . . . . . . . . . . . . . .200%
FROM 3 YEARS TO LESS THAN 4 YEARS . . . . . . . . . . . . . . . . . . .300%
FROM 4 YEARS TO LESS THAN 5 YEARS . . . . . . . . . . . . . . . . . . .400%
FROM 5 YEARS TO LESS THAN 6 YEARS . . . . . . . . . . . . . . . . . . .450%
FROM 6 YEARS TO LESS THAN 7 YEARS . . . . . . . . . . . . . . . . . . .500%
FROM 7 YEARS TO LESS THAN 10 YEARS . . . . . . . . . . . . . . . . . .550%
FROM 10 YEARS TO LESS THAN 15 YEARS . . . . . . . . . . . . . . . . . .575%
FROM 15 YEARS TO LESS THAN 20 YEARS . . . . . . . . . . . . . . . . . .650%
FROM 20 YEARS TO LESS THAN 30 YEARS . . . . . . . . . . . . . . . . . .700%
FROM 30 YEARS TO LESS THAN 40 YEARS . . . . . . . . . . . . . . . . . .825%
</TABLE>
<PAGE> 30
Exhibit B
[LETTERHEAD OF AGENT]
[DATE]
Advanta Corp.
Five Horsham Business Center
300 Welsh Road
Horsham, Pennsylvania 19044
Ladies and Gentlemen:
Reference is hereby made to that certain Distribution Agreement dated
as of _________________, 1996 by and among Advanta Corp., Salomon Brothers Inc,
CS First Boston Corporation, Donaldson, Lufkin & Jenrette Securities
Corporation and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Distribution Agreement"). Capitalized terms used herein
without definition shall have the respective meanings ascribed thereto in the
Distribution Agreement.
The undersigned hereby represents and warrants to you that it is
taking delivery of the Notes being delivered to it on this date solely as agent
and such Notes are being sold to investors at 100% of their principal amount.
Very truly yours,
[AGENT]
By:
------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.1
[FORM OF FIXED RATE GLOBAL MEDIUM-TERM NOTE]
If the registered owner of this Note (as indicated below) is The
Depository Trust Company (the "Depositary") or a nominee of the Depositary,
this Note is a Global Security and the following legends apply:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the 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.
THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID," "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
REGISTERED PRINCIPAL AMOUNT
No. FX CUSIP No. $
--------------- -------
ADVANTA CORP.
MEDIUM-TERM NOTE, SERIES C
(Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: STATED MATURITY
DATE:
INTEREST PAYMENT DATES
(IF OTHER THAN JUNE 15
AND DECEMBER 15):
<PAGE> 2
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: PERCENTAGE: PERCENTAGE
REDUCTION:
OPTIONAL REPAYMENT DATE(S):
DAY COUNT CONVENTION
/ / 30/360 FOR THE PERIOD FROM TO
/ / ACTUAL/360 FOR THE PERIOD FROM TO
/ / ACTUAL/ACTUAL FOR THE PERIOD FROM TO
ADDENDUM ATTACHED: ORIGINAL ISSUE DISCOUNT:
/ / Yes / / Yes
/ / No / / No
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period:
OTHER PROVISIONS:
2
<PAGE> 3
Advanta Corp., a Delaware corporation ("Issuer" or the "Company,"
which terms include any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ,
or registered assigns, the principal sum of
DOLLARS on the Stated Maturity Date specified above (except to the extent
redeemed or repaid prior to the Stated Maturity Date), and to pay interest
thereon at the Interest Rate per annum specified above, until the principal
hereof is paid or duly made available for payment. Reference herein to "this
Note", "hereof", "herein" and comparable terms shall include an Addendum hereto
if an Addendum is specified above.
The Company will pay interest on each Interest Payment Date specified
above, commencing on the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Stated Maturity Date or any
Redemption Date or Optional Repayment Date (as defined below) (the date of each
such Stated Maturity Date, Redemption Date and Optional Repayment Date and the
date on which principal or an installment of principal is due and payable by
declaration of acceleration pursuant to the Indenture, being referred to
hereinafter as a "Maturity" with respect to principal payable on such date);
provided, however, that if the Original Issue Date falls between a Regular
Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the Interest Payment Date immediately
following the next succeeding Regular Record Date to the registered Holder on
such next succeeding Regular Record Date. Except as provided above, interest
payments will be made on the Interest Payment Dates shown above. Unless
otherwise specified above, the "Regular Record Date" with respect to any
Interest Payment Date shall be the date 15 calendar days (whether or not a
Business Day) immediately preceding such Interest Payment Date. Interest on
this Note will accrue from and including the most recent Interest Payment Date
to which interest has been paid or duly provided for or, if no interest has
been paid or duly provided for, from and including the Original Issue Date
specified above, to but excluding such Interest Payment Date or Maturity, as
the case may be. If the Maturity or an Interest Payment Date for this Note
falls on a day which is not a Business Day, the related payment of principal,
premium, if any, or interest will be made on the next succeeding Business Day
with the same force and effect as if made on such Maturity or Interest Payment
Date, as the case may be, and no interest shall accrue on the amount so payable
for the period from and after such Maturity or Interest Payment Date, as the
case may be. The interest so payable and punctually paid or duly provided for
on any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Note (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
Interest Payment Date. Any such interest which is payable, but not punctually
paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest"), shall forthwith cease to be payable to the registered
Holder on such Regular Record Date, and may either be paid to the Person in
whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to
the Holder of this Note not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner, all as more fully
provided in the Indenture. Interest payable at Maturity will be payable to the
Person to whom the principal hereof shall be payable.
3
<PAGE> 4
Notwithstanding anything else contained herein, if this Note is a
Global Security as specified on the face hereof and is held in book-entry form
through the facilities of the Depositary, payments on this Note will be made to
the Depositary or its nominee in accordance with the arrangements then in
effect between the Trustee and the Depositary.
Payment of the principal of, premium, if any, and interest on this
Note at Maturity will be made in immediately available funds upon presentation
of this Note at the Office or Agency of the Company maintained by the Company
for such purpose, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.
Payment of interest on this Note (other than at Maturity) will be made at the
Office or Agency of the Company maintained by the Company for such purpose or,
at the option of the Company, may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
at the close of business on the Regular Record Date immediately preceding the
applicable Interest Payment Date. Notwithstanding the foregoing, a Holder of
$10,000,000 or more in aggregate principal amount of the Notes (whether having
identical or different terms and provisions) will be entitled to receive
interest payments by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee at least 16 days prior to the applicable Interest Payment Date. Such
wire instructions, upon receipt by the Trustee, shall remain in effect until
revoked by such Holder.
Unless the certificate of authentication hereon has been executed by
or on behalf of The Chase Manhattan Bank (National Association), the Trustee
for this Note under the Indenture, or its successor thereunder, by the manual
signature of one of its authorized officers, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
This Note is one of a duly authorized series of Securities
(hereinafter called the "Securities") of the Company, which series of the
Securities is limited to an aggregate principal amount of up to not more than
$500,000,000 (or the equivalent thereof, determined as of the respective dates
of issuance, in any other currency or currencies) (the issue price of any
original issue discount Notes being treated as the principal amount thereof),
designated as its Medium-Term Notes, Series C (the "Notes"); provided, however,
that the foregoing limit may be increased by the Company. The Notes are issued
and to be issued under an Indenture dated as of November 15, 1993 (herein
called the "Indenture") between the Company and The Chase Manhattan Bank
(National Association) 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 (as defined below) and the Holders of the Notes and the terms upon
which the Notes are to be authenticated and delivered. The Chase Manhattan
Bank (National Association) shall act as Trustee with respect to the Notes
(herein called the "Trustee", which term includes any successor Trustee with
respect to the Notes, under the Indenture). The terms of individual Notes may
vary with respect to interest rates or interest rate formulas, issue dates,
maturity, redemption, repayment, currency of payment and otherwise.
4
<PAGE> 5
The Notes are issuable only in registered form without coupons in
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes are exchangeable for a like aggregate principal amount of
Notes denominated as authorized, as requested by the Holder surrendering the
same.
Except as otherwise provided in the Indenture and as set forth below,
the Notes will be issued in global form only, registered in the name of the
Depositary or its nominee and ownership of the Notes shall be maintained in
book-entry form by the Depositary for the accounts of participating
organizations of the Depositary. If this Note is a Global Security, this Note
is exchangeable only if (a) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for this Global Security and a
successor depositary is not appointed by the Company within 60 days or if at
any time the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (b) the Company in its sole
discretion determines that this Global Security shall be exchangeable for
definitive Securities of this series in registered form or (c) an Event of
Default with respect to the Notes represented hereby has occurred and is
continuing.
This Note is not subject to any sinking fund and, unless otherwise
provided above in accordance with the provisions of the following paragraphs,
is not redeemable or repayable prior to the Stated Maturity Date.
If so provided above, this Note may be redeemed by the Company on any
date on and after the Initial Redemption Date, if any, specified above. If no
Initial Redemption Date is set forth above, this Note may not be redeemed prior
to the Stated Maturity Date. On and after the Initial Redemption Date, if any,
this Note may be redeemed at any time in whole or from time to time in part in
increments of $1,000 (provided that any remaining principal hereof shall be at
least $100,000) at the option of the Company at the applicable Redemption Price
(as defined below), together with accrued interest, if any, hereon at the
applicable rate payable to the date of redemption (each such date, a
"Redemption Date"), on written notice given not more than 60 nor less than 30
days prior to the Redemption Date. In the event of redemption of this Note in
part only, a new Note for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the surrender hereof.
Unless otherwise specified above, the "Redemption Price" shall
initially be the Initial Redemption Percentage, specified above, of the
principal amount of this Note to be redeemed and, if greater than 100%, shall
decline at each anniversary of the Initial Redemption Date, shown above, by the
Annual Redemption Percentage Reduction, if any, specified above, of the
principal amount to be redeemed until the Redemption Price is 100% of such
principal amount.
This Note may be subject to repayment at the option of the Holder on
the Optional Repayment Date(s), if any, indicated above. If no Optional
Repayment Date(s) are set forth above, this Note is not subject to repayment at
the option of the Holder hereof prior to the Stated
5
<PAGE> 6
Maturity Date. On any Optional Repayment Date, this Note shall be repayable in
whole or in part in increments of $1,000 (provided that any remaining principal
hereof shall be at least $100,000) at the option of the Holder hereof at a
repayment price equal to 100% of the principal amount to be repaid, together
with accrued interest, if any, hereon at the applicable rate payable to the
relevant Optional Repayment Date. For this Note to be repaid in whole or in
part at the option of the Holder hereof, this Note must be received, with the
form entitled "Option to Elect Repayment" below duly completed, by the Trustee
at its Corporate Trust Office, or such address which the Company shall from
time to time notify the Holders of the Notes, not more than 60 nor less than 30
days prior to the relevant Optional Repayment Date. Exercise of such repayment
option by the Holder hereof shall be irrevocable. In the event of repayment of
this Note in part only, a new Note for the unrepaid portion hereof shall be
issued in the name of the Holder hereof upon the surrender hereof.
Interest payments on this Note shall include interest accrued from and
including the Original Issue Date indicated above, or the most recent date to
which interest has been paid or duly provided for, to but excluding the related
Interest Payment Date or Maturity, as the case may be. Interest payments for
this Note shall be computed and paid on the basis of a 360-day year of twelve
30-day months if the Day Count Convention specified above is "30/360" for the
period specified thereunder, on the basis of the actual number of days in the
related month and a 360-day year if the Day Count Convention specified above is
"Actual/360" for the period specified thereunder or on the basis of the actual
number of days in the related year and month if the Day Count Convention
specified above is "Actual/Actual" for the period specified thereunder.
As used herein, "Business Day" means, unless otherwise specified
above, any day that in The City of New York is not a day on which banking
institutions are authorized or required by law or regulation to close.
Any provision contained herein with respect to the calculation of the
rate of interest applicable to this Note, its Interest Payment Dates or any
other matter relating hereto may be modified as specified in an Addendum
relating hereto if so specified above.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance with certain conditions set
forth in the Indenture.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of all the Notes 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 thereby at any time by the Company and the Trustee with the consent of
the Holders of 66 2/3% in aggregate principal amount of the Outstanding
Securities of each series affected thereby. The Indenture also contains
provisions
6
<PAGE> 7
permitting the Holders of specified percentages in aggregate principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all the 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. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note 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: (i) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Notes; (ii) the Holders of not less than 25% in principal amount of the
Notes 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; (iii) the Trustee shall not have
received from the Holders of a majority in principal amount of the Notes at the
time Outstanding a direction inconsistent with such request; and (iv) the
Trustee 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 Note 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 Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the time, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in The City of New York, 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 by its attorney duly authorized in writing, and thereupon one
or more new Notes of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any 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 Note 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
7
<PAGE> 8
Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
No recourse for the payment of the principal of or interest on this
Note, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any indenture supplemental thereto, or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
8
<PAGE> 9
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its
corporate seal to be imprinted hereon.
[SEAL] Advanta Corp.
By:
---------------------------
Name: Jeffrey D. Beck
Title: Vice President and
Treasurer
Attest:
By:
-------------------------
Name: Gene S. Schneyer
Title: Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of
the series designated herein
referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
(National Association),
as Trustee
By: Dated:
------------------------------ -----------------------
Authorized Officer
9
<PAGE> 10
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with interest to
the repayment date, to the undersigned, at ____________________________________
_______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office, or at such other place or places of which the Company shall from
time to time notify the Holder of this Note, not more than 60 nor less than 30
days prior to an Optional Repayment Date, if any, shown above, this Note with
this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of $1,000 provided that
any remaining principal hereof shall be at least $100,000) which the Holder
elects to have repaid and specify the denomination or denominations (which
shall be at least $100,000 or an integral multiple of $1,000 in excess thereof)
of the Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid).
$
--------------------- ---------------------------------------
NOTICE: The signature on this
Date Option to Elect Repayment must
----------------- correspond with the name as written upon
the face of this Note in every particular,
without alteration or enlargement or any
change whatever.
10
<PAGE> 11
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto (insert Taxpayer Identification No.)
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing ___________________________________________ attorney to transfer
said Note on the books of the Company with full power of substitution in the
premises.
Dated:
-------------------------- --------------------------------------
NOTICE: The signature of the registered Holder to this assignment
must correspond with the name as written upon the face of the within
instrument in every particular, without alteration or enlargement or
any change whatsoever.
11
<PAGE> 12
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
UNIF GIFT MIN ACT--..............Custodian...........
(Cust) (Minor)
Under Uniform Gifts to Minors Act
.....................
(State)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above
list.
12
<PAGE> 1
EXHIBIT 4.2
[Form of Floating Rate Global Medium-Term Note]
If the registered owner of this Note (as indicated below) is The Depository
Trust Company (the "Depositary") or a nominee of the Depositary, this Security
is a Global Note and the following legends apply:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the 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.
THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
IF APPLICABLE, THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" and "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
REGISTERED CUSIP No. PRINCIPAL AMOUNT
No. FLR --------------- $
--- ------
Advanta Corp.
MEDIUM-TERM NOTE, SERIES C
(Floating Rate)
<TABLE>
<S> <C> <C>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR:
/ / LIBOR Reuters
/ / LIBOR Telerate
INDEX CURRENCY:
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
SPREAD (PLUS OR INITIAL INTEREST RESET DATE: INTEREST PAYMENT DATES:
MINUS):
SPREAD MULTIPLIER: INTEREST RATE RESET PERIOD: INTEREST RESET DATES:
MAXIMUM INTEREST MINIMUM INTEREST RATE: INITIAL REDEMPTION DATE:
RATE:
INITIAL REDEMPTION ANNUAL REDEMPTION OPTIONAL REPAYMENT
PERCENTAGE: PERCENTAGE REDUCTION: DATE(S):
</TABLE>
<TABLE>
<S> <C> <C>
CALCULATION AGENT:
INTEREST CALCULATION: DAY COUNT CONVENTION
/ / Regular Floating Rate Note / / 30/360 for the period
/ / Floating Rate/Fixed Rate from to .
Fixed Rate Commencement Date: / / Actual/360 for the period
Fixed Interest Rate: from to .
/ / Inverse Floating Rate Note / / Actual/Actual for the period
Fixed Interest Rate: from to .
ADDENDUM ATTACHED: ORIGINAL ISSUE DISCOUNT
/ / Yes / / Yes
/ / No / / No
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period:
OTHER PROVISIONS:
</TABLE>
2
<PAGE> 3
Advanta Corp., a Delaware corporation ("Issuer" or the "Company,"
which terms include any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , or
registered assigns, the principal sum of
DOLLARS on the Stated Maturity Date specified above (except to the extent
redeemed or repaid prior to the Stated Maturity Date), and to pay interest
thereon, at a rate per annum equal to the Initial Interest Rate specified above
until the Initial Interest Reset Date specified above and thereafter at a rate
per annum determined in accordance with the provisions hereof and any Addendum
relating hereto depending upon the Interest Rate Basis or Bases, if any, and
such other terms specified above, until the principal hereof is paid or duly
made available for payment. Reference herein to "this Note", "hereof",
"herein" and comparable terms shall include an Addendum hereto if an Addendum
is specified above.
The Company will pay interest monthly, quarterly, semi-annually,
annually or such other period as specified above under "Interest Payment
Period", on each Interest Payment Date specified above, commencing on the first
Interest Payment Date specified above next succeeding the Original Issue Date
specified above, and on the Stated Maturity Date or any Redemption Date or
Optional Repayment Date (as defined below) (the date of each such Stated
Maturity Date, Redemption Date and Optional Repayment Date and the date on
which principal or an installment of principal is due and payable by
declaration of acceleration pursuant to the Indenture, being referred to
hereinafter as a "Maturity" with respect to principal payable on such date);
provided, however, that if the Original Issue Date falls between a Regular
Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the Interest Payment Date immediately
following the next succeeding Regular Record Date to the registered Holder on
such next succeeding Regular Record Date; and provided further, that if an
Interest Payment Date (other than an Interest Payment Date at Maturity) would
otherwise fall on a day that is not a Business Day (as defined below), such
Interest Payment Date shall be postponed to the next succeeding day that is a
Business Day, except that if an Interest Rate Basis is LIBOR, as indicated
above, and such next Business Day falls in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding day that is a
Business Day. Except as provided above, interest payments will be made on the
Interest Payment Dates shown above. Unless otherwise specified above, the
"Regular Record Date" with respect to any Interest Payment Date shall be the
date 15 calendar days (whether or not a Business Day) immediately preceding
such Interest Payment Date. If the Maturity of this Note falls on a day which
is not a Business Day, the payment of principal, premium, if any, and interest
due at Maturity will be made on the next succeeding Business Day with the same
force and effect as if made on such Maturity and no interest shall accrue on
the amount so payable for the period from and after such Maturity. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture, be paid to the Person in whose
name this Note (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such Interest Payment Date.
Any such interest which is payable, but not punctually paid or duly provided
for on any Interest Payment Date (herein called "Defaulted Interest"), shall
forthwith cease to be payable to the registered Holder on such Regular Record
3
<PAGE> 4
Date, and may either be paid to the Person in whose name this Note (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of this Note not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in the Indenture. Interest
payable at Maturity will be payable to the Person to whom the principal hereof
shall be payable.
Notwithstanding anything else contained herein, if this Note is a
Global Security as specified on the face hereof and is held in book-entry form
through the facilities of the Depositary, payments on this Note will be made to
the Depositary or its nominee in accordance with the arrangements then in
effect between the Trustee and the Depositary.
Payment of the principal of, premium, if any, and interest on this
Note at Maturity will be made in immediately available funds upon presentation
of this Note at the Office or Agency of the Company maintained by the Company
for such purpose, in such coin or currency of the United States of America as
at the time of payment is legal tender for payment of public and private debts.
Payment of interest on this Note (other than at Maturity) will be made at the
Office or Agency of the Company maintained by the Company for such purpose or,
at the option of the Company, may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register
at the close of business on the Regular Record Date immediately preceding the
applicable Interest Payment Date. Notwithstanding the foregoing, a Holder of
$10,000,000 or more in aggregate principal amount of the Notes (whether having
identical or different terms and provisions) will be entitled to receive
interest payments by wire transfer of immediately available funds if
appropriate wire transfer instructions have been received in writing by the
Trustee at least 16 days prior to the applicable Interest Payment Date. Such
wire instructions, upon receipt by the Trustee, shall remain in effect until
revoked by such Holder.
Unless the certificate of authentication hereon has been executed by
or on behalf of The Chase Manhattan Bank (National Association), the Trustee
with respect to the Notes under the Indenture, or its successor thereunder, by
the manual signature of one of its authorized officers, this Note shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
This Note is one of a duly authorized series of Securities
(hereinafter called the "Securities") of the Company, which series of the
Securities is currently limited to an aggregate principal amount of up to not
more than $500,000,000 (or the equivalent thereof, determined as of the
respective dates of issuance, in any other currency or currencies) (the issue
price of any original issue discount Notes being treated as the principal
amount thereof), designated as its Medium-Term Notes, Series C (the "Notes");
provided, however, that the foregoing limit may be increased by the Company.
The Notes are issued and to be issued under an Indenture, dated as of November
15, 1993 (herein called the "Indenture"), between the Company and The Chase
Manhattan Bank (National Association), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights,
4
<PAGE> 5
duties and immunities thereunder of the Company, the Trustee (as defined below)
and the Holders of the Notes and the terms upon which the Notes are to be
authenticated and delivered. The Chase Manhattan Bank (National Association)
shall act as Trustee with respect to the Notes (herein called the "Trustee",
which term includes any successor Trustee with respect to the Notes under the
Indenture). The terms of individual Notes may vary with respect to interest
rates or interest rate formulas, issue dates, maturity, redemption, repayment,
currency of payment and otherwise.
The Notes are issuable only in registered form without coupons in
denominations of $100,000 and integral multiples of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, the Notes are exchangeable for a like aggregate principal amount of
Notes denominated as authorized, as requested by the Holder surrendering the
same.
Except as otherwise provided in the Indenture and as set forth below,
the Notes will be issued in global form only, registered in the name of the
Depositary or its nominee and ownership of the Notes shall be maintained in
book-entry form by the Depositary for the accounts of participating
organizations of the Depositary. If this Note is a Global Security, this Note
is exchangeable only if (a) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for this Global Security and a
successor depositary is not appointed by the Company within 60 days or if at
any time the Depositary ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, (b) the Company in its sole
discretion determines that this Global Security shall be exchangeable for
definitive Securities of this series in registered form or (c) an Event of
Default with respect to the Notes represented hereby has occurred and is
continuing.
This Note is not subject to any sinking fund and, unless otherwise
provided above in accordance with the provisions of the following paragraphs,
is not redeemable or repayable prior to the Stated Maturity Date.
If so provided above, this Note may be redeemed by the Company on any
date on and after the Initial Redemption Date, if any, specified above. If no
Initial Redemption Date is set forth above, this Note may not be redeemed prior
to the Stated Maturity Date. On and after the Initial Redemption Date, if any,
this Note may be redeemed at any time in whole or from time to time in part in
increments of $1,000 (provided that any remaining principal hereof shall be at
least $100,000) at the option of the Company at the applicable Redemption Price
(as defined below) together with accrued interest, if any, hereon at the
applicable rate payable to the date of redemption (each such date, a
"Redemption Date"), on written notice given not more than 60 nor less than 30
days prior to the Redemption Date. In the event of redemption of this Note in
part only, a new Note for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the surrender hereof.
Unless otherwise specified above, the "Redemption Price" shall
initially be the Initial Redemption Percentage, specified above, of the
principal amount of this Note to be redeemed
5
<PAGE> 6
and, if greater than 100%, shall decline at each anniversary of the Initial
Redemption Date, shown above, by the Annual Redemption Percentage Reduction, if
any, specified above, of the principal amount to be redeemed until the
Redemption Price is 100% of such principal amount.
This Note may be subject to repayment at the option of the Holder on
the Optional Repayment Date(s), if any, indicated above. If no Optional
Repayment Date(s) are set forth above, this Note is not subject to repayment at
the option of the Holder hereof prior to the Stated Maturity Date. On any
Optional Repayment Date, this Note shall be repayable in whole or in part in
increments of $1,000 (provided that any remaining principal hereof shall be at
least $100,000) at the option of the Holder hereof at a repayment price equal
to 100% of the principal amount to be repaid, together with accrued interest,
if any, hereon at the applicable rate payable to the relevant Optional
Repayment Date. For this Note to be repaid in whole or in part at the option
of the Holder hereof, this Note must be received, with the form entitled
"Option to Elect Repayment" below duly completed, by the Trustee at its
Corporate Trust Office, or such address which the Company shall from time to
time notify the Holders of the Notes, not more than 60 nor less than 30 days
prior to the relevant Optional Repayment Date. Exercise of such repayment
option by the Holder hereof shall be irrevocable. In the event of repayment of
this Note in part only, a new Note for the unrepaid portion hereof shall be
issued in the name of the Holder hereof upon the surrender hereof.
The interest rate borne by this Note shall be determined as follows:
1. If this Note is designated as a Regular Floating Rate
Note above or if no designation is made for Interest Calculation
above, then, except as described below or in an Addendum hereto, this
Note shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases shown above (i) plus or minus
the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any, specified and applied in the
manner described above. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note is payable shall be
reset as of each Interest Reset Date specified above; provided,
however, that (i) the interest rate in effect for the period from the
Original Issue Date to the Initial Interest Reset Date will be the
Initial Interest Rate, and (ii) unless otherwise specified above, the
interest rate in effect hereon for the 10 calendar days immediately
prior to Maturity shall be that in effect on the tenth calendar day
preceding such Maturity.
2. If this Note is designated as a Floating Rate/Fixed Rate
Note above, then, except as described below or in an Addendum hereto,
this Note shall bear interest at the rate determined by reference to
the applicable Interest Rate Basis or Bases shown above (i) plus or
minus the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any, specified and applied in the
manner described above. Commencing on the Initial Interest Reset
Date, the rate at which interest on this Note is payable shall be
reset as of each Interest Reset Date specified above; provided,
however, that (i) the interest rate in effect for the period from the
Original Issue Date to the Initial Interest Reset Date shall be the
Initial Interest Rate; (ii) unless otherwise specified above,
6
<PAGE> 7
the interest rate in effect hereon for the 10 calendar days
immediately prior to the Fixed Rate Commencement Date shall be that in
effect on the tenth calendar day preceding the Fixed Rate Commencement
Date; and (iii) the interest rate in effect commencing on, and
including, the Fixed Rate Commencement Date to the Maturity shall be
the Fixed Interest Rate, if such a rate is specified above, or if no
such Fixed Interest Rate is so specified, the interest rate in effect
hereon on the Business Day immediately preceding the Fixed Rate
Commencement Date.
3. If this Note is designated as an Inverse Floating
Rate Note above, then, except as described below or in an Addendum
hereto, this Note shall bear interest equal to the Fixed Interest Rate
indicated above minus the rate determined by reference to the
applicable Interest Rate Basis or Bases shown above (i) plus or minus
the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any, specified and applied in the
manner described above; provided, however, that, unless otherwise
specified above, the interest rate hereon will not be less than zero
percent. Commencing on the Initial Interest Reset Date, the rate at
which interest on this Note is payable shall be reset as of each
Interest Rate Reset Date specified above; provided, however, that (i)
the interest rate in effect for the period from the Original Issue
Date to the Initial Interest Reset Date shall be the Initial Interest
Rate, and (ii) unless otherwise specified above, the interest rate in
effect hereon for the 10 calendar days immediately prior to Maturity
shall be that in effect on the tenth calendar day preceding such
Maturity.
Notwithstanding the foregoing, if this Note is designated above as
having an Addendum attached, this Note shall bear interest in accordance with
the terms described in such Addendum.
Except as provided above, the interest rate in effect on each day
shall be (a) if such day is an Interest Reset Date, the interest rate
determined as of the Interest Determination Date (as defined below) immediately
preceding such Interest Reset Date or (b) if such day is not an Interest Reset
Date, the interest rate determined as of the Interest Determination Date
immediately preceding the next preceding Interest Reset Date. Each Interest
Rate Basis shall be the rate determined in accordance with the applicable
provision below. If any Interest Reset Date (which term includes the term
Initial Interest Reset Date unless the context otherwise requires) would
otherwise be a day that is not a Business Day, such Interest Reset Date shall
be postponed to the next succeeding day that is a Business Day, except that if
an Interest Rate Basis specified above is LIBOR and such next Business Day
falls in the next succeeding calendar month, such Interest Reset Date shall be
the immediately preceding Business Day.
Unless otherwise specified above, interest payable on this Note on any
Interest Payment Date shall be the amount of interest accrued from and
including the next preceding Interest Payment Date in respect of which interest
has been paid (or from and including the Original Issue Date specified above,
if no interest has been paid), to but excluding the related Interest Payment
Date or Maturity, as the case may be; provided, however, that if the Interest
Rate Reset Period with respect to this Note is daily or weekly, unless
otherwise specified above, interest payable on any Interest Payment Date will
include interest accrued from and including the Original Issue Date, if no
interest has been paid, or from but excluding the last Regular Record
7
<PAGE> 8
Date to which interest has been paid, as the case may be, to and including the
Regular Record Date next preceding such Interest Payment Date; and provided
further that the interest payments on Maturity will include interest accrued to
but excluding such Maturity.
Unless otherwise specified above, accrued interest hereon shall be an
amount calculated by multiplying the face amount hereof by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factor calculated for each day in the period for which accrued interest is
being calculated. Unless otherwise specified above, the interest factor for
each such day shall be computed and paid on the basis of a 360-day year of
twelve 30-day months if the Day Count Convention specified above is "30/360"
for the period specified thereunder, or by dividing the interest rate
applicable to such day by 360 if the Day Count Convention specified above is
"Actual/360" for the period specified thereunder or by the actual number of
days in the year if the Day Count Convention specified above is "Actual/Actual"
for the period specified thereunder. If interest on this Note is to be
calculated with reference to two or more Interest Rate Bases as specified
above, the interest factor will be calculated in each period in the same manner
as if only one of the applicable Interest Rate Bases applied.
Unless otherwise specified above, the "Interest Determination Date"
with respect to the CD Rate, the Commercial Paper Rate, the Federal Funds Rate
and the Prime Rate will be the second Business Day preceding each Interest
Reset Date; the "Interest Determination Date" with respect to the Eleventh
District Cost of Funds Rate will be the last working day of the month
immediately preceding each Interest Reset Date on which the Federal Home Loan
Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as
defined below); the "Interest Determination Date" with respect to LIBOR shall
be the second London Business Day (as defined below) preceding each Interest
Reset Date; the "Interest Determination Date" with respect to the Treasury Rate
will be the day in the week in which the related Interest Reset Date falls on
which day Treasury bills (as defined below) are normally auctioned (Treasury
bills are normally sold at auction on Monday of each week, unless that day is a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the related Interest Reset Date, the related Interest Determination
Date shall be such preceding Friday; and provided, further, that if an auction
shall fall on any Interest Reset Date, then the Interest Reset Date shall
instead be the first Business Day following such auction. If the interest rate
of this Note is determined with reference to two or more Interest Rate Bases as
specified above, the Interest Determination Date pertaining to this Note will
be the latest Business Day which is at least two Business Days prior to such
Interest Reset Date on which each Interest Rate Basis is determinable. Each
Interest Rate Basis shall be determined on such date, and the applicable
interest rate shall take effect on the related Interest Reset Date.
Unless otherwise specified above, the "Calculation Date" pertaining to
any Interest Determination Date will be the earlier of (i) the tenth calendar
day after such Interest Determination Date or, if such day is not a Business
Day, the next succeeding Business Day and (ii) the Business Day immediately
preceding the applicable Interest Payment Date or Maturity, as the case may be.
All calculations on this Note shall be made by the Calculation Agent specified
above or such successor thereto as is duly appointed by the Company.
8
<PAGE> 9
All percentages resulting from any calculation on this Note will be
rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or 0.09876545) would be rounded to 9.87655% (or 0.0987655) and
9.876544% (or 0.09876544) would be rounded to 9.87654% (or 0.0987654)), and all
dollar amounts used in or resulting from such calculation will be rounded to
the nearest cent (with one-half cent being rounded upward).
As used herein, "Business Day" means, unless otherwise specified
above, any day that in The City of New York is not a day on which banking
institutions are authorized or required by law or regulation to close and, if
an Interest Rate Basis shown above is LIBOR, is also a London Business Day.
As used herein, unless otherwise specified above, "London Business
Day" means any day (a) if the Index Currency is other than the European
Currency Unit ("ECU"), on which dealings in deposits in such Index Currency are
transacted in the London interbank market or (b) if the Index Currency is the
ECU, that is not designated as an ECU Non-Settlement Day by the ECU Banking
Association in Paris or otherwise generally regarded in the ECU interbank
market as a day on which payments on ECUs shall not be made.
Determination of CD Rate. If an Interest Rate Basis for this Note is
the CD Rate, as indicated above, the CD Rate shall be determined as of the
applicable Interest Determination Date (a "CD Rate Interest Determination
Date"), as the rate on such date for negotiable certificates of deposit having
the Index Maturity specified above as published by the Board of Governors of
the Federal Reserve System in "Statistical Release H.15(519), Selected Interest
Rates" or any successor publication ("H.15(519)"), under the heading "CDs
(Secondary Market)", or, if such rate is not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the rate on such CD Rate
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity specified above as 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 any successor publication ("Composite Quotations")
under the heading "Certificates of Deposit". If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time,
on the related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date shall be calculated by the Calculation Agent and shall be
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
non-bank dealers in negotiable United States 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 in the market
for negotiable certificates of deposit with a remaining maturity closest to the
Index Maturity designated above in an amount that is representative for a
single transaction in that market at that time; provided, however, that if any
of the dealers selected as aforesaid by the Calculation Agent are not quoting
as mentioned in this sentence, the CD Rate determined as of such CD Rate
Interest Determination Date shall be the CD Rate in effect on such CD Rate
Interest Determination Date.
9
<PAGE> 10
Determination of Commercial Paper Rate. If an Interest Rate Basis for
this Note is the Commercial Paper Rate, as indicated above, the Commercial
Paper Rate shall be determined as of the applicable Interest Determination Date
(a "Commercial Paper Rate Interest Determination Date"), as the Money Market
Yield (as defined below) on such date of the rate for commercial paper having
the Index Maturity specified above as published in H.15(519) under the heading
"Commercial Paper". In the event that such rate is not published by 3:00 P.M.,
New York City time, on the related Calculation Date, then the Commercial Paper
Rate shall be the Money Market Yield on such Commercial Paper Rate Interest
Determination Date of the rate for commercial paper having the Index Maturity
shown above as published in Composite Quotations under the heading "Commercial
Paper" (with an Index Maturity of one month or three months being deemed to be
equivalent to an Index Maturity of 30 days or 90 days, respectively). If by
3:00 P.M., New York City time, on the related Calculation Date such rate is not
yet published in either H.15(519) or Composite Quotations, then the Commercial
Paper Rate on such Commercial Paper Rate Interest Determination Date shall be
calculated by the Calculation Agent and shall be the Money Market Yield of the
arithmetic mean of the offered rates at approximately 11:00 A.M., New York City
time, on such Commercial Paper Rate Interest Determination Date of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent for commercial paper having the Index Maturity specified
above placed for an industrial issuer whose bond rating is "AA," or the
equivalent, from a nationally recognized securities rating agency; provided,
however, that if any of the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
determined as of such Commercial Paper Rate Interest Determination Date shall
be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest
Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D x 360 x 100
----------
360-(D x M)
where "D" refers to the applicable 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 interest period for which interest is being
calculated.
Determination of Eleventh District Cost of Funds Rate. If an Interest
Rate Basis for this Note is the Eleventh District Cost of Funds Rate, as
indicated above, the Eleventh District Cost of Funds Rate shall be determined
as of the applicable Interest Determination Date (an "Eleventh District Cost of
Funds Rate Interest Determination Date"), as the rate equal to the monthly
weighted average cost of funds for the calendar month immediately preceding the
month in which such Eleventh District Cost of Funds Rate Interest Determination
Date falls, as set forth under the caption "11th District" on Telerate Page
7058 (as defined below) as of 11:00 A.M., San Francisco time, on such Eleventh
District Cost of Funds Rate Interest Determination Date. If such rate does not
appear on Telerate Page 7058 on any related Eleventh District Cost of Funds
Rate Interest Determination Date, the Eleventh District Cost of Funds Rate for
such Eleventh District Cost of Funds Rate Interest Determination Date shall be
the monthly weighted average
10
<PAGE> 11
cost of funds paid by member institutions of the Eleventh Federal Home Loan
Bank District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
the date of such announcement. If the FHLB of San Francisco fails to announce
such rate for the calendar month immediately preceding such Eleventh District
Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost
of Funds Rate determined as of such Eleventh District Cost of Funds Rate
Interest Determination Date shall be the Eleventh District Cost of Funds Rate
in effect on such Eleventh District Cost of Funds Rate Interest Determination
Date.
"Telerate Page 7058" means the display designated as page "7058" on
the Dow Jones Telerate Service (or such other page as may replace the 7058 page
on that service for the purpose of displaying the monthly weighted average cost
of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District).
Determination of Federal Funds Rate. If an Interest Rate Basis for
this Note is the Federal Funds Rate, as indicated above, the Federal Funds Rate
shall be determined as of the applicable Interest Determination Date (a
"Federal Funds Rate Interest Determination Date"), as the rate on such date for
federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not so published by 3:00 P.M., New York City time, on the
related Calculation Date, the rate on such Federal Funds Rate Interest
Determination Date, as published in Composite Quotations under the heading
"Federal Funds/Effective Rate." If by 3:00 P.M., New York City time, on the
related Calculation Date such rate is not published in either H.15(519) or
Composite Quotations, then the Federal Funds Rate on such Federal Funds Rate
Interest Determination Date shall be calculated by the Calculation Agent and
shall be the arithmetic mean of the rates for the last transaction in overnight
United States dollar federal funds arranged by three leading brokers of federal
funds transactions in The City of New York selected by the Calculation Agent
prior to 9:00 A.M., New York City time on such Federal Funds Rate Interest
Determination Date; provided, however, that if any of the brokers selected as
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the Federal Funds Rate determined as of such Federal Funds Rate
Interest Determination Date shall be the Federal Funds Rate in effect on such
Federal Funds Rate Interest Determination Date.
Determination of LIBOR. If an Interest Rate Basis for this Note is
LIBOR, as indicated above, LIBOR will be determined as of the applicable
Interest Determination Date (a "LIBOR Interest Determination Date") in
accordance with the following provisions under LIBOR Reuters or LIBOR Telerate
as specified above:
(i)(a) If LIBOR Reuters is specified above as the method for
determining LIBOR, with respect to an Interest Determination Date
relating to this Note (a "LIBOR Interest Determination Date"), LIBOR
will be determined on the basis of the arithmetic mean of the offered
rates (unless the specified Designated LIBOR Page specified above by
its terms provides for only a single rate, in which case such single
rate shall be used) for deposits in the Index Currency (as defined
below) having the Index Maturity designated above, commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date, that appear on the Designated LIBOR Page
11
<PAGE> 12
specified above as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date, provided that at least two such offered rates
appear (unless, as aforesaid, only a single rate is required) on such
Designated LIBOR Page, or (b) if LIBOR Telerate is specified above as
the method for determining LIBOR, or if no other method is specified
above as the method for determining LIBOR, with respect to a LIBOR
Interest Determination Date for this Note, LIBOR will be the rate for
deposits in the Index Currency having the Index Maturity designated
above, commencing on the second London Business Day immediately
following such LIBOR Interest Determination Date, that appears on the
Designated LIBOR Page specified above as of 11:00 A.M., London time,
on such LIBOR Interest Determination Date. If fewer than two such
offered rates appear (unless the specified Designated LIBOR Page by
its terms provides for a single rate), or if no such rate appears, as
applicable, LIBOR in respect of the related LIBOR Interest
Determination Date will be determined in accordance with the
provisions described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which
fewer than two offered rates appear, or no rate appears, as the case
may be, on the applicable Designated LIBOR Page as specified in clause
(i) above, 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, to provide the
Calculation Agent with its offered quotation for deposits in the Index
Currency for the period of the Index Maturity specified above,
commencing on the second London Business Day immediately following
such LIBOR Interest Determination 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., 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 for loans in the
Index Currency to leading European banks, having the Index maturity
specified above and in a principal amount that is representative for a
single transaction in such Index Currency in such market at such time;
provided, however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, LIBOR determined
as of such LIBOR Interest Determination Date shall be LIBOR in effect
on such LIBOR Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified above as the currency for which LIBOR shall be calculated. If no
such currency is specified above, the Index Currency shall be United States
dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is
specified above, the display on the Reuters Monitor Money Rates Service for the
purpose of displaying the London
12
<PAGE> 13
interbank offered rates of major banks for the applicable Index Currency, or
(b) if "LIBOR Telerate" is specified above or neither "LIBOR Reuters" nor
"LIBOR Telerate" is specified as the method for calculating LIBOR, (i) if the
applicable Index Currency is United States dollars, the display designated as
page "3750" on the Dow Jones Telerate Service (or such other page as may
replace 3750 on that service for purpose of displaying London interbank offered
rates for U.S. dollar deposits, or (ii) if the applicable Index Currency is
other than United States dollars, the display on the Dow Jones Telerate Service
for the purpose of displaying the London interbank offered rates of major banks
for the applicable Index Currency.
"Principal Financial Center" will generally be the capital city of the
country for the specified Index Currency, except that with respect to United
States dollars and, Deutsche Marks, Dutch Guilders, Italian Lire, Swiss Francs
and ECUs, the Principal Financial Center shall be The City of New York,
Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively.
Determination of Prime Rate. If an Interest Rate Basis for this Note
is the Prime Rate, as indicated above, the Prime Rate shall be determined as of
the applicable Interest Determination Date (a "Prime Rate Interest
Determination Date") as the rate on such date as such rate is published in
H.15(519) under the heading "Bank Prime Loan". If such rate is not published
prior to 3:00 P.M., New York City time, on the related Calculation Date, then
the Prime Rate shall be the arithmetic mean of the rates of interest publicly
announced by each bank that appears on the Reuters Screen USPRIME1 (as defined
below) as such bank's prime rate or base lending rate as in effect for such
Prime Rate Interest Determination Date. If fewer than four such rates but more
than one such rate appear on the Reuters Screen USPRIME1 for such Prime Rate
Interest Determination Date, the Prime Rate shall be the arithmetic mean of the
prime 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, or two if only two such rates are quoted,
major money center banks in The City of New York selected by the Calculation
Agent. If fewer than two such rates appear on the Reuters Screen USPRIME1 ,
the Prime Rate will be determined by the Calculation Agent on the basis of the
rates furnished in The City of New York by three, or two if only two such rates
are quoted, substitute banks or trust companies organized and doing business
under the laws of the United States, or any state thereof, having total equity
capital of at least U.S.$500 million and being subject to supervision or
examination by a Federal or state authority, selected by the Calculation Agent
to provide such rate or rates; provided, however, that if fewer than two such
substitute banks or trust companies selected as aforesaid are quoting as
mentioned in this sentence, the Prime Rate determined as of such Prime Rate
Interest Determination Date shall be the Prime Rate in effect on such Prime
Rate Interest Determination Date.
"Reuters Screen USPRIME1" means the display designated as page
"USPRIME1" on the Reuters 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).
13
<PAGE> 14
Determination of Treasury Rate. If an Interest Rate Basis for this
Note is the Treasury Rate, as specified above, the Treasury Rate shall be
determined as of the applicable Interest Determination Date (a "Treasury Rate
Interest Determination Date") as the rate applicable to the most recent auction
of direct obligations of the United States ("Treasury Bills") having the Index
Maturity specified above, as such rate is published in H.15(519) under the
heading "Treasury Bills -- auction average (investment)" or, if not published
by 3:00 P.M., New York City time, on the related Calculation Date, 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) as otherwise announced
by the United States Department of the Treasury. In the event that the results
of the auction of Treasury Bills having the Index Maturity specified above are
not reported as provided by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then the Treasury
Rate shall be calculated by the Calculation Agent and shall be a yield to
maturity (expressed as a bond equivalent on 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 Rate Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified above; provided, however, that if any of the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate determined as of such Treasury Rate Interest
Determination Date shall be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
Determination of CMT Rate. If an Interest Rate Basis for this Note is
the CMT Rate, as indicated above, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date"), as the rate displayed on the Designated CMT Telerate Page under the
caption " ... Treasury Constant Maturities ... Federal Reserve Board Release
H.15 ... Mondays approximately 3:45 P.M.," under the column for the Designated
CMT Maturity Index (as defined below) for (i) if the Designated CMT Telerate
Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if
the Designated CMT Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which the related CMT Rate
Interest Determination Date occurs. If such rate is no longer displayed on the
relevant page, or if not displayed by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index as published in H.15(519). If such rate is no
longer published, or if not published by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for such CMT Rate Interest
Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date
with respect to such Interest Reset Date as may then be published by either the
Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided
by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated by the
14
<PAGE> 15
Calculation Agent and will be a yield to maturity, based on the arithmetic mean
of the secondary market closing offer side prices as of approximately 3:30
P.M., New York City time, on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury
Note quotations, the CMT Rate for such CMT Rate Interest Determination Date
will be calculated by the Calculation Agent and will be a yield to maturity
based on the arithmetic mean of the secondary market offer side prices as of
approximately 3:30 P.M., New York City time, on the CMT Rate Interest
Determination Date of three Reference Dealers in The City of New York (from
five such Reference Dealers selected by the Calculation Agent and eliminating
the highest quotation (or, in the event of equality, one of the highest) and
the lowest quotation (or, in the event of equality, one of the lowest)), for
Treasury Notes with an original maturity of the number of years that is the
next highest to the Designated CMT Maturity Index and a remaining term to
maturity closest to the Designated CMT Maturity Index and in an amount of at
least U.S. $100 million. If three or four (and not five) of such Reference
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided however, that if fewer than
three Reference Dealers selected by the Calculation Agent are quoting as
described herein, the CMT Rate will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity
as described in the third preceding sentence, have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the CMT Rate
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service designated above (or any other page as may replace such page
on that service for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519)), for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519). If no such page is specified in the
applicable Pricing Supplement, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity
of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years)
specified above with respect to which the CMT Rate will be calculated. If no
such maturity is specified in the applicable Pricing Supplement, the Designated
CMT Maturity Index shall be 2 years.
Any provision contained herein, including the determination of an
Interest Rate Basis, the specification of an Interest Rate Basis, calculation
of the interest rate applicable to this Note, its Interest Payment Dates or any
other matter relating hereto may be modified as specified in an Addendum
relating hereto if so specified above.
15
<PAGE> 16
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 above. In addition to any Maximum Interest
Rate applicable hereto pursuant to the above provisions, the interest rate on
this Note 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 Calculation Agent shall calculate the interest rate hereon in
accordance with the foregoing on or before each Calculation Date. Unless
otherwise specified above, The Chase Manhattan Bank (National Association) will
be the Calculation Agent.
At the request of the Holder hereof, the Calculation Agent shall
provide to the Holder hereof the interest rate hereon then in effect and, if
determined, the interest rate which shall become effective as of the next
Interest Reset Date.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance with certain conditions set
forth in the Indenture.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of all the Notes 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 thereby at any time by the Company and the Trustee with the consent of
the Holders of 66 2/3% in aggregate principal amount of the Outstanding
Securities of each series affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all the 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. Any such consent or
waiver by the Holder of this Note shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note 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 Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note 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: (i) such Holder shall have previously
given the Trustee written notice of a continuing Event of Default with respect
to the Notes; (ii) the Holders of not less than 25% in principal amount of the
Notes 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; (iii) the Trustee shall not have
received from the Holders of a majority in principal amount of Notes at the
time Outstanding a direction inconsistent with such request; and (iv) the
Trustee 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 Note for
16
<PAGE> 17
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 Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Note at the time, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Note may be registered on the Security
Register of the Company, upon surrender of this Note for registration of
transfer at the office or agency of the Company in The City of New York, 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 by its attorney duly authorized in writing, and thereupon one
or more new Notes of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made for any 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 Note 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 Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse for the payment of the principal of or interest on this
Note, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any indenture supplemental thereto, or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, shareholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
17
<PAGE> 18
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and an imprint or facsimile of its
corporate seal to be imprinted hereon.
[SEAL] Advanta Corp.
By:
-------------------------------
Name: Jeffrey D. Beck
Title: Vice President and
Treasurer
Attest:
By:
----------------------------
Name: Gene S. Schneyer
Title: Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of
the series designated herein
referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
(National Association),
as Trustee
By: Dated:
--------------------------- -----------------
Authorized Officer
18
<PAGE> 19
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof together with interest to
the repayment date, to the undersigned, at_____________________________________
_______________________________________________________________________________
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Trustee must receive at its Corporate
Trust Office, or at such other place or places of which the Company shall from
time to time notify the Holder of this Note, not more than 60 nor less than 30
days prior to an Optional Repayment Date, if any, shown above, this Note with
this "Option to Elect Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of $1,000 provided that
any remaining principal hereof shall be at least $100,000) which the Holder
elects to have repaid and specify the denomination or denominations (which
shall be at least $100,000 or an integral multiple of $1,000 in excess thereof)
of the Notes to be issued to the Holder for the portion of this Note not being
repaid (in the absence of any such specification, one such Note will be issued
for the portion not being repaid).
$
------------- ----------------------------------------
NOTICE: The signature on this
Date Option to Elect Repayment must
--------- correspond with the name as written upon
the face of this Note in every particular,
without alteration or enlargement or any
change whatever.
19
<PAGE> 20
ASSIGNMENT/TRANSFER FORM
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto (insert Taxpayer Identification No.)
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
________________________________________________________________________________
within Note and all rights thereunder, hereby irrevocably constituting and
appointing ________________________ attorney to transfer said Note on the
books of the Company with full power of substitution in the premises.
Dated:
------------------- ------------------------------------------------
NOTICE: The signature of the registered Holder to this assignment
must correspond with the name as written upon the face of the within
instrument in every particular, without alteration or enlargement or
any change whatsoever.
20
<PAGE> 21
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
UNIF GIFT MIN ACT--..............Custodian...........
(Cust) (Minor)
Under Uniform Gifts to Minors Act
.....................
(State)
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
21
