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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): September 26, 1997
Advanta Corp.
(Exact name of registrant as specified in its charter)
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Delaware 0-14120 23-1462070
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
Welsh & McKean Road, P.O. Box 844
Spring House, Pennsylvania 19477
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code: (215) 657-4000
(Former name or former address, if changed since last report)
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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 is filed herewith for incorporation
by reference in such Registration Statement.
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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.
(Registrant)
By: /s/Elizabeth H. Mai
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Elizabeth H. Mai, Senior Vice President
and General Counsel
Date: September 26, 1997
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Index to Exhibits
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Exhibit Number Per
Item 60l of
Regulation S-K Description of Document
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1 Distribution Agreement, dated as of September 26, 1997, between
Advanta Corp. and Salomon Brothers Inc, Bear, Stearns & Co. Inc.,
Chase Securities Inc., Credit Suisse First Boston and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
4.1 Form of Fixed Rate Global Note
4.2 Form of Floating Rate Global Note
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Exhibit 1
ADVANTA CORP.
MEDIUM-TERM NOTES DUE
FROM 9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
September 26, 1997
SALOMON BROTHERS INC
Seven World Trade Center
New York, NY 10048
BEAR, STEARNS & CO. INC.
245 Park Avenue
11th Floor
New York, NY 10167
CHASE SECURITIES INC.
270 Park Avenue, 8th Floor
New York, NY 10017-2070
CREDIT SUISSE FIRST BOSTON CORPORATION
11 Madison Avenue
New York, NY 10010
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, Bear, Stearns & Co. Inc., Chase Securities
Inc., Credit Suisse First Boston 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 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
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Company and The Chase Manhattan Bank (successor by merger to 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. $350,000,000
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 E" 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") a registration statement on Form S-3 (No. 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 statement has 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 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").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement or Prospectus (or other references of like import) shall
be deemed to mean and include all such financial statements and schedules and
other information which are incorporated by reference in the
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Registration Statement or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Registration Statement or
Prospectus shall be deemed to mean and include the filing of any document under
the 1934 Act, which is incorporated by reference in the Registration Statement
or Prospectus, as the case may be.
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
subagents. 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
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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 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 to enter into this
Agreement and consummate the transactions contemplated 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
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existing as a corporation 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 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 and 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
post-effective 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 delivered to the Agents for use
in connection with the offering of Notes is identical to any
electronically transmitted copies thereof filed with the SEC pursuant
to EDGAR, except to the extent permitted by Regulation S-T; and 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").
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(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 and notes thereto of the Company and its
consolidated subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
consolidated 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 in the United States
applied on a consistent basis throughout the periods mentioned; 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 (assuming the Indenture has been duly authorized,
executed and delivered by the Trustee) constitutes, 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 similar 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 against the Company in
accordance with their terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar 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
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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
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 by-laws, 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 do not and will not conflict with or
constitute a breach of the terms or provisions 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,
rule, regulation, judgment, 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
necessary or required for the consummation by the Company of the
transactions contemplated by this Agreement or in connection with the
issuance and sale of Notes hereunder, except such as have been obtained
or rendered, as the case may be.
(x) Legal Proceedings; Contracts. Except as disclosed
in the Registration Statement or the Prospectus, no legal or
governmental actions, suits or proceedings, domestic or foreign, 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 that would reasonably be
expected to result in any material adverse change in the condition
(financial or otherwise), business, properties or results of operations
of the Company and its subsidiaries considered as one enterprise or
which are required to be
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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.
(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"). Advanta National Bank (formerly, Advanta
National Bank USA and referred to herein as the "Bank") is validly
existing as an association in good standing under the laws of the
United States; the Bank is 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 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; and the Bank is in
compliance with each of the limitations contained in Section 4(f)(3) of
the BHCA.
(xii) Accuracy of Exhibits. There are no contracts or
documents of a character required to be described in the Registration Statement
or Prospectus or to be filed as an exhibit to the Registration Statement by the
1933 Act or by the 1933 Act Regulations that are not described or filed as
required.
(xiii) Possession of Licenses and Permits. The Company
and its subsidiaries each owns, possesses or has obtained adequate governmental
licenses, permits, certificates, consents, orders, approvals and other
authorizations necessary to carry on its business as presently conducted, except
those governmental licenses, permits, certificates, consents orders, approvals
and other authorizations which the failure to own, possess or obtain would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries considered as one enterprise, and none of them has received
any notice of proceedings relating to revocation or modification of any such
licenses, permits, certificates, consents, orders approvals or authorizations
that, if determined adversely would, individually or in the aggregate, have a
material adverse effect on the Company and its subsidiaries considered as one
enterprise.
(xiv) Possession of Intellectual Property. The Company
and its subsidiaries each owns, possesses or is licensed to use, or can acquire
on reasonable terms, adequate patents, patent licenses, trademarks, service
marks, trade names and other intellectual property rights (collectively,
"Intellectual Property Rights") necessary to carry on its business as presently
conducted, except those Intellectual Property Rights that the failure to own,
possess or be licensed to use would not, individually or in the aggregate, have
a material adverse effect on the Company and its subsidiaries considered as one
enterprise, and none of them has received any notice or infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property Rights that would, individually or in the aggregate, reasonably be
expected
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to have a material adverse effect on the Company and its subsidiaries considered
as one enterprise.
(xv) 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 or any Significant Subsidiary 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 all
or 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(j), 7(b), 7(c) and 7(d) hereof.
(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
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prepare and deliver to the Company a representation letter in the form of
Exhibit B hereto, or such other substantially similar form as is mutually agreed
upon by the Company and the Agents (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 (and, if reasonably requested by the Agents, will confirm such
notice in writing) of (i) the effectiveness of any amendment to the Registration
Statement, (ii) 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) the receipt of any comments from the SEC with respect to the
Registration Statement or the Prospectus, (iv) any request by the SEC for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, and (v) 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.
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(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 (k) 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 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, subject to Section 4(b) herein,
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.
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(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (k) 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 (k) 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 explana-
tions 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) 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 the 1934 Act,
including, without limitation, Sections 13(a), 13(c), 14 or 15(d) of the 1934
Act.
(j) Stand-Off Agreement. In connection with a purchase of Notes by an
Agent as principal, if the Company and the Agent shall mutually agree in writing
(or orally and confirmed in writing), then 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
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ordinary course of business, debt securities sold by the Company or its selling
agents pursuant to the Company's existing retail note program and retail
medium-term note program).
(k) 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 their capacity as agents 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) Effectiveness of Registration Statement. The Registration Statement
(including any post-effective amendments or further registration statements
filed by the Company for the purpose of registering additional Notes in
connection with this Agreement) has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act and no proceedings for that purpose shall have
been instituted or shall be pending or threatened by the Commission, and any
request on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Agents.
(b) 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 Elizabeth H.
Mai, Senior Vice President, Secretary and General Counsel to the
Company, to the effect that:
(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 and to
enter into and consummate the
transactions contemplated in the
Prospectus.
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<PAGE> 14
(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 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 and 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.
(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 against the Company
in accordance with its terms, except as
enforcement thereof may be limited by
bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating
to or affecting enforcement of creditors'
rights generally, or by general equity
principles, and except
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<PAGE> 15
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 against the
Company in accordance with their terms,
except as enforcement thereof may be
limited by bankruptcy, insolvency,
reorganization, moratorium or other
similar 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.
(viii) The statements in the Prospectus under
the captions "Description of the 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
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<PAGE> 16
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) Except as disclosed in the Registration
Statement or in the Prospectus, to the
best of such counsel's knowledge, there
are no legal or governmental actions,
suits or proceedings, domestic or
foreign, pending or threatened which are
required to be disclosed in the
Prospectus, or that would reasonably be
expected to materially and adversely
affect the consummation of this Agreement
or the Indenture or any transaction
contemplated thereby or that would
reasonably be expected to result in any
material adverse change in the condition
(financial or otherwise), business,
properties, or results of operations of
the Company and its subsidiaries
considered as one enterprise.
(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 by-laws 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 contemplated herein and
therein have been duly authorized by all
necessary corporate action and does not
and will not conflict with or constitute
a breach of any of the terms or
provisions 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
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<PAGE> 17
of the Company or any such subsidiary is
subject, or any law, rule, regulation,
judgment, 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 necessary or 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.
(xvi) Each document filed pursuant to the 1934
Act and incorporated by reference in the
Prospectus complied when filed as to form
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 Bank is
validly existing as an association in
good
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<PAGE> 18
standing under the laws of the United
States. The Bank is 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. The Bank is in compliance
with each of the limitations contained in
Section 4(f)(3) of the BHCA.
(xix) To the best of such counsel's knowledge,
the Company and its subsidiaries each
owns, possesses or has obtained adequate
governmental licenses, permits,
certificates, consents, orders, approvals
and other authorizations necessary to
carry on its business as presently
conducted, except those governmental
licenses permits, certificates, consents,
orders approvals and other authorizations
which the failure to own, possess or
obtain would not, individually or in the
aggregate, have a material adverse effect
on the Company and its subsidiaries
considered as one enterprise, and none of
them has received any notice of
proceedings relating to revocation or
modification of any such licenses,
permits, certificates, consents, orders,
approvals or authorizations that, if
determined adversely would, individually
or in the aggregate, have a material
adverse effect on the Company and its
subsidiaries considered as one
enterprise.
(xx) To the best of such counsel's knowledge,
the Company and its subsidiaries each
owns, possesses or is licensed to use, or
can acquire on reasonable terms, adequate
patents, patent licenses, trademarks,
service marks, trade names and other
intellectual property rights
(collectively, "Intellectual Property
Rights") necessary to carry on its
business as presently conducted, except
those Intellectual Property Rights that
the failure to own, possess or be
licensed to use would not, individually
or in the aggregate, have a material
adverse effect on the Company and its
subsidiaries considered as one
enterprise, and none of them has received
any notice of infringement of or conflict
with asserted rights of others that
would, individually or in the aggregate,
reasonably be expected to have a material
adverse effect on the Company and its
subsidiaries considered as one
enterprise.
In rendering such opinion, Ms. Mai may rely on the opinion of counsel
for the Agents as to matters of New York law.
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<PAGE> 19
(2) Opinion of Counsel to the Agents. The opinion of Brown &
Wood, LLP counsel to the Agents, covering the matters referred to in
subparagraph (1) under the subheadings (i) and (v) to (xi), inclusive,
above.
(3) Disclosure Statements. In giving their opinions required
by subsection (b)(1) and (b)(2) of this Section, Elizabeth H. Mai, Esq.
and Brown & Wood LLP 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
post-effective 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 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.
(c) 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.
(d) 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.
(e) 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
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<PAGE> 20
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 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).
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(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(c), 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 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
Elizabeth H. Mai, 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 and the description thereof in the Prospectus conforms to the terms 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
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<PAGE> 22
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(d) 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:
(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
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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 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. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action
in respect of which an indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnification 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
23
<PAGE> 24
terms, the Company and the Agents shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by the
indemnification provisions of Section 8 hereof incurred by the indemnified
party, as incurred, in such proportions that each Agent is responsible for that
portion represented by the percentage that the total commissions or underwriting
discounts received by such Agent in respect of the sale of Notes to or through
it that were the subject of the claim for indemnification bears to the total
sales price from the sale of such Notes, 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;
(e) The reasonable fees and disbursements of Brown & Wood LLP, counsel
to the Agents, or such other counsel to the Agents acceptable to the Company,
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 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;
24
<PAGE> 25
(g) The preparation, printing, reproducing and delivery to the Agents
of copies of the Indenture and all supplements and amendments thereto;
(h) Any fees charged by rating agencies for the rating of the Notes;
(i) The fees and expenses incurred in connection with the listing of
the Notes on any securities exchange;
(j) The fees and expenses, if any, incurred with respect to any filing
with the National Association of Securities Dealers, Inc.;
(k) Any advertising and other out-of-pocket expenses of the Agents
incurred with the approval of the Company;
(l) The cost of providing any CUSIP or other identification numbers for
the Notes; and
(m) 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.
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
25
<PAGE> 26
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 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.
26
<PAGE> 27
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.
Welsh & McKean Roads
Spring House, PA 19477-0844
Attention: Elizabeth H. Mai, General Counsel
If to Salomon Brothers Inc:
Seven World Trade Center
32nd Floor
New York, NY 10048
Attention: Medium-Term Note Group
If to Bear, Stearns & Co. Inc.:
245 Park Avenue
4th Floor
New York, NY 10167
Attention: Medium-Term Note Group
If to Chase Securities Inc.:
270 Park Avenue, 8th Floor
New York, NY 10017-2070
Attention: Medium-Term Notes Desk
If to Credit Suisse First Boston Corporation:
11 Madison Avenue
New York, New York 10010
Fax: (212) 325-8183
Attention: Short and Medium-Term Finance Dept.
27
<PAGE> 28
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.
28
<PAGE> 29
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: /s/
-------------------------------------
Name: David D. Wesselink
Title: Senior Vice President and
Accepted: Chief Financial Officer
Salomon Brothers Inc
By: /s/
-------------------------------
Name:
Title:
Bear, Stearns & Co. Inc.
By: /s/
-------------------------------
Name:
Title:
Chase Securities Inc.
By: /s/
-------------------------------
Name:
Title:
Credit Suisse First Boston Corporation
By: /s/
-------------------------------
Name:
Title:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
By: /s/
-------------------------------
Name:
Title:
29
<PAGE> 30
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:
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(j) of the Distribution
Agreement.
1
<PAGE> 31
EXHIBIT B
[LETTERHEAD OF AGENT]
[DATE]
Advanta Corp.
Welsh & McKean Road
P.O. Box 844
Spring House, Pennsylvania 19477-0844
Ladies and Gentlemen:
Reference is hereby made to that certain Distribution Agreement dated
as of September __, 1997 by and among Advanta Corp., Salomon Brothers Inc, Bear,
Stearns & Co. Inc., Chase Securities Inc., Credit Suisse First Boston
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 (the "Subject Notes")
solely as agent and the Subject Notes are being sold to investors at 100% of
their principal amount.
If any securities are or will be "taken in trade" (as defined in Rule
2730 of the National Association of Securities Dealers, Inc. Conduct Rules
("Rule 2730")) in connection with the sale of the Subject Notes to investors,
the undersigned acknowledges that such transaction is subject to Rule 2730 and
certifies that the transaction will comply with all aspects of Rule 2730.
Very truly yours,
[AGENT]
By:__________________________
Name:
Title:
2
<PAGE> 32
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 ............................................... .125%
FROM 1 YEAR TO LESS THAN 18 MONTHS ............................. .150%
FROM 18 MONTHS TO LESS THAN 2 YEARS ............................ .200%
FROM 2 YEARS TO LESS THAN 3 YEARS .............................. .250%
FROM 3 YEARS TO LESS THAN 4 YEARS .............................. .350%
FROM 4 YEARS TO LESS THAN 5 YEARS .............................. .450%
FROM 5 YEARS TO LESS THAN 6 YEARS .............................. .500%
FROM 6 YEARS TO LESS THAN 7 YEARS .............................. .550%
FROM 7 YEARS TO LESS THAN 10 YEARS ............................. .600%
FROM 10 YEARS TO LESS THAN 15 YEARS ............................ .625%
FROM 15 YEARS TO LESS THAN 20 YEARS ............................ .700%
FROM 20 YEARS TO LESS THAN 30 YEARS ............................ .750%
FROM 30 YEARS TO LESS THAN 40 YEARS ............................ .875%
</TABLE>
3
<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 E
(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,
and/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, 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 $350,000,000 (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 E (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 (successor by merger to 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 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
4
<PAGE> 5
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 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 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
5
<PAGE> 6
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, other than a Saturday or Sunday, that is neither that is neither a
legal holiday nor a day on which banking institutions are authorized or required
by law, regulation or executive order to close in the City of New York.
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 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
6
<PAGE> 7
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 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
7
<PAGE> 8
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: Linda C. Morris
Title: Vice President and Assistant 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,
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 E
(Floating Rate)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY
OR BASES: DATE:
IF LIBOR:
[ ] LIBOR Reuters
[ ] LIBOR Telerate
DESIGNATED LIBOR CURRENCY:
<PAGE> 2
<TABLE>
<S> <C> <C>
INDEX MATURITY: INITIAL INTEREST RATE: INTEREST PAYMENT PERIOD:
SPREAD (PLUS OR INITIAL INTEREST RESET DATE: INTEREST PAYMENT
MINUS): DATES:
SPREAD MULTIPLIER: INTEREST RATE RESET PERIOD: INTEREST RESET DATES:
MAXIMUM INTEREST MINIMUM INTEREST RATE: INITIAL REDEMPTION
RATE: DATE:
INITIAL REDEMPTION ANNUAL REDEMPTION OPTIONAL REPAYMENT
PERCENTAGE: PERCENTAGE REDUCTION: DATE(S):
</TABLE>
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:
Fixed Interest Rate: [ ] Actual/360 for the period
from to .
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed Interest Rate: from to .
ORIGINAL ISSUE DISCOUNT
[ ] No
[ ] Yes
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period:
2
<PAGE> 3
ADDENDUM ATTACHED:
[ ] Yes
[ ] No
OTHER PROVISIONS:
3
<PAGE> 4
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 Date, and may either be paid to the
Person in whose name this Note (or one or more Predecessor
4
<PAGE> 5
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, 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
$350,000,000 (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 E (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
(successor by merger to 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 shall act as Trustee with respect to the
Notes (herein called the "Trustee", which term includes
5
<PAGE> 6
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 or the minimum authorized denomination specified above) 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 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.
6
<PAGE> 7
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 or the minimum authorized denomination specified above) 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 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:
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.
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, 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
7
<PAGE> 8
interest rate in effect hereon on the Business Day immediately
preceding the Fixed Rate Commencement Date.
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 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
8
<PAGE> 9
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,
the Prime Rate and the CMT 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, unless the Designated LIBOR Currency (as defined below) is British pounds
sterling, in which case the Interest Determination Date will be the applicable
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.
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).
9
<PAGE> 10
As used herein, "Business Day" means, unless otherwise specified above,
any day other than a Saturday or Sunday, that is neither a legal holiday nor a
day on which banking institutions are authorized or required by law, regulation
or executive order to close in The City of New York; provided, however, that
with respect to a Note denominated in a Specified Currency other than United
States dollars, such day is also not a day on which banking institutions are
authorized or required by law, regulation or executive order to close in the
Principal Financial Center (as defined below) of the country issuing the
Specified Currency (unless the Specified Currency is European Currency Units
("ECU"), in which case such day is also not a day that appears as an ECU
non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or is not a day designated as an ECU non-settlement day by
the ECU Banking Association) or, if ECU non-settlement days do not appear on
that page (and are not so designated), a day that is not a day on which payments
in ECU cannot be settled in the international interbank market); provided,
further, that, with respect to Notes as to which LIBOR is an applicable Interest
Rate Basis, such day is also a London Business Day (as defined below). As used
herein, unless otherwise specified above, "London Business Day" means any day on
which dealings in the Designated LIBOR Currency are transacted in the London
interbank market.
As used herein, unless otherwise specified above, "Principal Financial
Center" means (i) the capital city of the country issuing the Specified Currency
(except as described in the immediately preceding paragraph with respect to ECU)
or (ii) the capital city of the country to which the Designated LIBOR Currency
relates (or, in the case of ECU, Luxembourg), as applicable, except, in the case
of (i) or (ii) above, that with respect to United States dollars, Australian
dollars, Canadian dollars, Deutsche marks, Dutch guilders, Italian lire and
Swiss francs, the "Principal Financial Center shall be The City of New York,
Sydney, Toronto, Frankfurt, Amsterdam, Milan (solely in the case of the
Specified Currency) and Zurich, respectively.
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
10
<PAGE> 11
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.
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 caption
"Commercial Paper-Nonfinancial". 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
11
<PAGE> 12
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 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 Markets Limited (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 Designated LIBOR Currency (as
defined below) having the Index
12
<PAGE> 13
Maturity designated above, commencing on the applicable Interest Reset
Date, that appear on the Designated LIBOR Page 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 Designated LIBOR Currency having the Index Maturity designated
above, commencing on the applicable Interest Reset 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
Designated LIBOR Currency for the period of the Index Maturity
specified above, commencing on the applicable Interest Reset Date, to
prime banks in the London interbank market at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date and in a
principal amount that is representative for a single transaction in
such Designated LIBOR 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 Designated LIBOR 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 Designated LIBOR 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.
"Designated LIBOR Currency" means the currency (or composite currency)
specified above as the currency for which LIBOR shall be calculated. If no such
currency or composite currency is specified above, the Designated LIBOR
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 interbank offered rates of major banks for the
applicable Designated LIBOR Currency, or (b) if
13
<PAGE> 14
"LIBOR Telerate" is specified above or neither "LIBOR Reuters" nor "LIBOR
Telerate" is specified as the method for calculating LIBOR, (i) if the
applicable Designated LIBOR Currency is United States dollars, the display
designated as page "3750" on the Dow Jones Markets Limited (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 Designated
LIBOR Currency is other than United States dollars, the display on the Dow Jones
Markets Limited for the purpose of displaying the London interbank offered
rates of major banks for the applicable Designated LIBOR Currency.
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).
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
14
<PAGE> 15
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 weekly or the monthly average,
as specified above, 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
Calculation Agent and
15
<PAGE> 16
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 second 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
Markets Limited 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.
"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.
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 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.
16
<PAGE> 17
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 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.
17
<PAGE> 18
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.
18
<PAGE> 19
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: Linda C. Morris
Title: Vice President and Assistant 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,
as Trustee
By: Dated:
------------------------------------- ----------------
Authorized Officer
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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 or the minimum
authorized denomination specified in this Note) which the Holder elects to have
repaid and specify the denomination or denominations (which shall be at least
the minimum authorized denomination specified in this Note 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.
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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.
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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
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(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.
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