EXHIBIT 4.1
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PROVIDIAN FINANCIAL CORPORATION
TO
BANK ONE TRUST COMPANY, N.A.
as Trustee
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FIRST SUPPLEMENTAL INDENTURE
Dated as of August 23, 2000
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Supplement to Indenture dated as of May 1, 1999
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TABLE OF CONTENTS
Page
ARTICLE 1 CREATION OF THE NOTES...................................................... 2
1.1 DESIGNATION OF SERIES...................................................... 2
1.2 FORM OF NOTES.............................................................. 2
1.3 LIMIT ON AMOUNT OF SERIES.................................................. 2
1.4 INTEREST................................................................... 2
1.5 CERTIFICATE OF AUTHENTICATION.............................................. 2
1.6 NO SINKING FUND............................................................ 2
1.7 ISSUANCE IN GLOBAL FORM.................................................... 2
1.8 DISCHARGE OF INDENTURE; DEFEASANCE......................................... 3
1.9 OTHER TERMS OF NOTES....................................................... 3
ARTICLE 2 CONVERSION OF NOTES........................................................ 3
2.1 CONVERSION PRIVILEGE....................................................... 3
2.2 CONVERSION RATE............................................................ 3
2.3 EXERCISE OF CONVERSION PRIVILEGE........................................... 4
2.4 FRACTIONS OF COMMON STOCK SHARES........................................... 4
2.5 ADJUSTMENT OF CONVERSION RATE.............................................. 5
2.6 NOTICE OF ADJUSTMENTS OF CONVERSION RATE................................... 10
2.7 NOTICE OF CERTAIN CORPORATE ACTION......................................... 11
2.8 COMPANY TO RESERVE COMMON STOCK............................................ 11
2.9 TAXES ON CONVERSIONS....................................................... 12
2.10 COVENANT AS TO COMMON STOCK................................................ 12
2.11 CANCELLATION OF CONVERTED SECURITIES....................................... 12
2.12 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.............. 12
2.13 RIGHT OF HOLDERS TO CONVERT................................................ 13
ARTICLE 3 REDEMPTION OF NOTES........................................................ 13
3.1 OPTIONAL REDEMPTION BY THE COMPANY......................................... 13
3.2 APPLICABILITY OF ARTICLE................................................... 14
ARTICLE 4 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDERS UPON A CHANGE OF CONTROL.. 14
4.1 REPURCHASE AT OPTION OF HOLDERS UPON CHANGE OF CONTROL..................... 14
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TABLE OF CONTENTS
(Continued)
Page
4.2 CERTAIN DEFINITIONS........................................................ 16
ARTICLE 5 EVENTS OF DEFAULT.......................................................... 17
5.1 ADDITIONAL EVENTS OF DEFAULT............................................... 17
ARTICLE 6 AMENDMENTS, SUPPLEMENTS AND WAIVERS........................................ 18
6.1 WITH CONSENT OF HOLDERS.................................................... 18
ARTICLE 7 MISCELLANEOUS.............................................................. 18
7.1 APPLICATION OF FIRST SUPPLEMENTAL INDENTURE................................ 18
7.2 EFFECTIVE DATE............................................................. 19
7.3 COUNTERPARTS............................................................... 19
EXHIBIT A
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FIRST SUPPLEMENTAL INDENTURE, dated as of August 23, 2000 by and between
PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation, as issuer (the
"Company"), and BANK ONE TRUST COMPANY, N.A., a national banking association
duly organized and existing under the laws of the United States of America, as
Trustee under the Indenture (as hereinafter defined) (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee, as successor in interest to The First
National Bank of Chicago, are parties to that certain Indenture dated as of May
1, 1999 (the "Indenture", all capitalized terms used and not otherwise defined
herein shall have the meanings set forth in the Indenture) providing for the
issuance by the Company of securities from time to time;
WHEREAS, no securities have been issued under the Indenture and there do
not currently exist any Holders;
WHEREAS, the Company desires to issue a series of Securities under the
Indenture, and has duly authorized the creation and issuance of such Securities
and the execution and delivery of this First Supplemental Indenture to modify
the Indenture and provide certain additional provisions as hereinafter
described;
WHEREAS, the Company and the Trustee deem it advisable to enter into this
First Supplemental Indenture for the purposes of establishing the terms of such
series of Securities;
WHEREAS, the execution and delivery of this First Supplemental Indenture
has been authorized by a Board Resolution;
WHEREAS, concurrent with the execution hereof, the Company has delivered an
Officers' Certificate and has caused its counsel to deliver to the Trustee an
Opinion of Counsel; and
WHEREAS, all things necessary to make this First Supplemental Indenture a
valid agreement of the Company in accordance with its terms have been done, and
the execution and delivery thereof have been in all respects duly authorized by
the parties hereto.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Notes (as hereinafter defined), as follows:
ARTICLE 1
CREATION OF THE NOTES
1.1 DESIGNATION OF SERIES.
Pursuant to the terms hereof and Section 301 of the Indenture, the Company
hereby creates a series of Securities designated as the "3.25% Convertible
Senior Notes due August 15, 2005" (the "Notes"), which Notes shall be deemed
"Securities" for all purposes under the Indenture.
1.2 FORM OF NOTES.
The definitive form of the Notes shall be substantially in the form set
forth in Exhibit A attached hereto, which is incorporated herein and made part
hereof. The Stated Maturity of the principal of the Notes shall be August 15,
2005.
1.3 LIMIT ON AMOUNT OF SERIES.
The Notes shall not exceed U.S. $402,500,000 in aggregate principal amount,
and may, upon the execution and delivery of this First Supplemental Indenture or
from time to time thereafter, be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes upon a Company Order and delivery of an Officers' Certificate
and Opinion of Counsel as contemplated by Section 303 of the Indenture.
1.4 INTEREST.
The Notes shall bear interest at a rate of 3.25% per annum, payable semi-
annually. The Interest Payment Dates for the Notes shall be February 15 and
August 15 of each year, commencing February 15, 2001, with interest payable in
Dollars to Holders in whose names the Notes are registered at the close of
business on February 1 or August 1 of each year (each, a "Record Date"), or, if
such Record Date is not a Business Day, at the close of business of the
immediately succeeding Business Day.
1.5 CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication to be borne on the Notes shall
be substantially as provided in the Form of Note attached hereto as Exhibit A.
1.6 NO SINKING FUND.
No sinking fund will be provided with respect to the Notes.
1.7 ISSUANCE IN GLOBAL FORM.
The Notes shall be issued as one or more Global Securities, representing
the aggregate principal amount of the Notes, and shall be deposited with the
Trustee as custodian for the
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Depositary. The Notes shall be registered in the name of Cede & Co., or other
nominee of the Depositary.
1.8 DISCHARGE OF INDENTURE; DEFEASANCE.
The Notes shall not be subject to the provisions of Article XIII of the
Indenture.
1.9 OTHER TERMS OF NOTES.
The other terms of the Notes shall be as expressly set forth in Articles 2,
3, 4, 5, 6 and 7 hereof and Exhibit A hereto.
The words "herein", "hereof" and "hereunder" and other words of similar
import refer to this First Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE 2
CONVERSION OF NOTES
2.1 CONVERSION PRIVILEGE.
Subject to and upon compliance with the provisions of this Article 2, at
the option of the Holder thereof, any Note or any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000, and which has
not previously been redeemed pursuant to Article 3 hereof or repurchased
pursuant to Article 4 hereof, may be converted into fully paid and nonassessable
shares of common stock of the Company, $0.01 par value per share (the "Common
Stock"), at the conversion rate, determined as hereinafter provided, in effect
at the time of conversion. Such conversion right shall commence on the date of
original issuance of the Notes, and shall expire at the close of business on the
Business Day immediately preceding the Stated Maturity. In case a Note or
portion thereof is called for redemption, such conversion right in respect of
the Note or portion so called shall expire at the close of business on the
Business Day immediately preceding the Redemption Date, unless the Company
defaults in making the payment due upon redemption. A Note in respect of which
a Holder has delivered a Repurchase Notice pursuant to Section 4.1 hereof may be
converted only if such Repurchase Notice is withdrawn in accordance with the
terms of such section, unless the Company defaults in the payment of the Change
of Control Repurchase Price.
2.2 CONVERSION RATE.
The rate at which shares of Common Stock shall be delivered upon conversion
(the "Conversion Rate") shall be initially 7.2446 shares of Common Stock for
each $1,000 principal amount of Notes. The Conversion Rate shall be adjusted in
certain instances as provided in Section 2.5 hereof. All calculations under
this Article 2 shall be made to the nearest cent or the nearest 1/100th of a
share, as the case may be.
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2.3 EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise the conversion privilege, the Holder of any Note to be
converted shall surrender such Note, duly endorsed or assigned to the Company or
in blank, at the Corporate Trust Office of the Trustee, located at 00 Xxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn: Corporate Trust
Administration, accompanied by a duly signed and completed written notice to the
Company at the Corporate Trust Office that the Holder elects to convert such
Note. Holders of Notes surrendered for conversion during the period from the
close of business on any Record Date immediately preceding any Interest Payment
Date to the opening of business on such Interest Payment Date shall (except in
the case of Notes or portions thereof which have been called for redemption or
in respect of which the Repurchase Notice delivered by the Holder has not been
withdrawn, the conversion rights of which would terminate during the period
between such Record Date and the close of business on such Interest Payment
Date) be entitled to receive the interest payable on such Interest Payment Date
on the principal amount of Notes being surrendered for conversion. Such Notes
surrendered for conversion during the period from the close of business on any
Record Date immediately preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except in the case of Notes or
portions thereof which have been called for redemption or in respect of which
the Repurchase Notice delivered by the Holder has not been withdrawn, the
conversion rights of which would terminate during the period between such Record
Date and the close of business on such Interest Payment Date) be accompanied by
payment in immediately available funds or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of Notes being surrendered for conversion. Except as set forth
above, no payment or adjustment shall be made upon any conversion on account of
any interest accrued on the Notes surrendered for conversion from the Interest
Payment Date preceding the day of conversion, or on account of any dividends on
the Common Stock issued upon conversion. In addition, Holders shall not be
entitled to receive any dividends payable to holders of Common Stock as of any
record date before the close of business on the conversion date. Notes shall be
deemed to have been converted immediately prior to the close of business on the
day of surrender of such Notes for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Notes as Holders
shall cease, and the Person or Persons entitled to receive the Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such Common Stock at such time. As promptly as practicable on or
after the conversion date, the Company shall issue and shall deliver to the
Trustee at its Corporate Trust Office a certificate or certificates for the
number of full shares of Common Stock issuable upon conversion, together with
payment in lieu of any fraction of a share thereof, as provided in Section 2.4
hereof, and the Trustee shall forward such certificate or certificates at the
addresses set forth in the written notices sent to the Company by the Holders
electing to convert their Notes.
2.4 FRACTIONS OF COMMON STOCK SHARES.
No fractional shares of Common Stock shall be issued upon conversion of the
Notes. If more than one Note shall be surrendered for conversion at one time by
the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Notes so surrendered. Instead of any fractional share of Common
Stock which would otherwise be issuable upon conversion of any Note or
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Notes, the Company shall pay a cash adjustment in respect of such fraction in an
amount equal to the same fraction of the Market Price (determined by the Company
in accordance with the following paragraph) per share of Common Stock.
For purposes of this Section 2.4, "Market Price" means the Sale Price (as
defined below) of the Common Stock on the date of conversion of the Notes or, if
such date is not a Trading Day (as defined below), then on the last Trading Day
prior to such date. The "Sale Price" of the Common Stock on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices) on such date as reported in
the composite transactions for the principal United States securities exchange
on which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional stock exchange, as reported by the Nasdaq
National Market. "Trading Day" means, in respect of any securities exchange or
securities market, each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.
2.5 ADJUSTMENT OF CONVERSION RATE.
(1) In case at any time after the date of the issuance of the Notes, the
Company shall pay or make a dividend or other distribution to the Common Stock
payable in shares of its Common Stock, the Conversion Rate in effect at the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
increased by dividing such Conversion Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (1), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company.
(2) Subject to paragraph (9) of this Section 2.5, in case at any time
after the date of the issuance of the Notes, the Company shall issue rights,
options or warrants to all holders of its Common Stock (other than any rights,
options or warrants that by their terms will also be issued to any Holder upon
conversion of a Note into Common Stock without any action required by the
Company or any other Person) entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the then current market price per
share (determined as provided in paragraph (9) of this Section 2.5) of the
Common Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Conversion Rate in effect at the opening of business on
the day following the date fixed for such determination shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering
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price of the total number of shares of Common Stock so offered for subscription
or purchase would purchase at the then current market price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock so offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case at any time after the date of the issuance of the Notes,
outstanding shares of Common Stock shall be subdivided into a greater number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall be combined into a smaller number of shares of Common Stock,
the Conversion Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
reduced, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) In case at any time after the date of the issuance of the Notes, the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock, shares of any class of its capital stock, evidences of its indebtedness
or other assets (including securities, but excluding any rights, options or
warrants referred to in paragraph (2) of this Section 2.5, any dividend or
distribution paid exclusively in cash, any dividend or distribution referred to
in paragraph (1) of this Section 2.5 and distributions upon a merger or
consolidation to which Section 2.12 applies), the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (9) of this Section 2.5) of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Trustee) of the
portion of the assets, shares of capital stock or evidences of indebtedness so
distributed applicable to one share of Common Stock and the denominator shall be
such current market price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders entitled to
receive such distribution. If the Board of Directors determines the fair market
value of any distribution for purposes of this paragraph (4) by reference to the
actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market over the
same period used in computing the current market price per share pursuant to
paragraph (9) of this Section 2.5.
(5) In case at any time after the date of the issuance of the Notes, the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock cash (excluding any cash
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that is distributed upon a merger or consolidation to which Section 2.12 applies
or as part of a distribution referred to in paragraph (4) of this Section 2.5)
in an aggregate amount that, combined together with:
(A) the aggregate amount of any other distributions to all holders of
its Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) has been made, and
(B) the aggregate of any cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) of
consideration payable in respect of any tender offer by the Company or any
of its subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of such distribution and
in respect of which no adjustment pursuant to paragraph (6) of this Section
2.5 has been made,
(the amount of such cash distribution together with the amounts described in
clauses (A) and (B) above being referred to herein as the "Aggregate Cash
Distribution Amount") exceeds 10% of the product of (I) the current market price
per share (determined as provided in paragraph (9) of this Section 2.5) of the
Common Stock on the date for the determination of holders of shares of Common
Stock entitled to receive such distribution, times (II) the number of shares of
Common Stock outstanding on such date (the amount by which the Aggregate Cash
Distribution Amount exceeds 10% of the product of the amounts described in
clauses (I) and (II) above being referred to herein as the "Excess Amount"),
then, and in each such case, immediately after the close of business on such
date for determination, the Conversion Rate shall be increased in accordance
with the following formula:
AC = CR/ M - (EA/O)
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M
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate in effect immediately prior to the close of business on
the date fixed for determination of the stockholders entitled to receive the
distribution.
M = the current market price per share (determined as provided in paragraph (9)
of this Section 2.5) of the Common Stock on the date fixed for determination of
the stockholders entitled to receive the distribution.
EA = the Excess Amount.
O = the number of shares of Common Stock outstanding on the date fixed for
determination of the stockholders entitled to receive the distribution.
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(6) In case at any time after the date of the issuance of the Notes, a
tender offer made by the Company or any Subsidiary for all or any portion of the
Common Stock shall expire and such tender offer (as it may be amended) shall
require the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as defined
below)) of an aggregate consideration having a fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and described
in a Board Resolution filed with the Trustee) that combined together with:
(A) the aggregate of the cash plus the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee), as
of the expiration of such tender offer, of consideration payable in respect
of any other tender offer, by the Company or any Subsidiary for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this paragraph (6) has been made, and
(B) the aggregate amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash within 12 months preceding
the expiration of such tender offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section 2.5 has been made, exceeds 10% of
the product of (I) the current market price per share (determined as
provided in paragraph (9) of this Section 2.5) of the Common Stock as of
the last time (the "Expiration Time") tenders could have been made pursuant
to such tender offer (as it may be amended), times (II) the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be reduced in accordance with the following formula:
AC = CR/ (M x O) - C
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M x (O - TS)
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate immediately prior to close of business on the date of
the Expiration Time.
M = the current market price per share (determined as provided in paragraph (9)
of this Section 2.5) of the Common Stock on the date of the Expiration Time.
O = the number of shares of Common Stock outstanding (including any tendered
shares) on the Expiration Time.
C = the amount of cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below).
TS = the number of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares").
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(7) The reclassification of Common Stock into securities other than Common
Stock (other than any reclassification upon a consolidation or merger to which
Section 2.12 applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section 2.5), and (b) a subdivision or combination, as the case may be, of
the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective", as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of paragraph (3) of this Section 2.5).
(8) In case at any time after the date of the issuance of the Notes, the
Company shall issue rights or warrants to all holders of the Common Stock
entitling the holders thereof to subscribe for or purchase shares of Common
Stock (either initially or under certain circumstances), which rights or
warrants (i) are deemed to be transferred with such shares of Common Stock, (ii)
are not exercisable and (iii) are also issued in respect of future issuances of
Common Stock, in each case in clauses (i) through (iii) until the occurrence of
a specified event or events ("Trigger Event"), such rights or warrants shall for
purposes of this Section 2.5 not be deemed issued or distributed until the
occurrence of the earliest Trigger Event, whereupon such rights and warrants
shall be deemed to have been distributed and an appropriate adjustment (if any
is required) to the Conversion Rate shall be made under this Section 2.5. If any
such rights or warrants, including any such existing rights or warrants
distributed prior to the date of this Indenture are subject to subsequent
events, upon the occurrence of each of which such rights or warrants shall
become exercisable to purchase different securities, evidences of indebtedness
or other assets, then the occurrence of each such event shall be deemed to be
such date of issuance and record date with respect to new rights or warrants
(and a termination or expiration of the existing rights or warrants without
exercise by the holder thereof). In addition, in the event of any distribution
(or deemed distribution) of rights or warrants, or any Trigger Event with
respect thereto, that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 2.5 was
made, (1) in the case of any such rights or warrant which shall all have been
redeemed or repurchased without exercise by any holders thereof, the Conversion
Rate shall be readjusted upon such final redemption or repurchase to give effect
to such distribution or Trigger Event, as the case may be, as though it were a
cash distribution, equal to the per share redemption or repurchase price
received by a holder or holders of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of such rights or warrants which shall have expired or been
terminated without exercise by any holders thereof, the Conversion Rate shall be
readjusted as if such rights and warrants had not been issued.
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(9) For the purpose of any computation under paragraphs (2), (4), (5) or
(6) of this Section 2.5, the current market price per share of Common Stock on
any date shall be deemed to be the average of the daily Sale Prices (as defined
in Section 2.4 hereof) of the Common Stock for the five consecutive Trading Days
(as defined in Section 2.4 hereof) selected by the Company commencing not more
than ten Trading Days before, and ending not later than the earlier of, the day
in question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex" date, when used with respect to any issuance or distribution, means
the first date on which the Common Stock trades regular way in the applicable
securities market or on the applicable securities exchange without the right to
receive such issuance or distribution.
(10) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(10)) would require an increase or decrease of at least 1.0% in such rate;
provided, however, that any adjustments which by reason of this paragraph (10)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this paragraph (10) shall be
made to the nearest whole cent.
(11) The Company may make such increases in the Conversion Rate, in
addition to those required by this Section 2.5, as it considers to be advisable
in order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reasons. The Company shall have the
power to resolve any ambiguity or correct any error in this paragraph (11) and
its decisions in so doing shall be final and conclusive.
(12) To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least 20 days, the increase is irrevocable during such period,
and the Board of Directors shall have made a determination that such increase
would be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall give notice of the increase to the Holders in the
manner provided for in Section 105 of the Indenture at least 15 days prior to
the date the increased Conversion Rate takes effect, and such notice shall state
the increased Conversion Rate and the period during which it will be in effect.
(13) In the event that this Article 2 requires adjustments to the
Conversion Rate under more than one of Sections 2.5(1), 2.5(2), 2.5(4) or 2.5(5)
hereof, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 2.5(4), second, the provisions of
Section 2.5(5), third, the provisions of Section 2.5(1) and, fourth, the
provisions of Section 2.5(2). After an adjustment to the Conversion Rate under
this Article 2, any subsequent event requiring an adjustment under this Article
2 shall cause an adjustment to the Conversion Rate as so adjusted. Whenever
successive adjustments to the Conversion Rate are called for pursuant to this
Article 2, such adjustments shall be made to the provisions of Section 2.5(9)
hereof as may be necessary or appropriate to effectuate the intent of this
Article 2 and to avoid unjust or inequitable results as determined in good faith
by the Board of Directors.
10
2.6 NOTICE OF ADJUSTMENTS OF CONVERSION RATE.
Whenever the Conversion Rate is adjusted as herein provided: (a) the
Company shall compute the adjusted Conversion Rate in accordance with Section
2.5 hereof and shall prepare an Officers' Certificate, one of the signatories of
which shall be the Treasurer or Chief Financial Officer of the Company, setting
forth the adjusted Conversion Rate (certified by the Company's independent
public accountants or other certified public accountant) and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee at each office or agency
maintained for the purpose of conversion of Securities pursuant to Section 2.3
hereof; and (b) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be required, and as
soon as practicable after it is required, such notice shall be given by the
Company to the Trustee and all Holders in the manner provided for in Section 105
of the Indenture. The Trustee shall not be deemed to have notice of any change
in the Conversion Rate unless and until it receives the Officers' Certificate
provided for in the foregoing clause (a) setting forth such change.
2.7 NOTICE OF CERTAIN CORPORATE ACTION.
In case: (a) the Company shall declare a dividend or make any other
distribution that would require any adjustment pursuant to Section 2.5 hereof;
or (b) the Company shall authorize the granting to the holders of its Common
Stock of rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any other rights; or (c) of any reclassification of the
Common Stock of the Company, or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required or that is otherwise subject to Section 2.12 hereof, or of the
conveyance, lease, sale or transfer of all or substantially all of the assets of
the Company; or (d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; then the Company shall cause to be filed at each
office or agency maintained for the purpose of conversion of Securities pursuant
to Section 2.3 hereof, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the register for the Securities, at least 20
days prior to the applicable record or effective date hereinafter specified, a
notice (which notice shall also be sent by release to Reuters Economic Services
and Bloomberg Business News as set forth in Section 105 of the Indenture)
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (y) the
date on which such reclassification, consolidation, merger, share exchange,
conveyance, lease, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, conveyance, lease,
sale, transfer, dissolution, liquidation or winding up. Neither the failure to
give such notice nor any defect therein shall affect the legality or validity of
the proceedings described in clauses (a) through (d) of this Section 2.7. If at
the time the Trustee shall not be the conversion agent, a copy of such notice
shall also forthwith be filed by the Company with the Trustee. The Company
shall cause to be filed at the Corporate Trust Office and each office or agency
maintained for the purpose of conversion of Notes pursuant to Section 305 of the
Indenture, and shall cause to be provided to all Holders in accordance with
Section 105 of the Indenture, notice
11
of any tender offer by the Company or any Subsidiary for all or any portion of
the Common Stock at or about the time that such notice of tender offer is
provided to the public generally.
2.8 COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Notes, the full number of shares of
Common Stock then issuable upon the conversion of all outstanding Notes.
2.9 TAXES ON CONVERSIONS.
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Common Stock on conversion of Notes pursuant
hereto. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that of the Holder of the Note or Notes to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax,
or has established to the satisfaction of the Company that such tax has been
paid.
2.10 COVENANT AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Notes will upon issue be fully paid and nonassessable and,
except as provided in Section 2.9 hereof, the Company will pay all taxes, liens
and charges with respect to the issue thereof.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the issuance and delivery of shares of Common Stock
upon conversion of Notes, if any, and will use its best efforts to list or cause
to have quoted all such shares of Common Stock on each United States national
securities exchange or over-the-counter or other domestic market on which the
Common Stock is then listed or quoted.
2.11 CANCELLATION OF CONVERTED SECURITIES.
All Notes delivered for conversion shall be delivered to the Trustee to be
canceled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 309 of the Indenture.
2.12 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.
In case of any merger, amalgamation, arrangement or consolidation of the
Company with or into any other Person, any merger of another Person into the
Company (other than a merger, amalgamation, arrangement or consolidation which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Company) or any conveyance, lease,
sale or transfer of all or substantially all of the assets of the Company, the
Person formed by or resulting from such merger, amalgamation, arrangement or
12
consolidation or which acquires such assets, as the case may be, shall execute
and deliver to the Trustee a supplemental indenture providing (in addition to
matters, if any, required by Section 801 of the Indenture) that the Holder of
each Note then outstanding shall have the right thereafter, during the period
such Note shall be convertible as specified in Section 2.1 hereof, to convert
such Note only into the kind and amount of securities, cash and other property
receivable upon such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such Note might have been converted
immediately prior to such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer, assuming such holder of Common Stock of the
Company (i) is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("Constituent Person"), or an Affiliate of
a Constituent Person and (ii) failed to exercise its rights of election, if any,
as to the kind or amount of securities, cash and other property receivable upon
such merger, amalgamation, arrangement, consolidation, conveyance, lease, sale
or transfer (provided that if the kind or amount of securities, cash and other
property receivable upon such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer is not the same for each share of Common
Stock of the Company held immediately prior to such merger, amalgamation,
arrangement, consolidation, conveyance, lease, sale or transfer by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("Non-Electing Share"), then for the
purpose of this Section 2.12 the kind and amount of securities, cash and other
property receivable upon such merger, amalgamation, arrangement, consolidation,
conveyance, lease, sale or transfer by each Non-Electing Share shall be deemed
to be the kind and amount so receivable per share by a plurality of the Non-
Electing Shares). Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2. The foregoing provisions of this
Section 2.12 shall similarly apply to successive mergers, amalgamations,
arrangements, consolidations, conveyances, leases, sales or transfers. The
Company shall cause notice of the execution of such supplemental indenture to be
given to each Holder in the manner provided for in Section 105 of the Indenture.
2.13 RIGHT OF HOLDERS TO CONVERT.
The limitations set forth in Section 507 of the Indenture shall not apply
to the right of a Holder to bring a suit for the enforcement of such Holder's
right to convert Notes pursuant to this Article 2.
ARTICLE 3
REDEMPTION OF NOTES
Pursuant to Section 301(7) of the Indenture, so long as any of the Notes
are outstanding, the following provisions shall be applicable to the Notes:
13
3.1 OPTIONAL REDEMPTION BY THE COMPANY.
At any time on or after August 20, 2003, and prior to the Stated Maturity,
the Notes may be redeemed at the option of the Company, in whole or in part,
upon notice as set forth in Section 1104 of the Indenture, at the following
redemption prices (expressed as a percentage of principal amount), in each case,
together with accrued interest to the Redemption Date:
Redemption Date Redemption Price:
--------------- ----------------
from August 20, 2003 until August 14, 2004 101.30%
from August 15, 2004 until Stated Maturity 100.65%
3.2 APPLICABILITY OF ARTICLE.
Redemption of the Notes at the election of the Company or otherwise, as
permitted or required by any provision of the Notes or this First Supplemental
Indenture, shall be made in accordance with such provision, Article XI of the
Indenture and this Article 3.
ARTICLE 4
REPURCHASE OF NOTES AT THE OPTION
OF THE HOLDERS UPON A CHANGE OF CONTROL
Pursuant to Section 2.2(8) of the Indenture, so long as any of the Notes
are outstanding, the following provisions shall be applicable to the Notes:
4.1 REPURCHASE AT OPTION OF HOLDERS UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (the date of such
occurrence, the "Change of Control Date"), the Company shall notify the Holders
of the Notes in writing of such occurrence in accordance with paragraph (b)
below, and shall make an offer to purchase (a "Change of Control Offer"), and
shall purchase, on a Business Day (a "Change of Control Purchase Date") not more
than 60 nor less than 30 days following the Change of Control Date all of the
then outstanding Notes validly tendered at a purchase price in cash equal to
100% of the principal amount thereof plus accrued interest, if any, to the
Change of Control Purchase Date (the "Change of Control Purchase Price").
(b) Notice of a Change of Control Offer (a "Change of Control
Notice") shall be sent, by first-class mail, postage prepaid, by the Company not
later than the 30th day after the Change of Control Date to the Holders of the
Notes at their last registered addresses with a copy to the Trustee and the
Paying Agent (and shall also be given by release made to Reuters Economic
Services and Bloomberg Business News as provided in Section 10.2 of the
Indenture). The Change of Control Offer shall remain open from the time of
delivery of the Change of Control Notice for at least 20 Business Days and until
5:00 p.m., New York City time, on the Business Day prior to the Change of
Control Purchase Date. The Change of Control Notice, which shall govern the
terms of the Change of Control Offer, shall include such disclosures as are
required by law and shall state:
14
(i) that the Change of Control Offer is being made pursuant to this
Section 4.1 and that any portion of the principal amount of Notes that is equal
to $1,000 or an integral multiple thereof, validly tendered into the Change of
Control Offer and not withdrawn, will be accepted for payment;
(ii) the cash purchase price (including the amount of accrued
interest, if any) for each Note, the Change of Control Purchase Date and the
date on which the Change of Control Offer expires;
(iii) that any Note not tendered for payment will continue to accrue
interest in accordance with the terms thereof;
(iv) that, unless the Company shall default in the payment of the
Change of Control Purchase Price, any Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(v) that Holders electing to have Notes purchased pursuant to a
Change of Control Offer will be required to surrender their Notes to the Paying
Agent at the address (in New York City) specified in the Change of Control
Notice prior to 5:00 p.m., New York City time, on the Business Day prior to the
Change of Control Purchase Date and must complete an election notice as set
forth in Exhibit A or any form of letter of transmittal proposed by the Company
and reasonably acceptable to the Trustee and the Paying Agent;
(vi) that Holders of Notes will be entitled to withdraw their
election if the Paying Agent receives, not later than 5:00 p.m., New York City
time, on the Business Day prior to the Change of Control Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes the Holder delivered for purchase, the Note
certificate number (if any) and a statement that such Holder is withdrawing its
election to have such Notes purchased;
(vii) that Holders whose Notes are purchased only in part will be
issued Notes equal in principal amount to the unpurchased portion of the Notes
surrendered;
(viii) the instructions that Holders must follow in order to tender
their Notes; and
(ix) information concerning the business of the Company, the most
recent annual and quarterly reports of the Company filed with the SEC pursuant
to the Exchange Act (or, if the Company is not then permitted to file any such
reports with the SEC, the comparable reports prepared pursuant to Section 4.2 of
the Indenture), a description of material developments in the Company's
business, information with respect to pro forma historical financial information
after giving effect to such Change of Control and such other information
concerning the circumstances and relevant facts regarding such Change of Control
Offer as would be material to a Holder of Notes in connection with the decision
of such Holder as to whether or not it should tender Notes pursuant to the
Change of Control Offer.
15
(c) To exercise a repurchase right pursuant to this Section 4.1, a
Holder shall deliver to the Trustee a written notice (a "Repurchase Notice") of
such Holder's exercise of such right, in accordance with the terms and
conditions set forth in the Change of Control Notice. Upon receipt by the
Trustee of a Repurchase Notice, the Holder of the Note in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is withdrawn)
thereafter be entitled to receive solely the Change of Control Purchase Price
with respect to such Note. Notes in respect of which a Repurchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock on or after the date of the delivery of such Repurchase Notice, unless
such Repurchase Notice has first been validly withdrawn as set forth in the
foregoing paragraph (b)(vi), unless the Company has defaulted in the payment of
the Change of Control Purchase Price.
(d) On the Change of Control Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof validly tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent (no later than 10:00
A.M. EST on the Change of Control Purchase Date) money, in immediately available
funds, sufficient to pay the purchase price of all Notes or portions thereof so
tendered and accepted and (iii) deliver to the Trustee the Notes so accepted
together with an Officers' Certificate setting forth the Notes or portions
thereof tendered to and accepted for payment by the Company. The Paying Agent
shall promptly mail or deliver to the Holders of Notes so accepted payment in an
amount equal to the purchase price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Note equal in principal amount to any
unpurchased portion to the Notes surrendered; provided that each such new Note
shall be issued in an original principal amount in denominations of $1,000 and
integral multiples thereof. Any Notes not validly tendered and not accepted by
the Company shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Change of Control
Offer not later than the first Business Day following the Change of Control
Purchase Date.
(e) In the event that a Change of Control occurs and the holders of
Notes exercise their right to require the Company to purchase Notes, if such
purchase constitutes a "tender offer" for purposes of Rule 14e-1 under the
Exchange Act at that time, the Company will comply with the requirements of Rule
14e-1 as then in effect with respect to such repurchase.
4.2 CERTAIN DEFINITIONS.
For purposes of this Article 4:
(a) the term "Change of Control" means the occurrence of any of the
following events:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
person or group shall be deemed to have "beneficial ownership" of all
securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time, upon
the happening of an event or otherwise), directly or indirectly, of more
than 50% of the total voting power of all Voting Stock of the Company;
16
(ii) the Company consolidates with, or merges with or into,
another person or sells, assigns, conveys, transfers, leases or otherwise
disposes of, all or substantially all of its assets to any Person, or any
Person consolidates with, or merges with or into, the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock of
the Company is converted into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is converted into or exchanged for Voting Stock (other
than Disqualified Capital Stock) of the surviving or transferee
corporation, and (ii) immediately after such transaction no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a person or group shall be deemed to have
"beneficial ownership" of all securities that such person or group has the
right to acquire, whether such right is exercisable immediately or only
after the passage of time, upon the happening of an event or otherwise),
directly or indirectly, of more than 50% of the total voting power of all
Voting Stock of the surviving or transferee corporation; provided, however,
that a Change of Control shall not be deemed to have occurred if (I) the
Sale Price, as defined in Section 2.4, of the Common Stock for any five
Trading Days, as defined in Section 2.4, within the period of 10
consecutive Trading Days ending immediately after the later of the Change
of Control or the public announcement of the Change of Control (in the case
of a Change of Control under clause (i) above) or the period of 10
consecutive Trading Days ending immediately before the Change of Control
(in the case of a Change of Control under clause (ii) above) shall, in the
case of each of such five Trading Days, equal or exceed 105% of the
Conversion Price of the Securities in effect on each of such five Trading
Days or (II) all of the consideration (excluding cash payments for
fractional shares and cash payments made pursuant to dissenters' appraisal
rights) in a merger or consolidation otherwise constituting a Change of
Control under clause (i) and/or clause (ii) above consists of shares of
common stock traded on a national securities exchange or quoted on the
Nasdaq National Market (or will be so traded or quoted immediately
following such merger or consolidation) and as a result of such merger or
consolidation the Notes become convertible solely into such common stock;
(iii) at any time during any consecutive two-year period,
individuals who at the beginning of such period constituted the board of
directors of the Company (together with any new directors whose election by
such board of directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority of the board of
directors of the Company then in office; or
(iv) the Company is liquidated or dissolved or adopts a plan of
liquidation.
(b) the term "Voting Stock" means, with respect to any Person,
securities of any class or classes of capital stock in such Person entitling the
holders thereof to vote under
17
ordinary circumstances in the election of members of the board of directors or
other governing body of such Person.
(c) the term "Disqualified Capital Stock" means any capital stock of
a Person which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the Stated Maturity of the
Notes, for cash or securities constituting indebtedness of such Person.
(d) the term "Conversion Price" shall equal U.S. $1,000 divided by
the Conversion Rate (rounded to the nearest cent).
ARTICLE 5
EVENTS OF DEFAULT
5.1 ADDITIONAL EVENTS OF DEFAULT.
Pursuant to Sections 301(17) and 501(8) of the Indenture, so long as any of
the Notes are outstanding, the following shall be an Event of Default with
respect to the Notes, in addition to the Events of Default contained in Section
501 of the Indenture:
(1) The Company fails to convert any portion of the principal amount of a
Note following the exercise by the Holder of such Note of the right to convert
such Note into Common Stock pursuant to and in accordance with Article 2 hereof.
(2) The Company fails to give a Change of Control Notice in accordance
with Section 4.1(b) hereof, or defaults in the payment of the Change of Control
Purchase Price.
ARTICLE 6
AMENDMENTS, SUPPLEMENTS AND WAIVERS
6.1 WITH CONSENT OF HOLDERS.
Pursuant to Sections 301 (and subject to Section 902) of the Indenture, so
long as any of the Notes are outstanding, without the consent of each Holder
affected, an amendment, supplement or waiver, including a waiver pursuant to
Section 513 of the Indenture, may not (in addition to the events described in
paragraphs (1) through (9) of Section 901 of the Indenture):
(1) make any change that impairs or adversely affects the right to convert
any Notes into Common Stock;
(2) impair or adversely affect the right of a Holder to institute suit for
the enforcement of any payment with respect to, or conversion of, the Notes;
18
(3) make any change that adversely affects the right to require the
Company to repurchase the Notes upon a Change of Control pursuant to and in
accordance with Article 4 hereof; or
(4) reduce or impair or adversely affect the right of a Holder to receive
the applicable redemption price set forth in Section 3.1 hereof or the Change of
Control Purchase Price pursuant to Section 4.1 hereof.
ARTICLE 7
MISCELLANEOUS
7.1 APPLICATION OF FIRST SUPPLEMENTAL INDENTURE.
Each and every term and condition contained in this First Supplemental
Indenture that modifies, amends or supplements the terms and conditions of the
Indenture shall apply only to the Notes created hereby and not to any future
series of Securities established under the Indenture. Except as specifically
amended and supplemented by, or to the extent inconsistent with, this First
Supplemental Indenture, the Indenture shall remain in full force and effect and
is hereby ratified and confirmed.
7.2 EFFECTIVE DATE.
This First Supplemental Indenture shall be effective as of the date first
above written and upon the execution and delivery hereof by each of the parties
hereto.
7.3 COUNTERPARTS.
This First Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
19
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first above written.
PROVIDIAN FINANCIAL CORPORATION
By:
---------------------------------------------
Name:
Title:
BANK ONE TRUST COMPANY, N.A., as Trustee
By:
---------------------------------------------
Name:
Title:
20
EXHIBIT A
[FORM OF FACE OF NOTE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY 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.
PROVIDIAN FINANCIAL CORPORATION
3.25% Convertible Senior Note due August 15, 2005
No. R- $_______________
CUSIP No. 74406A AA 0
PROVIDIAN FINANCIAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter defined), for
value received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of $___________ (____________ Dollars) on August 15, 2005, and to
pay interest thereon from August 23, 2000 or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on February 15 and August 15 in each year, commencing February 15, 2001, at the
rate of 3.25% per annum, until the principal hereof is paid or made available
for payment.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Note is registered at the close of business on the regular
record date for such interest, which shall be the 1st of February or 1st of
August, as the case may be, next preceding such Interest Payment Date or, if
such record date is not a Business Day, at the close of business of the
immediately succeeding Business Day. A "Business Day" shall mean any day other
than a Saturday, Sunday, a federally recognized holiday or a day on which
banking institutions are not authorized or required by law or executive order to
be open in the State of New York. Any such interest not so punctually paid or
duly provided for will forthwith cease to be payable to the Holder on such
regular record date and shall be paid to the Person in whose name this Note is
registered at the close of business on a subsequent special record date, which
date shall be the fifteenth day next preceding the date fixed by the Company for
the payment of defaulted interest or the next succeeding Business Day if such
date is not a Business Day. At least 15 days before the special record date,
the Company shall mail or cause to be mailed to each Holder, with a copy to the
A-1
Trustee, a notice that states the special record date, the payment date, and the
amount of defaulted interest, and interest payable on such defaulted interest,
if any, to be paid.
Payments of principal of and interest on this Note and any additional
payments due hereunder shall be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the register for the Notes maintained by the Registrar.
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof or an authenticating agent appointed
by the Company, by manual signature, this Note shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.
A-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and delivered under its corporate seal.
Dated:
PROVIDIAN FINANCIAL CORPORATION
By:
--------------------------------------------
Name:
Title:
This is one of the Securities of the Series designated therein referred to
in the within-mentioned Indenture.
Dated:
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By:
--------------------------------------------
Authorized Signatory
A-3
[FORM OF REVERSE OF NOTE]
This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes"), issued and to be issued in one or more series under
an Indenture, dated as of May 1, 1999 (as supplemented by a First Supplemental
Indenture, dated as of August 23, 2000, the "Indenture"), between the Company
and Bank One Trust Company, N.A., as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), and reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, and the Holders of the Notes and of the terms upon which the Notes are,
and are to be, authenticated and delivered. This Note is one of the series
designated on the face hereof as "3.25% Convertible Senior Notes due August 15,
2005", limited in aggregate principal amount to $402,500,000. All terms used in
this Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
The Notes are subject to redemption, at the election of the Company, at any
time on or after August 20, 2003, as a whole or in part, upon not less than 30
nor more than 60 days' notice to the Holders (in the manner provided for in the
Indenture) prior to the Redemption Date at the following redemption prices
(expressed as percentages of the principal amount):
Redemption Date Redemption Price:
--------------- ----------------
from August 20, 2003 until August 14, 2004 101.30%
from August 15, 2004 until Stated Maturity 100.65%
together in each case of any such redemption with accrued interest to the
Redemption Date; provided, however, that interest installments whose payment
date is on or prior to such Redemption Date will be payable to the Holders of
such Notes of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture.
No sinking fund is provided for the Notes.
Subject to and upon compliance with the provisions of the Indenture, any
Note (or any portion of the principal amount thereof which is $1,000 or an
integral multiple of $1,000) which has not previously been redeemed or
repurchased, is convertible at the option of the Holder thereof, at any time
following the original issue date of the Notes and on or before the close of
business on the Business Day immediately preceding the Stated Maturity, into
fully paid and nonassessable shares of common stock of the Company, $0.01 par
value per share (the "Common Stock"), at an initial conversion rate (calculated
to the nearest 1/100 of a share) of 7.2446 shares of Common Stock for each
$1,000 principal amount of Note, or at the current adjusted conversion rate if
an adjustment has been made as provided in the Indenture. In case the Notes or
a portion thereof are called for redemption, such conversion right in respect of
the Notes or portion so called shall expire at the close of business on the
Business Day immediately preceding the Redemption Date, unless the Company
defaults in making the payment due upon redemption. A Note or portion thereof
in respect of which the Holder has delivered a Repurchase Notice may be
converted only if such notice is withdrawn in accordance with the terms of the
Indenture, unless the Company has defaulted in the payment of the Change of
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Control Purchase Price. The Holder of a Note surrendered for conversion during
the period from the close of business on any Record Date immediately preceding
any Interest Payment Date to the opening of business on such Interest Payment
Date shall (except in the case of a Note or portions thereof which have been
called for redemption or in respect of which the Repurchase Notice delivered by
the Holder has not been withdrawn, the conversion rights of which would
terminate during the period between such Record Date and the close of business
on such Interest Payment Date) be entitled to receive the interest payable on
such Interest Payment Date on the principal amount of the Note being surrendered
for conversion. To convert this Note the Holder must (1) surrender this Note,
duly endorsed or assigned to the Company or in blank, provided that if such
surrender shall be made during the period from the close of business on any
Record Date immediately preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except in the case of Notes or
portions thereof which have been called for redemption or in respect of which
the Repurchase Notice delivered by the Holder has not been withdrawn, the
conversion rights of which would terminate during the period between such Record
Date and the close of business on such Interest Payment Date) also be
accompanied by payment in immediately available funds or other funds acceptable
to the Company of an amount equal to the interest payable on such Interest
Payment Date on the principal amount of the Note being surrendered for
conversion, and (2) complete and manually sign a conversion notice in
substantially the form attached hereto. Except as set forth above, no payment
or adjustment shall be made upon any conversion on account of any interest
accrued hereon from the Interest Payment Date immediately preceding the day of
conversion, or on account of any dividends on the Common Stock issued on
conversion hereof. In addition, the Holders shall not be entitled to receive
any dividends payable to holders of Common Stock as of any record date before
the close of business on the conversion date. No fractional shares will be
issued on conversion, but instead of any fractional interest (calculated to the
nearest 1/100th of a share) the Company shall pay a cash adjustment as provided
in the Indenture.
The Indenture provides that in the event of any merger, amalgamation,
arrangement or consolidation to which the Company is a party (other than one
that does not result in any reclassification, conversion, exchange or
cancellation of the Common Stock) or any conveyance, lease, sale or transfer of
all or substantially all of the assets of the Company, the Indenture shall be
amended, without the consent of any Holders of Notes, so that this Note, if then
outstanding, will be convertible thereafter, during the period this Note shall
be convertible as specified above, only into the kind and amount of securities,
cash and other property receivable upon such merger, amalgamation, arrangement,
consolidation, conveyance, lease, sale or transfer by a holder of the number of
shares of Common Stock of the Company into which this Note could have been
converted immediately prior to such merger, amalgamation, arrangement,
consolidation, conveyance, lease, sale or transfer (assuming such holder of
Common Stock is not a Constituent Person or an Affiliate of a Constituent
Person, failed to exercise any rights of election and received per share the
kind and amount received per share by a plurality of Non-Electing Shares). No
adjustment in the Conversion Rate shall be made until such adjustment would
require an increase or decrease of at least one percent of such rate, provided
that any adjustment that would otherwise be made will be carried forward and
taken into account in the computation of any subsequent adjustment.
Subject to and upon compliance with the provisions of the Indenture, upon
the occurrence of a Change of Control, the Company shall notify the Holders of
the Notes of such occurrence by
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delivering a Change of Control Notice, shall make a Change of Control Offer and
shall purchase, on a Business Day not more than 60 nor less than 30 days
following the Change of Control Date (a "Change of Control Purchase Date") all
of the then outstanding Notes validly tendered at a purchase price in cash equal
to 100% of the principal amount thereof plus accrued interest, if any, to the
Change of Control Purchase Date (the "Change of Control Purchase Price"). The
Change of Control Offer shall remain open from the time of delivery of the
Change of Control Notice for at least 20 Business Days and until 5:00 p.m., New
York City time, on the Business Day prior to the Change of Control Purchase
Date. To exercise its repurchase right, a Holder shall deliver to the Trustee a
Repurchase Notice, in accordance with the terms and conditions set forth in the
Change of Control Notice. Upon receipt by the Trustee of a Repurchase Notice,
the Holder of the Note in respect of which such Repurchase Notice was given
shall (unless such Repurchase Notice is withdrawn) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such Note
and, unless the Company has defaulted in the payment of the Change of Control
Purchase Price, any Note accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest after the Change of Control Purchase Date.
Holders of Notes will be entitled to withdraw their election if the Paying Agent
receives notice of such withdrawal not later than 5:00 p.m., New York City time,
on the Business Day prior to the Change of Control Purchase Date. Notes in
respect of which a Repurchase Notice has been given by the Holder thereof may
not be converted into shares of Common Stock on or after the date of the
delivery of such Repurchase Notice, unless such Repurchase Notice has first been
validly withdrawn in the manner provided for in the Indenture or unless the
Company has defaulted in the payment of the Change of Control Purchase Price.
Holders electing to have Notes purchased pursuant to a Change of Control Offer
will be required to surrender their Notes to the Paying Agent at the address (in
the Borough of Manhattan, The City of New York) specified in the Change of
Control Notice prior to 5:00 p.m., New York City time, on the Business Day prior
to the Change of Control Purchase Date and must complete any form of letter of
transmittal proposed by the Company and reasonably acceptable to the Trustee and
the Paying Agent. Any portion of the principal amount of Notes that is equal to
$1,000 or an integral multiple thereof, validly tendered into the Change of
Control Offer and not withdrawn, will be accepted for payment.
In the event of redemption, repurchase or conversion of this Note in part
only, a new Note or Notes for the unredeemed, unrepurchased or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation thereof.
The provisions for defeasance and covenant defeasance set forth in Sections
1302 and 1303 of the Indenture, respectively, will not apply to the Notes.
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 Notes under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66 2/3%
in principal amount of the Notes at the time Outstanding. The Indenture also
contains provisions permitting the Holders of a majority in principal amount of
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the Notes at the time Outstanding, on behalf of the Holders of all Notes, 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 such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, 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, and 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 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
or for the enforcement of the right to convert this Note as provided in the
Indenture.
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 times, place and rate, and in the coin or currency, herein
prescribed or to convert this Note as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Note is registrable in the Security Register, upon
surrender of this Note for registration of transfer at the office or agency of
the Company in any place where the principal of and any premium and interest on
this Note are payable, 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 such Holder's 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.
This Note is a Global Note and shall be exchangeable for Notes registered
in the names of Persons other than the Depositary with respect to this Global
Note or its nominee only if (A) such Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for this Global Note or at any
time ceases to be a clearing agency registered as such under the Securities
Exchange Act of 1934, as amended, (B) the Company in its discretion executes and
delivers to the Trustee a Company Order that this Global Note shall be
exchangeable or (C) there shall have occurred and be continuing an Event of
Default with respect to the Notes. If this Global Note is exchangeable pursuant
to the preceding sentence, it shall be exchangeable for Notes issuable in
denominations of $1,000 and any integral multiple of $1,000 in excess thereof,
registered in such names as such Depositary shall direct.
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The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this 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.
A director, officer, employee, stockholder or incorporator, as such, of the
Company shall not have any liability (except in the case of bad faith or willful
misconduct) for any obligations of the Company under the Notes or the Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties (Cust)
JT TEN - as joint tenants with right of survivorship and
not as tenants in common
UNIF GIFT MIN ACT - Uniform Gifts to Minors Act
Additional abbreviations may also be used though not in the above list.
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CONVERSION NOTICE
The undersigned Holder of this Note hereby irrevocably exercises the option
to convert this Note, or any portion of the principal amount hereof (which is
$1,000 in principal amount or an integral multiple of $1,000), below designated,
into shares of common stock of Providian Financial Corporation, $0.01 par value
per share (the "Common Stock"), in accordance with the terms of the Indenture
referred to in this Note, and directs that such shares, together with a check in
payment for any fractional share and any Notes representing any unconverted
portion of the principal amount hereof, be issued and delivered to and be
registered in the name of the undersigned unless a different name has been
indicated below. If shares of Common Stock or any portion of this Note not
converted are to be registered in the name of a Person other than the
undersigned, (a) the undersigned will pay all transfer taxes payable with
respect thereto and (b) signature(s) must be guaranteed by an Eligible Guarantor
Institution with membership in an approved signature guarantee program pursuant
to Rule 17Ad-15 under the Securities Exchange Act of 1934.
Dated _________________
______________________________________________
______________________________________________
Signature(s)
If shares or Notes are to be registered in the name of a Person other than the
Holder, please print such Person's name and address:
____________________________________
Name
____________________________________
Address
____________________________________
Social Security or Other Taxpayer
Identification Number
____________________________________
[Signature Guaranteed]
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If only a portion of the Notes is to be converted, please indicate:
1. Principal amount to be converted:
$__________________
2. Principal amount and denomination of Notes representing unconverted
principal amount to be issued:
$__________________
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ELECTION OF HOLDER TO REQUIRE REPURCHASE
UPON A CHANGE OF CONTROL
(1) Pursuant to Article 4 of the First Supplemental Indenture dated as of
August 23, 2000 to the Indenture, the undersigned hereby acknowledges receipt of
a notice from the Company of a Change of Control Offer and requests and
instructs the Company to repurchase this Note, or the portion hereof (which is
$1,000 in principal amount or an integral multiple of $1,000) below designated,
as of the Change of Control Purchase Date pursuant to the terms and conditions
specified in such Article 4.
(2) The undersigned hereby directs the Trustee or the Company to pay to
the undersigned an amount in cash equal to 100% of the principal amount to be
repurchased (as set forth below), plus interest accrued to the Change of Control
Purchase Date, as provided in the Indenture.
(3) The undersigned elects (check one):
( ) to receive the Change of Control Purchase Price with respect to the
following portions of the following Notes:
Note certificate number:
Principal amount to be repurchased (if less than all): $______________
Remaining principal amount after repurchase: $___________________
( ) to receive the Change of Control Purchase Price with respect to the
full principal amount of all of the Notes that are subject to this
notice.
Notice: If the Holder fails to make an election, the Holder shall be deemed to
have elected to receive the Change of Control Purchase Price for the full
principal amount of all of the Notes subject to this notice.
Dated ______________
_______________________________________
_______________________________________
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Signature(s)
Signature(s) must be guaranteed by an
Eligible Guarantor Institution with
membership in an approved signature
guarantee program pursuant to Rule 17Ad-
15 under the Securities Exchange Act of
1934.
______________________________________
Signature Guaranteed
Security certificate number:
Principal amount to be repurchased
(if less than all): $__________________
Remaining principal amount after
repurchase:
$_____________________
________________________________________
Social Security or Other Taxpayer
Identification Number
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FORM OF ASSIGNMENT
For value received ________________ hereby sell(s), assign(s) and
transfer(s) unto ________________ [also insert social security or other taxpayer
identification number of assignee] the within Note, and hereby irrevocably
constitutes and appoints ____________________ as attorney to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
Dated _________________
_________________________________________________
_________________________________________________
Signature(s)
Signature(s) must be guaranteed by an Eligible
Guarantor Institution with membership in an
approved signature guarantee program pursuant to
Rule 17Ad-15 under the Securities Exchange Act of
1934.
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